January 24, 2019 by David Gambrill
Ontario auto insurance rates increased by an average of 3.35% in the fourth quarter of 2018, with several companies receiving approval for double-digit rate increases, the province’s regulator reported.
Overall, 23 insurers representing approximately 51% of the market based on premium volume had rates approved in 2018 Q4. Hartford Fire Insurance Company was approved for the largest average quarterly auto rate increase at 34.87%. None of the insurers were approved for a rate decrease.
Out of the 23 insurers that filed for a rate change in 2018 Q4, the largest insurer by market share, Aviva Insurance Company of Canada (6.6% market share), was approved for an average 8.63% increase, effective Feb. 1. Aviva General Insurance, with a 5.34% market share, received approval for a rate increase of 16.8%, effective Mar. 20.
Economical Mutual Insurance Company, the second largest insurer by market share (6.9%), reported no overall rate impact after the implementation of Canadian Loss Experience Automobile Rating (CLEAR) update. CLEAR is the system used by the industry to assign private passenger vehicle rate groups to be used in rating, based on the estimated loss costs of different make, model and model year vehicles.
A number of other notable insurers reported approved rate changes that balanced out to zero, meaning there was overall impact on rates. They included Belair Insurance Company Inc., Farm Mutual Reinsurance Plan Inc. (on behalf of Ontario Mutuals), and Northbridge General Insurance Company.
Other insurers with more than a 1% market share in Ontario received the following rate increases:
Allstate Insurance Company of Canada 4.5%
CAA Insurance Company 1.65%
Certas Direct Insurance Company 14.57%
COSECO Insurance Company 5.03%
Pembridge Insurance Company 7.95%
Personal Insurance Company, The 10.05%
Scottish & York Insurance Co. Limited 5.84%
Traders General Insurance Company 8.64%
Unifund Assurance Company 4.04%
What was the breakdown of claims costs for Ontario auto insurers, by coverage?
Almost 33% of claims costs by coverage in 2017 went to accidents benefits. Collision accounted for about 20% of claims costs, while 19.7% went to direct compensation and property damage and 19.5% went to third-party liability costs.