August 16, 2007 by Canadian Underwriter
Consumers have enjoyed nearly Cdn$7 billion of auto insurance premium savings since insurance reforms were implemented in 2003 and 2004 in Ontario, Alberta, and Atlantic Canada, according to the Insurance Bureau of Canada.
IBC made its observations in a press release following an analysis of the latest data available from the General Insurance Statistical Agency (GISA), a government body that collects data on premiums recorded for every private passenger vehicle in those regions of the country.
“Reaching nearly the [Cdn]$7 billion mark is an unprecedented level of savings for consumers,” said Stan Griffin, IBC’s president and CEO. In every region of the country where insurers compete for the business of consumers, auto insurance reforms have delivered substantial savings for drivers.
These benefits are the direct result of efforts by auto insurers and governments across the country to design and implement auto insurance reforms focused on the best interests of consumers.”
The IBC notes the average auto insurance premiums in Ontario decreased from approximately Cdn$1,499 per vehicle in November 2003 to Cdnn$1,260 in June of 2007 a reduction of nearly 16%.
“The savings we have seen in Ontario since the 2003 reforms represents the largest premium reduction ever seen in Canada,” says Mark Yakabuski, vice-president, federal affairs and Ontario, and incoming president of the IBC. “For Ontario drivers, it means an aggregate savings of [Cdn]$4.5 billion.”
In Alberta, Canada’s second-largest private auto insurance market, reform efforts have provided savings for consumers of Cdn$1.13 billion.
Alberta auto premiums in 2004 peaked at an average of Cdn$1,182, whereas now the average level is Cdn$1,021, a decline of nearly 14%.
Total savings available to consumers in Atlantic Canada amounted to Cdn$1.17 billion.
According to Don Forgeron, vice-president, Atlantic, IBC, these savings are a direct result of auto insurance reform efforts that focused on rising pain and suffering awards for minor injuries.
Governments in Nova Scotia, New Brunswick and PEI introduced a limit of Cdn$2,500 for the compensation paid out as pain and suffering awards for minor injuries sustained in a motor vehicle collision.
In Nova Scotia, reforms saw premiums drop from an average of Cdn$1,048 in November 2003 to Cdn$800 in June 2007.
In New Brunswick, auto premiums have dropped from an average high of Cdn$1,259 in 2003 to the current average of Cdn$797.