November 6, 2002 by Canadian Underwriter
The Co-operators General Insurance says it will not accept new business at “preferred” auto rates in Alberta after November 1, 2002. In essence this means the Co-operators operation will no longer write the business, but will offer those clients rates from its Echelon subsidiary for higher risk drivers. Existing customers will still be offered Co-operators rates.
As well, the company is limiting its new business offerings in Ontario auto.
The company issued a press release in the face of media reports that it was essentially withdrawing from the markets. Co-operators is stressing that the restrictions apply to new business, not existing customers, and that it hopes to lift the restrictions if regulations are changed to make the business more profitable.
“Increased claims severity, rising health care costs, more expensive auto repairs and other factors have led to significant losses in the auto insurance industry over the last several years,” says Co-operators CEO Kathy Bardswick. “The Co-operators has reduced its expenses, implemented rate increases and introduced a variety of underwriting initiatives to improve the situation but the real culprit is the rising costs of claims.”