Canadian Underwriter

Election 2018: Will Ontario get public auto?

May 27, 2018   by Greg Meckbach

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If an election were held today in Ontario, the country’s largest private auto insurance market would be governed by a party that has promised public auto insurance in the past.

Forum Research announced Thursday it projects a New Democratic Party majority government if an election were held today. The provincial election is scheduled June 7.

About 47% of 906 Ontario voters surveyed Wednesday by Forum say they would support the NDP. The Liberals, which have been in power since 2003, have about 14% support while the Progressive Conservatives have about 33% support. In essence, Forum predicts a 95% probability that the margin of error is 3%.

As it stands, the NDP is promising to reduce the average private passenger auto rate by 15%, a promise the ruling Liberals made in 2013. The NDP does not go so far as to promise a public auto insurer in its platform, but when questioned by Canadian Underwriter, the party did not rule it out either. British Columbia, Saskatchewan and Manitoba all have public auto insurers.

“We will look beyond the current system if insurance providers do not provide the savings people deserve,” the NDP says in its party platform.

The New Democrats first asked for a 15% reduction in insurance rates in 2013. At the time the Liberals ruled Ontario with a minority. Jagmeet Singh, at the time an Ontario NDP MPP, claimed that Ontario auto insurers had made $2 billion in “extra profits” in 2011. What in fact happened, according to Insurance Bureau of Canada, was the P&C industry lost $2.7 billion on auto insurance in Ontario in 2010, and followed up with a profit of less than $300 million in 2011.

In the summer of 2013, the Liberals passed a law requiring Ontario auto insurers to explain in their rate filings to the Financial Services Commission of Ontario how their proposed rate changes would contribute to an industry-wide rate reduction of 15%. The intent was to reduce the industry-wide auto premium by 15% over two years.

But figures from industry watchers including A.M. Best Company Inc. indicate the actual reduction was less than 10%.

Before the 1990 general election, the NDP promised to introduce public auto but abandoned that promise after taking power. In the 1995 election, the Progressive Conservatives won a majority government.

Both the Liberals and NDP have promised to put the kibosh on the use of territory as a rating factor. So did Vic Fedeli when he was interim PC leader earlier this year. Doug Ford, elected PC leader in March, has not publicly said whether or not he would end territory as a rating factor. As of press time, the PC party has not responded to requests by Canadian Underwriter to confirm the party’s position on territorial ratings.

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9 Comments » for Election 2018: Will Ontario get public auto?
  1. M. Kelly says:

    We continue to hear from the IBC about the losses supposedly incurred by insurers on auto claims in Ontario. One would think insurers would be the biggest supporters of public auto insurance. Where is the business case for private insurance companies to sell automobile insurance if it does nothing lose money for them? Doesn’t make sense.

  2. Anne-Marie says:

    I believe that Vic Fedeli stated this under the Patrick Brown leadership, not during the interim.

  3. Scott says:

    The government can’t run anything as efficiently as private enterprise. The belief that the government can operate the insurance system more economically is proven not to be true by the provinces that have done it.
    Well, that is if we compare apples to apples but that will never happen. No government run system is as generous as Ontarios. The actuaries know this and so government issued policies have different coverage limitations that in the end serve to deny claimants what Ontario would provide. It should be noted that despite the depth of coverage found in Ontario, our pricing is comparable or better than the gov’t run systems. The most important thing is, if an accident with serious injuries were to occur today to a friend or family member, which provinces pink slip would you want in their car?

    • Derek says:

      I have worked for both private and public and can assure you that public insurance in both healthcare and auto is absolutely superior. In the private sector our policies were driven by shareholder greed. Also, the Ontario system is a no-fault system so you’re comparing apples and pasta….it’s the worst option any consumer could have. Again, I’ve worked under 2 systems and after seeing what I’ve seen it’s time to shut down the private system.

  4. k says:

    Too much attention is given to the delivery mechanism and not enough to the underlying legislation as the driver of price in auto insurance. I would be curious to see if, as a part of implementing government insurance, the government would change the compensation model to be more like Manitoba and Saskatchewan or leave the legislative mess they have now as is.

  5. Derek says:

    Having worked for both private and government insurance over 20 years I can say by far government is better. Pick a private company and check out the reviews. Enough said!

  6. Chris says:

    It’s an NDP push for more gov’t employees and therefore more voters for their platform.

    It’s a mixed bag on the benefits. The winners are the drivers with poor driving records, MPI tends to be cheaper in that regard, but in private auto good drivers get better pricing, also the ability to have rental car insurance for much cheaper included.

    It’s not a fluffy cloud dream, check out the mpisucks website…

  7. Charles Montorey says:

    The public that has a claim while be the losers here. You have options to negotiate with a private insurer. There is little to no negotiation with the Government.

  8. Zewdu Gebre-Hiwet says:

    The Ontario Government should set up a parallel auto-insurance to the private sector and let the public take their pick. That is fair to drivers as well as the private insurance companies.

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