Facility Association volumes generally stable, with increases in New Brunswick and Newfoundland and a decrease in Ontario

***CORRECTION***: In the original version of this story, posted on Sept. 12, Canadian Underwriter incorrectly identified written exposures as premium volumes. This version corrects the numbers and units of measurement. Canadian Underwriter apologizes for the error.

Facility Association volume remains relatively “stable” across the system, with some volume growth in New Brunswick and Newfoundland and Labrador over the past year, and a volume decrease in Ontario.
The Facility figures are included in a committee report presented to the Insurance Brokers Association of Canada (IBAC) in advance of its AGM on Sept. 22-24.
The figures in the report are on a rolling, 12-month basis between June 2010 and June 2011. In that time, private passenger written exposures in New Brunswick increased from 7,405 written vehicles to 8,781. In Newfoundland, the volume went from 9,292 written vehicles to 10,716.
In Ontario, the volume fell from approximately 8,657 written vehicles down to 7,245.
The committee report does not discuss reasons for the uptick in New Brunswick volume, but of Newfoundland it says: “Facility Association staff has conducted a review of the volume growth in Newfoundland and Labrador and it really seems to come down to the fact that there is no significant non-standard market other than Facility Association in the province.”
The committee report adds: “Ontario is an important ‘non-story’ in terms of volume because despite the (now easing) cost pressures of the last few years, the FARM [Facility Association Residual Market] PPV [Private Passenger Vehicle] volumes have actually trended downward.
“The small volume of PPV in Ontario does continue [to] demonstrate unacceptably high loss rations, so management and the board of directors continue to support a six month review and file process for those rates.”
FA’s Ontario operational report for May 2011 showed a Risk Sharing Pool loss ratio of 256.1% in May 2011, compared to 207.8% in May 2010.