IBC urges Ontario government to reform auto insurance framework

Ontario’s government needs to reform its auto insurance regulatory framework to contribute to long-term stability of the provincial economy by keeping the cost of insurance for consumers from growing, Insurance Bureau of Canada (IBC) says.
In a pre-budget submission to Dwight Duncan, minister of finance, IBC has identified areas where it believes strategic government action can help strengthen the provincial economy and enhance the ability of the property and casualty insurance industry to deliver innovative and effective risk management solutions.
Currently, Ontarians pay the highest auto insurance premiums in Canada— 25% more than in Alberta, which is the next highest premium in a private insurance province, IBC notes in the submission.
If the Ontario auto insurance product does not undergo fundamental reform, IBC believes that auto insurance will “take an even bigger bite” out of disposable income.
“For this reason, we believe that the overriding goal of the automobile insurance system in Ontario should be to provide motorists with assurance that the auto insurance will remain affordable and available over the short, medium and long-term,” the submission reads.
One way to close the sizeable gap between rising claim costs and current premium levels, the IBC notes in its submission to the finance minister, is to implement the 25 recommendations the IBC set out in a previous submission regarding the five-year auto insurance review. IBC notes that the potential cost savings from these measures would go a long way towards reducing the threat that costs will push premium levels ever upward. (The submission to FSCO can be viewed at http://www.ontarioinsurance.com/english/insurance/auto/5yr-review/default.asp).
“Without significant reform, injury claims costs will continue to remain a key factor in driving up insurance prices,” IBC notes to the Ontario government.
Additionally, IBC called on the government to support measures to adapt to an era of climate change and to support the growth potential of Ontario’s financial sector.