Ontario insurers should raise auto insurance rates in October, actuaries tell NICC panel

Ontario insurers need to raise their auto rates in order to make up for escalating loss ratios, and this could [and should] happen shortly after Ontarios election is over on Oct. 10, according to an actuary presenting on a panel at the National Insurance Conference of Canada (NICC) in Montreal.
Barb Addie, an actuary at Baron Insurance Services, noted that while auto loss ratios are increasing, Ontario insurers have released reserve funds, which has had the net effect of making the financial situations of Ontarios auto insurers appear much better than they are.
Also, Addie told NICC delegates, some Ontario insurers have been holding back on filing for rate increases with the Ontario regulator until after Oct.10, the date of the Ontario election. The reason, she noted, was to try and keep the issue of rate increases under the radar, which I think is a pretty reasonable thing to do.
But once Ontarios election is over, someone will have to start raising their rates, she told NICC delegates attending the actuarial panel on auto rate and reserve adequacy. Do we need to raise rates in Ontario auto? Yes. Yes. Yes. And you should hire a consultant [to explain the rate hikes to consumers].
Richard Gauthier of PricewaterhouseCoopers likened the situation in Ontario to insurers playing a game of chicken, waiting to see who will be first to raise the rates. He said the better approach would be to raise rates incrementally when needed, as opposed to avoiding rate increases for a long period of time, and then everyone all of a sudden asking for a 25% rate hike, for example.
We have 60 to 70 of our players [Ontario auto insurers] who, for a long time, the name of the game is playing chicken: ‘Who is the first one to move [raise rates]?’ And then everybody moves once that [first insurer] does. Maybe we as an industry should have a longer-term view.