Ontario’s auto insurance results in 2011 taking a U-turn from “horrific” 2010 results: A.M. Best

Ontario’s personal auto accident results are already showing signs of a drastic improvement, one year after the implementation of the reforms.
Jeff Mango, assistant vice president at A.M. Best, offered his thoughts on the effectiveness of the auto reforms during A.M. Best Company’s 2011 Insurance Market Briefing-Canada, held in Toronto on Sept. 8.
The loss ratio for Ontario’s personal auto accident lines had soared to 143.3% in 2010, Mango noted. But by the end of the first half of 2011, that figure plummeted to an estimated 84.3%.
Mango described the 2010 results as “horrific.” He said the results were made worse in part because plaintiffs’ counsel and health care providers were trying to file claims in advance of the Sept. 1, 2010 implementation of Ontario’s auto insurance reforms.
“We’ve been talking to a lot of companies that just saw an exponential spike in claims activity [before Sept 1, 2010],” he said. “You know reforms are coming. So plaintiffs counsel and folks on the medical side tried to get their claims pushed through beforehand. We’ve seen these dramatic spikes in claims activity in U.S. jurisdictions with impending reforms.”
Mango also attributed the improvement to stricter underwriting discipline and pricing by insurers; an improved regulatory framework; and an aggressive approach to tackle fraud within the system.
“Getting rate through the market is one thing, but there’s going to be a saturation point where consumer confidence won’t allow any more rate activity,” he continued. “So, rate can go up to a certain point, but it’s additional regulations and additional aggressive activities that are really going to take the auto results to the next level.”