November 24, 2014 by Canadian Underwriter
Aviva Canada said Monday it is pleased with the recent passage of Bill 15 in Ontario, which takes measures to reduce auto insurance fraud in the province, and has an overall goal of reducing average rates.
“We are pleased that the Ontario government passed Bill 15 without issue, it is a good first step,” Karin Ots, senior vice president of regulatory and government relations for Aviva Canada said in a statement.
“But to truly affect long-term change for the Ontario auto insurance system, we need to reduce claims costs to be in line with other provinces.”
The insurer says that for every $1 of premium it earns, $0.65 is paid out in claims costs.
“Claims costs need to come down in order to reduce premiums, especially when 92% of Aviva’s policyholders in Ontario do not make a claim,” it said.
In Ontario, accident benefit claims have an average cost of $26,863 compared to $3,628 in Alberta, the insurer also noted, based on 2012 data from the General Insurance Statistical Agency (GISA).
Of those costs, 48% go to non-treatment expenses, such as legal fees and assessments, versus the 52% that go to actually treating of victims, based on Aviva’s own data.
For bodily injury tort claims, the average cost in Ontario is $157,133 while it is only $50,020 in Alberta, the insurer also noted.
Avvia made several recommendations to reduce claims costs in a plan sent to Ontario Finance Minister Charles Sousa earlier this year, including:
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