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Third-quarter Ontario auto insurance rates decline


October 17, 2005   by Canadian Underwriter


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Ontario private passenger auto insurance approved rates decreased during the third quarter of 2005, the Financial Services Commission of Ontario (FSCO) reports.
“The rate changes posted reflect cost saving measures arising from recent reforms to the automobile insurance system, which are being passed on to consumers in the form of lower rates,” FSCO says on its Web site. “FSCO will continue to ensure that insurance companies’ rate changes are reasonable and justified, and that the rates insurers charge are balanced with their ability to meet their future claims costs.”
During the third quarter of 2005 (between July 1, 2005 to September 30, 2005), for the 61.82% of the market that had rate changes approved, the average rate change decreased 1.62% when weighted by market share.
In comparison, the average rate changes approved for the first quarter of 2005 dropped 1.12% (representing 7.5% of the market) and by 1.62% in the second quarter (representing 45.79% of the market). From the beginning of 2005 up to the end of the third quarter, approved rates declined by 1.82% for the entire market.
In 2004, rate changes approved for the entire market averaged a drop of 10.60%. Overall, the combined decline in approved rates for 2004 and the first three quarters of 2005 is 12.42%. The rate changes approved in the third quarter of 2005 become effective in the third quarter of 2005 or later, for renewal business.
The impact of a rate change on an individual consumer will vary depending on where the consumer lives, the type of car he or she is driving, and other risk characteristics.
FSCO’s report includes a list of approved auto rate decreases for individual companies. Among them, the following companies each of which controlled 3% or more of the market share in 2004 reported the following, third-quarter decreases in their private passenger auto rates:
– Allstate Insurance Company of Canada (2.48% decrease)
– ING Insurance Company of Canada (1.2% decrease)
– Personal Insurance Company (2.4% decrease)
– Pilot Insurance Company (1.93% decrease)
– Security National Insurance Company (1.4% decrease)
– Traders General Insurance Company (1.93% decrease)


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