Competitive market best positioned to
deliver improved affordability for drivers
EDMONTON, AB, April 26,
2024 /CNW/ - Today, the Alberta government announced a consultation on
auto insurance system reform, releasing two reports that examine
potential options. The reports are from consulting firms
Oliver Wyman (OW) and Nous Group.
Following the release of the reports, Aaron
Sutherland, Vice-President, Pacific and Western, Insurance
Bureau of Canada (IBC), issued the
following statement:
"Alberta's private auto
insurers are ready to work with the government to deliver change
that improves the affordability of auto insurance and the quality
of care provided to those injured in a collision. With significant
cost pressures continuing to mount, there are important decisions
that need to be made to ensure the sustainability of the auto
insurance market moving forward.
The reports released today provide further evidence of the
enormous financial impact that litigation costs and legal abuse are
having on the auto insurance premiums that drivers pay. While IBC
has concerns over significant omissions in OW's actuarial analysis,
the government now has further proof from an independent third
party that the best way to deliver savings to Alberta drivers is by getting legal costs
under control.
The Nous report also drives home the devastating impacts of
moving to a government-run insurance monopoly. The evidence is
undeniable. It would be an economic boondoggle that would kill
thousands of stable, private sector jobs. Taxpayers would be forced
to pay billions of dollars to subsidize auto insurance premiums,
while drivers would be deprived of the benefits of choice in a
competitive market. Establishing a government-run monopoly would
also take years and jeopardize the government's fiscal plan in both
the near and long term. These significant negative consumer and
economic impacts are why no North American jurisdiction has moved
to a public auto insurance system in more than 50 years.
Given the negative impact of government-run auto insurance, it
is unfortunate that more viable solutions to reform Alberta's auto insurance system were not
explored in OW's actuarial analysis. IBC has compiled a list and
description of the errors in the OW report.
Albertans agree that the auto insurance system requires urgent
reform. IBC has put forward its Enhancing Care & Expanding
Choice proposal to the government as a solution that would
give drivers more control over their coverage and the ability to
save by choosing new coverage options, while doubling benefits to
those injured in a collision. Combined with regulatory and tax
improvements, this proposal could save drivers an average of
$325 annually on their auto
insurance, and will not cause irrevocable damaging Alberta's economy.
Alberta's property and casualty
industry, along with the 17,000 insurance professionals that live
and work in communities across the province, are ready to assist
the government as it undertakes meaningful reforms that puts
drivers first and brings long-term stability to the auto insurance
market."
Links
Oliver Wyman Report Backgrounder
Public Auto Backgrounder
Enhancing Care & Expanding Choice Reform Proposal
About Insurance Bureau of
Canada
Established in 1964, Insurance Bureau of Canada (IBC) is the national industry
association representing Canada's
private home, auto and business insurers. Its member companies make
up the vast majority of Canada's
highly competitive property and casualty (P&C) insurance
market.
As the leading advocate for Canada's private P&C insurers, IBC
collaborates with governments, regulators and stakeholders to
support a competitive environment for the P&C insurance
industry to continue to help protect Canadians from the risks of
today and tomorrow.
IBC believes that Canadians value and deserve a responsive and
resilient private P&C insurance industry that provides
insurance solutions to both individuals and businesses.
For media releases, IN Focus articles, or to book an interview
with an IBC representative, visit ibc.ca. Follow us on LinkedIn, X
and Instagram, and like us on Facebook. If you have a question
about home, auto or business insurance, contact IBC's Consumer
Information Centre at 1-844-2ask-IBC. We're here to help.
SOURCE Insurance Bureau of Canada