HALIFAX, July 16 – The Insurance Bureau of Canada (IBC) today released its most recent Atlantic
region figures for 1999 and 2000, confirming the steadily worsening losses being incurred on automobile insurance.
“Our actuarial estimates confirm the
trends we’ve seen in recent years are continuing,” said Don Forgeron, regional
vice-president of the IBC. “Costs continue to increase significantly, all of which
will soon negatively impact motorists in every province in the region.”
In 2000, losses incurred by the auto insurance
industry in Atlantic Canada were about $190 million. In 1999, the industry increased its
original loss estimate to $150 million from $100 million. Analysts predict a continued
rise in costs unless changes are made to the current auto insurance products offered.
“For several years, the average cost per
claim rose while the frequency of claims and accidents fell,” said Mr. Forgeron.
“In recent years, the frequency of claims has started to rise again, creating the
worst possible scenario, a higher average cost per claim and more of them.”
Research shows that the types of claims with
the greatest increase in cost are soft tissue injuries such as neck strains and sprains.
Most the claims that are paid in these cases do not compensate the victim for what has
been lost, but rather for pain and suffering.
Research is now underway to help the industry
determine the reasons why costs continue to rise, confirm the types of injuries that are
contributing most to the current high costs, and look at the distribution of these costs.
The bureau is also surveying public opinion to find out the level of understanding of
industry issues and the tolerance for changes to auto insurance products.
“As consumers feel the effects of these
rising costs over the next six to 18 months, government and industry leaders will be
called upon to respond,” added Mr. Forgeron. “In addition to meeting with
government officials to ensure that they fully understand the problem, we’re working to
provide a range of solutions.”
The bureau is working with governments to
develop various options to reform the current auto insurance product so that costs remain
stable and accident victims can be fairly compensated and in a way that is consistent with
the views of Atlantic Canadians. Consumers can contact the bureau’s consumer information
centre in Halifax if they have questions about their home or car insurance. The centre can
be reached at (902) 429-2730 or toll-free at 1-800-565-7189.
The Insurance Bureau of Canada is the national
trade association of the private property and casualty insurance industry. It represents
about 200 companies that provide more than 90 per cent of the non-government home, car and
business insurance sold in Canada. Visit the media section of the bureau’s Web site at
www.ibc.ca for more news releases and information.
Automobile Insurance Industry Analysis
| Province/Item | 1990 | 1991 | 1992 | 1993 | 1994 | 1995 |
| New Brunswick Pre tax profit (loss) |
(18,824) | (13,675) | (2,333) | 573 | 9,736 | 9,061 |
| Newfoundland Pre tax profit (loss) |
(16,748) | (16,435) | (18,414) | (6,301) | 4,322 | 13,675 |
| Nova Scotia Pre tax profit (loss) |
(20,837) | (27,058) | (19,748) | (11,907) | 7,162 | 6,668 |
| Prince Edward Island Pre tax profit (loss) |
(5,101) | (2,718) | (1,506) | 2,364 | 3,794 | 3,426 |
| Total Region | (61,510) | (59,886) | (42,001) | (15,271) | 25,014 | 32,830 |
| Province/Item | 1996 | 1997 | 1998 | 1999 | 2000 |
| New Brunswick Pre tax profit (loss) |
(1,045) | (20,156) | (42,589) | (70,370) | (70,502) |
| Newfoundland Pre tax profit (loss) |
15,786 | 13,457 | 3,249 | (17,788) | (34,839) |
| Nova Scotia Pre tax profit (loss) |
(388) | (17,913) | (26,196) | (55,615) | (74,955) |
| Prince Edward Island Pre tax profit (loss) |
54 | 1,374 | 456 | (6,509) | (7,664) |
| Total Region | 14,407 | (23,238) | (65,080) | (150,282) | (187,960) |
For further information: Don Forgeron, Regional Vice-President,
(902) 429-2730 ext. 225;
Linda Chiarvesio, Manager, External Relations,
(416) 362-2031 ext. 351
