Qu�bec Auto Insurance Industry Continues Growth in 2005

Qu�bec City, April 5, 2006 — The Qu�bec automobile insurance industry posted further growth in 2005. Indeed, based on an analysis of the rates being charged in the past year, insurers as a whole reported operating income totalling 16.8% of earned premiums, up slightly from the 16.6% generated in 2004, as losses (3.0%) grew at a slower pace than earned premiums (3.2%). The results are in line with the positive trend which, in the past five years, has been outpacing the historical returns generally anticipated in the insurance industry.

These findings were taken from the 2005 annual report on Qu�bec automobile insurance rates that was tabled recently in the National Assembly by Finance Minister Michel Audet.

The report highlights the solid position of the Qu�bec automobile insurance industry, a situation that can only be in the interest of consumers. In this regard, the decline in rates reported in 2005 for a third consecutive year reflects a market that is operating efficiently and for the benefit of consumers.

As well, numerous product offerings continued to be available to Quebeckers in 2005 (through 105 firms), even though the auto insurance market is still dominated by a small number of insurers or insurance groups. Despite the concentration, an analysis reveals that the market remains competitive and that competition varies from one market segment to another.
Again this year, the demand for insurance products and the ensuing volume of written premiums were on the rise as a result in particular of the renewal of the automobile fleet, coupled with a jump in the number of insured vehicles and holders of driver�s permits.

Moreover, further to a review of changes made to rate manuals, a ceiling seems to have been reached with respect to refinements carried out to classification and rate criteria used by insurers, particularly with respect to passenger cars. Nonetheless, to maintain their competitiveness and enhance customer loyalty, insurers continue to adjust rating practices based on the terms and conditions in place at each institution.

Finally, the substantial level of operating income earned in the past five years combined with higher demand is expected to sharpen future rate competition in Qu�bec for all risk categories related to auto insurance.

Consumers are urged to compare rate proposals and service offerings available from various insurers. Competition in the industry can only be further stimulated by an ever larger number of consumers seeking to be better informed and shopping for best buys.
The 2005 annual report on Qu�bec automobile insurance rates is available (in French only) on the AMF website at www.lautorite.qc.ca.

The Autorit� des march�s financiers (AMF) is the regulatory and oversight body for Qu�bec’s financial sector.