TORONTO, July 5, 2011 – Recent claims that auto insurance rates may be rising dramatically are neither accurate nor supportable. Ontario’s recent auto insurance reforms are addressing cost pressures and working to stabilize the province’s auto insurance system, according to the Insurance Bureau of Canada’s (IBC) Ontario region.
Data provided by the General Insurance Statistical Agency (GISA) and the Financial Services Commission of Ontario (FSCO) show that Ontario auto insurance rates have been trending at the rate of inflation.
Based on GISA monthly average data, premiums have increased by 2.5% from May 2010 to May 2011. FSCO’s data for the first quarter of 2011 shows an average increase of 1.78%. While there is still a requirement for insurers to increase their rates to match their underwriting and expense needs.
The target range set by the Bank of Canada to contain inflation ranges from 1 to 3%.
“Auto insurance premiums that are renewed today can reflect rates that were requested up to one year ago,” said Ralph Palumbo, Vice-President IBC, Ontario. “The tangible benefits of Ontario’s auto insurance reforms will take some time before they are realized by consumers. The good news however, is that we are already seeing that premium increases when they occur, are keeping pace with the rate of inflation.”
About Insurance Bureau of Canada
Insurance Bureau of Canada is the national industry association representing Canada’s private home, car and business insurers. Its member companies represent 90% of the property and casualty (P&C) insurance market in Canada. The P&C insurance industry employs over 114,000 Canadians, pays more than $7 billion in taxes to the federal, provincial and municipal governments, and has a total premium base of $40 billion. www.ibc.ca.