Toronto, ON (Aug. 24, 2013) – Yesterday’s announcement on auto insurance does nothing to lower costs before insurers are expected to lower premiums, says Insurance Bureau of Canada.
“While the Government has approved insurance rate reductions they still haven’t outlined how they will address some key cost reforms we need to see implemented.” said Ralph Palumbo, Vice President Ontario, IBC. “Reducing costs is the only way to reduce premiums.”
The Ontario Government’s commitment to combatting fraud, such as licensing health care clinics and providing clear direction around the 2010 reforms, is a good first step; however, it will still be some time before these measures are in place producing savings. On a positive note, the government has signaled its intent to implement further reforms in order to resolve long-standing problems that plague the current auto insurance product. That is a welcome development.
In recent years, the industry has been modestly profitable but not all firms are in the same financial position. Recent public statements from some insurers raised concerns over how this might impact their businesses and consumers.
“The solution is clear – premium reductions need to be commensurate with additional cost reduction measures – it is definitely a necessary next step”, said Palumbo. “We look forward to partnering with the government and all stakeholders to develop and implement a program to bring affordable insurance to Ontario consumers.”
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 115,000 Canadians, pays more than $7 billion in taxes to the federal, provincial and municipal governments, and has a total premium base of $44 billion.
To view media releases and information, visit the media section of IBC’s website at www.ibc.ca and for IBC on Twitter follow @insurancebureau.