FSCO Reports 4th Quarter 2014 Auto Insurance Rate Approvals and Breakdown of 2013 Claims Costs

Toronto, ON (Jan. 22, 2015) – The Financial Services Commission of Ontario (FSCO) has provided an overview of the private passenger automobile insurance rate changes approved or ordered in the fourth quarter of 2014. The number of filings reviewed by FSCO and the overall average rate change for the Ontario market may vary from quarter to quarter.

Sixteen insurers, representing 46.81% of the market based on premium volume, had rates approved in the fourth quarter of 2014. Approved rates from sixteen insurers which represent 46.8% of the market decreased on average by 0.54% when applied across the total market. This compares to a decrease of 0.11% on average for the third quarter of 2014. Rate changes approved for each insurer this quarter and effective dates of the rate changes can be seen in the FSCO release. Note that the rate change shown for each insurance company is the average for that company, based on all the drivers it insures. The average rate changes reported are a strong indicator of the direction of premiums in the upcoming policyholder renewal cycle.

More background and details about FSCO’s Rate Approval Process are available in the same release.


Most premium dollars collected by insurers go towards paying for claims for people injured in car accidents. Insured persons who are injured can make a claim for Accident Benefits (AB), regardless of fault.

In the same release is a pie-chart illustrating a breakdown of claims costs for a typical private passenger policy by coverage, based on claims costs for accidents from 2013. It shows Third Party Liability Bodily Injury at 34.2% of claims costs, and Accident Benefits at 29.6% with Direct Compensation Property Damage at only 14.4% and Collision at only 10.5%.

Auto Insurance Cost and Rate Reduction Strategy

The Ontario Government initiated a cost and rate reduction strategy in the 2013 Ontario Budget. This strategy builds on the 2010 reforms and includes further measures aimed at reducing costs and fraud in the auto insurance system.

Awareness is a vital part of combating auto insurance fraud in Ontario. FSCO has information for consumers on its website on detecting and avoiding fraud in order to lower premiums, including a fraud hotline.

About the Financial Services Commission of Ontario

FSCO was established under the Financial Services Commission of Ontario Act, 1997 (FSCO Act) with a legislative mandate set out in the FSCO Act.

FSCO’s legislative mandate is to provide regulatory services that protect the public interest and enhance public confidence in the sectors it regulates.

FSCO regulates the insurance sector; pension plans; loan and trust companies; credit unions and caisses populaires; the mortgage brokering sector; co-operative corporations in Ontario; and service providers who invoice auto insurers for statutory accident benefits claims. FSCO is accountable to the Minister of Finance.

In order to support FSCO’s legislative mandate, the FSCO Act sets out a three-part structure for FSCO, which includes the Commission; the Superintendent of Financial Services and Staff; and the Financial Services Tribunal (Tribunal).