Insurance Bureau of Canada statement: Alberta government's decision to freeze auto insurance rates
EDMONTON, AB, Jan. 26, 2023 /CNW/ - Today's announcement of the government's decision to freeze insurance rate filings for private passenger vehicles is disappointing for insurers and, most importantly, for consumers. A rate freeze does nothing to improve the affordability of auto insurance in the near term and only pushes today's challenges down the road.
Rate caps have resulted in significant negative consequences for consumers when undertaken previously in Alberta and elsewhere. During Alberta's last provincial rate cap from 2017 to 2019, consumers faced challenges securing the coverage they needed, as insurers were forced to take action to remain viable and continue paying customers' claims. Premiums still increased 12% when the rate cap was in place.
In California, drivers are also living through the pitfalls of their government's decision to freeze rates two years ago. There, individuals, families and businesses have faced challenges obtaining the insurance they need because insurers have been forced to limit the sale of new policies to remain viable. Some insurers have even been forced to close, reducing choice and competition for consumers.
Alberta's auto insurers are keen to work with the government and all stakeholders to bring better, more affordable auto insurance options to Alberta's 2.8 million drivers. To that end, IBC and its members have proposed options that would result in an average of $325 in premium savings for drivers. While premiums remain stable today, the government must undertake urgent reforms needed to truly address the costs that are putting pressure on the auto insurance system and on the premiums of Alberta drivers.
The role of insurers in Alberta's economy
- The property and casualty (P&C) insurance industry directly contributes $1.2 billion to Alberta's real GDP and provides over $500 million in provincial taxes annually.
- Approximately 23,000 people work directly in Alberta's P&C insurance industry. For every 100 jobs created in the P&C insurance industry, 42 are gained in other industries in Alberta. The total economic footprint associated with the P&C insurance industry supports 37,775 jobs in Alberta.
- Alberta's P&C insurers provided $460 million in premium relief and deferrals to help customers during the pandemic. For auto insurance, that works out to an average of $151 per eligible policyholder.
Insurance Bureau of Canada is the national industry association representing Canada's private home, auto and business insurers. Its member companies make up the vast majority of the property and casualty (P&C) insurance market in Canada. For more than 50 years, IBC has worked with governments across the country to help make affordable home, auto and business insurance available for all Canadians. IBC supports the vision of consumers and governments trusting, valuing and supporting the private P&C insurance industry. It champions key issues and helps educate consumers on how best to protect their homes, cars, businesses and properties.
For media releases and more information, visit IBC's Media Centre at www.ibc.ca. Follow us on Twitter @InsuranceBureau and like us on Facebook. If you have a question about home, auto or business insurance, contact IBC's Consumer Information Centre at 1-844-2ask-IBC.
SOURCE Insurance Bureau of Canada
Media Contact: Brett Weltman, Manager, Media Relations, IBC, [email protected]
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