Report shows Ontario auto insurance profits soaring!
Drivers overpay by $5 billion over five years – Profits of $1.5 billion 2016 alone
TORONTO, May 1, 2018 /CNW/ - A report released today provides alarming new data on just how much profit exists in the auto insurance system in Ontario.
The updated report, conducted by York University Schulich School of Business Professor Dr. Fred Lazar reports that Ontario auto insurers made $1.5 billion pre-tax income in 2016, up nearly 60% over the last four years alone.
"This increase in profitability is likely the result of a widening gap between reductions in claims coverage costs and premiums. In 2011, for example, average claims per vehicle declined by 27%. Premiums, on the other hand, barely declined," according to Lazar.
Lazar also calculates that Ontario drivers continue to pay excessive auto insurance premiums in Ontario.
"I estimate that in the last five years alone, the overpayments might have totaled $5 billion," said Fred Lazar in the report. "This represents 9.5% of the total premiums paid during this same amount of time."
That works out to an additional $143 for every policy in Ontario per year, for each of the last five years!
The Ontario Trial Lawyers Association (OTLA), which commissioned the report, concludes that Ontario's auto insurance system – where accident victims are not treated fairly, premiums continue to increase, and insurers enjoy excessive profits – needs to be thoroughly debated during the election campaign and overhauled.
A copy of the updated report is available here.
"This update is just another example of how Ontario's auto insurance system is in need of a complete rethink," said Claire Wilkinson, President of OTLA. "It underscores the extent to which our system is completely dysfunctional," she added.
"Let's face it, no one looks at Ontario as a model of how to structure an insurance system."
"Instead, with respect to auto insurance, Ontario serves only as a cautionary tale – a bad example to be avoided at all costs."
OTLA is calling for greater transparency and reporting of the profits enjoyed by the automobile insurance industry. The provincial auditor should be involved to provide that level of clarity.
"By increasing transparency and reporting the government and consumers would have a better understanding of just how much profit is currently enjoyed by auto insurance companies in Ontario. These are the first steps in restoring balance to ensure justice for accident victims and fairness for drivers," said Ron Bohm, President-Elect, OTLA.
About the Ontario Trial Lawyers Association: Founded in 1991, the Ontario Trial Lawyers Association (OTLA) is an organization of more than 1,500 plaintiff lawyers, law clerks, articling students and law students. Our purpose is to promote access to justice for all Ontarians, preserve and improve the civil justice system, and advocate for the rights of those who have suffered injury and losses as the result of wrongdoing by others, while at the same time advocating strongly for safety initiatives. For more information, visit www.otla.com.
SOURCE Ontario Trial Lawyers Association
John Karapita, Director of Public Affairs, OTLA, Tel: 289-242-8577; Matt Caron, Public Affairs Specialist, OTLA, Tel: 416-805-9125
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