The Insurance Bureau of Canada (IBC) announced that a review of its database on 119.2 million automobile insurance policies sold throughout Canada in the past 17 years, confirms that in every province the growth in claims costs has outpaced premium growth for several years, particularly injury claims.
As a result, Canada is experiencing recent growth in premiums.
“As the official statistical agency, IBC has access to the most comprehensive pool of insurance data available,” stated Chief Economist Paul Kovacs. “We reviewed data for each of the last 17 years. Information available in this study is based on the largest sampling of data available.” The study revealed that from 1996 until 2000, auto insurance prices were stable. In contrast, average premiums grew 9% in 2001, 15% in 2002 and currently, premiums are 20% higher than they were last year. “There was a lag, but the higher cost of claims has finally led to higher prices,” Kovacs stated.
The analysis shows average premium increases of 19.8% from March 2002 to March 2003 in the six provinces in which private insurers operate. It gave the following figures:
Province Percentage Change
Nova Scotia 23.4%
New Brunswick 27.5%
Weighted Average = 19.8%
“Drivers will have heard many figures bandied about during the past months in many regions,” Kovacs indicated. “IBC is working to provide a clear picture from a complete set of facts.”
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