Alberta Mirror

Sunday, February 5, 2023

Alberta car insurance industry followed more in premiums, less in claims 

Alberta

Key takeaways: 

  • The government earlier submitted legislation to fight increasing rates.
  • The Alberta vehicle insurance industry gathered $1.32 billion more in premiums than it spent out in claims for 2020. 

According to a yearly report, Alberta’s auto insurance firms collected more premiums and paid out less in claims in 2020 than in 2019.

The Superintendent of Insurance 2020 Annual Report, published online Thursday, offers the claim ratio — the payment made in claims compared to premiums got in — decreased by two percent compared to 2019.

However, the industry noticed around $400 million more in premiums in 2020.

“They’re cheating Alberta drivers with the use of the [United Conservative Party],” Kathleen Ganley, energy critic for the Opposition NDP, spoke at a press conference Friday.

“Many Albertans parked their cars and hardly drove in 2020.”

The claiming percentage was 77 percent in 2020, down from 79 percent in 2019. In 2018, the ratio was 80 percent.

Read more: Canadian troops depart to assist the humanitarian situation in Europe

Alberta’s auto insurance firms collected more premiums and paid out less in claims in 2020 than in 2019

Auto insurance firms registered $5.8 billion in premiums in 2020. Direct claims were $4.5 billion, likened to $4.3 billion in 2019.

For 2019, the car insurance enterprise managed $1.15 billion more in premiums than it spent on claims. In 2020, that numeral increased to $1.32 billion.

On Friday, the NDP said the difference was produced by the UCP government’s decision in 2019 to allow an auto insurance rate cap, which the last government set, to expire.

2021 premium reductions

The UCP government stated in 2019 that the end of the rate cap was to provide the sustainability of the auto insurance industry.

Premiums saw a steep climb following the expiry: financial technology company LowerRates.ca calculated a 19.2 percent rise in 2020 overall.

The company kept a downward trend in early 2021, citing the effect of COVID-19 and a demonstrated readiness by firms to insure new clients.

Source – cbc.ca

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