NDP Leader Andrea Horwath accuses insurance industry of jacking up auto premiums

By: Richard J. Brennan Provincial Politics, Published on Mon Sep 23 2013

NDP Leader Andrea Horwath is accusing the insurance industry of jacking up auto premiums to compensate for the 15 per cent reduction introduced in the budget earlier this year. In the legislature Monday, Horwath offered examples of motorists receiving significant increases when their situation hasn’t changed, including Hector Ferriol, 69, of Bramalea, whose annual premiums jumped to $1,700 from $1,350.

“That’s more than a 20 per cent increase. What does the premier have to say to drivers like Hector who are seeing their premiums go up rather than down?” she asked Premier Kathleen Wynne.

“The premier is helping insurance companies maintain generous guaranteed profits,” she said.

Said Wynne: “We will continue to work with the industry. It is absolutely our intention to reduce rates by 15 per cent on average. That’s the target; that’s what we will aim for.”

The government has promised to phase in the reduction over two years while bringing in other initiatives like curbing fraud, but Horwath said that, in the meantime, the insurance companies are moving quickly to fill in the gap before the axe comes down.

“When people were promised double-digit reductions and they’re seeing their double-digit increases, they feel like they’re getting played by the Liberals and insurance companies, and I don’t blame them,” Horwath told the Star later.erkel Prepares for Tight Election Race

Peter Karageorgos, a spokesperson for the Insurance Bureau of Canada, said it is “nonsense” to suggest there are widespread premium increases because of the government-mandated cut.

“For the first two quarters of 2013, the trend is slightly downward,” Karageorgos said, adding that increases people are receiving now may have been approved months ago.

“The challenge is you can claim companies are jacking up rates in the space of one sentence, but to defend that . . . takes more time than people are willing to devote,” he said.

Ferriol, a 69-year-old retired construction worker, told the Star all he knows is that he drives a 2000 Honda Accord worth about $600 and his insurance climbed by 20 per cent. He said he has had no claims and no ticket within the past four to five years, adding the last one was for going 10 kilometres over the speed limit.

“They are full of excuses; there is nothing specific,” he said, other than the fact he lives in an area of the GTA infamous for auto insurance fraud.

“That is not my problem. . . You can’t penalize everybody for one group of people,” Ferriol said.

Car insurance cuts 4 Numbers show Ontario’s auto insurers can easily afford a 15% reduction in premiums over 2 years



Is it realistic for the provincial government to require Ontario car insurers to reduce premiums for car insurance by 15% over the next two years?

Well, according to numbers released by the General Insurance Statistical Agency, the non-profit agency that tracks information on behalf of provincial insurance regulators, reductions are realistic and overdue.

According to the GISA statistics (you can read them on the tables available at www.gisa.ca/en/pubs/), Ontario car insurers paid out only 44¢ out of every dollar of premiums collected for accident benefits in 2012.

That’s their lowest payout ratio for accident benefits in the past 10 years.

The second lowest payout was in 2011, when insurers paid out 52¢ for every premium dollar collected.

This is the natural consequence of the Ontario Liberal government’s 2010 “reforms,” where most claims were shunted into a minor injuries category, with a cap of $3,500 for medical and rehabilitation benefits.

Ontario’s payout ratio for accident benefits is now lower than those of Alberta (73¢ paid out for every premium dollar received in 2011 and 2012) and the Atlantic provinces (54¢ and 57¢ paid out for every premium dollar received in 2011 and 2012).

Using dollars instead of ratios, in 2012 Ontario’s car insurers collected $3.78 billion in accident benefits premiums but paid out only $1.67 billion in claims and adjustment expenses.

That makes Ontario’s accident benefits coverage the most profitable (both dollar wise and percentage wise) for insurers in the regions of Canada that maintain 100% private insurance.

The numbers for overall insurer payments on all car insurance coverage paint the same picture for Ontario.

In 2012, Ontario car insurers paid 62¢ out of every dollar of premiums collected for all car insurance coverage.

They collected $10.4 billion in premiums but paid out $6.48 billion in claims and adjustment expenses.

That’s the lowest payout ratio in 10 years.

Their payout ratio in 2011 was 65%.

In Alberta, the payout ratios for 2011 and 2012 were 70% and 77%. In Atlantic Canada, 64% in each of 2011 and 2012.

While none of these numbers includes insurers’ overhead costs, they similarly don’t show insurers’ investment earnings on the premiums they charge, and there can be little doubt that Ontario policyholders are paying too much for car insurance.

Of course, we already knew Ontario policyholders pay the highest premiums in the country and for the majority of accident victims, those classified into the minor injury classification, we have the worst accident benefits coverage.

According to Nick Gurevich, President of the Ontario Rehab Alliance, these numbers show insurers can easily afford to cut car insurance premiums by 15% and still obtain excellent results.

He says a 15% cut in premiums, assuming it ever actually happens, would cause the accident benefits payout ratio to increase from 44% to 52% and the total payout ratio would increase from 62% to 73%.

In each case, that would provide insurers with excellent results as compared to results in the past 10 years, and the results for Alberta and Atlantic Canada.

I’m not suggesting payout ratios in Ontario leading up to 2010 were sustainable or that some reforms were not required. Clearly changes were necessary.

But we seem to have gone overboard with the 2010 reforms and even with excellent results in the past two years, the insurance lobby continues to push the fraud button hard.

Yes, there is auto insurance fraud, too much of it, but we can’t use that as an excuse to punish legitimate accident victims — and the industry is now lobbying hard to change the current definition of catastrophic impairment.

The sought after changes would serve to lower the number of victims who qualify for enhanced catastrophic impairment medical and rehabilitation benefits, which would serve to further lower the insurers’ payout ratio for accident benefits.

As the numbers illustrate, there’s no need to take any action that would serve to lower the insurers’ payout ratio for accident benefits. A premium reduction is overdue.

Canadianunderwriter.ca – Ontario NDP calls for quicker action on reducing auto insurance rates

Ontario NDP leader Andrea Horwath called for the provincial government to step up the pace of reducing auto insurance rates in Ontario.

“Drivers paying the highest auto insurance rates in the country are wondering how long they’re going to have to wait for their rates to actually come down,” Horwath said in the legislature Monday, arguing that government is “moving as slowly as possible when it comes to lowering their auto insurance rates.”

To read the entire article please click here.

Toronto Sun – Big bucks spent on Liberal leadership

TORONTO – So, what’s the price tag on the premiers’ office these days?

Try around a cool $3 million. Will that be cash or charge?

That’s the total raised by seven candidates who slugged it out for the job after former premier Dalton McGuinty called it quits almost a year ago.

Top fundraiser was Sandra Pupatello, who came in at $748,939. Next was now Premier Kathleen Wynne, who raised $707,728 for her successful campaign. She showed a slim, $8,000 surplus.

To read the entire article please click here.