UPDATE: Report on Ontario auto insurance premiums criticized
A new report for the Ontario Trial Lawyers Association alleges that Ontario drivers continue to pay excessive auto insurance premiums in Ontario while insurers rack up billion-dollar profits.
York University Schulich School of Business Professor Dr. Fred Lazar looked at the 10 ten insurance companies in the province. He found they had higher profitability in Ontario compared to their Canada-wide businesses in each of the last three years.
“In essence, if they weren’t in the auto insurance market in Ontario, they would have been marginally profitable in the rest of their business in the country,” said Lazar.
However, The Insurance Bureau of Canada is criticizing the report’s accuracy based on past work by Lazar. The Newfoundland and Labrador provincial insurance regulator said previous work by Lazar was not an accurate reflection of the actual profit levels of the industry.
The IBC also said previous reports by Lazar were reviewed by certified actuaries and found to contain fundamental flaws in presenting revenues and return on equity (ROE) earned by all Ontario insurance companies that write automobile insurance policies in the province
The Ontario Trial Lawyers Association President Allen Wynperle said auto insurance premiums in the province of Ontario are helping subsidize the rest of the insurance industry around the country.
Wynperle said it is just not fair to Ontario drivers.
“We’re paying more and getting less. It simply doesn’t add up. And Dr. Lazar has now shed some light on this issue,” Wynperle added.
“Under the previous Ontario government, benefits were cut 17 times. It was supposed to reduce premiums, but premiums have not gone down,” said Wynperle. “And now, the regulator has approved the ninth consecutive increase totalling 20 per cent over the last three years. It just doesn’t make sense.”
OTLA is calling for greater transparency and clear reporting of the profits enjoyed by the automobile insurance industry.