2014 saw a sizeable rise in the loss ratio in personal accident benefits

Published: September 25, 2015

Updated: February 27, 2019

Author: Luke Jones



2014 saw a sizeable rise in the loss ratio in personal accident benefits for private auto insurance companies within Canada, although actions in Ontario are starting to move through the industry, for better or worse.

Speaking to insurance specialists in Toronto on Thursday, A.M. Best Company Inc. analyst Joel Silverthorn discussed the initiative undertaken by the liberal Ontarian government to reduce auto insurance costs. At the same time the government also promised to reduce the costs for auto insurance companies by lowering the mandatory rate for accident benefits.

Silverthorn was speaking at the A.M. Best’s 2015 Insurance Market Briefing – Canada.

Bill 15 was passed in November 2014 in Ontario, while the 2015-16 budget in the province showed that the government planned to lower the accident benefits coverage to $65,000, including attendant care. The budget also detailed plans to change the definitions for catastrophic impairment and the coverage from catastrophic injury, two points that are coming into effect in 2016.

Bill 15 made changes to the Consumer Protection Act to clamp down on tow trucks, making operators of tow trucks publish their rates, accept credit card payments and provide itemized invoices.

Those measures "had some anti-fraud as well as some other initiatives to help the expense side, because as rates were brought down, the promise from the government was, 'We will help you on the expense side,'" Silverthorn said Thursday. "That's working its way through and that's going to be something everyone is holding their breath with."

Across the industry, the loss ratios for auto accidents for personal policies in the private sector were 143.3% in 2010, 74.3% in 2011, 50.4% in 2012, 67% in 2013 and 82.3% in 2014. Loss ratios in auto liability were 69% in 2010, 82.5% in 2011, 88.6% in 2012, 77.4% in 2013 and 73.5% in 2014.

Changes are afoot in Ontario, with the benefits for both catastrophic and non-catastrophic injuries. Previously in the province victims of road accidents with catastrophic injuries were entitled to $1 million in medical and rehabilitation benefits and another $1 million in attendant care coverage. On June 1, 2016 this will change to $1 million across the board and separated for rehab and attendant care.

Non catastrophic injuries will have coverage limits reduced to $65,000 for medical car and attendant care, $21,000 less than the separate $50,000 for medical/rehab benefits and a separate limit of $36,000 for attendant care that is currently mandatory.