Atlantic Canada bucking trends as auto insurance prices fall for second consecutive quarter
Published: July 18, 2018
Collision and claims frequencies are increasing, while the cost of repairs are also on the rise. Insurance companies across Canada are raising premium rates to cope with unfavourable conditions, but there are some markets where the cost of car insurance is falling. In Atlantic Canada, the average premium to personal auto has decreased for the second consecutive quarter.
Clearly while some markets struggle, others are coping. For example, this month Saskatchewan Government Insurance (SGI) confirmed it will seek a rate decrease.
Applied Systems released its 2018 Q2 index last week and showed personal auto insurance increased in almost all provinces during the last year. However, the Atlantic provinces say a decline in premium cost, down 5.4% for the second quarter of 2018 compared to the same frame in 2017.
The decrease is the second consecutive quarter following a 2.5% year-on-year fall during 2018 Q1. Speaking to Canadian Underwriter, Amanda Dean, vice president of Atlantic for the Insurance Bureau of Canada (IBC) said numerous factors explain the decrease in Atlantic Canada:
“Atlantic Canada certainly, with the exception of Newfoundland and Labrador, is very competitive on personal lines products.”
Dean says this is good news, but warns it will probably not last. For example, in Nova Scotia and New Brunswick market data shows the markets are coming under claims pressure like seen in other provinces where rate increases have been observed.
“Once claims pressures build enough, there does need to be some pressure relief,” Dean added.
“The cost of filing for increases is quite expensive as well, so we may also be seeing a negative impact of the current rate regulation regime,” she said. “We might see some companies holding off until they get – or they need – enough of an increase to cover the cost of rate filings.”