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Aviva Canada confirms 5% increase in auto and home insurance premiums

By: , Published on , Last Update on March 9, 2018 10:19 AM


Aviva Canada has already hinted it will increase auto insurance premiums this year. After releasing its 2017 end-of-year results, the company has confirmed the premium bump for auto and will also increase home insurance premiums, both from 5%.

During 2017, the company reported a combined operating ratio of 102% with a net written premium hike of 15%. Operating profit declined to $78 million in 2017 from $582 million in 2016.

“These are disappointing results, below what is acceptable for a business of this size and potential,” Aviva Canada’s chief financial officer, Colin Simpson, said in a statement. “Our performance reflects auto insurance claims increases in both frequency and severity, catastrophe weather events, and the impact of large losses in commercial insurance.

“Difficult market trends also developed during the year, primarily with regard to personal auto in regulated markets where our pricing did not keep up with claims inflation.”

Speaking to Canadian Underwriter, Jason Storah, Aviva Canada’s executive vice president of broker distribution, told Canadian Underwriter inflation in claims of 3.3% in 2018 means premiums will have to increase.

“So, over the last year or so, we haven’t kept up with that in terms of the rate that we have in the overall book,” he said. “We’ve certainly spent a great deal of time looking at where we can increase our rates, where it is appropriate, and we’ve got about 5% increases going through at the moment. That would be a blended average.”

It “varies by region and line of business, but in terms of a headline number, 5% is what we’ve put though our book so far,” Storah said. “We will be looking at where we need to get more rate as well in the future.”

Aviva Canada has previously cited the cost of repairing cars and distracted driving as the reasons why auto insurance premiums will rise. Intact Canada and RSA Canada have both confirmed they will also increase premiums this year.

Aviva Canada has already hinted it will increase auto insurance premiums this year. After releasing its 2017 end-of-year results, the company has confirmed the premium bump for auto and will also increase home insurance premiums, both from 5%.

During 2017, the company reported a combined operating ratio of 102% with a net written premium hike of 15%. Operating profit declined to $78 million in 2017 from $582 million in 2016.

“These are disappointing results, below what is acceptable for a business of this size and potential,” Aviva Canada’s chief financial officer, Colin Simpson, said in a statement. “Our performance reflects auto insurance claims increases in both frequency and severity, catastrophe weather events, and the impact of large losses in commercial insurance.

“Difficult market trends also developed during the year, primarily with regard to personal auto in regulated markets where our pricing did not keep up with claims inflation.”

Speaking to Canadian Underwriter, Jason Storah, Aviva Canada’s executive vice president of broker distribution, told Canadian Underwriter inflation in claims of 3.3% in 2018 means premiums will have to increase.

“So, over the last year or so, we haven’t kept up with that in terms of the rate that we have in the overall book,” he said. “We’ve certainly spent a great deal of time looking at where we can increase our rates, where it is appropriate, and we’ve got about 5% increases going through at the moment. That would be a blended average.”

It “varies by region and line of business, but in terms of a headline number, 5% is what we’ve put though our book so far,” Storah said. “We will be looking at where we need to get more rate as well in the future.”

Aviva Canada has previously cited the cost of repairing cars and distracted driving as the reasons why auto insurance premiums will rise. Intact Canada and RSA Canada have both confirmed they will also increase premiums this year.

Category: News    Tags: News, canada, insurance, news

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