By: Luke Jones, Published on May 23, 2018 03:02 PM, Last Update on May 23, 2018 12:06 PM
The Ontario Trial Lawyers Association has updated a three-year-old report suggesting that the Ontario auto insurance industry is far more profitable than the industry thinks – an assertion that insurers say is “simply false”.
The Price Regulation and Possible Premium Overpayments: Automobile Insurance Companies in Ontario report was released earlier in the month. It suggested the “cumulative premium overpayments might have been as high as $9.2 billion since 2001.”
Compiled by Schulich School of Business professor Fred Lazar on behalf of the OTLA, the report is likely to cause contention from insurance providers. Indeed, industry representatives have already claimed the reports numbers are inaccurate and based on false information.
“OTLA falsely claims insurers are making excessive profits,” Insurance Bureau of Canada (IBC) spokesperson Steve Kee said. “Let me be clear – this is not true. GISA, the Financial Services Commission of Ontario (FSCO), and the government’s independent auto insurance expert David Marshall have all reviewed insurer operations and agree that profits are not significant.”
OTLA president Claire Wilkinson says customers are being pinched by two sides, with premiums rising and benefits reducing. Wilkinson said customers “come into my office and I have to be the one that tells them, ‘You can’t get compensation for a number of things,’” Wilkinson told Canadian Underwriter.
This year, major carriers in Canada have confirmed they will increase auto insurance. Intact Insurance, Aviva Canada, Economical, and RSA Canada are among the giant insurer raising their premiums during 2018.
She was referring to several changes made to Ontario auto accident benefits, including the reduction in 2016 of catastrophic impairment. These cuts were made “presumably to bring premiums down,” Wilkinson said.