By: Luke Jones, Published on June 9, 2017 03:19 PM, Last Update on June 9, 2017 12:20 PM
Auto insurance in Ontario is a consistent bug bear for people in the province, with customers paying excessively high premiums to insure their vehicles. Neil Weir, vice president of claims at Gore Mutual, says brokers also face challenges, citing once specifically.
“If you read the Marshall report that was recently released by the Ministry of Finance, it does suggest that a reduction of 40% from where premiums currently are, for Ontario drivers, is actually feasible and without a tremendous amount of change to the actual auto product,” Weir said, in regarding Ontarians paying 40% above the Canadian average for auto coverage.
Marshall became the advisor or auto insurance and pensions in February 2016. provide advice and recommendations to governing and regulatory bodies in an effort to reduce auto insurance costs in Ontario, while the role also involves him overseeing the roll out of the Ontario Retirement Pension Plan (ORPP). He worked as a direct advisor to Ontario finance minister Charles Sousa.
“What does that mean for us? It means 40% less gross written premiums for primary insurers and potentially it means 40% less commission income for brokers out there. To me that really suggests we, as insurers, and yourselves as brokers, need to look to other products, other risks.”
Weir was speaking at the Gore Mutual Fast Forward conference when he made his remarks. Despite numerous reforms to reduce rates, Ontario remains among the most expensive insurance markets in the world.
Weir believes reforms have been unsuccessful and the product may end up changing.
“The Marshall report was speaking to procedural changes with the idea of removing third party participants, assessment centres and independent medical examinations. Limit the certain amount of compensation the lawyers will take out of the system,” Weir said.
“But 40% is a massive reduction in automobile costs when you really aren’t touching any of the physical damage costs which are trending 4-6% increases every year.”
“If you really want to aim for such a significant reduction, you really do have to look at the benefits,” he explained. “Because it’s not a matter of apples and apples when you compare the Ontario product and system. We’ve got a very litigious tort system combined with a very rich asset management system and I don’t think there’s another province that combines both.”