IBC head says auto insurance reform progress is being made but will take years
Published: July 25, 2019
Updated: August 1, 2019
Author: Luke Jones
CATEGORY: Car Insurance
Auto insurance reform is one of the hot topics in the industry, with most provinces in need of an overhaul of their auto system. However, the IBC has warned that progress towards improved vehicle insurance methods will be slow and frustrating.
Speaking to Canadian Underwriter this week, Insurance Bureau of Canada president and CEO Don Forgeron said the industry would have to wait two years for sweeping changes, and that’s if every province in Canada announced auto insurance reforms at once.
Of course, that is unlikely to happen. However, auto reform is on the agenda in Ontario and New Brunswick, with industry watchers calling for Alberta and British Columbia to implement reforms. Forgeron is optimistic but cautious, saying progress is being made with governments in Ontario and Alberta, but it’s a painstaking process.
Getting an agreement could take years, and then implementing reforms would take longer.
“Once legislative reforms are brought in, there is still a 12- to 24-month cycle before all the benefits are seen by consumers,” Forgeron said. “But we are certainly headed in the right direction. We are close.”
Canada’s auto insurance market is in bad shape, mirroring a general hard market on a global level. One problems for insurers in Canada is the country’s auto insurance systems have been broken for some time. Current insurance climates around the world have made the situation worse. The Office of the Superintendent of Financial Institutions (OSFI) reports markets it regulates had a claims ratio of 86.8% in private auto during 2019 Q1.
“The conversations we are having in Ontario and Alberta are heading to some sort of reform package,” Forgeron added. “I can’t tell you if that’s next month, or the end of the year, or even next year.”
Ontario Premier Doug Ford and his Progressive Conservative government have taken positive steps towards auto insurance reform since being elected a year ago. Among the proposals in the province’s “put drivers first” plans are to introduce a Driver Care Card, reform the medical assessments system, and to ensure driver’s have enough coverage to receive treatment.
Forgeron says the Ontario government seems serious about change and calls the proposals “the most expansive commitment made on auto in the recent budget that we’ve ever seen. We are having excellent discussions with a premier who is focused on getting costs out of the system and wanting to deliver a better consumer experience. So that’s very encouraging here.”