A pledge by the liberal government in Ontario to cut auto insurance rates by 2015 fell well short. The 2013 promise has been largely criticized, but it did manage to drive auto insurance premiums in the province down by nearly 7 per cent. The Insurance Bureau of Canada (IBC) has now said that it expects auto insurance rates to continue to fall through 2016 and into next year.
The IBC was giving a presentation P&C Crystal Ball Conference in Toronto on Thursday when Barbara Taylor, the bureau’s director of policy for Ontario, said "Several insurers have already hit the government's targeted 15% reduction."
The original promise was made when the liberal government headed by Ontario Premier, Kathleen Wynne, directed the Financial Services Commission of Ontario (FSCO) to reduce the auto insurance average by 15 per cent. In return, the opposition NDP voted to push through the 2013 budget and the whole pledge has been described as vote buying.
The government missed its pledge and the average auto insurance policy in Ontario still costs over $1,500 and is comfortably the most expensive in Canada.
"We expect to see more reductions in the next quarter" as insurers prepare for the "next set of reforms" in the auto insurance industry that take effect June 1, Taylor suggested Thursday at the P&C Crystal Ball, organized by CW Group and held at the International Plaza Hotel.
The province is introducing new reforms this year, such as a reduction for non-catastrophic injury payouts, while the definition of catastrophic impairment will also be changed. The government is also reforming tow truck practices to cut costs of an industry the finance minister, Charles Sousa, has been critical of during 2015.
"The transfer of disputes from FSCO to the License Appeal Tribunal will ultimately be good for consumer but it's a huge undertaking, and we expect that there will be many bumps along the road," Taylor said. "It's important that the tribunal manage these additional costs and complexities for consumers. We understand that the tribunal will be offering training sessions that will be held in March, so hopefully that will help our industry. It is important that the companies are kept adequately informed of this whole process."