The clock is ticking on the government of Ontario to fulfil its promise to lower the amount drivers shell out for auto insurance in the province. The Automobile Insurance Rate Stabilization Act came into effect in August 2013, with the Liberals promising to reduce auto insurance rates by 15 percent in two years – by August 2015. Last week Canadian Underwriter provided on a status update on how close the Grits are to achieving their target.
According to the Financial Services Commission of Ontario (FSCO), private passenger auto insurance premiums were 0.54 percent lower in the fourth quarter of 2014. This figure only includes insurance companies with rate changes that were approved or ordered by FSCO.
FSCO recently put out its report for fourth-quarter auto insurance rate changes for 16 of Ontario’s largest insurers. These insurers, which represent nearly half (46.81 percent) of the market, had rates approved in the fourth quarter.
Insurers that offer coverage for private passenger vehicles can’t just change their insurance premiums at will. They must first seek approval from FSCO, the overseer of the insurance industry in Ontario, and include supporting actuarial data.
Those with auto insurance coverage with the Wawanesa Mutual Insurance Company will enjoy the biggest savings in premiums. Wawanesa, which represents 4 percent of the insurance industry, has promised to reduce auto premiums by 6.44 percent in the quarter.
The timeframe of when rates changes come into effect varies. While changes came into effect on October 20th of last year at Pilot Insurance Company, those with Aviva will see a rate change starting April 15, 2015, upon renewal.
Most motorists won’t enjoy the same savings as those at Wawanesa. While Intact Insurance Company had an approved rate drop of 2.83 percent, its annual rate cap filing impact was 0 percent. "The estimated residual impact of a previously approved rate filing that introduced rate capping procedures," reported FSCO.
FSCO reported the premium changes for several other big players in the insurance industry in Ontario. Three companies owned by Intact Financial Corp. will see changes: rates will decrease by 2.89 percent at Novex Insurance Company, which has a 1 percent share of the market; rates will decrease by a meagre 0.07 percent at Jevco Insurance Company, which has a 0.9 percent share of the market; while rates will increase by 0.27 percent at Trafalgar Insurance Company of Canada, which has a 1.17 percent share of the market.
Some insurers in Ontario had rates changes approved that aren’t expected to have an overall impact on the market.
Aviva Insurance Company of Canada, which has a 5.74 percent share of the market, reported rate changes with no overall impact. There were two reports filed for the Pilot Insurance Company of Canada, which is a subsidiary of Aviva. While one reported rate changes with no overall impact, the other didn’t report a figure, as it’s introducing a new rate program.