Insurance profits keep climbing while drivers wait for relief: NDP

This article was last updated on April 16, 2022

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New Democrat Consumer Affairs Critic Jagmeet Singh says auto insurers are enjoying $1.6  billion in annual profits while drivers wait longer and longer for relief from the highest auto insurance rates in Canada. 

“Eight months after the Budget promised a 15 percent reduction in auto insurance, some drivers are still seeing hikes despite healthy industry profits. I know it’s January, but I think I’ve seen molasses move faster,” said Singh. “Drivers are frustrated. Experts have testified that the industry enjoyed a $1.6 billion  after-tax  profit in 2012 alone, but drivers are still waiting for relief, and some have seen steep hikes.”

Singh noted that actuarial experts who appeared at hearings on auto insurance concluded that the average premium for drivers  was $1,544.25 , but the average benefit claim was $958.87. That means for every dollar insurers take in in premiums, only 62 cents is being paid out in benefits for accident victims. 

The Liberal government brought in sweeping changes in benefits to aid the industry in 2010 resulting in a $2 billion cut in benefit payouts  in just one year. And while those savings did save auto insurers money, few companies have passed on the savings to drivers. Overall, rates have decreased by less than 1 per cent since that time. 

Meanwhile, drivers across Ontario have yet to see any meaningful savings and some drivers are seeing significant premium hikes.  

“Drivers are tired of waiting. The Liberals cut accident benefits and handed billions to auto insurers, now it’s time to see rates come down for drivers,” said Singh.