Reform done right: IBC President & CEO praises Nova Scotia auto insurance
Don Forgeron encourages Ontario to look at similar reforms
HALIFAX, Feb. 26, 2015 /CNW/ - Today, Don Forgeron, President & CEO, Insurance Bureau of Canada, told the Halifax Chamber of Commerce about a Nova Scotia success story – auto insurance reform.
Not that long ago, auto insurance in Nova Scotia was in crisis. Insurers were paying out more in claims than they were collecting in premiums, auto insurance was expensive and hard to get and consumers were unhappy. Fortunately, this is no longer the case.
"Today, premiums in Nova Scotia are among the lowest in the country. Auto insurance is affordable, and Nova Scotians have access to the benefits they need, when they need them," Forgeron told the Halifax audience. "Since the reforms, the average cost of auto insurance in Nova Scotia has dropped almost 27 per cent."
Fixing the auto insurance system was no easy feat. It took leadership, cooperation and hard work on the part of governments, insurers and many others. Governments of differing political backgrounds saw past their differences and supported changes that led to an auto insurance system that is now the envy of many provinces.
The Ontario government and insurers currently face problems similar to Nova Scotia's problems before reforms. Ontario's nine million drivers consistently pay the most for auto insurance in Canada. And claims costs are extremely high compared to other jurisdictions. In 2013, the average cost of an accident benefit claims payout in Nova Scotia was $8,600; in Ontario, it was $31,785.
In Ontario, one of the biggest problems driving up premiums is that there are too many players looking for a piece of what they see as the "car accident business." These players are draining much-needed resources and, in some cases, defrauding the system by staging collisions, falsifying medical claims and exaggerating auto body repair costs.
In Ontario, only 57% of payouts actually goes to the accident victim; the rest goes to cover expenses unrelated to treatment and lost income.
"We continue to work to bring down the cost of premiums for Ontario's drivers and we are doing so in the same way we did in Nova Scotia – through leadership, hard work and cooperation. This, of course, is not easy, but it can be done. The private sector can work successfully with governments of all political stripes so consumers can come out on top. Nova Scotia is proof of that," Forgeron added.
About Insurance Bureau of Canada
Insurance Bureau of Canada (IBC) is the national industry association representing Canada's private home, auto and business insurers. Its member companies make up 90% of the property and casualty (P&C) insurance market in Canada. For more than 50 years, IBC has worked with governments across the country to help make affordable home, auto and business insurance available for all Canadians. IBC supports the vision of consumers and governments trusting, valuing and supporting the private P&C insurance industry. It champions key issues and helps educate consumers on how best to protect their homes, cars, businesses and properties.
P&C insurance touches the lives of nearly every Canadian and plays a critical role in keeping businesses safe and the Canadian economy strong. It employs more than 118,000 Canadians, pays $6.7 billion in taxes and has a total premium base of $48 billion.
For media releases and more information, visit IBC's Media Centre at www.ibc.ca. Follow IBC on Twitter @InsuranceBureau or like us on Facebook. If you have a question about home, auto or business insurance, contact IBC's Consumer Information Centre at 1-844-2-ASK-IBC.
If you require more information, IBC spokespeople are available to discuss the details in this media release.
SOURCE Insurance Bureau of Canada
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