as many as 16,000 albertans to be out auto insurance after company pulls out
alberta finance minister nate horner told postmedia the insurance rate freeze is keeping rates down for now but isn't a long-term solution
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cars move along macleod trail with the calgary skyline in the background on monday, december 12, 2022.
azin ghaffari
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postmedia
one insurance company has informed alberta it is withdrawing from selling auto insurance in the province, citing a provincial rate freeze set to last through the end of 2023. officials with alberta’s finance ministry confirmed the company, which has a market share of less than 0.5 per cent of alberta’s auto insurance policies, had provided the superintendent of insurance with notice it was withdrawing from the province effective november 2023. the ministry said the company can’t be named due to insurer confidentiality rules.
the withdrawal is set to affect as many as 16,000 of alberta’s 3.32 million licensed drivers, who will need to obtain new policies.
the government said it’s a “partial” withdrawal, meaning the company intends to “significantly reduce” its auto insurance business in alberta.
in its notice, the company said its withdrawal was the result of the rate pause; the ucp government in january put a freeze on insurance rates for private passenger vehicles through the end of the year as part of its raft of measures to combat affordability concerns.
alberta finance minister nate horner told postmedia that freeze is keeping rates down for now but isn’t a long-term solution for insurance companies.
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“we know the pause is doing, what caps and pauses do. it’s preventing an uptick in rates,” horner said.
“but i would say that it’s something that we can’t leave on forever. it was meant to be a short-term affordability measure, right at the peak of the affordability crisis.”
nate horner, president of treasury board and minister of finance.
gavin young
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postmedia
‘unfortunate development’: executive concerned about withdrawal
the withdrawal is a negative for both albertans and insurance companies, said aaron sutherland, a vice-president with the insurance bureau of canada, the industry’s national association.
“this is a real unfortunate development for drivers in alberta,” sutherland said.
“the insurance industry certainly isn’t immune to the inflationary impacts that we’re seeing right across the economy. we’ve seen double-digit increases to the costs of repairing and replacing vehicles after collisions. legal costs in the system continue to surge. those underlying pressures are creating real challenges, with insurers unable to account for them in their rate.”
it’s possible other insurers will also opt to withdraw from offering vehicle coverage in alberta, sutherland said, voicing concern this could turn into a trend moving forward.
he argued the alberta auto insurance market having fewer options for drivers will ultimately lead to increased prices for consumers.
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“we’re certainly hearing from consumers that there’s challenges there,” he said. “we think the best way we can (improve affordability) is to give drivers more choice in what it is that they’re buying.”
— with files from lisa johnson
twitter: @jasonfherring
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