Auto insurers hold off on seeking large increases

Some of the largest auto Insurance companies operating in New Brunswick have decided not to pull the trigger on large rate increases next year, sparing provincial motorists what could have been hikes as high as 35 per cent on their 2017 policies.

While some firms say they can justify hikes of 30% or more, most are keeping increases to 3% or less

Most automobile insurers in New Brunswick will be looking to increase rates by three per cent or less next year, despite coming off their worst financial year since 2001. (David Zalubowski/Associated Press)

Some of the largest auto Insurance companies operating in New Brunswick have decided not to pull the trigger on large rate increases next year, sparing provincial motorists what could have been hikes as high as 35 per cent on their 2017 policies.

"I think its fair to say we were surprised," said Kevin Duff, the executive director of the New Brunswick Insurance Board, which regulates auto insurance rates in the province.

"There are some significant variances between what the company actuaries say the companies require and what the companies are asking the board to approve."

New filings with the insurance board show drivers in the province dodged increases of up to $247 per vehicle on next year's insurance as most companies decided against acting on recent poor results and opting for modest rate hikes instead.

Figures show most drivers will pay three per cent more next year or less, about $20 per vehicle.

Wawanesa is the largest auto insurer in New Brunswick, covering 97,000 vehicles and nearly 21 per cent of the province's drivers. It submitted documentation with its 2017 rate application showing recent results so poor in New Brunswick it was entitled to a 35.27 per cent rate increase.

But the company applied for only a 2.83 per cent increase instead. The decision potentially saves Wawanesa customers $190 per insured vehicle next year.

Wawanesa did not respond to a request for information on why it decided against a larger rate hike, but its conduct was not unusual.

Worst year since 2001

According to recently released information Canada's General Insurance Statistical Agency (GISA), auto insurers had their worst financial year in New Brunswick since 2001 last year. Insurance claims reached $304.8 million, a $70-million increase in three years, just as premiums hit a 15-year low.

Three TD Insurance companies, Primmum, TD and Security National, which cover over 30,000 New Brunswick vehicles all submitted justifications for 31 per cent increases but applied for less.

A 31 per cent increase of Security national's rates, if applied for and approved, would have cost its customers an extra $247 per car.

Intact, New Brunswick's second largest insurer, said it was entitled to a 14.29 per cent increase given recent results in the province, but applied for 2.99 per cent

In its rate application last year Intact said it was concerned about driving customers away, or "policy dislocation" if its rates increased too rapidly.

3% advantage

There is an advantage in New Brunswick to keep increases below three per cent — it avoids a mandatory rate hearing.

But Duff said the insurance board can schedule a hearing for a company seeking an increase below three per cent if it sees fit.

"I think it's fair to say the board will be asking for some explanations from the companies about why they've decided to hold the line this year," said Duff.

Not all companies kept their increases below three per cent, however. 

The Personal, which insures over 14,000 vehicles in New Brunswick, applied for a 12 per cent increase.

About the Author

Robert Jones

Reporter

Robert Jones has been a reporter and producer with CBC New Brunswick since 1990. His investigative reports on petroleum pricing in New Brunswick won several regional and national awards and led to the adoption of price regulation in 2006.