Auto Insurance Rates for the Third Quarter of 2013

This notice provides an overview of the private passenger automobile insurance rate filings that are approved by the Financial Services Commission of Ontario (FSCO) each quarter. The number of filings reviewed by FSCO and the overall rate change for the Ontario market may vary from quarter to quarter, based on updated information about claims costs, market conditions and other financial factors and the resulting impact that these factors have on the adequacy of an insurance company’s current rates.
 
Rate filings approved during the third quarter of 2013 (July 1, 2013 to September 30, 2013) declined on average by 0.68%, based on the entire market.
 
Approved rate changes for this quarter and the dates they take effect are shown in Table 1.
 

Individual Rates

 
The approved rate change shown for each insurance company is the average for that company, based on all the drivers it insures.  An individual policyholder may experience a rate change that is either higher or lower than the average, depending on several factors, such as:
 
  • the vehicle insured,
  • where he or she lives and other risk factors,
  • choices made by the policyholder on coverages purchased and deductible or liability limits.
Also, as most policyholders purchase annual policies, the rate change from the last renewal will also reflect any changes approved for the insurer in the last year.
 
Consumers are urged to shop around for auto insurance. Ontario has a very competitive marketplace. Prices for the same coverage vary based on each insurer’s claims experiences and the insurer’s rating system.
 
FSCO has several resources to help consumers better understand auto insurance, including an Understanding Rates/Interactive Tool and tips on shopping around and saving on auto insurance.
 

FSCO's Rate Approval Process

 
Insurers must submit proposed changes to their rates to FSCO for approval along with supporting actuarial data. 
 
FSCO and its actuaries review this data and insurers’ assumptions regarding claims costs, expenses and investment income to ensure that, as required by law, the proposed rates are:
 
  • just and reasonable,
  • not excessive, and
  • not going to impair a company’s long-term financial solvency.
As a result of FSCO’s review, an insurance company may be required to amend its proposed rates before the rates are approved.
 

Rate Changes by Coverage

 
Most premium dollars collected by insurers go towards paying for claims for people injured in car accidents. Persons injured can make a claim for Accident Benefits if injured, regardless of fault.
 
In some cases, seriously injured parties can also make a claim by launching a lawsuit against the at-fault driver. These claims are paid under the Third Party Liability – Bodily Injury coverage of an automobile insurance policy. These two coverages account for 66.4% of claims costs, as shown in Graph 1 included below.
 
When an insurance company adjusts its rates for any given coverage, it means that the company has experienced a change in the claims costs for that coverage. For example, an increase in rates for Third Party Liability - Bodily Injury coverage would indicate that an insurer has experienced a higher number or higher average cost of bodily injury claims. A company must provide claims costs data to FSCO when proposing a rate change for any coverage. 
 
It is important to understand the coverages available to consumers under an automobile insurance policy in Ontario. FSCO has a number of consumer-friendly descriptions of these coverages available on its website.
 

Automobile Insurance Cost and Rate Reduction Strategy

 
The 2013 Ontario Budget announced a cost and rate reduction strategy, which includes measures to reduce costs in the auto insurance system. In August 2013, the government enacted legislative and regulation changes.  The legislative amendments included measures to address recommendations outlined in the November 2012 Auto Insurance Anti-Fraud Task Force final report, such as creating a framework for FSCO licensing of health clinic business practices that provide services to auto insurance claimants.
 
FSCO continues to work with government and stakeholders to make changes that will crack down on auto insurance fraud, benefit drivers by helping to lower premiums, increase road safety and ensure people hurt in auto accidents get the treatment they need to recover.
 
Awareness is a vital part of combating auto insurance fraud in Ontario. FSCO has resources for consumers on detecting and avoiding fraud.
 

Table and Graph

 

Table 1

 
ONTARIO PRIVATE PASSENGER AUTOMOBILE
INSURANCE RATE FILINGS APPROVED
July 1, 2013 to September 30, 2013
 
 
Insurer
2012 Market Share
Effective New Business Date
Effective Renewal Business Date
Approved Rate Change
 
ACE INA Insurance (1)
0.00
1-Nov-13
1-Dec-13
-1.40
 
AIG Insurance Company of Canada (1)
0.05
1-Nov-13
29-Jan-14
-2.46
 
Allstate Insurance Company of Canada (1)
4.10
1-Nov-13
1-Dec-13
-0.97
 
Arch Insurance Company (1)
0.00
1-Nov-13
1-Dec-13
-1.38
 
Aviva Insurance Company of Canada (1)
5.67
1-Nov-13
1-Jan-14
-0.79
 
Aviva Insurance Company of Canada (2)
5.67
1-Nov-13
1-Nov-13
1.07
 
Belair Insurance Company Inc. (1)
0.08
26-Sep-13
20-Nov-13
-0.99
 
CAA Insurance Company (Ontario) (1)
1.31
1-Dec-13
1-Jan-14
-0.78
 
CAA Insurance Company (Ontario)
1.31
1-Nov-13
1-Dec-13
-7.15
 
Chubb Insurance Company of Canada (incl. Mitsui Sumitomo & Federal Insurance Companies) (1)
0.52
1-Nov-13
1-Jan-14
-2.45
 
Chubb Insurance Company of Canada (incl. Mitsui Sumitomo & Federal Insurance Companies) (2)
0.52
28-Oct-13
28-Oct-13
2.74
 
Co-operators General Insurance Company (1)
3.89
1-Dec-13
1-Dec-13
-1.06
 
Co-operators General Insurance Company
3.89
15-Oct-13
15-Oct-13
-1.78
 
COSECO Insurance Company (1)
1.08
1-Dec-13
1-Jan-14
-0.87
 
CUMIS General Insurance Company (1)
0.37
1-Dec-13
1-Jan-14
-0.95
 
Echelon General Insurance Company (1)
0.75
1-Nov-13
1-Jan-14
-0.69
 
Farm Mutual Reinsurance Plan Inc. (on behalf of Ontario Mutuals) (1)
1.83
1-Dec-13
1-Dec-13
-0.90
 
Farmers' Mutual Insurance Company (Lindsay) (1)
0.35
1-Nov-13
1-Dec-13
0.00
 
Federated Insurance Company of Canada (1)
0.03
15-Jan-14
15-Jan-14
-1.37
 
Gore Mutual Insurance Company (1)
1.56
1-Dec-13
1-Dec-13
-1.31
 
Guarantee Company of North America, The (1)
0.65
1-Nov-13
1-Dec-13
-1.05
 
Intact Insurance Company (1)
9.66
1-Nov-13
1-Dec-13
-0.99
 
Jevco Insurance Company (1)
1.34
1-Nov-13
1-Dec-13
-0.39
 
Nordic Insurance Company of Canada, The (1)
2.86
26-Sep-13
20-Nov-13
-0.76
 
North Waterloo Farmers Mutual Insurance Company (1)
0.29
15-Dec-13
15-Dec-13
-1.05
 
Novex Insurance Company (1)
0.90
1-Nov-13
1-Dec-13
-1.11
 
Optimum Insurance Company Inc. (1)
0.27
1-Nov-13
1-Dec-13
-1.10
 
Optimum Insurance Company Inc.
0.27
15-Aug-13
15-Oct-13
-3.00
 
Pafco Insurance Company (1)
0.71
1-Nov-13
1-Dec-13
-0.38
 
Pembridge Insurance Company (1)
1.05
1-Nov-13
1-Dec-13
-0.85
 
Portage La Prairie Mutual Insurance Company, The (1)
0.27
1-Nov-13
1-Dec-13
-1.13
 
Primmum Insurance Company (1)
1.95
15-Nov-13
15-Dec-13
-0.73
 
RBC General Insurance Company (1)
3.14
27-Oct-13
10-Jan-14
-0.52
 
RBC Insurance Company of Canada (1)
1.15
27-Oct-13
10-Jan-14
-0.54
 
Royal & SunAlliance Insurance Company of Canada (1)
1.32
1-Jan-14
15-Feb-14
-1.06
 
Scottish & York Insurance Co. Limited (2)
0.79
1-Nov-13
1-Nov-13
0.56
 
Scottish & York Insurance Co. Limited (1)
0.79
1-Nov-13
1-Jan-14
-0.82
 
Security National Insurance Company (1)
6.77
15-Nov-13
15-Dec-13
-1.01
 
Sovereign General Insurance Company, The (1)
0.00
1-Nov-13
1-Dec-13
-1.55
 
State Farm Mutual Automobile Insurance Company (1)
10.66
1-Nov-13
1-Nov-13
0.00
 
TD General Insurance Company (1)
1.17
15-Nov-13
15-Dec-13
-0.55
 
TD Home and Auto Insurance Company (1)
2.30
15-Nov-13
15-Dec-13
-0.85
 
Traders General Insurance Company (2)
2.12
1-Nov-13
1-Nov-13
0.48
 
Traders General Insurance Company (1)
2.12
1-Nov-13
1-Jan-14
-0.93
 
Trafalgar Insurance Company of Canada (1)
1.18
1-Nov-13
1-Dec-13
-0.74
 
Unica Insurance Inc. (1)
0.53
1-Dec-13
1-Jan-14
-0.85
 
Unifund Assurance Company (1)
4.22
1-Jan-14
1-Mar-14
-0.99
 
Waterloo Insurance Company (2)
0.72
1-Jan-14
1-Jan-14
0.72
 
Western Assurance Company (1)
1.18
1-Jan-14
15-Feb-14
-1.13
 
XL Insurance Company Limited (1)
0.00
1-Nov-13
1-Dec-13
-0.50
 
  1. Implementation of CLEAR update.
  2. Annual rate cap filing impact – These anniversary capping reports were reviewed in this quarter. The chart shows the estimated residual impact of a previously approved rate filing that introduced rate capping procedures.  The purpose of rate capping is to minimize the rate change for a particular risk over a period of time. The effective dates for anniversary filings are based on the effective dates in the original rate filing.

Graph 1

Claims Costs for a Typical Private Messenger Passenger Policy by Coverage

 
2012 GISA Automobile Statistical Plan AUTO1005 Private Passenger excluding Farmers Actual Loss Ratio Exhibit
 


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