Auto Insurance Rates for the Fourth Quarter of 2016

​This notice provides an overview of the private passenger automobile insurance rate changes approved or ordered by the Financial Services Commission of Ontario (FSCO) for filings reviewed in the fourth quarter of 2016. The number of filings reviewed by FSCO and the overall average 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.


Average Rate Changes

Ten insurers representing 24.17% of the market based on premium volume had rates approved in the quarter. Approved rates decreased on average by 0.14% when applied across the total market. Rate changes approved for each insurer this quarter and effective dates of the rate changes are shown in Table 1.
This compares to an increase of 1.50% on average for the third quarter of 2016.

Individual Rates

The rate change shown for each insurance company is the average for that company, based on all the drivers it insures.
However, an individual policyholder may experience a rate change that is either higher or lower than the industry-wide average rate change, or the average rate change for a particular insurer, depending on several factors, such as:
  • the vehicle insured
  • where he or she lives
  • driving experience
  • at-fault accident and conviction history of drivers
  • whether the vehicle is used for pleasure or commuting, and
  • choices made by the policyholder on coverages purchased and deductible or liability limits.
Also, as most policyholders purchase annual policies, any changes approved for the insurer and effective prior to the policy renewal date, or changes in the policyholder’s circumstances since their last renewal (e.g., at-fault accidents, driving convictions), will impact the policyholder’s rate at renewal.
Consumers are urged to shop around for auto insurance. Ontario has a very competitive marketplace. Rates for the same coverage vary based on each insurer’s claims experience and the insurer’s rating system.

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 financial solvency.
As a result of FSCO’s review, an insurance company may be required to amend its proposed rates before they are approved.

Most premium dollars collected by insurers go towards paying for claims for people injured in car accidents. Insured persons who are injured can make a claim for Accident Benefits (AB), 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 (TPL) coverage of an automobile insurance policy. The AB and TPL coverages account for 58.1% of claims costs, as shown in Graph 1.

When an insurance company adjusts its rates for a particular coverage, it means that the company has experienced a change in the claims costs for that coverage. For example, an increase in rates for TPL 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 Ontario Government initiated a cost and rate reduction strategy in the 2013 Ontario Budget and has continued on a path of reforms aimed at reducing costs and increasing consumer protection through successive budgets in 2014 and 2015. Changes effective June 1, 2016, included reductions to the compulsory standard Accident Benefits coverage, with the continued ability for consumers to buy optional benefits. The cost and rate reduction strategy builds on the 2010 reforms and includes further measures aimed at reducing costs and fraud in the auto insurance system.

Awareness is a vital part of combatting auto insurance fraud. FSCO has a fraud hotline and information for consumers about detecting and avoiding fraud on its website.

Table 1 

Ontario Private Passenger Automobile

Insurance Rate Filings Approved/Ordered

 Filings reviewed October 1, 2016 – December 31, 2016

2015 Market Share (%)
Effective New Business Date
Effective Renewal Business Date
Approved Average Rate Change (%)
Belair Insurance Company Inc. (1)
Farm Mutual Reinsurance Plan Inc. (on behalf of Ontario Mutuals)
Nordic Insurance Company of Canada, The (1)
Northbridge Personal Insurance Corporation
Optimum Insurance Company Inc.
Primmum Insurance Company
Security National Insurance Company
TD General Insurance Company
Traders General Insurance Company (2)
Unifund Assurance Company
Total Market Impact


  1. Usage-Based Insurance Program changes only
  2. Rating rule change only

 Graph 1

 % of Claim Costs by Coverage for Accidents in 2015

2015 GISA Automobile Statistical Plan AUTO1005
Private Passenger excluding Farmers Actual Loss Ratio Exhibit


Accessible Description of Graph 1:

Accident Benefits 34.0 per cent, Third Party Liability - Bodily Injury 24.1 per cent, Direct Compensation and Property Damage 17.0 per cent, Collision 17.0 per cent, Comprehensive 5.6 per cent, Uninsured Automobile, 1.2 per cent, OPCF 44R Family Protection Coverage 1.0 per cent.

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