Sonnet reveals decision to exit Alberta auto insurance
Sonnet reveals decision to exit Alberta auto insurance | Insurance Business Canada
Motor & Fleet
Sonnet reveals decision to exit Alberta auto insurance
Growth opportunities described as “limited”
Motor & Fleet
By
Terry Gangcuangco
Sonnet Insurance Company has announced its decision to ultimately exit the auto insurance market in Alberta.
After a detailed evaluation of its operations in the province, Sonnet submitted a notice of intention to withdraw from the auto insurance market to the Alberta Superintendent of Insurance, with a planned exit date of December 13, 2024.
“Limited opportunities for Sonnet to grow profitably in the current auto insurance operating environment in Alberta were a key consideration in making this decision,” stated the company, which conducted a “thorough review” of its prospects in the region.
Sonnet has assured its auto insurance policyholders in Alberta that they will not see an immediate effect from the company’s decision.
Post-withdrawal, Sonnet will stop issuing new and renewal auto insurance policies in the province. The Definity-owned brand has pledged to inform all impacted customers in Alberta promptly, ensuring they have the necessary information regarding the change.
Importantly, Sonnet’s home insurance offerings in Alberta will remain unaffected by the decision.
“Sonnet remains committed to serving Albertans by offering home insurance and also making available pet insurance underwritten by its affiliate Petline Insurance Company,” declared Paul MacDonald, executive vice president for personal insurance and digital channels.
“Sonnet will continue to focus its efforts to profitably grow its auto insurance business in other regions in Canada.”
The announced departure comes amid calls for urgent reform in the province.
Earlier this month, Insurance Bureau of Canada Western and Pacific vice president Aaron Sutherland noted: “Claims costs now exceed the amount of money insurers are collecting in premiums because of the auto insurance rate cap in Alberta.
“As a result, insurers are being forced to scale back their offerings to remain viable, and this is making it more difficult for many drivers to secure the coverage they need. Reform is needed urgently, and as the government considers various solutions to reduce premiums for drivers, it’s critical that it addresses these cost pressures.”
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