Majority of Albertans support capping auto insurance profits

Majority of Albertans support capping auto insurance profits – survey | Insurance Business Canada

Motor & Fleet

Majority of Albertans support capping auto insurance profits – survey

Residents weigh in on possible legislation

Motor & Fleet

By
Mika Pangilinan

Most Albertans are in favour of capping auto insurance profits, according to a new survey from advocacy coalition Fair Alberta Insurance Regulations (FAIR Alberta).

According to the poll, 69% of Albertans believe insurance profits are too high, while 75% feel that more should be done to regulate windfall profits in the auto insurance market.

Furthermore, three-quarters of respondents (75%) expressed their support for legislation that would cap profits in Alberta’s auto insurance market at 7% per premium policy.

“While it is not commonly known, auto insurance premiums in Alberta are designed to target a 7% profit for companies, but insurers have been regularly exceeding that target without consequences,” said Owen Lewis, chair of the Alberta Civil Trial Lawyers Association.

“Had a 7% premium profit cap been applied since 2020, a typical Alberta household would have saved more than $1,200, including $378 in premiums in 2020, $691 in 2021, and at least $161 in 2022.”

The auto insurance industry has experienced substantial growth in profitability, according to FAIR Alberta, with companies earning over $2.9 billion in pre-tax profit since 2020.

The group underscored how the insurance industry is lobbying for reforms that would reportedly reduce consumer protections by limiting the rights of Albertans to “access the courts and challenge insurer decisions through ‘no-fault’ insurance systems.”

“What we’ve learned from British Columbia is no-fault systems punish innocent accident victims and protect bad drivers from consequences,” said Lewis. “The same thing would happen in Alberta. It would be an industry-friendly reform that would make an already profitable industry more profitable at the expense of consumers.”

The survey was conducted by Calgary-based Janet Brown Opinion Research between April 11 and 25, 2023, prior to the Alberta election. It involved 900 respondents, aged 18 and over.

“When we look into public perceptions of auto insurance, it’s clear that Albertans believe profits are too high, and secondly that the public is open to reforms that would include more consumer protections,” said pollster Janet Brown.

What are your thoughts on this story? Feel free to comment below.