GOVERNMENT REPORTING PROVES INSURANCE INDUSTRY PROFITS ARE INCREASING

EDMONTON -- According to a new official government report from the Superintendent of Insurance, Alberta auto insurance companies remained highly profitable last year despite claims by the UCP they were suffering due to the rate cap - an argument used to justify the removal of the cap. 

The recently released 2019 Superintendent of Insurance Annual Report showed that the automobile insurance industry pocketed nearly $1.15 billion more in insurance premiums than they paid out in claims — an 18 per cent increase over the $974 million reported in 2018. 

“Jason Kenney’s own government report on insurance proves his narrative about the struggling industry is pure fiction. Before the rate cap was lifted, industry margins were growing at the expense of drivers, and now they’re being allowed to price gouge regular Albertans to expand profits even further,” said NDP Service Alberta Critic Jon Carson.

While in government, the NDP introduced a five per cent cap on auto insurance premium increases. However, the rate cap was not renewed by the UCP in the fall of 2019 after Premier Jason Kenney’s former Chief of Staff, Nick Koolsbergen, lobbied the UCP on behalf of the insurance industry to remove it.

Data compiled by Lower Rates in September showed that auto insurance premiums increased by an average of twenty four percent in 2020. This increase came at a time during the COVID-19 pandemic when Albertans were driving less due to public health restrictions. 

Mariam Ahmad, a university student, now faces additional financial pressure due to increased premiums. She said, “I have no claims or tickets, and now I pay almost the value of my car annually. I am now hundreds of dollars more in debt just so I can drive to work.” 

In contrast, the provincial NDP government in British Columbia has announced it will decrease insurance rates for drivers by 15%. Similarly, Manitoba provided insurance relief of $140-160 in May and another $100 in December.

NDP Finance Critic Shannon Phillips said, “It’s clear Jason Kenney is not concerned about Albertans’ pocketbooks. While other governments are making the logical decision to provide relief during these dire times, Jason Kenney is finding ways to help an already profitable industry make more on the backs of Albertans doing everything they can to make ends meet.”

“Jason Kenney already gifted profitable corporations with a $4.7 billion giveaway. Now he’s giving the insurance industry even more because he’s more concerned with the pleas of his insider friends than the cries of Albertans who can no longer afford to drive.”

Insurance companies licensed in Alberta are legally required to file a number of documents on a consistent basis with the Superintendent of Insurance to ensure that they are in sound financial condition and are able to pay claims. These filings form the basis of the Superintendent of Insurance Annual Report and present an unbiased assessment on the financial health of the industry operating in Alberta. 

Data from the Superintendent Reports