IBAA responds to report by ICBC claiming Alberta rates highest in country
EDMONTON, AB, Dec. 13, 2022 /CNW/ – Last week, the Insurance Corporation of British Columbia (ICBC) released a report it commissioned from Ernst & Young (EY) that suggests Alberta drivers pay amongst the highest premiums in the country. Following the release of this report, the president of the Insurance Brokers Association of Alberta, Barry Haggis, issued the following statement:
“On Friday, the Insurance Corporation of British Columbia released a report suggesting Alberta drivers pay the highest auto insurance premiums in Canada. The report, commissioned by the British Columbia government auto insurance provider appears to extoll the virtues of public insurance, should be read with a healthy dose of skepticism. We have serious concerns that the methodology used paints a skewed picture of Alberta’s auto insurance market and presents misleading findings as to the prices drivers are paying.
The methodology of the report has several key shortfalls:
EY did not take the lowest quote when reporting the rates it suggests drivers are paying. Instead, they dropped the lowest quote and took the ‘average’ of the higher prices they obtained for the same level of coverage. This is not a realistic or accurate representation of consumer purchasing habits. Insurance brokers do not select the “average” of the higher prices, but rather the best price for the best insurance.
- EY declined all discounts offered in Alberta, further driving the premiums higher.
Brokers work with their customers to identify the lowest rates possible while providing complete coverage. Private insurers in open, competitive markets are usually aggressive in their pricing and typically use discounts to lower consumer premiums. E.g., bundling home and property insurance may entitle customers up to a 20% discount from many private insurers, whereas public insurers do not have to compete for business so they do not offer these discounts.
- The EY quotes were generated through an online quoting tool and did not utilize the efforts of a licensed insurance broker. Using a broker would typical yield additional and more affordable quotes.
More can, and should, be done to improve the affordability of auto insurance in Alberta, but such discussions should be based in facts, not misleading arguments put out by the proponents of public auto insurance.
SOURCE Insurance Brokers Association of Alberta
