Lawyers target auto insurance firms over premiums

An Alberta lawyers group is taking aim at the insurance industry ’s complaints about the NDP government’s cap on auto premium increases.

The Insurance Bureau of Canada and the Insurance Brokers Association of Alberta have said the car insurance market in the province is in “crisis” because of Finance Minister Joe Ceci’s order last year limiting cumulative auto rate hikes to five per cent.

The industry groups say the cap, along with increasing claim costs, mean insurance companies are losing money on car insurance in the province.

But Mark Feehan, president of the Alberta Civil Trial Lawyers Association, said the industry is asking Albertans to accept its claims of red ink without providing proof.

He said the province acted appropriately with its five-per-cent rate cap, which runs through the end of November, because there were indications the industry was preparing for significant rate increases for consumers in 2018.

The government is reviewing claim costs in a study to be completed by next year and is looking for full information from the insurance industry, said Feehan, a personal injury lawyer from Edmonton.

“They ought to be applauded for their careful approach,” he said.

Feehan said the insurance industry has benefited greatly from caps on small injury claims instituted over a decade ago, but has continually raised concerns to the Alberta Automobile Insurance Rate Board.

“The insurance industry constantly comes in and says ‘we’re not making enough money, the courts are giving away too much money, we’re giving away too much money, so let us charge more money,’” he said.

But Celyeste Power, Insurance Bureau of Canada’s acting vicepresident for Western Canada, said the insurance industry’s losses on auto premiums are based on data compiled by the independent firm MSA Research.

The industry says companies are already paying out between $1.01 and $1.29 on auto claims in Alberta for every dollar brought in from premiums.

“Those numbers are fairly solid. We also contract consulting actuaries, the government has consulting actuaries. So the numbers are fairly accessible,” said Power.

Power said consumers will ultimately be the ones to lose out through the rate cap if fewer companies are providing insurance in the province.