Curtailing gouging in auto insurance
Re End this dispute, Editorial April 13
It really took two university professors to alert us that auto insurance companies are ripping us off? Almost everyone in Ontario knows that, with the full collusion of the government and its ministers, drivers are required to have insurance, but insurance payouts are severely capped. We pay lots, they pay little.
There is no such thing as “pain and suffering.” I know. My wife was seriously injured in a collision that was 100 per cent the other driver’s fault. She spent six painful months recovering and received little more than the book value of her car and most medical expenses. Does this sound familiar to anyone?
When individuals steal, they go to jail. When governments steal, their members get amazing pensions. Edward A. Collis, Burlington Your editorial is based solely on a self-funded study by personal injury lawyers, stakeholders worried their large future billings may be derailed by reforms to Ontario’s car insurance system.
Its conclusions are based on cherry-picked assumptions. For instance, the authors reach misleading conclusions about profits by excluding one-third of the industry — those with a negative return on equity (ROE). If, in fact, you include the performance of all insurers in the province, the return for the industry was not 9.7 per cent from 2001-11, 14.9 per cent in 2012 and 17.5 per cent in 2013 as they suggest but 1.1 per cent for 2001-11, 4.2 per cent in 2012 and 2.4 per cent in 2013.
An independent regulatory organization — the General Insurance Statistical Agency — reported on insurer profitability in 2013 and found that the ROE for the entire auto insurance industry in Ontario was 7.4 per cent, much lower than the study’s two authors suggest. It’s a bit like saying the Maple Leafs had a good season if you only count their wins and disregard the losses.
The insurance industry supports the province’s recently launched panel to review the Financial Services Commission of Ontario’s vision and mandate. Ralph Palumbo, vice-president, Ontario, Insurance Bureau of Canada