Government launches consultation on Alberta auto insurance reforms

Government launches consultation on Alberta auto insurance reforms | Insurance Business Canada

Motor & Fleet

Government launches consultation on Alberta auto insurance reforms

Insurance bureau says industry ready to collaborate

Motor & Fleet

By
Terry Gangcuangco

The government is seeking feedback from Albertans on what they value and need from their auto insurance as the province moves to transform the system into one that addresses affordability.

Treasury Board president and Minister of Finance Nate Horner said when the consultation was launched: “We have been working hard to come up with a long-term solution to the complex issue of rising costs of auto insurance.

“As we weigh our options to improve the system, we need to hear from Albertans with their thoughts and experiences. Their feedback will help us choose the right path to keep auto insurance affordable and sustainable.”

To help with the initiative, Alberta’s government has tapped independent experts from Oliver Wyman (OW) and the Nous Group. Their reports on different auto insurance models will be used to inform future engagements and policies, the government said.

Commenting on the reports and the online public engagement survey, Insurance Bureau of Canada (IBC) Pacific and Western vice president Aaron Sutherland said private auto insurers in Alberta are ready to work with the government to deliver the necessary change.

“The reports… provide further evidence of the enormous financial impact that litigation costs and legal abuse are having on the auto insurance premiums that drivers pay,” Sutherland said.

“The Nous report also drives home the devastating impacts of moving to a government-run insurance monopoly. The evidence is undeniable. It would be an economic boondoggle that would kill thousands of stable, private sector jobs.”

It was pointed out that, under a government-run insurance monopoly, taxpayers would be forced to pay billions of dollars to subsidize auto insurance premiums while losing the benefits of choice that a competitive market offers.

“Establishing a government-run monopoly would also take years and jeopardize the government’s fiscal plan in both the near and long term,” Sutherland added while expressing the industry’s readiness to assist the government.

“These significant negative consumer and economic impacts are why no North American jurisdiction has moved to a public auto insurance system in more than 50 years.”

What do you think about this story? Share your thoughts in the comments below.