A major global credit rating agency says Alberta must come up with a “clear long-term solution” to its auto insurance woes or additional insurers will depart the province.
DBRS Morningstar says it believes other insurers may follow on the heels of Sonnet and Aviva subsidiary S&Y, both of which recently announced plans to phase out their auto insurance businesses in Alberta.
DBRS adds that even those who don’t have plans to exit the market may be implementing cost-saving measures that are reducing the accessibility and availability of auto insurance in the province.
Alberta’s auto insurers say they are struggling with claim costs that for many years have exceeded premiums collected in the province.
They say part of the problem are spiralling litigation costs in Alberta’s tort-based system, which allows collision victims who have sustained both minor and major injuries to sue the insurance company of the at-fault driver.
The Alberta government is currently reviewing auto insurance in the province with the goal of finding a “simpler, more affordable and stable insurance system.”
© 2024 The Canadian Press
Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.