EY Canada has issued a clarification to the report it conducted, which said B.C.’s public auto insurance company showed auto insurance rates in the province to be among the lowest in Canada. bottom.
EY is commissioned by the British Columbia Insurance Corporation (ICBC) to Canadian private car insurance rate comparison In a January 23 statement, EY Canada, with the list of limitations and assumptions listed, said: This restriction explains that auto insurance products, benefit levels, and access to benefits (including various tort to no-fault models) vary from state to state. state,
“Furthermore, the comparisons made in the data summary are not a complete representation of the tariff options available or what consumers are paying,” EY said. , but it is not the intention of this comparison that EY Canada did not draw any conclusions, including on the merits of public and private ownership models.”
EY Canada’s explanation clearly displeased BC’s public insurers. Private insurers saw this explanation as a degree of justification.
“[We are] We are disappointed with EY Canada’s recent statements on the merits of public and private insurance models,” ICBC said in a statement. canadian underwriter“Among 27 customer profiles covering a wide range of drivers, the data in the report clearly show that motor insurance costs are generally lower in British Columbia, Saskatchewan and Manitoba. All have adopted an insurance model based on public care: a private insurance model.”
ICBC also said the findings of EY Canada’s latest report are consistent with those of another EY report from 2017. ICBC Affordable and Effective Auto Insurance – A New Way in British Columbia.
“[EY’s 2017 report] ICBC has concluded that British Columbia’s care-based insurance model offers significant reductions in premiums and generous benefits for customers,” said ICBC. According to ICBC, Enhanced Care saves customers an average of $490 or 38% off full-coverage auto insurance when renewing for the first time under this model and “some of the best care and recovery benefits available in Canada.” Saved.
EY said it has contracted with ICBC to compare public motor insurance rates published across Canada for a specific set of customer profiles for the period September-October 2022. .
The report, which was also endorsed by public auto insurance companies in Manitoba and Saskatchewan, according to ICBC, looked at profiles of 30 different drivers and compared auto insurance costs in nine states. ICBC tied the introduction of a no-fault enhanced-care auto insurance model to the report’s low interest rates. An EY report found that states with publicly owned care-based models are more affordable than states with private insurance models, according to ICBC.
EY felt the need for an explanation. “This statement is intended to summarize EY’s data and clarify the limited scope described above and does not comment on the reform work undertaken by ICBC,” the company said in a statement.
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Broadly speaking, the report sometimes showed that states such as BC, Saskatchewan and Manitoba had lower rates for single or multiple operator driver profiles. So did several private auto states such as PEI, New Brunswick, Newfoundland and Labrador.
“Although the minimum cost of auto insurance in Ontario is sometimes lower than the maximum payable in a city in BC, in general across all profiles, the report states that auto insurance in BC It shows that prices are more affordable than comparable cities in some states,” ICBC said. CUs.
This report includes various limits, rating assumptions, and price comparisons by city. For example, the rating assumption included only personal use, and “every driver was assumed to get his license at the age of 16.th As we celebrate our birthday, we are moving quickly through our tiered licensing program without delay. “
Among other assumptions, all drivers were fitted with winter tires and “first entered into the policy as a driver when they turned 16 and have been covered by the same insurance company for the entire period.” There was a premise.
For all profiles, rates for the Public Automobile Scheme were provided directly by government insurance companies. Rates for other states were collected “from a broad sample of quotes obtained online.”
Private auto insurers did not share the same conclusions as ICBC based on the report’s assumptions and limitations.
The Alberta Insurance Brokers Association (IBAA) said the report suggests Alberta drivers pay the highest premiums in the country. IBAA President Barry Haggis said the report “should be read with a healthy dose of skepticism. We are seriously concerned that we are presenting misleading findings regarding pricing.”
In particular, the IBAA was concerned that the online quote was generated through a licensed insurance broker’s online quote tool. “Using a broker will usually give you additional quotes that are more affordable,” said Haggis.
The report also did not take the lowest estimate, but the higher price “average,” IBAA argued. “This is a realistic or accurate representation of consumer buying habits.” No,” said Haggis. “Insurance brokers choose the best price for the best insurance, rather than choosing the ‘average’ of higher prices. ”
Finally, the report rejected all discounts offered, further pushing up premiums, the IBAA said. For example, bundling home and property insurance allows customers to receive discounts of up to 20% from many private insurers.
The Canadian Insurance Commission (IBC) has also criticized the methodology as flawed. IBC said in his January 24th release: “This report shows a skewed picture of how much drivers are paying for auto insurance across the country, especially in Alberta.”
The IBC acknowledged EY’s explanation and noted other methodological issues (in addition to those raised by the IBAA). Among these are the significant differences in auto insurance coverage levels between BC and Alberta (i.e., in Alberta, drivers can claim additional recovery benefits), and data from the General Insurance Statistics Authority (GISA). There was a fact that it was not. GISA is the statistical agency of his nine participating insurance regulators in Canada for data on motor insurance premiums and claims.
“Auto insurance systems are complex and much more can be done to improve them for drivers,” said IBC. “But such arguments must be based on facts and not on reports containing misleading results based on such questionable methodologies.
ICBC countered: “Any suggestion that ICBC is in any way misleading about the way information is presented is untrue and baseless, especially since the report was carried out by a third party. am.”
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