Canadian home and auto insurance premium rates have witnessed a significant uptick year over year, according to the 2024 Q1 results showcased in the Applied Rating Index.
Steve Whitelaw, the senior vice president and general manager at Applied Systems Canada, emphasized the role of market trends in these escalations. “Premium renewal rates for both personal auto and personal property have surged into double digits year over year,” he remarked. Whitelaw also mentioned that the data within the Index assists brokers and insurers in making informed decisions about renewals and pricing.
The Applied Rating Index, which analyzes completed quotes, has indicated a trend towards increasing average premium rates across Canada, signaling a hardening market in personal lines for auto and property insurance.
Notably, personal auto premium rates have risen 13.3% in the first quarter of 2024 compared to the same period in 2023. Increases were recorded across all provinces:
– Atlantic provinces saw a 14.5% rise
– Ontario experienced a 12.1% increase
– Quebec had a 9.7% hike
– Alberta reported a 7% growth
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Interestingly, when compared to the final quarter of 2023, auto premium rates in early 2024 saw a modest overall increase of 0.5%, though several provinces experienced slight decreases. Provincial contrasts from the last quarter show Alberta down by 1.3%, Quebec by 2.3%, Atlantic provinces by 1.4%, while Ontario saw an increase of 1.2%.
Factors like auto theft, the soaring costs of car repairs including labour, advanced technology replacements, and disruptions in the supply chain have led to these rising costs for auto insurers.
In related developments, Canadian home insurance premium rates also increased by 10.9% year-over-year in the 2024 Q1. Here’s how the rates increased across various provinces:
– B.C.: 18.3%
– Ontario: 12.7%
– Alberta: 10.5%
– Prairie provinces (Manitoba and Saskatchewan): 12%
– Atlantic provinces: 9.2%
– Quebec: 3.7%
Except for Quebec, which saw a 2.1% decrease from the previous quarter, all Canadian provinces reported increases in their home insurance rates in the first quarter of 2024. B.C. recorded the sharpest rise with a 10.7% quarterly rate increase.
These rate hikes are consistent with the rising costs of claims following a particularly catastrophic season last year, one of the worst in Canadian history. Insurers disbursed $3.1 billion in catastrophe claims in 2023, predominantly due to the severe wildfire season. Estimates from CatIQ put the cost of the B.C. wildfires alone at approximately $720 million.
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[Source: Applied Systems Canada’s Applied Rating Index, Morningstar DBRS, and CatIQ]
Words by: Craig Clowes
Credits
www.canadianunderwriter.ca
