Sept. 11, 2023 —ALBERTA’s brokers have warned that the pending withdrawal of an unnamed carrier from the province’s auto insurance market could cause a domino effect within the industry if meaningful system reforms are not enacted soon.

In July, officials from the province’s finance ministry confirmed that an insurer holding roughly a 0.5% market share had issued a notification that it intends to exit the sector in November.

More than 15,000 drivers will be affected.

“In recent years, the IBAA repeatedly warned government officials that rate pauses like the one enacted this past January may result in the withdrawal of insurance carriers from the Alberta market,” the Insurance Brokers Association of Alberta said in a release. “The ongoing concern is that the withdrawal of one carrier puts additional pressure on the remaining insurers to pick up the slack to ensure the drivers that are being cancelled have adequate coverage.”

Aaron Sutherland, VP of western and Pacific regions for the Insurance Bureau of Canada, noted in an opinion piece in the Calgary Herald this summer that there are now fewer insurers operating in the Alberta auto market than in the Maritime provinces, despite Alberta having more than twice the population.

The IBAA said one way to provide immediate relief for rising insurance costs without the need for a rate pause would be for the government to suspend the provincial tax on personal auto premiums.

“This would result in immediate premium reduction for all Alberta drivers while long-term solutions are implemented,” the IBAA said.

The brokers also support regulatory changes that would allow drivers to have more choice in how they purchase insurance, with options to choose a limited right to sue for minor injuries while still maintaining the right to sue for major injuries.

“We also feel strongly that premiums charged should be based on the risk and that good drivers should not need to subsidize bad drivers,” the association said. “Along with this change, IBAA would like an immediate increase in pre-approved treatment provisions for injured motorists, with a ‘care not cash approach’ to minor injuries.”

The IBAA said a complete no-fault system would not be beneficial for Albertans and that the province should refrain from implementing one.

“However, there is an urgent need for meaningful change to the current system. We hope to continue to work to enact sustainable changes to our auto insurance system that will see long-lasting benefits to consumers.”

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