Special to The Globe and Mail
The Fraser Institute’s landmark 2011 study on public-versus-private delivery of auto insurance in Canada concluded that Ontario’s private-sector insurance regimen enjoyed the questionable distinction of being the most expensive in the country – a conclusion even more damning because the report’s major takeaway was the overall superiority of the private system in other parts of Canada.
The Ontario government’s 2010 reforms to private insurance were supposed to address the system’s problems – high premiums, fraud, over-regulation, a punitive cost structure – but have they? As it stands “post-reform,” the insurance industry and many of its major stakeholders are in a state of undeclared war. And the government is caught in the middle, dodging volleys of angry rhetoric from opposing sides.
Ontario’s private auto insurance industry is a train wreck. “When we concluded our study, Ontario had the most expensive system in the country due to regulatory severity and massive fraud,” says Emrul Hasan, an economics instructor at Vancouver’s Simon Fraser University and one of the author’s of the Fraser study.
Another out-of-province expert is even more frank. “Insurance company margins have increased incredibly over the last decade,” says British Columbia-based Bruce Cran, president of the Consumers’ Association of Canada. “The companies are making a lot of money and people are getting less benefits … to be perfectly honest, I don’t know how you’re going to fix Ontario.” ~ More.
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Ed. note: The auto insurance industry is just one voracious money grasper. The travel insurance industry needs a thorough examination as well. From my own personal experience, the premium asked by RBC (Royal Bank) increased 63% in one year (2012 - 2013) for the same coverage, and with no change in my age or health status.
Why is it that governments seem afraid to touch insurance and credit card companies?
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