Auto and home insurance rates in Canada are heading in opposite directions
According to the latest Applied Systems Premium Rate Index results, the average personal premium rates for automobiles in Canada fell 2.6% in the fourth quarter of 2020 compared to the same period in 2019, but some provinces recorded an increase.
On average, premium rates at the end of 2020 and in the fourth quarter decreased in personal auto insurance compared to the previous year results, while personal property insurance rates increased , according to the last digits of the applied rating index. During the pandemic, rate cuts may reflect the fact that fewer Canadians are on the roads due to lockdown measures imposed by the government to prevent the spread of COVID-19.
But not all regions of Canada have seen a drop in auto insurance rates.
“Alberta and the Atlantic provinces saw the largest increase in year-over-year contribution rates for the fourth consecutive quarter, to 8% and 2.6, respectively,” the report said. report. “Quebec saw a modest increase of 1.6%, while Ontario saw its contribution rates decrease [by 3.2%] Year after year.”
Applied released its fourth quarter 2020 and year-end rating index results on Thursday. The index measures the increase or decrease in average premium rate trends across Canada by analyzing more than 1.3 billion completed submissions. It represents more than 80% of the brokerage market and 675 insurer rating plans written by brokers, Applied reported.
In the area of personal property, all provinces saw premiums increase an average of 3.6% in Q4 2020 compared to Q4 2019. From the third quarter of 2020 to the last quarter of 2020, rates increased by 2.8%.
Comparing personal property rates across Canada, Quebec’s year-over-year premiums posted the largest rate increase in the fourth quarter of 2020, at 13.6% (although it was is a decrease from the third quarter of 2020, when it was 15.6%). Alberta had its second consecutive quarter of year-over-year declines in personal property lines, down 1.2% in the third quarter and 1.4% in the fourth quarter. British Columbia’s rates increased 3.1% in the fourth quarter, compared to a decrease of 7.9% in the third quarter of 2020. Ontario, the provinces of Saskatchewan and Manitoba and the provinces of the Atlantic all recorded modest year-over-year increases of 3.1%, 6% and 2.1%, respectively.
“At the end of the fourth quarter of 2020, our data indicates that the market has continued to tighten as premium rates for personal property increased from 2019,” said Steve Whitelaw, vice president of industry and partner relationships with Applied Systems. “Alternatively, the personal automobile market has weakened, with premium rates declining at the end of 2020 compared to 2019.”
Featured image via iStock.com/sesame