Edmonton, Alberta — The Alberta government is currently considering auto insurance reforms and is seeking public feedback in order to implement a decision that is broadly accessible.
Notably, Alberta’s government recently asked independent experts to look at systems that could help reduce the costs of auto insurance and “improve the sustainability of the insurance industry.”
The province specifically reached out to Oliver Wyman, an American-based management consulting firm, and Nous Group, and international management consultancy, which focused its work on comparing average premiums under different existing auto insurance systems, largely across Canada. Here, the group examined the broader costs and benefits of these different auto insurance models.
The report concludes that a Manitoba-style public auto insurance model would lead to more significant premium savings than a private model reform.
“Oliver Wyman’s calculations predict the lowest required premiums occur in a change from the current court model to a care model where the government created a public insurer that offered both bodily injury and vehicle damage coverage. The required average premium would be around $1,250, rather than an anticipated average premium of $2,015 if no changes are implemented and the current system is maintained.”
Comparatively, the report further notes that “the next largest anticipated savings are found in a system that is similar to the insurance system in Quebec, where bodily injury coverage under a care model is provided by a public insurer, but vehicle damage coverage is provided by private insurance companies.”
Moreover, Nate Horner, President of Treasury Board and Minister of Finance further commented that “we have been working hard to come up with a long-term solution to the complex issue of rising costs of auto insurance. As we weigh our options to improve the system, we need to hear from Albertans with their thoughts and experiences. Their feedback will help us choose the right path to keep auto insurance affordable and sustainable.”
To read the full report or to provide feedback, click here.
