NB car insurers to see higher profits

New Brunswick-based car insurance companies are set to see higher profits than other Atlantic Canadian provinces that are exposed to rate regulations. The New Brunswick Insurance Board (NBIB) recently granted NB car insurers permission to earn these higher profits. This development stems from the NBIB’s approval of company rate applications including a 14% profit margin. This figure is calculated based on return on equity. NBIB director of operations Kevin Duff explains the board felt a reasonable return on equity for auto insurance should be between 10 and 12%. However, he adds the companies successfully argued they should be able to earn more. The NBIB’s decision was made despite the fact that the companies making the argument saw their two highest earning years ever. The board made no comment regarding the spread between auto insurance premiums and claims experienced by companies operating inside the province.