Canadian auto and property insurance rates headed in opposite directions

Average personal auto premium rates in Canada decreased 2.6% in 2020 Q4 compared to the same period in 2019, but some provinces did see an increase, according to the latest results from Applied Systems’ premium rate index.

On average, both the 2020 year-end and fourth-quarter premium rates decreased in personal auto lines versus the previous year’s results, while personal property insurance rates increased, according to the latest figures from the Applied Rating Index. During the pandemic, rate decreases can reflect the fact that fewer Canadians are on the roads as a result of government lockdowns to prevent the spread of COVID-19.

But not all areas of Canada saw auto insurance rate decreases.

“Alberta and the Atlantic provinces experienced the most significant increase in premium rate change year-over-year for the fourth quarter in a row, at 8% and 2.6, respectively,” the report said. “Quebec experienced a modest increase of 1.6%, while Ontario saw premium rate change decrease [by 3.2%] year-over-year.”

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Applied released its 2020 Q4 and year-end Rating Index results Thursday. The index measures the increase or decrease in average premiums rate trends across Canada by analyzing more than 1.3 billion quotes completed. It represents more than 80% of the brokerage market and 675 insurer rating plans written by brokers, Applied reported.

In the personal property line, all provinces saw premiums increase by an average of 3.6% in 2020 Q4 versus 2019 Q4. 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 showed the largest rate increase in 2020 Q4, running at 13.6% (albeit this was down from 2020 Q3, when it was 15.6%). Alberta saw its second consecutive quarter of decreases year-over-year in personal property lines, down 1.2% in Q3 and 1.4% in Q4. British Columbia’s rates were up 3.1% in Q4 compared to a 7.9% decrease in 2020 Q3. Ontario, the provinces of Saskatchewan and Manitoba, and the Atlantic provinces all saw modest increases year over year of 3.1%, 6% and 2.1%, respectively.

“At the end of 2020 Q4, our data indicates that the market continued to harden as premium rates for personal property increased compared to 2019,” said Steve Whitelaw, vice president of industry and partner relations with Applied Systems. “Alternatively, the market for personal auto has softened, as premium rates decreased at year-end 2020 relative to 2019.”

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