Deterioration marks Facility results

Poor results in the overall auto market are carrying over into the Facility Association, the insurance pool for high-risk drivers. At the association’s recent AGM, outgoing CEO Stan Griffin noted that in Ontario combined ratios for the FA jumped from 87% in 1999 to 109% in 2000. “I can say from having looked at the first three months of this year that that deterioration is continuing.”

The results in the East Coast are not much better, he adds, including Nova Scotia where the combined ratio sits at 115%. Across the country, the FA’s combined ratio for 2000 stands at 104%. Another concern facing the FA is that the depopulation trend over recent years has turned. Griffin blames the inability of the FA to raise its rates substantially in respect to hardening in the voluntary insurance market for more drivers being placed with the association. Recent hearings in Newfoundland were a chance for Griffin to demonstrate to regulators the need for rate increases. “It is clear that the marketshare placed in FA is impacted by the ratio of FA rates to voluntary market rates.”