Facility Association sees marketshare rise

Despite several years of depopulation, the Facility Association (FA) saw a modest increase in marketshare across the board in 2001. According to preliminary data released at its recent AGM, the “insurer of last resort” for high-risk drivers saw written premiums go up last year for the residual market to $178 million, and its risk sharing pool to $91 million.

The association’s marketshare rose year-on-year by 1.76% overall, showing increases in every province. “The market has hardened significantly in the past 12 to 18 months, and with the turning of the cycle, both the residual market and the risk sharing pool are beginning to re-populate in virtually all jurisdictions,” says FA chair Bob Cooke. “Our biggest challenge this past year, and in the coming year, is in achieving and maintaining rate adequacy in all jurisdictions, particularly in Atlantic Canada.”

FA CEO Dave Simpson notes that as the voluntary market hardens, if FA rates are not raised in tandem, the residual market can become a competitive alternative rather than a market of last resort. Another concern is the FA’s own results, which were among the worst in a decade last year with a 137% combined ratio. Some headway has been made with the New Brunswick Public Utilities Board in coming up with a quicker process for rate filing, he adds, and discussions are under way with all Atlantic regulators on the issue of rate adequacy.

In Ontario, the association is hoping to administer the “uninsured automobile fund” as it does in the Atlantic provinces, and expects that if the “take all comers” provisions are eliminated from regulations, then the risk sharing pool can be wound down. “In 2001, each vehicle insured through the risk sharing pool was subsidized over $400 by the total market,” notes Simpson.