Nova Scotia actuarial review cites inadequate rates

The Insurance Bureau of Canada (IBC) is pleased with the results of a new independent report commissioned by Nova Scotia’s Utilities and Review Board (UARB) that suggests auto insurance rates have been inadequate for at least the past five years.The report also notes that rates are on the rise, but that current premiums levels are still 10%-20% below what they need to be for insurers to make a solid return on equity.”The analysis reflects what industry has known for some time, and has been attempting to communicate to government, stakeholders and the public,” says IBC regional vice president Don Forgeron.The actuarial report, put together by MMC Enterprise Risk Consulting, suggests rising claims costs are one culprit when it comes to current rate hikes, as are insurer’s overall losses in the Nova Scotia market.”We also note that the findings of the board’s own independent actuary and the insurance industry’s evidence have come to the same conclusion that ‘there appears to be no evidence of discriminatory rating or underwriting practices in the province’,” Forgeron says.The report is part of an ongoing review of Nova Scotia’s auto insurance system which will include UARB hearings in the near future.The province’s New Democratic Party opposition says the report’s findings indicate that consumers are facing successive rate increases and have publicly called for a freeze on rates in response.Forgeron says that consumers should be made aware that rising rates are coming in response to rising claims costs being faced in the region.