Edmonton, Alberta — Intact Financial Corp says its appetite for Alberta auto insurance business is “reducing” in light of the provincial auto insurance rate cap.
During a Q2 2024 earnings call, Intact CEO and Director Charles Brindamour said Alberta’s “artificial cap that is below inflation” makes it “very hard for the industry.”
“As a result, players, as anticipated, started to exit this market,” said Brindamour during the Q2 2024 earnings call. “I do think that if the cap stays in place, you’ll see more exit from the market.”
“Every month where you’re in a position where there’s more inflation than the cap, our own appetite in this province is reducing,” Brindamour continued. “We think there are very clear solutions on the table, we shared those with the government, the ball is in their court.”
Implemented at the start of 2024, Alberta’s auto insurance rate cap limits insurers from increasing premiums beyond a 3.7 percent rate for “good drivers”—anyone who has not had an at-fault accident in the past six years; a Criminal Code traffic conviction in the last four years; a major traffic conviction in the last three years or more than one minor traffic conviction in the last three years. Alberta claims the rate cap applies to about 80 percent of its drivers.
Brindamour added that, in the current environment, Intact seeks to “lean in” to markets “where it makes the most sense to do so.”
“I’d say the exception for me is Alberta, where there’s this artificial cap that is below inflation.”
According to Canadian Underwriter and MSA Research data, Intact wrote $1.1 billion in Alberta auto premiums in 2023; a market share of 27.2 percent.
Aviva Direct and Sonnet have recently announced plans to withdraw auto insurance services from Alberta, following Zenith Insurance Company’s termination of services last year. Thus far, collision repairers have reported little to no impact.
For Q2 2024, Intact reported that personal auto claims in Canada grew 11 percent, “reflecting strong rate increases and continued unit growth.” Click here for more information on Intact’s Q2 2024 financial results.
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