Alberta’s auto insurance sector is already grappling with a growing set of pressures that are reshaping the financial landscape for insurers.
On one side, rising costs for automotive parts – driven by inflation, global supply chain disruptions, and limited availability of specialized components – are making vehicle repairs more expensive and time-consuming. These pressures are compounded by the looming impact of US tariffs, which threaten to raise the cost of imported materials even further and create uncertainty around future claims costs.
On the other side, insurers face regulatory constraints that limit their ability to respond through pricing. A provincially imposed cap on premium increases for good drivers means that even as insurers face mounting operational expenses, their flexibility to recoup those costs through rate adjustments is significantly curtailed. The result is a financial squeeze that is forcing insurers to rethink how they operate, allocate resources, and plan for long-term sustainability.
But a third, less-discussed challenge is quietly looming on the horizon – one that could reshape the provincial insurance workforce itself.
With the Alberta government set to implement a no-fault auto insurance model by 2027, industry roles, especially in claims and legal support, may face a significant realignment, warns Evangeline Berube (pictured), associate director, management resources at Robert Half.
The planned transition to a no-fault auto insurance system by 2027 marks a significant departure from Alberta’s current claims model – one that could reshape how insurers handle litigation and structure their teams.
Under the current system, drivers involved in accidents – such as being rear-ended – can pursue legal action and sue for damages, even in minor incidents. Berube says that the new no-fault framework will restrict that right significantly, limiting personal injury claims to only the most severe cases or those involving criminal fault.
This reduced litigation exposure is expected to lower the volume and complexity of claims insurance companies must manage.
However, she warns that it also brings organizational challenges. Many insurers are currently staffed with legal and claims professionals whose roles are heavily geared toward fault-based investigations and litigation management. As those claims decline under the new model, companies will need to reassess their workforce structures. “It may impact how they're doing their claims, or the structure of their organization and what kind of talent they need. You may not need as many lawyers anymore,” she said.
Even before the no-fault system takes effect, Alberta’s auto insurers are already contending with financial constraints that make long-term planning more difficult. Chief among these is a government-mandated cap on premium increases for good drivers.
While designed to protect consumers, the cap also restricts insurers’ ability to adjust pricing in response to inflation and escalating claims costs.
Those cost pressures, Berube says, are only intensifying. Tariffs and supply chain disruptions are driving up the cost of imported automotive parts, while repair and replacement expenses continue to climb. Insurers face mounting difficulty in covering these rising outlays while remaining profitable – particularly when rate adjustments are off the table.
When margins shrink, insurers may be forced to limit hiring, cut operational costs, or even reduce their presence in certain regions. “Some larger insurers have left because they can’t insure people in this market as a result of those restrictions. That then impacts people, because they are losing their jobs,” she said.
Berube says that the upcoming changes to Alberta’s auto insurance model won’t just affect policy frameworks and pricing – they’ll also require insurers to source and train talent with new skill sets.
As organizations rethink how they handle claims under a no-fault system, they’ll need employees familiar with the revised approach – but that talent, Berube says, isn’t easy to find.
She pointed out that 94% of hiring managers say recruitment takes longer than it did two years ago, and almost a quarter admit to making a hiring mistake during that time.
“This is going to add to complexity,” she said.
In a market already facing talent shortages, these longer hiring cycles pose serious risks. As Berube noted, employers who delay offers can quickly lose candidates to competitors.
“Everyone’s going to be fighting for that talent,” she warned.
