EY Canada clarifies controversial BC auto rate comparison study

EY Canada clarifies controversial BC auto rate comparison study | Insurance Business Canada

EY Canada clarifies controversial BC auto rate comparison study

Ernst & Young Canada (EY Canada) has issued a statement providing clarification on its much-maligned auto insurance rate report for the Insurance Corporation of British Columbia (ICBC), stating that it was not trying to make a full representation of auto insurance options in Canada.

ICBC engaged EY Canada to conduct a comparison of auto insurance rates, over a period between September and October 2022. The comparison was carried out with the cooperation of other Crown corporations, Manitoba Public Insurance and Saskatchewan Government Insurance. The findings were then compiled into the “Canadian Private Passenger Vehicle Insurance Rate Comparisons” report.

The report claimed that drivers in BC generally paid the least for auto insurance, while other provinces that offer private auto insurance like Alberta paid some of the highest rates in Canada. ICBC has pointed to the results as proof its care-based model helped drivers save more on auto insurance.

But this same report was also lambasted by industry experts for misrepresenting insurance options across Canada. To this, EY Canada last week issued a statement on the matter.

“The Canadian Private Passenger Vehicle Insurance Rate Comparisons was conducted with a set of listed limitations and assumptions explaining that automobile insurance products, benefit levels and access to the benefits, including a range of tort to no-fault models, vary from province to province,” said EY Canada team lead, public relations Victoria McQueen in a release. “Further, the comparisons made in the data summary do not attempt to provide a full representation of the rate options available or what consumers are paying.”

McQueen added that while EY Canada’s report has been “publicly referenced” in provincial rate comparison discussions, EY Canada did not intend for its report to be the focal point for those discussions. The firm also underlined that it did not draw any conclusions from its report, particularly about the potential merits of publicly owned versus privately owned insurance models.

But critics of EY Canada’s report say that it should have been “based in facts, not misleading arguments put out by the proponents of public auto insurance.”

The Insurance Brokers Association of Alberta (IBAA) claimed that while the EY Canada report appears to heap praise upon public insurance, it also presented misleading findings by not taking the lowest possible insurance quotes among private insurers. IBAA also noted that EY Canada declined to consider discounts being offered in Alberta, which may have skewed the results further.

Even the Insurance Bureau of Canada (IBC) had something critical to say about EY Canada’s report.

"I don't expect monopolies to understand how people shop the market, but this is really a gross misrepresentation of the market in Alberta, of how people behave and how drivers are able to shop around to find savings to get the best product at the best possible price,” said IBC Western and Pacific vice president Aaron Sutherland in a previous statement.