Following a report sponsored by the Insurance Bureau of Canada (IBC), which compared BC and Alberta’s auto insurance systems, the Insurance Brokers Association of BC (IBABC) has issued a response.
IBC’s report analyzed the cost of auto insurance in both BC and Alberta, finding similarities in the auto insurance systems of both provinces while pointing out the glaring differences. The key difference between the two is that BC’s Insurance Corporation of British Columbia (ICBC) is the sole distributor of auto insurance in the province, while Alberta features a free insurance market.
IBABC countered in its release that IBC cannot just make an “apples to apples” comparison, since “no two provinces are alike in their driving exposure or auto insurance system.”
The broker association explained that Alberta has had a “fractured” auto insurance system for years due to its free market. This system means that insurers are free to leave if they do not want to offer coverage to consumers in that area – but BC’s brokers have helped prevent this, IBABC said.
“The hard-working insurance professionals at all levels in Alberta have worked diligently to correct this crisis and it is improving but with significant and yet to be realized premium increases,” the broker association stated in its release.
IBABC also pointed out that IBC’s report used Alberta’s lowest insurance premiums to compare against ICBC’s, which may have been unfair. The association further claims that IBC has been using contrasting information in its recent releases related to BC’s auto insurance.
The association quoted a previous statement made by IBC Western Canada vice-president Celyeste Power in March 2019, wherein Power said Alberta insurers are losing up to $0.30 on every single dollar. However, in November 2019, Power said in another statement that Alberta insurers were instead losing about 12 cents on average, on every dollar earned.