Alberta's Automobile Insurance Rate Board released its 2026 Market and Trends Report last week, finding that average driver premiums rose 8.7% to $1,903 in 2025, while insurers continued losing money on auto insurance sales, losing 9 cents for every dollar of coverage sold that year.
Insurance Bureau of Canada seized on the findings to make its case for the province's incoming Care-First reform.
"The AIRB's '2026 Market and Trends Report' reinforces what drivers already know: Alberta's auto insurance system is broken," said Aaron Sutherland, IBC's vice-president for Western and Pacific. He pointed to third-party liability costs, primarily legal and litigation expenses, now accounting for 58.2% of what drivers pay in premiums, calling trial lawyers a costly factor in the current system.
The report also found comprehensive vehicle damage claims, largely tied to severe weather like hail, declined year over year even as repair cost inflation pushed those claims up roughly 27% in recent years. Vehicle theft costs held relatively stable at $39.50 per policy.
According to MSA Research, an independent firm focused on the Canadian insurance industry, insurers lost money on Alberta auto insurance sales in every year between 2013 and 2024 except 2021 and 2022, when pandemic-related claims drops temporarily boosted profitability.
IBC's framing of legal costs as the central affordability problem isn't uncontested, and this isn't the first time the two sides have clashed over how to read the same underlying numbers. The Alberta Civil Trial Lawyers Association has directly challenged the insurer industry's account of its own losses.
"When insurers aren't honest about the main reasons for their losses, Albertans should doubt that removing the right to sue, which holds insurers accountable, will magically lower premiums," said ACTLA chair Jillian Gamez earlier this year, in response to the broader Care-First push.
ACTLA has pointed specifically to liability insurance, the line most directly affected by litigation costs, remaining comparatively stable and profitable: the association's analysis found insurers paid 44% less in liability claims and fees in both 2023 and 2024 than what they collected in that line's premiums, a data point that sits uneasily next to IBC's characterization of legal costs as the industry's dominant financial pressure.
ACTLA has also consistently supported this position with its own retained actuarial analysis, arguing that Alberta's claims costs, adjusted for inflation, have remained comparatively stable since 2016 even as insurer profitability improved, and has instead pointed to increasingly frequent severe weather events, hail, storms and related property damage, as a bigger driver of overall claims costs than litigation specifically.
The AIRB's own data partially supports that broader framing, attributing rising loss costs to a combination of legal expenses, inflation, vehicle theft and natural disasters rather than litigation in isolation.
Care-First is set to take effect January 1, 2027, replacing Alberta's tort-based system with a model that expands care and income benefits while narrowing the circumstances under which injured drivers can sue.
The dispute between IBC and ACTLA over what's actually driving Alberta's premium increases isn't just rhetorical positioning ahead of that launch; it goes directly to whether removing broader litigation rights will produce the savings IBC and the government have projected, or whether, as ACTLA argues, those savings are being oversold based on a reading of the data that doesn't hold up against the AIRB's own liability-line figures.
Both sides are working from the same AIRB report and reaching different conclusions about which cost pressure matters most, which is worth keeping in mind for brokers and clients trying to assess how much confidence to place in the $260 average annual savings figure the government has attached to the reform.
For brokers, the report's underlying market data, rising premiums, continued insurer losses on auto insurance, and two years of already-approved rate increases, remains the more stable ground to work from with clients regardless of how the legal-cost debate resolves. That the AIRB itself continues to describe the province's affordability situation as a central, unresolved concern, even as premiums approved through the rate cap process keep climbing, suggests the underlying market pressure won't fully ease on Care-First's implementation date alone.
