From sea to shining sea, provincial auto insurance markets are facing some tough times. Critics of the Insurance Corporation of British Columbia (ICBC) have claimed that the Crown company is purposefully making it difficult for private auto insurers to enter the marketplace; Manitoba Public Insurance (MPI) has requested the first overall rate reduction to auto insurance premiums in eight years; and insurance rates across Ontario, Alberta, and Atlantic Canada have all gone up in Q1 of 2019, according to a recent LowestRates.ca report.
Not only is this market challenging for insurers, but consumers are struggling to understand why they’re paying so much for auto insurance.
“Auto insurance is really tough in Canada,” said Denise Gaeta, who was recently appointed head of property and casualty insurance at LowestRates.ca. “There’s not enough education in the marketplace for consumers – they don’t understand what caps mean and they don’t understand what the governments are doing. I think they believe that carriers are making all this money and never paying out claims, and that’s in fact not true.”
LowestRates.ca has set its sights on filling that education gap in the consumer sphere, putting out information on auto insurance in its blog and regularly speaking out about challenges in the marketplace. However, consumers aren’t the only ones who are hurting right now. Brokers, too, are having a hard time working with the current auto insurance conditions.
“For brokers, there’s just so many rules and there’s so many limitations around what they can write, where they can write, and when they can write business,” said Gaeta, adding that even if new business comes in the door, “How do they know that they’re getting the type of leads that the carriers are willing to accept?”
As Gaeta comes into her new role, she’ll be focusing in part on how to help brokers achieve scalable growth on the auto insurance side, even as carriers have to change their mind on a regular basis due to market conditions and the resulting impact on profitability.
Rate comparison sites, like LowestRates.ca, can help both brokers boost their books of business and empower consumers when they feel like they have little control over their premiums.
“I think what it does for consumers is it helps them do their research. As a consumer that doesn’t understand much about auto insurance, when I go on to LowestRates.ca and I get myself a quote, I’m looking at potentially up to 30 different quotes on my screen when I’m done, and that gives me some satisfaction that I’ve tested the marketplace,” said Gaeta. “I’ve put in my information, and here are the options and the broker or the carrier (if it’s a direct) that is the best fit for my profile because it’s right in front of me on the page.”
In turn, consumers’ faith in their broker is established right up front, while they save time by not having to independently contact multiple brokerages for quotes. Importantly, this type of shopping experience actually reflects how people want to buy goods and services today.
“When we shop for travel, or if we’re going on vacation, or if we shop for credit cards or banking, gone are the days that you go door to door banging to see who’s got what, and nobody has time to make 16 phone calls,” said Gaeta. “The way the world is, you’ve got two incomes and a household, kids, sports, all kinds of stuff going on and people just don’t have the time anymore. So, [the rate comparison site] provides a quick and easy solution to really [tap into] what’s going on in the market.”