Report: Auto insurers have saved billions during COVID-19 restriction period

Report: Auto insurers have saved billions during COVID-19 restriction period | Insurance Business Canada

Report: Auto insurers have saved billions during COVID-19 restriction period

Insurance comparison website Hellosafe.ca has published a new report, which found that Canadian auto insurance companies managed to save nearly $2.8 billion on insurance payouts during the COVID-19 restriction period.

According to Hellosafe.ca, Canadian auto insurers would have typically paid a total claims amount of about $5,066,838,140 from the period between March 15 and June 16, 2020. However, during that period, the average claims number across Canada declined by 54.9% following pandemic restriction measures. This meant that the actual amount paid by car insurers during the period was about $2,283,694,524, the insurance comparison website said.

Hellosafe.ca estimated that auto insurers realized $2,783,143,616 in savings on payouts during the 91-day pandemic restriction period.

On top of the considerable decline in average claims numbers in Canada during the pandemic, Hellosafe.ca also found that there was a 53.4% decrease in car accidents from March 15th to June 16th. The period also saw a 35.6% decrease in deaths by accident and a 67.4% decrease in auto repair work referred by auto insurers to repair shops.

The report comes as Canada begins to slowly relax pandemic restriction measures.

“With most people stuck at home, their cars have inevitably stayed in the garage. Now that the restriction measures are over and people are going out again, the number of cars on the road is almost back at its pre-COVID level,” commented Hellosafe.ca CEO Antoine Fruchard. “However, customers are inevitably questioning why they continued to pay such high insurance premiums while they weren’t able to drive.”

Fruchard added that as restrictions relax, it would be worth keeping an eye on insurers to see whether they would actually offer refunds to their customers. He also said that competition between insurers may be increasing in the coming months, so customers might be a slight decrease in auto insurance premiums.