2023 is going to be a rough year for the Canadian insurance market, an expert with the rate comparison site Ratehub.ca has predicted.
Matt Hands, director of insurance at Ratehub.ca, had several insights to share about this year. Specifically, he shared predictions regarding the auto and home insurance segments, plus another regarding the growing trend of online insurance shopping.
Hands expects auto repair claims to not only continue to cost more, but also take more time to resolve. This, he says, is going to hurt both customers and insurers.
“Three or four years ago, repairs would be done in a week or two. Now they’re probably taking three or four weeks – maybe even longer,” the director said. “That’s going to cost insurance companies more because they’re paying for rental cars longer, which would contribute to the rising cost of claims.”
Canada’s auto insurance industry also continues to grapple with the recession, Hands explained.
“This impacts brokerages more than it does the consumer. There are fewer people in the market shopping around because they’re waiting to get vehicles.”
The same recession also hurts the home insurance segment, especially as people are forced to re-evaluate their expenses.
“We may see people forego tenant insurance even more now during a recession,” Hands suggested. “A monthly Netflix subscription, for example, can cost roughly the same amount of money as a tenant insurance policy. While people see use in their Netflix account every day, people only see use in their tenant insurance once something actually happens.”
Not all of Hands’ predictions for 2023 are glum; the director also believes that shopping for insurance online is only going to grow in popularity this year.
“There are a number of ways consumers can save on their insurance policies, such as bundling, loyalty discounts, clean records, and quality credit scores, but first and foremost, we always stress the importance of shopping the market to Canadians.”
“No two insurance companies will rate you the same – they may all look at similar pricing factors, but weigh them differently in their rating calculations,” added Hands. “Insurance companies are always looking to balance their book of business against inherent risks associated with their customer base. Some insurers will be more willing to offer favourable insurance rates to you than others based on this ongoing risk-balancing exercise. So take some time to compare quotes from multiple insurers to ensure you’re getting the best price for your situation.”
The outlook provided by Hands echoes similar sentiments shared by Debbie Coull-Cicchini, executive vice president at Intact Insurance. Last month, Insurance Business spoke with Coull-Cicchini, who said that Canadians would be facing some headwinds in 2023 – especially as inflation continues to prolong the hard market.
