Regardless of a major drop in auto theft nationally in 2024, auto insurance coverage pricing stays challenged due to elevated accident advantages claims prices and rising litigation prices, Aviva Canada’s CEO informed Canadian Underwriter final week.
Aviva Canada plc reported a 13% development in Canadian private strains (residence and auto) insurance coverage premiums in 2024. Round three-quarters of that enhance was pushed by premium will increase, “together with double-digit will increase in Ontario motor,” as Aviva plc chief monetary officer Charlotte Jones defined Thursday in a video presentation to buyers.
Definitely, one tailwind for Aviva Canada in auto strains was 2024’s better-than-anticipated discount in auto theft. The Canadian property and casualty insurance coverage business paid out $1.5 billion in auto theft claims in 2023.
Équité Affiliation, a nationwide authority on insurance coverage crime, reported in February that auto theft throughout Canada decreased by 18.6% in 2024. Nonetheless, it famous the 57,000 autos stolen final 12 months was “nonetheless unreasonably excessive, posing an ongoing security menace to all Canadians.”
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Prime Minister Justin Trudeau held a Nationwide Summit on Combating Auto Theft final February. Varied authorities departments dedicated to duties to cut back auto theft, together with higher information-sharing between teams, intervention measures to dam stolen automobiles from being shipped abroad, and new, more durable rules to discourage automobile thieves.
In a year-end, 2024 earnings name with CU, Aviva Canada CEO Tracy Garrad stated efforts to curb auto theft seem to have succeeded.
“I feel the nationwide exercise round auto theft discount, and the duty pressure footing that was put in, has had good impact,” she informed CU. “And I feel we’ve seen even higher than the market stage of theft discount due to the assorted different issues that we’ve performed particularly inside Aviva Canada. You realize, our Tag program has had large success as a result of we communicated the ‘why’ to clients, they received it, and so they acted upon it.”
Beneath the Tag system, technicians set up a number of, difficult-to-locate monitoring gadgets all through a automobile. Within the occasion of a theft, these gadgets might be tracked anytime and wherever in North America. The monitoring makes it simpler to recuperate a stolen automobile.
Auto insurers have provided premium reductions to shoppers who set up the Tag system.
Auto reform initiatives
Regardless of beneficial properties auto theft discount, Garrad says Alberta auto had a drag impact on the corporate’s outcomes, and auto reforms are nonetheless required to assist sort out different growing claims prices for auto insurers.
“One of many greatest prices does proceed to be authorized prices and bodily harm prices,” Garrad stated. “And that does have to be addressed and…managed.”
She stated Aviva Canada is constant to work with the Alberta authorities to verify future auto reform will work to deal with the business’s litigation prices. Alberta has dedicated to establishing a no-fault auto insurance coverage system in 2027, which might prohibit drivers from suing for damages besides in distinctive circumstances — for instance, a catastrophic harm declare, during which an at-fault driver commits an unlawful act inflicting the accident (i.e., consuming and driving or distracted driving).
To fight rising accident advantages prices, the Ontario authorities has launched auto insurance coverage reforms based mostly on creating optionality for shoppers. The concept is that drivers can now select which of the beforehand necessary auto accident advantages they wish to buy, in order that they will get monetary savings on their insurance coverage premiums by not paying for advantages they don’t need.
Beginning July 1, 2026, Ontario shoppers must opt-in and pay further if they need protection for misplaced wages, non-earner advantages, housekeeping bills, caregiver bills, instructional bills, customer bills, bills for injury to private objects, loss of life advantages and funeral advantages.
Managing auto claims-handling
In the meantime, Aviva Canada has been engaged on methods to attain higher outcomes for shoppers on the claims-handling facet of the enterprise. That features assuming extra management over the provision chain. To that finish, Aviva launched its Aviva AutoCare Centres in June 2023, a partnership with its most well-liked auto collision restore centres.
“For our half, we’re doing all the pieces we will to give you revolutionary methods to handle a greater provide [of repair centres], a greater claims expertise, at a greater industrial price for us, and a greater consequence for the client,” she stated. “And our auto physique outlets, of which we’ve now received 9, are an incredible instance of that.
“They’re a win-win-win, as a result of we [the auto insurer] get a greater industrial price, the client will get their automobile repaired faster, and we all know that there’s a discernible distinction within the buyer [Net Promoter Score] from these websites as properly.”
Characteristic picture courtesy of iStock.com/supersizer
