Transcript Ontario's Auto Insurance System

Ontario’s Auto Insurance
System
A presentation to
Ontario Conference of Casualty
Actuaries
Mark Yakabuski, VP Ontario, IBC
November 27, 2003
Ontario’s Auto
Insurance System
Net Income - Ontario Auto Insurance Industry
0
2001
-200
$ Millions
-400
-600
-800
2002
Ontario’s Auto
Insurance System
Facility Association, Ontario Assessment
2003
2002
0
100
200
300
$ Millions
400
500
Ontario’s Auto
Insurance System
Ontario Auto Insurance Loss Ratio
100%
90%
80%
70%
60%
1995 1996 1997 1998 1999 2000 2001 2002
Ontario’s Auto
Insurance System
Insurance Investment Returns
15%
Insurer's 2002
Performance
10%
5.8%
5%
0%
1990
1995
2000
-5%
-10%
-15%
Compared with the
decline of the S&P TSX
Comp Ind (-13.5% ) over
2002
Ontario’s Auto
Insurance System
Change between 1997 and 2002 Ontario
Injury claims cost $
Vehicle claims cost $
Broker's commissions &
taxes
Insurer Expenses
Auto Insurance
Premiums
-20%
0%
20%
40%
60%
80%
100%
Ontario’s Auto
Insurance System
Auto Insurers’ Medical/Rehabilitation Costs
1600
1400
1200
1000
800
600
400
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
0
1991
200
1990
$ Millions
Ontario’s Auto
Insurance System
Auto Insurance Tort Costs in Ontario
1400
1200
1000
800
600
400
200
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
0
1991
$ Millions
Ontario’s Auto
Insurance System
• Liberal government has reiterated its 10% average rate
reduction target
• Bill 198 and related regs does not achieve this target
• Escalating med/rehab and torts cost continue while the
government decides how to control these pressures
• Significant additional loss cost reductions will be necessary
to meet the 10% target
• It will be a challenge to have measures in place by January
23rd