Ontario car insurance

Re: The bad math in Ontario’s car insurance, Darryl Singer, June 5

The real problem with Ontario auto insurance is that over a third of money ($1.4 billion annually) meant for claimants is being wasted on legal fees and excessive health assessments.

These are not new problems — insurance expert David Marshall raised them in his 2017 report to government on the state of auto insurance. We urge Mr. Singer and his colleagues to read it. If they did, they would see that Marshall concluded that the main cause of high premiums “is not inefficiency or excess profits by insurance companies.”

Instead, Mr. Singer uses a report — for which the Ontario Trial Lawyers Association paid — in which author Fred Lazar admits that even after reviewing legitimate sources of statistical information, he preferred to make his own assumptions. Where Lazar doesn’t use statistical data provided by the General Insurance Statistical Agency (GISA), he cites the property and casualty insurance industry’s return on equity in 2016 as 15.9 per cent, more than double the 6.64 per cent reported by StatCan or the 6.6 per cent reported by GISA.

He also asserts that claims costs have declined year over year. Claims costs have actually increased 4.5 per cent annually.

Ontario auto insurers are paying more in claims and expenses than they earn in the premiums they charge. In 2016, the most recent year for which we have data, for every dollar insurers collected in auto premiums, they paid out on average $1.03 in claims and operating costs.

If Mr. Singer and his fellow personal injury lawyers are sincere about wanting to improve auto insurance for consumers, the professional and responsible thing to do is to own up to their own role in the problem and bring real, factbased solutions to the table.

The current situation is unsustainable for consumers and we urge the incoming government to take note and act with informed urgency. Kim Donaldson, Vice-President Ontario, Insurance Bureau of Canada