Alberta’s Rate Cap is Deepening the Financial Crisis in the Auto Insurance Market

According to the latest annual report from the Alberta Superintendent of Insurance, insurers lost more than $1.2 billion on the sale of auto insurance in 2024, paying out 18% more in claims and expenses than drivers paid in premiums. These losses have forced some insurers to exit the Alberta market or restrict the sale of coverage, making it increasingly difficult for drivers to find the insurance coverage they need.

The report states: “The Superintendent expects this pressure on Alberta’s automobile insurance profitability and stability to continue through 2025. It is forecast that escalating claims costs due to inflation, bodily injury claims severity growth, vehicle theft rates, and weather-related losses will continue to exceed the Good Driver Rate Cap.”

The report confirms that, rather than helping drivers, the rate cap is harming the competitive market that consumers depend on.

That is why the government must move forward with its Care-First reforms to:

• address the key driver of rising premiums today – sky-high legal costs that account for 20% of what drivers currently pay
• improve benefits and care for those injured in collisions
• lower average premiums for drivers

If combined with efforts to attract competition back to the market by removing government rate interventions and other regulatory barriers, Care-First presents the best path to deliver lasting improvement in premiums for drivers.

Read the Superintendent of Insurance 2024 Annual Report.