IBC Reacts to Consumer’s Assn. Charges of Auto Rate Discrepancies

October 21, 2005

Bruce Cran, the president of Canada’s Consumers’ Association, is not one of the Insurance Bureau of Canada’s (IBC) favorite people. He recently compounded that animosity in a press release in which he charged that a study, produced by his organization, had found that “consumers in Halifax [Nova Scotia – in the East] pay 100 percent more for their auto insurance than if they lived in Victoria, BC. This is not only ridiculous but unacceptable to Nova Scotia consumers.”

The IBC quickly called the findings into question on behalf of Canada’s home, car and business insurers. “It is time to call Mr. Cran’s bluff with this so-called auto rate study he has been rolling out across the country,” stated Don Forgeron, vice-president, Atlantic, Insurance Bureau of Canada.

“We have already refuted the methodology and conclusions of earlier releases of the study in B.C. and Toronto. In this case, let’s just take a close look at what he has stated in this release – a release that is so shoddily assembled it is an insult to the consumers and media of Atlantic Canada,” Forgeron continued

The IBC’s bulletin then refuted some of the Consumer Association’s findings as follows: “He [Cran] says there is a cap on pain and suffering awards in Newfoundland and Labrador. There isn’t. He talks about age and gender as underwriting variables, but these are no longer uniformly used in the Atlantic Provinces. He says rates have not come down, but government figures clearly show that they have come down throughout the region. Furthermore, his estimates of average premiums are consistently well in excess of actual premiums paid.”

“If he can make these and other errors in a 300-word news release, can we have any faith in his study?” Forgeron queried. “The bottom line is that Mr. Cran has demonstrated that he has no idea what is going on with auto insurance in Atlantic Canada,” he charged. “At the end of the day, we are happy to have a discussion about auto insurance issues. We think the public would be better served if that discussion were both informed and intelligent,” Forgeron added.

“There are questions that we should be asking Mr. Cran,” he noted. “For example, where did these numbers come from? Where and how did he get the B.C. insurance quotes, which are not publicly available? Why won’t he reveal details about his methodology and funding? Why is he trying to get away with such a lack of transparency? And, with so many other pressing consumer issues today, why does he focus exclusively on insurance matters?”

The Consumers’ Association press release indicates that it “includes reference to 3,985,162 rate quotes across 300 diverse rating groups representing the key variables that affect auto insurance rates such as age, gender, location, claims, vehicle and driving record.” Cran called it “the largest independent study ever to have been conducted on auto insurance rates in Canada.”

Perhaps additional studies will shed further light on where the truth may lie, but for the moment the Consumers’ Association and Canadian insurers seem very far apart on the question.

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