Posted on Nov 5, 2020
INSURANCE COMPANIES PROFITS SOAR AFTER REMOVAL OF RATE CAP
EDMONTON -- Profits at insurance companies continue to skyrocket after the UCP removed the cap on auto insurance premiums, according to new financial returns.
Intact Financial Corporation, Alberta’s largest auto insurer, reported an increase in gross operating profits of 48 per cent, reaching an historic $411 million in the third quarter. . The company also approved another large dividend payout to shareholders, financed by increased premiums and reduced payouts in claims.
In response to Intact’s quarterly results, CIBC wrote “Can it get any better than this?”
“Things are better than ever for insurance companies,” said NDP Service Alberta Critic Jon Carson. “While insurance companies and the big banks celebrate, Albertans are paying higher premiums and are struggling to make ends meet in the middle of the pandemic.”
A cap on auto insurance premiums was put in place by the previous NDP government. After being lobbied by the insurance industry, the UCP lifted the cap, causing premiums to increase by an average of 24 per cent.
“Jason Kenney and the UCP continue to put the interests of big insurance companies ahead of Albertans,” said Carson. “These companies already benefited from the UCP’s $4.7 billion corporate handout, while the government increased taxes and fees on Albertans to pay for it. The removal of the rate cap was just the icing on the cake for Jason Kenney’s friends.
“If Jason Kenney and the UCP really wanted to help Albertans and reduce insurance costs, they would reinstate the rate cap.”