Gouging insurance firms grab $2.63 billion in profits

Record-smashing take equal to $85 for
every man, woman and child in the country

Toronto - Now we know where all those high car insurance premiums are going - straight to the bottom line of Canada's greedy insurance companies.

Figures released by the Insurance Bureau of Canada figures show that the industry raked in a record $2.63 billion last year, up 675% from the year before. That tops the most fabulous previous haul of $2 billion in 1997.

The total - from all types of insurance - works out to $85 for every man, woman and child in the country - or $340 for a family of four.

These are the figures of the bureau, which has a vested interest in laundering the tally as much as possible, since it is the corporate voice of the industry. It's frightening to think that the real situation might be even worse.

"We are the national trade association that represents the companies which insure the homes, cars and businesses of Canadians," the bureau says on its web site. "Member insurance companies provide about 90% of the private (non-government) property and casualty (P&C) insurance sold in Canada."

Big political issue

High premiums, especially for auto coverage, have become a major political issue across the country.

Insurance shock almost cost New Brunswick Premier Bernard Lord his job, wiping away the massive majority he enjoyed and reducing him to a thin one-seat margin in the legislature last year. He had expected to coast to an easy second term.

The issue has also been a factor in several other elections, including Nova Scotia, Ontario and Newfoundland.

George Jordan, appointed last year by the Nova Scotia government as consumer advocate to represent consumer issues on auto insurance, says citizens are going to be angry.

"People are going to scratch their heads and say why did you raise my rates by 15%, or 20% or 40%, in some cases I heard 200%, when you're making those kinds of profits. I mean what gives here?"

Good question - and another good reason (if one was needed) for public auto insurance.

Web posted by NUPGE: 17 March 2004

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