Québec auto insurance industry continues growth in 2004


Québec City – The Québec automobile insurance industry posted another year of growth in 2004. Indeed, based on an analysis of the rates being charged, insurers continued to generate operating income with this insurance class. Results for the past year topped the 2003 results as losses grew at a slower pace than earned premiums.

The information was taken from the 2004 annual report on Québec automobile insurance rates that was issued by the Autorité des marchés financiers (AMF) and tabled recently in the National Assembly by Finance Minister Michel Audet.

With rates declining further in 2004, the report notes that Québec auto insurance rates can be considered adequate based on related risks, although operating income generated by insurers over the long term can exceed past performances that insurers usually expect.

Moreover, the extent of annual changes in results demonstrates that insurers on the whole are able to properly assess the various elements related to the potential future cost of obligations, based on the many factors that impact trends.

As well, the auto insurance offering in Québec was extensive in 2004 (108 insurers), even though the market continues to be dominated by a small number of insurers or insurance groups. Despite the concentration, the analysis of the auto insurance market reveals that the market remains competitive and that competition varies from one market segment to another. The report’s findings also indicate that market forces respond satisfactorily to rate changes.

As a result of the renewal of the automobile fleet for a second consecutive year, coupled with a jump in the number of insured vehicles, the demand for insurance rose and consequently so did the total volume of written premiums.

Furthermore, as a result of a review of changes made to rate manuals, a certain limit seems to have been reached with respect to refinements carried out to classification and rate criteria used by insurers. Nonetheless, to maintain their competitiveness, insurers continue to adjust rating practices based on the terms and conditions in place at each institution.

Finally, the substantial amount of operating income generated in the past four years combined with higher demand is expected to sharpen rate competition over the coming years.

Consumers are therefore well advised to take full advantage of the competition, primarily by comparing price and service offerings among insurers. In addition, competition in the industry is being stimulated by the increasing number of consumers who are seeking more information and shopping for the best buy.

The 2004 annual report on Québec automobile insurance rates is available (in French only) on the AMF website.

The Autorité des marchés financiers (AMF) is the regulatory and oversight body for Québec's financial sector.

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