Québec automobile insurance industry posts solid earnings again in 2007


Québec City – The Autorité des marchés financiers (AMF) announces the release of its 2007 report on Québec automobile insurance rates following its tabling in the National Assembly today by Minister of Finance Monique Jérôme-Forget.

This report is intended to provide the public and the automobile insurance industry with information about developments and trends that took place in Québec in this important insurance sector over the past year.

The industry was considered healthy again in 2007. It continues to post sizeable earnings—a positive trend that has marked the past seven years. An analysis of insurance rates reveals that earnings posted by insurers as a group totalled 13.1% of the premiums earned in 2007.

Although dominated by a small number of insurers or insurance groups, the market remains diversified and competitive. Witness the downward pressure on rates and the increase in changes made to rate manuals, among other indications.

This situation is to the advantage of consumers of automobile insurance products. The AMF encourages consumers to ask for quotes from several different insurers so they can compare prices and services. The better consumers are able to compare premiums and the more they request information about applicable terms and service offerings, the more they contribute to maintaining active competition in the automobile insurance sector.

For a detailed analysis of the automobile insurance market in Québec, read the 2007 report available on the AMF website. A brief summary of the findings is also posted at the same address.

The Autorité des marchés financiers is the regulatory and oversight body for Québec’s financial sector.

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Highlights of the 2007 Report on Québec Automobile Insurance Rates


The 2007 report on Québec automobile insurance rates is intended to provide the public and the insurance industry with information on the trends and developments in a particularly important sector of the Québec economy. Generally speaking, automobile insurance attracts more interest and examination than other classes of insurance, primarily for the following reasons:

  • It is the only class of insurance for which rates draw on criteria based on personal characteristics;
  • The premiums charged in comparison with the property insured are higher than for home insurance and represent a larger portion of a consumer’s budget;
  • The frequency of claims is generally higher than for other classes of insurance;
  • Vehicle owners in Québec are required to hold a minimum amount of “civil liability” insurance.

The Autorité des marchés financiers (AMF) therefore has a role to play in ensuring a fair balance among various automobile insurance market participants and protecting consumers.

Automobile insurance in Québec

  • The industry is made up of:
    • 53 Québec chartered insurers, holding 59% of all direct written premiums;
    • 43 federally chartered insurers, holding 35% of all direct written premiums;
    • 28 foreign chartered insurers, holding 2% of all direct written premiums;
    • 3 provincial (other than Québec) chartered insurers, holding 4% of all direct written premiums.
  • Québec chartered insurers thus dominate the Québec market.
  • Direct insurers control the overall market, with a 51.6% market share. More specifically, they dominate the personal-lines insurance sector, holding 58.1% of premiums written.
  • The commercial-lines automobile insurance sector is clearly dominated by broker-based insurers; they hold an 84% share of the market.
  • 15 insurers or insurance groups control 94% of the Québec market.
  • In the past few years, a number of insurers have broadened their activities to cover all automobile risk categories.
  • Automobile insurance offerings in Québec remain extensive and diversified. Consumers can find suitable products for their needs.

Québec automobile insurance competition

  • Insurers continue to innovate with respect to practices and products so they can set themselves apart from the competition or gain an edge.
  • Changes made to rate manuals were up 24% in 2007.
  • Competition is active and sharper in all sectors, particularly with respect to utility and recreational vehicles.
  • Forty insurers, representing 99% of the passenger automobile market, carried out rate changes.
  • With more than 100 automobile insurers in Québec, the market is very competitive, and this can only benefit consumers.

Demand for automobile insurance

  • The number of vehicles covered by insurance jumped 1.9% in 2007 and the automobile fleet was renewed.
  • The larger demand for automobile insurance stemmed primarily from the increase in the number of driver’s licences, which were up 1.4%.
  • Consumers can benefit from substantial savings by asking for several insurance quotes.
  • The increase in the number of consumers who shop for insurance premiums and request information about terms and service offerings is contributing to healthy competition.

Consultation of rate manuals

  • Insurance rate manuals may be consulted by contacting the AMF.
  • Consultation through the AMF is intended essentially for verifying new classifications and rates.
  • 208 consultations were conducted in connection with the rate manuals of 31 different insurers.
  • Most consultations in 2007 pertained to the sections of manuals on applicable discounts and additional charges.

Changes to rate manuals

  • Insurers representing 77% of the passenger automobile market made changes to their classification and rate criteria.
  • Most changes made by insurers related to criteria for anti-theft protection systems and the use of credit scores.
  • Insurers continue to change their classification and rate criteria in order to build client loyalty and remain competitive in the Québec automobile insurance market.

Rate practices and rates

  • The downward trend in rates continued in 2007; rates declined 1.8% on average.
  • The average premium for passenger automobiles dipped by 0.4% to $565.
  • The AMF expects competition in automobile insurance in Québec to increase in the coming years.

Overall findings

  • The volume of premiums for all vehicles increased, and now stands at $3.026 billion.
  • The volume of premiums earned also rose. It now stands at $3.011 billion.
  • The total amount of claims in 2007 was $1.860 billion. The claims/premiums ratio rose from 58.5% of premiums earned to 61.8% in 2007.
  • Operating expenses were an estimated 26.6% of premiums earned.
  • Total expenses for all vehicles stood at 88.4% of premiums earned.
  • Earnings for all automobile insurers operating in Québec fell during the year from 16.2% of premiums earned to 13.1%.


  • The frequency of claims related to passenger automobiles continues to be low for all three main types of coverage on the automobile insurance policy, i.e. “civil liability,” “collision or upset” and “comprehensive.”
  • The frequency of claims related to automobile theft, window breakage and other perils, such as fire and vandalism, is on the decline. Since 1999, partial thefts have fallen by close to 57%, while total thefts have dropped 46%.
  • Claims for losses caused by wind or hail soared 50% in 2007.
  • The average cost per loss for passenger automobiles remains high, particularly because of the impact of the latest models, the hourly rates charged by repair shops and the cost of renting replacement vehicles.
  • The rise in claims and in the average cost per claim has resulted in an increase in the overall cost of “civil liability” and “collision or upset” coverage.
  • The overall cost of “comprehensive” coverage has declined.

Adequacy of rates in 2007

  • Calculated over a period of 20 years, earnings represent approximately 7.8% of premiums earned.
  • Given the risks associated with automobile insurance, rates are considered adequate.
  • Consumers are advised to compare the prices and services of different insurers in order to take full advantage of competition.
  • The Québec automobile insurance industry is healthy, and this situation is definitely favourable for consumers. The downward pressure on rates for the fifth consecutive year is a sign of market efficiency.

The 2007 report on Québec automobile insurance rates is available (in French only) on the AMF website.

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