Auto insurance reform needed in Alberta: DBRS [Video]

As Alberta considers an overhaul of its troubled auto insurance system, a global credit rating agency is warning a “clear long-term solution” must be found or more insurers will depart the province.

Sonnet Insurance Company and Aviva subsidiary S&Y both recently announced plans to phase out their auto insurance businesses in Alberta, citing claim costs that exceed premiums collected as well as a lack of opportunity to grow profits.

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In a new report this week, credit rating agency DBRS Morningstar warned other insurers could also be eyeing the exit doors.

“We believe that others may follow,” DBRS Morningstar said.

“Even those who do not have plans to withdraw from the market per se may be implementing cost savings measures that are reducing the accessibility and availability of auto insurance (in Alberta).”

After years of spiraling costs and rising premiums, problems within the western province’s auto insurance system appear to be coming to …