Article Summary
CUMIS General Insurance Company is withdrawing from Alberta's auto insurance market by the end of 2024, joining several other major insurers in departing the province due to escalating claim costs and rate cap restrictions that prevent insurers from adjusting premiums to match actual expenses.
- CUMIS General Insurance announced its withdrawal from Alberta's home and auto insurance market effective end of 2024, with coverage continuing through policy expiration in 2026.
- Multiple insurers have exited or reduced operations in Alberta, including Sonnet Insurance (June 2024) and Aviva Direct (July 2024).
- A rate cap introduced in 2022 prevents insurers from adjusting premiums to match driver behavior and rising repair costs, causing market failure according to the Insurance Brokers Association of Alberta.
- The exodus limits coverage options available to Alberta drivers, making it increasingly difficult for brokers to find affordable and accessible insurance solutions.
- This decision does not affect other CUMIS products or services in Alberta or CUMIS programs in other provinces.
Edmonton, Alberta -- An auto insurer is winding up its activities in Alberta, joining a growing list of providers departing from the province.
This week, CUMIS General Insurance Company announced plans withdraw from Alberta's home and automobile insurance market at the end of this year. This move is attributed to ongoing challenges within the province's auto insurance sector, including escalating auto claim costs.
CUMIS General Insurance Company is a subsidiary of The Co-operators Group Limited, a Canadian-owned and operated co-operative. Policyholders will continue to receive coverage until the expiration of their policies in 2026.
All affected policyholders will be provided with timely information and ample notice before their policies expire, assisting them in securing new coverage.
This decision does not impact other CUMIS-branded products and services offered in Alberta, nor does it affect the CUMIS General Home & Auto program in other provinces.
The move comes after several other insurers have cancelled or reduced auto offerings within the province. In June 2024, Sonnet Insurance Company announced it would phase out its auto insurance operations in Alberta. In July 2024, Aviva Direct also announced it would cease its auto insurance activities in the province at the end of 2025.
According to the Insurance Brokers Association of Alberta, the mass exodus is the result of a market failure caused by the introduction of a rate cap on premiums in the province.
The cap, introduced in 2022 to keep auto insurance premiums from rising too quickly, denies insurers the ability to adjust premiums to match driver behaviour and growing repair costs and claim expenses.
In a statement issued earlier this summer, IBAA chief executive officer Jhnel Weller-Hannaway (pictured) said: “An insurance broker is a driver’s best resource to secure the best coverage at the best possible price. Unfortunately, as auto insurers reduce available coverages or withdraw from the Alberta market due to the rate cap, brokers are increasingly unable to find coverage options that are both accessible and affordable for many drivers in the province.”
