Edmonton, Alberta -- Auto insurers operating in Alberta lost about $1.2 billion in 2024 after paying out significantly more in claims and expenses than they collected in premiums, according to a government report released this month, adding to concerns about the stability of the province’s auto insurance market.
The annual report from Alberta’s Superintendent of Insurance shows insurers paid out roughly 18% more in claims and operating costs than they earned through premiums during the year. In total, 35 insurers writing private passenger auto insurance in the province recorded underwriting losses.
Industry groups say the losses are being driven in part by Alberta’s auto insurance rate cap, a regulatory limit on how much insurers can raise premiums for drivers classified as “good drivers.” The cap was introduced following a rate freeze in 2023 to slow premium increases for consumers and is tied to inflation. It currently limits annual increases to about 7.5%.
“This new report confirms once again that, rather than helping Albertans, the rate cap is harming the competitive market that consumers depend on,” said Aaron Sutherland, vice-president, Pacific and Western, at the Insurance Bureau of Canada. “A number of companies have left the auto insurance market in Alberta and others have been forced to reduce the coverage they sell to consumers in an effort to stay financially viable.”
The regulator’s report notes that insurer pullbacks are already occurring. Aviva Canada announced in 2024 that it would stop writing new auto insurance policies in Alberta, citing sustained unprofitable conditions. Other insurers have limited new business, tightened underwriting rules or reduced their appetite for higher-risk drivers, according to industry groups and broker associations.
Sutherland said continued losses could further reduce competition if pricing restrictions remain while costs continue to rise. “Insurers cannot continue to absorb losses indefinitely,” he said, warning that market exits and reduced availability of coverage are likely to persist without changes to the system.
