A recent study that concludes Ontario consumers “may have overpaid” $3 to $4 billion for auto insurance between 2001 and 2013 actually excluded the carriers with negative return on equity in Ontario auto, the Insurance Bureau of Canada and the Insurance Brokers Association of Ontario (IBAO) suggest.
On April 10, the Ontario Trial Lawyers Association (OTLA) released a study it commissioned – titled Returns on Equity for Automobile Insurance Companies in Ontario – written by two professors at York University’s Toronto-based Schulich School of Business.
“At an aggregate level, (returns on equity) for Ontario auto insurance companies have been quite low – negative on average between 2001 and 2011, and positive in both 2012 and 2013,” wrote economics professor Fred Lazar and finance professor Eli Prisman. “However, when we exclude the companies with negative ROEs, the average ROEs for the remaining companies increase dramatically to 9.7% over the period 2001-11, 14.9% in 2012 and 17.5% in 2013.”
Canadian Underwriter.ca – Apr 13.
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