Rate increases for 2012 approved by FSCO

[mxs]

Anybody know what were the approved rate increases for 1st QT of 2012?

I am looking here, but there's no data for 2012 yet?? I mean the point is that they do have to file ahead of time, no?

http://www.fsco.gov.on.ca/en/auto/ra...s/q4-2011.aspx

[VifferFun]

FSCO won't publish the numbers until the end of the 2012 Q1. These documents outline the approved rate changes, not the filed rate changes. Changes approved in 2012 Q1 could have been filed as early as mid 2011, since it can take FSCO a long time to review and approve (or disapprove) of the changes.

If you're looking at these numbers, bear in mind that they are *overall* rate changes and don't get into the specifics about how individual premiums may change. For example, if a company's overall rate change is +3.54% (such as Aviva), some policyholders may see increases of 10%, some may see decreases of 10%, while others see no change at all. Combining the rate changes of all policyholders, the *average* is 3.54%. Also, bear in mind that these rate changes are for Auto insurance, not motorcycle insurance.

[mxs]

I realize most of things you have said. I am just curious how car insurance increases have fared when one company compared to another. Not really worried about motorcycle insurance at all. It's the car insurance which eats into my insurance budget the most.

[VifferFun]

Glad that you understand it. It's certainly interesting to look at provided you understand the document.

[VifferFun]

Even more interesting is to look at the profitability of each company in 2011, which could give you a hint to possible future rate changes. Below I have posted the dollar amount paid out for every $1.00 received. Obviously, an amount over $1.00 means an underwriting loss, and an amount under $1.00 means an underwriting profit. I would expect some rate increases for the companies with large losses, but these profitability numbers are for their Canada-wide performance for all of their business (Home, Auto, Recreational, etc.):

$1.37 -- State Farm (Yikes, that's terrible!!)
$1.17 -- Certas
$1.07 -- Dominion
$1.04 -- Wawanesa
$1.04 -- Personal
$1.01 -- Economical
$1.01 -- RBC Insurance
$1.00 -- Aviva
$0.99 -- Co-operators
$0.98 -- TD
$0.97 -- Intact
$0.97 -- Belair
$0.97 -- Nordic
$0.97 -- Royal & Sun Alliance
$0.96 -- Jevco
$0.96 -- Echelon
$0.96 -- Allstate
$0.91 -- Chubb
$0.86 -- Zurich

[mxs]

Thanks Viffer.

I don't regret leaving State Farm one bit ....

[MacDoc]

Just found out Jevco increased rates like crazy - I'm at $809 with a perfect record when Meloche is $605 ( via TD ) withe 1 Million Liability and comprehensive

But get this $636 gives collision as well with $1k deductible.

IN addition because they have set their renew dates together ( makes sense ) - my out of pocked til next Feb is $569 for full coverage.
No brainer

[Toreador]

I believe it was about a week and a half ago. I was calling for rates. A few companies said "If you want it, get it now. Rates are going up 10% after next weekend.

[GYMPY]

Again as I have said, you can manipulate the numbers to read what you want them to. That is why the insurance industry hires accountants for. They are there to do the numbers. Wonder what numbers would be if they had an outside auditor, say Sheila Frazer doing an audit. She sure brought up a lot of waste in gov and I wonder how much wadte would she find in the insurance industry that could rduce our premiums. Viffer sure won't like this comment but I give no ground and expect no ground to be given to me.

[mxs]

And you think that other industries do not hire accountants? Every single private company does. They hire financial controllers as well, so they all can cook numbers within the law. There's no right or wrong ... there's just a difference between whether you get caught or not when skating too close to the edge ....

[giesen]

Wonder what numbers would be if they had an outside auditor, say Sheila Frazer doing an audit. She sure brought up a lot of waste in gov and I wonder how much wadte would she find in the insurance industry that could rduce our premiums.

Given the size of just about every insurance company, I'm sure they're subject to regular audits. And while they're not government (and can spend their money any way they want, subject to the will of their shareholders), it's in their interest to drive efficiencies as it makes them more money. Also keep in mind that the majority of insurance companies lost money on the claims side of the business last year, and if they made money, it was on the investment side. But you can remain ignorant if you prefer.

Do I think insurance companies are perfect? No. But is there some giant conspiracy? No!

[VifferFun]

Given the size of just about every insurance company, I'm sure they're subject to regular audits. And while they're not government (and can spend their money any way they want, subject to the will of their shareholders), it's in their interest to drive efficiencies as it makes them more money. Also keep in mind that the majority of insurance companies lost money on the claims side of the business last year, and if they made money, it was on the investment side. But you can remain ignorant if you prefer.

Do I think insurance companies are perfect? No. But is there some giant conspiracy? No!

Couldn't have said it any better myself.

[GYMPY]

Geisan. Ignorant i am not. I have a contact who is in the Insurance industry and I get a lot of info on what the industry does. Some of it is, say not right but they get away with it because of the government contacts they have. Ninety eight per cent is legal but lets say, not all of it is ethical in behavior. Hell, if they made money on the investment side last year, I sure would like to know where they made it cause I lost money on the investment side. Maybe they had insider trading information and sucked up some of my investments to pad their profits. I did not say anything about investments, you did. As for audits, who orders them????????/ If they publish to the public their audits, how do we know they are right or have not been fudged. Maddock the swindler in the States fudged documents for years and swindled people for millions of dollars for years before being caught. I am quite leary of those inside audits being done. I think Sheila Frazer should be brought out of retirement by the gov to do an honest audit. I bet she would find deficiencies in their system like crazy and they should be posted so he public can see what the ineficiencies were and what it cost them in over charges on insurance premiums. Like you say. the share holders are looking for eficiencies in running the insurance company. Why would they not support that, or are they afrais of what the general public would find out. Just asking.

Let me tell you something that a Landlord told me in the seventies before I bought my first house. His wife said to us, the Tennant Association, that they had a gold mine in this appt building. I asked why??????/ She replied, whenever we need money for a new car, a trip, furnish their own home, we just raise the rent. Having this app building is like having a money printing press in the basement. The best thing about this money press, it is legal. Now, I wonder why we have rent controls in this province????????That is what I see in insurance companies as they know the public needs insurance for everything they own just like that landlord knew that the people in the building needed a place to live.

[mxs]

It's a catchy comparison, yet very naive in my opinion. You are essentially comparing a publicly/privately owned insurance companies (without zero government ownership) with government/city owned apartments??? You certainly could send Sheila Frazer there, but I hope you see how it would be wrong to suggest elsewhere where this is not government money we are talking about.

The tools already exist, the problem is that the current government is agreeing with the insurance companies (whether it's right or wrong). Your only choice is to vote for someone else, who will say no to them every time they ask for a rate increase. But they better get it right ..... because it could easily cost the province even more.

What strikes me though, is how you suggest that the insurance companies are doing something others, dont'. Lobbying and friends in government is what capitalism champions, no? You have to take the good with the bad ...

[VifferFun]

Geisan. Ignorant i am not. I have a contact who is in the Insurance industry and I get a lot of info on what the industry does. Some of it is, say not right but they get away with it because of the government contacts they have. Ninety eight per cent is legal but lets say, not all of it is ethical in behavior. Hell, if they made money on the investment side last year, I sure would like to know where they made it cause I lost money on the investment side. Maybe they had insider trading information and sucked up some of my investments to pad their profits. I did not say anything about investments, you did. As for audits, who orders them????????/ If they publish to the public their audits, how do we know they are right or have not been fudged. Maddock the swindler in the States fudged documents for years and swindled people for millions of dollars for years before being caught. I am quite leary of those inside audits being done. I think Sheila Frazer should be brought out of retirement by the gov to do an honest audit. I bet she would find deficiencies in their system like crazy and they should be posted so he public can see what the ineficiencies were and what it cost them in over charges on insurance premiums. Like you say. the share holders are looking for eficiencies in running the insurance company. Why would they not support that, or are they afrais of what the general public would find out. Just asking.

Let me tell you something that a Landlord told me in the seventies before I bought my first house. His wife said to us, the Tennant Association, that they had a gold mine in this appt building. I asked why??????/ She replied, whenever we need money for a new car, a trip, furnish their own home, we just raise the rent. Having this app building is like having a money printing press in the basement. The best thing about this money press, it is legal. Now, I wonder why we have rent controls in this province????????That is what I see in insurance companies as they know the public needs insurance for everything they own just like that landlord knew that the people in the building needed a place to live.

The insurance industry is very good at investing -- MUCH better than you or I. There are also regulations on how we can (and cannot) invest that money.

There are many controls -- it's called the Financial Services Commission of Ontario (FSCO) of the Ministry of Finance. Their name is in the topic of this thread (i.e. FSCO approves the rate changes). They go through each rate filing with a fine-tooth comb. You can read all about them.

http://www.fsco.gov.on.ca/en/about/Pages/default.aspx

"

The Financial Services Commission of Ontario is a regulatory agency of the Ministry of Finance that regulates insurance, pension plans, loan and trust companies, credit unions, caisses populaires, mortgage brokering, and co-operative corporations in Ontario."

[giesen]

Hell, if they made money on the investment side last year, I sure would like to know where they made it cause I lost money on the investment side. Maybe they had insider trading information and sucked up some of my investments to pad their profits. I did not say anything about investments, you did. As for audits, who orders them????????/

I don't know about you, but I've done pretty well on my investments in the last year. Maybe you need to get out of the high risk stuff or get a financial advisor?

I did not say anything about investments, you did.

Well given that you seem *so* knowledgeable about the insurance industry, surely you would realize that insurance and investing are intrinsically linked. Almost no insurance company makes money on the underwriting side of the business, its function is purely to provide capital for the investing side (where the money is made). That's why many life insurance policies have an investment component to them

As for audits, who orders them????????/

Any large company (and even smaller ones) are subject to regular audits by the CRA (don't mess with the taxman). I'm sure insurance companies are subject to further scrutiny (by the FSCO and others) because of the price-regulated nature of the industry.

[giesen]

It's also worth noting that given the amount of flak that the government regularly receives from voters over the price of insurance, it's in their best interest to ensure that premiums are as low as possible. They're just stuck in the unfortunate position of being between the insurance companies (who have rising claims costs due to fraud, skyrocketing healthcare costs, inflation, etc) and voters. Their solution was to reduce mandatory coverage in order to reduce premiums, as tackling fraud and healthcare costs is a much larger issue (and can't be solved in the span of an elected term).