Where auto and home insurance rates are headed

Hard market conditions in personal lines across Canada are not slowing down in 2023 Q3, according to data from tech vendor Applied Systems. Auto and homeowner premiums are rising year-over-year in all provinces. 

In 2023 Q3, personal auto premiums in Canada increased 7.5% year-over-year and 5.7% quarter-over-quarter. 

Canadian home insurance premiums also saw a 7.5% average rate increase year-over-year, but only 1.6% quarterly increase from 2022 Q3 to 2023 Q3, according to the results of the latest Applied Rating Index. 

“This quarter’s year-over-year premium rate change is the highest for both personal auto and personal property in years, except for 2022 Q2, when personal auto year-over-year premium rate change increased to 9.3%,” said Steve Whitelaw, Applied’s senior vice president and general manager in Canada.  

“Our data continues to show the hard market environment we are operating in… as we go into 2024 renewals.” 

In personal auto, all provinces experienced increased premiums year-over-year, including the Atlantic provinces (13.5%), Quebec (13%), Alberta (9%) and Ontario (5%).  

Compared to the last quarter, 2023 Q2, all provinces also experienced an upward trend in premium rates. The latest quarter-over-quarter increase was largest for Atlantic Canada (10.4%), followed by Quebec (7.5%), Alberta (5.5%) and Ontario (4.2%). 

In personal property, year-over-year increases ranged from a low of 1% in Alberta to a high of 11.1% in Quebec. The Atlantic provinces saw a 10.2% increase while B.C. saw a 10.1% increase. Ontario, Saskatchewan and Manitoba all saw a 7.5% increase.  

Quarter-over-quarter, the property rate increases were muted, with the Atlantic provinces seeing the largest increase at 3.2%, followed by Quebec at 3%, Saskatchewan and Manitoba at 2.6%, Ontario at 2.1% and B.C. at 1.4%. 

Applied’s latest rating index doesn’t detail the cause for the across-the-board increases, but the Canadian P&C industry has already outlined some of the reasons. In personal property, increased Cat activity is a factor — Catastrophe Indices and Quantification Inc. (CatIQ) recently told Canadian Underwriter insured losses from severe weather events have already topped $3 billion this year. 

Whether from Canada’s unprecedented fire season, flooding events or other disasters, Canada has seen at least 23 Cats this year, MSA Research president and CEO Joel Baker said during the National Insurance Conference of Canada in September. Cats are defined as events topping $30 million in insured losses.  

The previous record number of Cats in one year was 15, set in 2022.  

From a personal auto perspective, record auto thefts are taking a toll. Last year, insurers paid out more than $1 billion in auto theft claims for the first time.  

Premiums for commonly stolen vehicles have increased between 25% and 50% over the last two years, aggregator RatesDotCa reported recently. And so far, auto theft claims during the first three months of 2023 have exceeded those in 2022 Q1. 

Feature image by iStock.com/Solidago