Auto Insurers Paid Out 18% More Than Collected, Losing $1.2B in 2024, according to government report

 Alberta’s Superintendent of Insurance expects losses to worsen due to ongoing rate cap

EDMONTON, AB, Jan. 9, 2026 /CNW/ – A newly released government report shows that Alberta’s rate cap is deepening the financial crisis in Alberta’s auto insurance market.

In its annual report released this week, the Alberta Superintendent of Insurance notes that property and casualty insurers lost over $1.2 billion on the sale of auto insurance in 2024, paying out 18% more in claims and expenses than drivers paid in premiums. Notably, the Superintendent expects that “escalating claims costs due to inflation, bodily injury claims severity growth, vehicle theft rates and weather-related losses will continue to exceed the Good Driver Rate Cap.”

Alberta’s auto insurers have been under some form of rate intervention since 2023, starting with a year-long “pause” on auto insurance rate filings, followed by a Good Driver Rate Cap of 3.7% in 2024. In 2025, the cap increased to 7.5%, which will remain in place for 2026.

The Superintendent reports that in 2024, 35 carriers of auto insurance in Alberta suffered a financial loss. These results have forced a handful of insurers to exit the Alberta market, while others have restricted the sale of coverage. As a result, drivers and insurance brokers increasingly report difficulties in securing appropriate insurance coverage.

“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, Insurance Bureau of Canada. “That is why the government must move forward with its Care-First reforms to address the key driver of rising premiums today – sky-high legal costs that account for 20% of what drivers currently pay. Everyone has paid a price for inaction, except Alberta’s trial lawyers who continue to benefit from the status quo.”

Care-First is on track to deliver improved benefits and care for those injured in collisions, as well as lower average premiums for drivers when introduced in 2027. If combined with efforts to attract competition back to the market by removing government rate interventions and other regulatory barriers, it presents the best path to deliver lasting improvement in premiums for drivers.

The Superintendent’s annual report also shows the significant strain that hailstorms, wildfires, and other severe weather events are having on the home and property insurance marketplace. The 2024 Jasper Wildfire and Calgary hailstorm caused $1.3 billion and $3.25 billion in insured damage, respectively. As a result of these events, the Superintendent found that home and property insurers paid out 26% more in claims and expenses than they collected in premiums in 2024. This underscores the importance of enhancing resilience to these events through improvements in the provincial building code, land use requirements, and other actions.

Background

In 2023, the Alberta government froze auto insurance rate filings. It followed that policy in 2024 with a 3.7% “good driver” rate cap that was increased in both 2025 and 2026 to 7.5%. 

Alberta’s auto insurance system is facing significant costs, all of which are growing well in excess of the government’s current 7.5% rate cap and must be addressed to improve affordability for drivers. Over the past two years:

• Legal costs have grown 34% and are projected to grow 8.7% this year.
• The cost of delivering care and recovery benefits to those injured in a collision is up about 25% and is projected to grow nearly 12% this year.
• The cost of auto theft is up 21%.
• During the more than three years of rate intervention, the Alberta government has increased the Health Levy on auto insurers by a staggering 70%.

About Insurance Bureau of Canada

Established in 1964, Insurance Bureau of Canada (IBC) is the national industry association representing Canada’s private home, auto and business insurers. Its member companies make up the vast majority of Canada’s highly competitive property and casualty (P&C) insurance market.

As the leading advocate for Canada’s private P&C insurers, IBC collaborates with governments, regulators and stakeholders to support a competitive environment for the P&C insurance industry to continue to help protect Canadians from the risks of today and tomorrow.

IBC believes that Canadians value and deserve a responsive and resilient private P&C insurance industry that provides insurance solutions to both individuals and businesses.

For media releases, IN Focus articles or to book an interview with an IBC representative, visit ibc.ca. Follow us on LinkedIn, X and Instagram, and like us on Facebook. If you have a question about home, auto or business insurance, contact IBC’s Consumer Information Centre at 1-844-2ask-IBC. We’re here to help.

SOURCE Insurance Bureau of Canada