VANCOUVER, B.C. — A Fraser Institute think-tank has concluded that government-run vehicle insurance is a bust.
The think-tank recently concluded that public insurers have more claims and pay out less of their premiums than private-sector insurers. It also said public insurers produce the highest premiums and lowest claims payouts in Canada.
“Provinces with private auto insurance recently paid out average claims that were seven to nine times average premiums,” Mark Mullins, the institute’s director of Ontario policy studies told local media. “Every public insurer fared worse than that, with claims only two to five times higher than premiums. That is inferior insurance value.”
The study examined premiums and claims in all 10 provinces over the past decade. The Insurance Corp. of B.C. (ICBC) was found to be the worst with average premiums 20 per cent above the national level and average claim payments 50 per cent lower than the national average.
“The public insurance monopolies have turned auto insurance into a social program by mispricing risk and encouraging excessive claims usage,” Mullins said. “A program of privatization and market restructuring would remove the politics from this industry, encourage new business entrants, and better respond to consumer demand for high-value auto insurance.”
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