Truck News


Insurance going up thanks to Sept. 11

QUEBEC CITY, Que. -- Call it an aftershock left over from the day that shook the world; insurance costs will be cli...

QUEBEC CITY, Que. — Call it an aftershock left over from the day that shook the world; insurance costs will be climbing in everywhere to help cover the new risk of global terror.

Premiums for home and business insurance in Canada will head straight up next year and it’s all thanks to Sept. 11, a prominent Canadian actuary says.

Toronto-based David Oakden, who advises insurance companies on rate levels, says business owners will face the biggest hikes, they might be looking at increases of anywhere from 20 to 100 per cent. Oakden is outgoing president of the Canadian Institute of Actuaries, which held its annual meeting in Quebec City this week.

“Small business is going to get hurt badly,” adds Jo-Ann Davies, vice-president of Montreal insurance broker Bezanson & Davies.

To help stabilize market share, at least one company, ING Groupe Commerce, is now offering a two-year policy for home and auto insurance.

Oakden says the increase in premiums reflects the higher cost to insurance companies of buying catastrophic protection from reinsurance firms.

“That’s protection against an individual event that could cost them an unlimited amount of money, like an earthquake, hurricane or flooding,” Oakden explains.

Reinsurance companies are the ones that took the major financial hit — upward of $30 billion U.S. — from the World Trade Centre tragedy. Not surprisingly, they’ve since raised the rates they charge insurance companies by as much as 70 per cent.

“We knew this would happen,” Davies says. “Reinsurers are worldwide. In order for them to make up this loss, they’ll have to spread it over the entire world.”

Oakden doesn’t expect business insurance to return to “pre-Sept. 11” levels (with allowances for inflation) for another three or five years.

In fact, it probably will cost an average of about five per cent more in Quebec next year, Ontarians will probably see 10 per cent and the Atlantic provinces are looking at hikes of 20 per cent or more as insurance companies look to rebalance rates that have been “woefully inadequate” for five years, Oakden concludes.

Truck News

Truck News

Truck News is Canada's leading trucking newspaper - news and information for trucking companies, owner/operators, truck drivers and logistics professionals working in the Canadian trucking industry.
All posts by

Print this page

Have your say:

Your email address will not be published. Required fields are marked *