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My story in the Toronto Star May 28, 2016:
There’s more to the story however.
The Numbers Game
What’s the story behind the numbers of motorcycle related accidents and injuries said to be driving insurance premiums sky high?
Not enough competition
There are 36 insurance companies offering motorcycle coverage but of those just three account for 54 per cent of the market. Some of the 36 barely write any business, leaving the majority of the market in the hands of just a few companies.
Top of the pile is TD General Insurance Company which collected $38.8 million in premiums from 42,412 policies with an 18 per cent of the market in 2014 by dollar value, 19.51 per cent by number of policies.
Number two is Certas Home and Auto Insurance which collected $44.4 million from 39,122 policies for an 18 per cent and 21 per cent market share. Third is Intact which earned $44.4 million from 38,928 polices for a 21 and 18 per cent market share.
A distant fourth is Security National Insurance Company which wrote $38.7 million from 18,268 policies for a 6.46 and 8.4 per cent share
By contrast the 36th ranked company, Zurich Insurance collected just $795 in premium but lists no policy against it strangely enough.
Who increased rates?
Rates continue to rise, compounding increases. While the average rate increase in 2014 is shown only as 4.84 per cent rates actually jumped in most cases beween seven per cent to 10 per cent.
|Certas Home and Auto Insurance Company||21.06||0.00|
|Commonwell Mutual Insurance Group, The||0.14||0.00|
|COSECO Insurance Company||0.26||10.02|
|CUMIS General Insurance Company||0.07||9.96|
|Farm Mutual Reinsurance Plan Inc. (on behalf of Ontario Mutuals)||0.51||9.52|
|Farm Mutual Reinsurance Plan Inc. (on behalf of Ontario Mutuals)||0.51||7.93|
|Intact Insurance Company (MS re-calculated for Trafalgar)||21.10||9.73|
|Novex Insurance Company||0.14||6.79|
|Primmum Insurance Company (unadjusted MS)||11.85||9.14|
|Security National Insurance Company||6.46||9.01|
|TD General Insurance Company (unadjusted MS)||0.00||0.00|
|TD General Insurance Company (unadjusted MS)||0.00||9.16|
|TD Home and Auto Insurance Company (unadjusted MS)||9.70||9.16|
|Wawanesa Mutual Insurance Company, The||1.21||8.43|
In 2015 it was worse. Some 72 per cent of the market jumped rates an average 15.44 per cent. Only one carrier actually dropped rates. The big three, Certa, Intact and TD raised rates 42.27 per cent, 24.59 per cent and 25.28 per cent respectively. Security, the number four company raised theirs nearly 15 per cent.
|Certas Home and Auto Insurance Company||21.06||42.27|
|COSECO Insurance Company||0.26||9.94|
|CUMIS General Insurance Company||0.07||9.95|
|Dominion of Canada General Insurance Company, The||1.19||0.44|
|Intact Insurance Company (MS re-calculated for Trafalgar)||21.10||0.52|
|Novex Insurance Company||0.14||-6.32|
|Primmum Insurance Company (MS re-calculated for TDHA)||3.16||24.59|
|Security National Insurance Company||6.46||14.96|
|TD General Insurance Company (MS re-calculated for TDHA)||18.40||25.28|
The Number of Claims
Insurance companies say more riders having more accidents and making bigger claims are to blame. The numbers don’t lie but they don’t always add up and make sense..
The Ontario Ministry of Transportation says there were 234,893 active motorcycle registrations in 2014, up from 232,717 in 2013.
MTO further says there were 532,381 motorcycle M class riders in 2013 which increased to 538,206 in 2014. Of those 8,740 were newly licensed motorcycle riders with M1 licenses and 92,744 M2 as of Dec 31, 2013. In 2014, there were 8,337 with M1 and 91,563 with M2.
That’s a decrease of 413 new riders and 1, 181 intermediate riders.
MTO also confirms registrations over the last decade increased (2004-2013), by 72 per cent and riders are up 6.6 per cent. Dramatically more bikes, but not as many riders.
Finally, the MTO reports: “Over the last 10 years between 2004 and 2013, the number of fatalities per 10,000 registrations decreased by 38 per cent. Over the same period, the number of injury collisions per 10,000 registrations decreased by 31%.”
The General Insurance Statistical Agency (GISA), which collects and manages insurance data from all Ontario carriers however lists 217, 710 bikes are being insured in 2013, which further drops to 217, 476 in 2014.
The Insurance Bureau of Canada, which cited the numbers to The Star, says the difference is in whether bikes are insured and how long they were insured in the year.
Still, that’s a discrepancy of 18,007.
Who is at fault?
In the contest between cagers – car drivers – and riders, the latter are always coming to come off worse. That’s a fact.
Based 2013 data, MTO lists 2,354 reportable collisions involving motorcycles, of which 50 were fatal, 1,606 resulted in injury and 698 were Property Damage Only. That same year, there were 50 motorcycle fatalities and 1,681 motorcycle injuries.
GISA, however, lists 4,353 claims in 2013 dropping to 4,278 in 2014. That’s 1,999 fewer incidents than the MTO, more than a statistical rounding?
The answer, says GISA, is that each incident may trigger several claims within a policy, one for the bike, and up to two for the rider, one for the medical and rehabilitation costs and one for loss of income.
When a car hits a bike, statistically the car driver is usually at fault. And a two vehicle collision ostensible is two claims.
A motorcyclist losing control on a road riding along is a single claim and that’s fair enough.
But if the car driver is more likely to be at fault, why are motorcycle riders being dinged with soaring increases?
GISA says if a car is involved, there may be a claim for the car and third party damage such as a bus shelter, for example. However, GISA says, while Ontario has no fault insurance, the cost of the claims relating to the car insurance policy have not been included in their numbers.
|YEAR||Written Premiums (Dollars)||Claims Cost (Dollars)||Average Premium Cost (Dollars)||Ratio of Income to Claim costs. (%)|
From 2010 to 2014 companies insuring motorcycles collected $970 million in premiums from riders, paid out $924.5 million in claims and in adjusting those claims.
That left those companies $44.6 million, which over the four year period amounts to 96 cents on each dollar paid out in claims and a 4.6 per cent profit margin which doesn’t include the cost of running their business, selling policies and other admin costs.
Generally the industry wants to keep their ratio to 75 per cent.
It also doesn’t include any returns the companies receives from investing premiums.