CBC TORONTO - Canada’s insurance companies are coming off a record year, with $2.63 billion in profit in 2003, a 673 per cent increase over the previous year.
For people who have had to pay higher rates for auto, property and business insurance, it is all too much. Ron Reed is one of them. He says he can’t afford his own vehicle any more. “It’s making me sick. Why do they need all that money, what do they need it for?”
“I think they’re a bunch of crooks,” said another frustrated consumer.
Insurance companies have raised their rates because they said they were losing money. George Jordan, who was appointed last year by the Nova Scotia government as consumer advocate to represent consumer issues on auto insurance, says consumers are going to be angry.
“People are going to scratch their heads and say why did you raise my rates by 15 per cent or 20 or 40, in some cases I heard 200 per cent, when you’re making those kinds of profits. I mean what gives here?”
The insurance companies explain that some parts of their industry are just more profitable than others.
“The results are difficult to understand because they’re the combined aggregate of, as I said, over 200 companies and hundreds of different products in many different markets across the country,” said Jane Voll, chief economist with the Insurance Bureau of Canada.
Some advocates are calling on governments to rein in the insurance company profits. But that’s unlikely to happen. The Insurance Bureau points out the entire insurance industry in Canada still made less profit than the Royal Bank.
It also points out that profits were spread across more than 200 companies and result from fire, home, life, auto and other policies sold.
The previous profit record of $2 billion profit was set in 1997.