The Insurance Bureau of Canada (IBC) today released its most recent Atlantic region figures for 1999 and 2000, confirming the steadily worsening losses being incurred on automobile insurance.

“Our actuarial estimates confirm the trends we’ve seen in recent years are continuing,” said Don Forgeron, regional vice-president of the IBC. “Costs continue to increase significantly, all of which will soon negatively impact motorists in every province in the region.”

In 2000, losses incurred by the auto insurance industry in Atlantic Canada were about $190 million. In 1999, the industry increased its original loss estimate to $150 million from $100 million. Analysts predict a continued rise in costs unless changes are made to the current auto insurance products offered.

“For several years, the average cost per claim rose while the frequency of claims and accidents fell,” said Forgeron. “In recent years, the frequency of claims has started to rise again, creating the worst possible scenario, a higher average cost per claim and more of them.”

Research shows that the types of claims with the greatest increase in cost are soft tissue injuries such as neck strains and sprains. Most the claims that are paid in these cases do not compensate the victim for what has been lost, but rather for pain and suffering.

Research is now underway to help the industry determine the reasons why costs continue to rise, confirm the types of injuries that are contributing most to the current high costs, and look at the distribution of these costs. The bureau is also surveying public opinion to find out the level of understanding of industry issues and the tolerance for changes to auto insurance products.

“As consumers feel the effects of these rising costs over the next six to 18 months, government and industry leaders will be called upon to respond,” added Forgeron. “In addition to meeting with government officials to ensure that they fully understand the problem, we’re working to provide a range of solutions.”

The IBC say it is working with governments to develop various options to reform the current auto insurance product so that costs remain stable and accident victims can be fairly compensated.