Alberta’s auto insurance market sank deeper into the red in 2024 as insurers paid out far more than they collected, a government report showing the province’s rate cap is intensifying financial losses across the sector.According to the Alberta Superintendent of Insurance’s annual report released this week, property and casualty insurers lost more than $1.2 billion on auto insurance last year, paying out 18% more in claims and expenses than drivers paid in premiums. The superintendent warned losses are expected to grow as inflation, rising bodily injury claims, vehicle theft and weather-related damage continue to outpace the government’s Good Driver Rate Cap.Auto insurers in Alberta have faced rate intervention since 2023, beginning with a one-year freeze on rate filings. That was followed by a 3.7% cap in 2024, rising to 7.5% in 2025, a level that will remain in place through 2026.The report shows that 35 auto insurance carriers operating in Alberta recorded losses in 2024. Several insurers have exited the provincial market altogether, while others have reduced the availability of coverage, leaving drivers and brokers increasingly struggling to find policies..Industry groups say the numbers confirm the cap is backfiring. Insurance Bureau of Canada vice-president Aaron Sutherland said the policy is undermining competition rather than protecting consumers, arguing that legal costs — now accounting for 20% of what drivers pay — remain the core driver of rising premiums.Sutherland said the province’s proposed Care-First reforms, scheduled for 2027, would improve benefits for collision victims while lowering average premiums, but only if the government also removes rate caps and other regulatory barriers to restore competition.The superintendent’s report also highlighted mounting losses in home and property insurance, driven by extreme weather. .The 2024 Jasper wildfire and a major Calgary hailstorm caused an estimated $1.3 billion and $3.25 billion in insured damage, respectively. As a result, home and property insurers paid out 26% more in claims and expenses than they collected in premiums last year.The report warned the trend underscores the need for stronger building codes, land-use planning and other measures to improve resilience against severe weather events.Rising costs across the auto insurance system continue to outstrip the 7.5% rate cap. Over the past two years, legal costs have jumped 34% and are projected to rise another 8.7% this year. The cost of care and recovery benefits for collision victims has increased about 25% and is expected to climb nearly 12%, while auto theft costs are up 21%.Compounding the pressure, the Alberta government has increased the Health Levy on auto insurers by 70% during more than three years of rate intervention, further squeezing an industry already operating at a loss.
