Less than a year to go until Alberta releases Care-First auto insurance — a revisited topic — thanks to the recently released 2024 insurance report.The regulated auto insurance system is set to be released January 2027, and in the newly released Alberta Superintendent of Insurance annual report, property and casualty insurers lost more than $1.2 billion on auto insurance in 2024, accounting for insurers paying out 18% more in claims than drivers paid in their premiums.What's often forgotten, and what Mark McCourt, a personal injury lawyer at McCourt Law in Edmonton, points out, is the fact that most of this $1.2 billion loss happened in the same year as the great Calgary hailstorm on August 5, 2024."The report (p. 8) shows an underwriting loss in Alberta auto in 2024 of a little over a billion bucks," McCourt told the Western Standard.."Virtually all of that underwriting loss was due not to bodily injury claims, but rather to a single hailstorm."McCourt adds Alberta's Minister of Finance, Nate Horner, responsible for introducing the incoming Care-First system, knew this."Horner, at the November 2024 press conference [50:20], announcing his department's planned no-fault scheme, saying, 'The hailstorm in Calgary was a billion dollars in auto — it hit one of the parking lots at the airport. It's probably one of the most expensive airport parking lots you could hit with a hailstorm outside of Dubai.'"Due to this, McCourt says, "The Insurance Bureau of Canada (chief lobby group for the insurance industry) takes advantage of this outdated profitability information and spins it to support the insurance industry's desire for government action designed to increase premiums and decrease claims costs.".McCourt also adds the 18% increase in claims paid compared with premiums collected does not tell the whole story when it comes to insurers' actual profitability."Insurance companies love to plead poverty and beg the government to relieve them from the responsibility to fairly compensate Albertans injured by reckless drivers.""Yet those same insurance companies brag to their shareholders about the eye-popping profits they're making in investment income.""Let's face it: if auto insurance companies really were losing money in Alberta, they'd be more than happy to leave the province and have the government set up a publicly run insurance corporation in their place."."It's typically not on underwriting (premiums in vs. claims and operating expenses out), but on investing premiums and accumulated capital, where insurance corporations make their real profit," McCourt stated.In 2024, insurers' return on equity (ROE), the amount of profit insurers make in a year when investing the money they receive through premiums and accumulated capital, was 13%, recovering and stabilizing from a year earlier, when Statistics Canada stated it reached its lowest point at 9%.McCourt says, according to a 2025 survey conducted by Nanos for the Canadian Bar Association (CBA), only one in five Albertans believe it is likely auto insurance premiums will go down under Care-First.What's more, according to an MNP report published in June, the Care-First system could underperform, falling short of the government's promised $400 in annual premiums savings..Under the Care-First system, Albertans will be limited in their rights to sue at-fault drivers, as the legislation only permits legal action under certain circumstances — which depend on the at-fault driver having either a criminal or traffic conviction.With Alberta's current "mixed" insurance model, Albertans can sue at-fault drivers when suffering injuries, pain, lost income, and serious damage resulting from the incident.As reported by the Calgary Herald, the estimated cost of tort-access could add up to $218 annually in premiums — and when the right to sue is restricted under Care-First, premiums could cost drivers an extra $136 annually."And when you add in the increased cost of tariffs, other inflationary pressures which can’t be accounted for today due to the rate cap, it’s becoming increasingly unlikely that drivers are going to see savings when the care-first model is adopted,” Aaron Sutherland, IBC's vice-president for Western Pacific Canada, stated.
