Insurers and stakeholders are struggling to find a cure for Ontario’s auto insurance woes. But the solution may lie right next door, says
Echelon Insurance’s President and Chief Operating Officer, George Kalopsis.
“I’m not sure this is the most popular answer, but I would say Quebec,” says Kalopsis. “They’ve been running a system that has been in effect since the 1970s, and the public seems to be happy. They aren’t clamouring for a major gutting of the system. Costs are low, and consumers are happy with that.”
Another advantage of the Quebec system is that insurers can file and use, without having to jump through the filing regulatory hoops that are in place in Ontario.
“You find out very quickly in two weeks in the marketplace if your rates are too high or too low,” Kalopsis told Insurance Business. “That immediate feedback is great.”
It is very simple, and the market decides if you have the right product, whether it is moderately priced or not, he says, “as opposed to running the gauntlet like you have to do in many other jurisdictions in this country.”
Although it may not be perfect, it is as close to perfect as auto insurance can be, says Kalopsis.
“Quebec isn’t everybody’s cup of tea,” he says, “but I think when you look at it in its totality, and weigh the plusses and minuses, Quebec has it as close to right as possible.”
What has hamstrung many insurers in Ontario is the “evolution of offloading” of what governments used to pay for, says Kalopsis, that has been placed onto insurance companies over the years, “and that trend has only accelerated.” (continued.)
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But what about government-run auto insurance systems?
“I believe, philosophically, a government-run system doesn’t work,” he says. “Competition forces you to sharpen your product. Iron sharpens iron.”
While Quebec has the mix of public and private insurance, Kalopsis feels every province – not just Ontario – would be better served to follow the Quebec model.
“The clarity and the simplicity of the Quebec system would be a welcome change not just to the Ontario system, but probably in many other jurisdictions across the country,” he says. “What you see in Quebec is that first-party benefits have been pretty consistent; a broken arm has a fixed value. There’s no arguing – it is what it is.”
