The Financial Services Regulatory Authority of Ontario (FSRA), after retaining Oliver Wyman Limited, has published its draft annual review of private passenger vehicles that will reportedly inform future rate setting in the province. The consultation period for stakeholders interested in commenting on the report closes September 29, 2025.
The extensive report – 327 pages including notes – provides graphical representations depicting changes in the number of insured vehicles, average premiums and average loss costs per vehicle over the last 10 years. It discusses the impact of legislative reforms over the years and the impact of COVID-19 and excess inflation on the loss experience. “This document will help determine average industry costs and trends to inform the setting of future rates,” they write.
The review is based on the Ontario private passenger vehicle industry data compiled and presented by the General Insurance Statistical Agency (GISA) as of December 31, 2024. The Oliver Wyman report, entitled Draft Ontario Private Passenger Vehicles Annual Review, adds that loss trend selections are intended to be isolated from the influence of the COVID-19 pandemic.
The post-pandemic new normal
“The COVID-19 pandemic affected loss costs beginning in 2020, mainly driven by a decline in the claims frequency rate. Current projections of mileage and mobility (based on cell phone data) indicate a return to pre-pandemic mobility levels in the second half of 2022. However, commuting and other driving patterns may differ from those prior to the pandemic. We believe 2022 may be the start of the post-pandemic new normal with remote and hybrid work models commonplace and the pandemic restrictions no longer in effect,” they write.
The report also notes a significant increase in physical damage claim costs coinciding with the late 2021 rise in inflation. “The federal government’s steps to curb inflation through higher interest rates have tempered the rate of annual inflation. The rapid rise in claims costs due to the inflation surge has moderated and results in year-over-year changes similar to those observed prior to the pandemic.”
