Although Alberta has not yet created all of the necessary regulations needed to implement its care-first program for auto insurance, the province has released its final actuarial report from Oliver Wyman Limited showing that savings for drivers will result from the province moving away from a court-based insurance system.
The projected savings of up to $366 per vehicle, per year, extends to most classes, except motorcycle coverage, which is expected to cost more going forward. The care-first system, intended to support accident victims after a collision without the need for legal processes to access compensation, is expected to launch January 1, 2027.
The report sets out actuarial estimates of the required industry average premiums under the care-first system. “Required premiums represent our estimate of the amount that insurers would need to collect to cover claims, expenses and profit,” they write.
The report estimates that required premiums for full coverage will come in at $2,027.64 for private passenger vehicles, $1,900.00 for commercial vehicles and $920.24 for motorcycle coverage.
“We estimate a significant increase in motorcycle average premiums. This is primarily due to a higher likelihood of severe injury when a motorcycle accident occurs,” Oliver Wyman’s researchers state in the report, Care-First: Actuarial Costing, prepared for the Automobile Insurance Rate Board (AIRB).
According to the analysis, between January 1 and June 30, 2025, insurers’ average written premium for passenger vehicles was $2,001. It is estimated that this figure should instead be closer to $2,454. The report notes that ministerial orders have been suppressing rates, leading some insurers to exit the industry in Alberta.
Projected average required premium for policy year 2027 under the current tort system came in at $3,134 while the projected average required premium under the care-first program was $2,028 for full coverage.
“We expect direct premium savings for commercial vehicles to be approximately $337 and we expect direct premium increases of approximately $367 for motorcycles,” they state.
The report also looks at nominal loss costs and the estimated premiums required for top-up coverage. “It is unclear how insurers will market and sell top-up coverage. Our estimates for top-up loss costs reflect a ‘cafeteria offering’ which allows insureds to pick and choose top-ups,” they add.
Full coverage is defined as including bodily injury, property damage, direct compensation property damage, accident benefits, uninsured motorists, collision and comprehensive.
“Care-first results in changes in loss costs and premiums for injury coverages,” they write. “Care-first does not affect loss costs for other coverages. Changes to required premiums for coverages other than injury coverages result from the reallocation of fixed expenses. We note that the regulations on loss transfer have not yet been announced.” They add that it is the firm’s understanding that insurers will need to include loss transfer figures in their care-first reform filings.
The report also notes that insurers may need to absorb unspecified one-time costs and transition costs to adapt to the new system – these are not included in Oliver Wyman’s analysis of costs. The report also notes that the analysis is based on the assumption that the care-first system will function as intended. Any legal challenges, they say, will affect the required premium figures featured in the report.
