Sonnet Insurance Company, owned by Definity Financial Corp., is pulling out of the Alberta auto insurance market, saying limited opportunities to grow profitably in the current auto insurance operating environment were a key consideration in making the decision.

“Sonnet Insurance Company announced today that following a thorough review of its business in the province, it will phase out its auto insurance operations in Alberta. Sonnet has submitted a notice of intention to withdraw from auto insurance to the Alberta superintendent of insurance, indicating December 13, 2024 as the intended date of withdrawal,” the company said in a statement June 13.

They say the company will no longer issue new or renewal auto insurance policies in the province after that time. Existing clients, they say, will be notified in a timely manner. The company’s home insurance business in Alberta is not impacted by the change. The company is not discontinuing business in any other province and continues to operate its auto insurance business in New Brunswick, Nova Scotia, Ontario, Prince Edward Island and Quebec. Home insurance is also available from the company in British Columbia.

“Sonnet will continue to focus its efforts to profitably grow its auto insurance business in other regions in Canada,” added Paul MacDonald, executive vice president of personal insurance and digital channels with Sonnet.

Conference call discussion 

In their Q1 conference call on May 10, Definity executives discussed the situation in Alberta. Philip Mather, executive vice president and chief financial officer, commented, “Our approach includes focusing on areas of the business where we see opportunity for profitable growth. In the current environment, this excludes Alberta, where we maintain our pause on all Sonnet marketing activities.” 
Rowan Saunders, president and CEO, noted that Alberta represents only 12 per cent of Definity’s total auto portfolio, with 5 per cent of that in Sonnet and 7 per cent in the broker business. “The broker business is in a different position from our Sonnet business, brokers are much more mature business,” he said, adding that its Sonnet business in the province stood at $66 million at end of the first quarter.

Saunders added that Definity thinks that eventually the Alberta government will end up “with some form of a reasonable outcome and reforms in place.” 

This article was written by Kate McCaffery with files from Alain Castonguay.