Alberta auto insurers lost more than $1B in 2024: report

Alberta’s rate cap is deepening financial losses in the province's auto insurance market, industry experts say, as a new report found auto insurers lost more than $1.2 billion in 2024.

The latest annual report from Alberta's superintendent of insurance, released last month, cited the Calgary hailstorm and the Jasper wildfire as major factors driving the loss.

As a result, the Insurance Bureau of Canada (IBC), the national industry association, said insurers had to pay out 18 per cent more in claims than drivers paid in premiums. About 35 auto insurers in Alberta suffered a financial loss that year.

"The superintendent expects this pressure on Alberta’s automobile insurance profitability and stability to continue through 2025," the annual report says.

Aaron Sutherland, IBC's vice-president of Pacific and Western regions, said provincially regulated rate caps and high legal costs are factors that make it difficult for insurance companies to operate in the province.

“We've seen multiple insurance companies forced to leave Alberta. That means less competition, less choice, and the insurers that remain here are restricting the sale of coverage,” Sutherland said.

“It's not improving affordability. In fact, it's doing the opposite and it's making auto insurance much more difficult to secure at a time when it's needed the most.”

The provincial government introduced the "good driver rate cap" in 2024, limiting the amount insurance premiums can go up in a given year.

The cap was initially set around 3.7 per cent, then increased to 7.5 per cent in 2025.

The annual report forecasts escalating claims costs will continue to exceed that cap due to inflation, growing severity of bodily injury claims, vehicle theft rates and weather-related losses.

“[The rate cap] pales in comparison to the growth and cost pressures underneath coverage —  legal costs, the cost of theft, the cost of natural disasters like hail events, those are going up well in excess of that,” he said.

“With the cost of delivering coverage growing far faster than the price you're able to charge, that simply isn't sustainable.”

Those observations ring true for Heather Mack, manager of education and engagement with the Alberta Automobile Insurance Rate Board, which sets auto insurance rates in the province.

She said the biggest cost driver in auto insurance in Alberta is third-party liability or bodily injury — when the driver who isn't at fault sues the other to compensate for things like medical costs and property damages.