Alberta auto insurance reform incremental positive, National Bank says

Definity Financial

22/11/2024 18:08

** Alberta's government on Thursday announced the
introduction of new auto insurance system, which is expected to
be fully implemented by January 2027
    ** Starting next month, the rate cap on auto insurance
premiums will be increased to 7.5% from 3.7% 
    ** National Bank of Canada says it views the reforms as
slightly positive for Canadian auto insurers Intact Financial
 IFC.TO  and Definity Financial  DFY.TO  
    ** Brokerage notes the new policy aims to reduce legal costs
for insurers that has driven "significant" cost pressure 
    ** Still, National Bank cautions that auto insurers would
need more than the announced rate increase to become profitable,
given one-third of them that wrote business in Alberta in 2023
were unprofitable

 (Reporting by Arasu Kannagi Basil in Bengaluru)
 ((ArasuKannagi.Basil@thomsonreuters.com))