Insurance industry made profit of $4.2 billion in 2004

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Insurance companies post $4.2 billion in profits

CTV.ca News Staff

Canada's insurance industry announced another year of astronomical profits on Friday. New figures for 2004 from the Insurance Bureau of Canada showed the sector made a combined net profit of $4.2 billion.

That's a record high and a 150 per cent increase, up from $2.63 billion reported this time last year.

The figures include profits for 206 auto, home and business insurance companies operating in Canada.

IBC President Stan Griffith said Friday the 2004 figures reflect the industry's "return to financial health" after earlier years where it posted the weakest earnings in its history.

But already consumer watchdog groups are calling the announcement an outrage and demanding something be done.

"This is an obscene profit," Bruce Cran, President of the Consumers' Association of Canada, told CTV.ca.

"I think it's high time there was an open inquiry into the insurance industry and the way governments deal with this matter," said Cran.

Griffith acknowledged that, even before this year's figures had come out, the insurance industry was aware that, economically, the times were good for its members.

"Last year we returned to profitability and today with some relief we can say to policyholders, government and shareholders that the industry is strong again."

IBC said the strong profits have allowed companies to lower auto insurance premiums "substantially" in many jurisdictions, including Ontario, Atlantic Canada and Quebec.

Just last month, Statistics Canada said the annual inflation rate for December had stayed the same -- at 2.1 per cent -- and a major factor was lower auto insurance premiums.

They rose just 1.5 per cent through 2004 compared with a 22.1 per cent jump in 2003.

Cran pointed out that, no matter what the rates are for home, auto or business insurance, in many cases consumers have no choice but to purchase a policy.

"We should not forget this isn't an item you can chose to buy or not buy," he said.

"These profits have been made on the backs of consumers."

Gee.. record high insurance rates..
record high profits

Coincedence? Absolutely not.

Bunch of crooks.. especially for auto insurance, where they're sexist and ageist, too..

it amazes me that it isn't a bigger issue here in ontario, since in a couple of other provinces it almost decided their provincial elections.

i still believe that a public auto insurance scheme like they have in other provinces would be the best for ontarians.

too bad so many people associate the idea with the ndp and instantly turn their noses up at it. it works, it has been proven to save money, and yet we let the insurance industry rake in record profits every year.

Shockingly a number of consumer association groups are a little upset at this.