Purpose of consultation
FSRA serves the public interest by protecting consumers and fostering a strong, stable, competitive and innovative auto insurance sector. FSRA is responsible, under the Auto Insurance Rate Stabilization Act, 2003, for approving, rejecting, or requesting variance in proposed automobile insurance rates based on whether they meet statutory standards. Ratemaking benchmarks assist FSRA in determining whether an insurer’s assumptions are appropriate when seeking approval for rate changes.
FSRA retained Oliver Wyman (the “Consultant”) to independently analyze loss trend rates and reform factors along with other key actuarial assumptions, the results of which assist FSRA in conducting its statutory reviews of insurers’ rate filings . The Consultant’s preliminary report was posted on our website and feedback was requested on their assumptions and methodologies. This public consultation reflects FSRA’s broader commitment to transparency and collaboration with insurers.
Feedback received and response
FSRA appreciates the significant effort that went into the comments submitted in response to the Consultant’s preliminary annual review respecting proposed Benchmarks. FSRA received 12 submissions from August 28, 2025, to September 29, 2025. FSRA has considered all feedback during the public consultation. A full list of respondents to the consultation is provided in Appendix 1.
Responses have been broadly categorized as technical or general:
- Technical feedback on the Consultant’s preliminary analysis: The Consultant has addressed these submission comments in Appendix G of their final report.
- General feedback addressed towards FSRA: These comments were generally beyond the scope of the Benchmarks exercise and have been addressed in Appendix 2.
FSRA benchmarks based on the consultant’s results
FSRA has undertaken a thorough review of the Consultant’s annual review report and acknowledges that the Consultant’s analysis has been developed in accordance with accepted actuarial practices.
Over the past few years, labour and supply trends associated with the COVID-19 pandemic have led to rising inflation. This trend is reflected in the Consumer Price Index (CPI). Physical Damage (“PD”) claim costs have been directly impacted by the rise in inflation associated with vehicle parts, replacement vehicles, rental fees, maintenance, and repair costs since late 2021. Further, the impact of inflation on health care costs may ripple through the economy, affecting future trend rates for any coverages. Insurers should consider unusual economic changes for all coverages when selecting future trend rates.
As Benchmarks may not represent an individual insurer’s business, FSRA requires that all actuarial assumptions be fully supported with an analysis of the insurer’s own data to the extent credible, regardless of whether FSRA Benchmarks are adopted.
Appendix 1: List of respondents
Outlined below is a list of stakeholders that provided written submissions on the Benchmark consultation.
| ID | Company | Submission |
|---|---|---|
1
| Insurance Bureau of Canada (IBC)
| 2025 - 2025 - 09 Sept 29 - IBC Submission-FSRA 2025 PV Annual Review Consultation.pdf
|
2
| Facility Association (FA)
| FA Submission FSRA Annual Review 2025 v(final).pdf
|
3
| Alexander Daniel Germain
| I am writing as an injured claimant who has had to navigate Ontario’s auto insurance benefits system firsthand. My experience has made it clear that several areas require urgent modernization and reform to ensure fairness and accessibility:
|
4
| LedgerMasters
| Auto insurance rates should be based on the driving record of the licensed motor vehicle driver, not the postal code. Using the postal code to determine the insurance premium is not common sense. Unless corruption is a priority over fairness. Wake up, Ontario. This is always an election promise.
|
5
| Wawanesa Insurance
| The loss cost experience graphs in section 8. selected loss trends has a legend with a typo. Replace loess -> loss
|
6
| North York Physiotherapy Clinic
| Dear Sir/Madam: As a health care provider (physiotherapy), the rate that has not been changed/raised for multiple years is not reasonable but below what it should be at the current time. Motor vehicle accidents almost always cause multiple injury such as neck and back strain, shoulder strain, contusions, fractures, etc. For a clinic like mine, where comprehensive approach of physiotherapy is provided including electrotherapy, manual therapy, education, and exercise program, it is often difficult to provide proper treatment for such multiple injuries within the limited fees. |
7
| Dawn Shantz
| Regarding personal auto insurance. I feel it is unacceptable that auto insurance providers can penalize the policy holder because they own a car that appears on the high risk theft autos. My insurance company is charging me a large premium (additional $1000.00 annually) if I do not purchase a third party security system which will also cost me up to $700.00. They are only providing 60 days for me to complete this addition to my vehicle. This feels like the victims are being charged instead of resources being directed to stop the offenders who are stealing vehicles on Ontario. This is happening in addition to premiums rising at an alarming rate for both home and auto insurance. This is unacceptable.
|
8
| Parry Josan Signh
| Auto insurance is unreasonably high. In Brampton it's being charged by postal code which is unfair.
|
9
| World Financial Group
| In Ontario, the average cost of car insurance for full coverage ranges between $500 and $900 in the Greater Toronto Area (GTA), while third-party liability coverage typically costs between $300 and $450. Outside the GTA, insurance premiums are somewhat lower, but still significantly higher compared to other provinces, where full coverage can cost as little as $250. In recent years, Ontario has seen a consistent annual increase of approximately $100 in car insurance premiums. This growing financial burden has placed considerable strain on many households. As a result, some individuals are choosing to forgo important financial protections such as life insurance or term insurance for their families in order to manage their monthly expenses.
|
10
| GTA Lender
| [sic]
|
11
| Mike J
| The rates are becoming ridiculous in some areas, almost that of a mortgage. Why not set up more automated speed traps/red light cameras in conjunction with insurers and use those funds to lower insurance coverage costs. This will ensure more equitable costs for all parties involved. Not to mention safer driving. Start really punishing those who break the law and not just everyone.
|
12
| Mohamed Mahmoud
| Hi, I had an accident, and my insurance company doesn’t offer me the right amount for my car. Although I sent them a list of cars price smiler [sic] to my car in the market but they didn’t accept it and pay me the right price. |
Appendix 2: FSRA consultation responses
The following table summarizes the key themes that were raised during the consultation period and FSRA’s response.
| Theme | Summary of comments | FSRA response |
|---|---|---|
Flexibility in Rate Level Indication Calculation
| “we would respectfully ask FSRA to clarify that the target underwriting profit provision benchmark (currently at 5% of the premiums) is subject to the same level of flexibility as the other benchmarks.” (FA)
| The 5% target underwriting profit provision benchmark represents the maximum allowable underwriting profit - expressed as a percentage of premium - that an insurer may incorporate when setting rates for the proposed policy period.
|
Use of Benchmarks and Rate Regulation Principles
| “To ensure the execution of one of FSRA’s key organizational priorities, to encourage a competitive and sustainable auto insurance market, FSRA should continue to assess any rate increase on their individual merits.” (IBC)
“We also believe regulators should allow the filing insurer to set their prices and market share on their views of ultimates and their selections of models describing frequency/severity/loss costs over time and as projected into the future. The rate review process should focus on whether the filing insurer’s process to arrive at their forecast was reasonable (and consistent with the insurer’s previous views / process / approach unless an explanation is provided as to what has changed and why). If so satisfied, we believe regulators should accept the filing insurer’s view, even if it differs from the view of the regulator’s actuary.”
“FA’s long‐standing position has been that that benchmarking exercises should be used to inform regulators of considerations for rate filings, rather than to set specific targets, caps, or floors with respect to any one particular assumption. This approach opens the opportunity for insurers to reflect their own assessment of future costs in providing their product / service to the consumer, and allows them to set their rates based on their assessment of the competitive market in which they operate.” (FA) | Benchmarks assist FSRA in reviewing insurers’ auto insurance rate filing applications based on statutory requirements.
As Benchmarks are developed based on the review of the industry data, they may not represent an individual insurer’s business. Insurers are not permitted to directly adopt the Benchmarks without justification. FSRA requires that all actuarial assumptions be fully supported with an analysis of the insurers’ own data, to the extent credible, regardless of whether FSRA Benchmarks are assumed. |
Post Pandemic Claim Frequency Level
| “As more industries begin to mandate a return-to-office policy, IBC believes that utilizing H2 2022 no longer represents the period of ‘new normal’ for claim frequency.” (IBC)
| FSRA conducts semi-annual reviews of industry data to inform benchmark trend factors. We continuously monitor claim frequency levels and emerging trends, and will adjust our benchmarks as needed based on the latest claims experience.
|
Vehicle Damage Trends and Tariffs
| “It is critical that FSRA continue to permit a wide range of projected trend factors, even if they are above this upper bound, to reflect each individual insurers own experience with rising vehicle damage claims costs.”
“FSRA must continue to be aware of the implications tariffs may have on the automotive industry and Ontario and its impact on insurer rate filings, as well should continue to prioritize individual insurer claim experience and future trends.” (IBC)
“FSRA should permit the inclusion of estimated tariff impacts in rate filings given they are supported by emerging data and analysis.”
“the projection of future loss trend rate needs is subject to considerable uncertainty and FSRA should consider this when reviewing individual rate filings.” (FA) | FSRA recognizes the industry's concerns around rising claims costs and tariff impacts. Any rate adjustments must be supported by credible claims experience. To ensure fairness for consumers, it is important to recognize that not all policyholders will be equally affected by tariff-related costs. Some may see less impact, while others could be more exposed to changes, depending on vehicle type, usage, and repair needs. Insurers should be cautious and avoid premature pricing actions. Instead, we encourage planning for volatility, monitoring actual impacts over time, and maintaining transparency with customers. FSRA remains committed to working collaboratively with the industry to support a stable and fair auto insurance system in Ontario.
|
Affordability, accessibility, and Fairness
| Auto insurance is high, and consumers find it unfair to be rated by postal code or to be charged for additional premium if no anti-theft device is installed in vehicles.
Consumers suggest modernization and reform to ensure fairness and accessibility to auto insurance. Consumers also suggest setting up more speed traps and red-light cameras to encourage safe driving. (Consumers)
Health care providers find treatment rates to be unreasonable as those rates have not been changed for years. (Health care providers) | Auto insurance rates are determined based on various rating factors, including vehicle characteristics, driver experience, and the location where the vehicle is typically garaged. In FSRA’s rate review and approval process, a rate is approved only if the insurer’s proposed rates and risk classification system are actuarially justified using credible claims experience data. Whether the risk stems from high-risk geographic areas or specific vehicle makes and models, insurers must demonstrate that the premiums charged accurately reflect the associated risk levels. Proposals that lack actuarial justification are generally not approved by FSRA.
Thank you for taking an interest in our Ontario Private Passenger Vehicles Annual Review.
Although these comments are outside the scope of the Annual Review Guidance, FSRA will consider them in relation to its broader strategy to reform the regulation of rates and underwriting. |