‘Trial lawyers continue to play a costly role in the current system’: Insurance Bureau of Canada VP
In its recently released 2026 Market and Trends Report, Alberta’s Automobile Insurance Rate Board (AIRB) highlighted auto insurance affordability as a concern, with vehicle repair costs, catastrophic weather events, and bodily injury claims putting upward pressure on insurance premiums.
The report shared that the full coverage premium was $1,903 in 2025, an 8.7 percent increase from $1,751 in 2024.
“Finding that premiums increased 8.7 percent last year, while insurers continue to lose money at record levels, the report provides further validation that the government’s new Care-First insurance system can’t come soon enough,” said Aaron Sutherland – vice-president, Western and Pacific, of Insurance Bureau of Canada (IBC) – in a statement.
According to the report, while the good driver rate cap and other regulatory measures have moderated some drivers’ premium increases for now, the underlying cost drivers have remained, and deferred pricing adjustments and other market distortions have arisen.
Goals of AIRB report
Providing an annual overview, the report assesses the province’s auto insurance market conditions, focusing on affordability, accessibility, competition, and sustainability during transition periods.
The report seeks to explain how Alberta’s care-first auto insurance reform might help enhance medical and income replacement benefits while improving long-term affordability and sustainability.
According to Sutherland, the report confirms that “Alberta’s auto insurance system is broken, as the availability and affordability of coverage continues to decline.”
2025 data in Alberta
The report shares the following statistics based on last year’s data, including:
- The industry private passenger vehicle loss ratio was 83.6 percent, down from 98.9 percent in 2024 and 97.1 percent (estimated) in 2023
- Across all coverages, Alberta’s total loss cost was around $1,591, down from $1,731, reflecting a normalization after the 2024 rise in comprehensive losses due to the Calgary hailstorm
- Alberta’s vehicle theft loss cost was about $39.45 in the second half of 2025, compared with $63.80 in Ontario and $24.80 in the Atlantic provinces
- For drivers with at least one at-fault claim or criminal or major conviction, 67.7 percent bought collision coverage
- For drivers without any at-fault claims or major or criminal convictions, 73.2 percent purchased collision coverage
- The average deductible for collision was around $870, with deductibles of $1,054 for drivers with at‑fault claims or higher-risk characteristics and deductibles of $848 for those without
- Third-party liability costs, primarily comprising legal and litigation costs, made up 58.2 percent of premiums paid by drivers
- Vehicle theft costs were stable at $39.50 for each policy
- Inflationary pressures have raised vehicle repair costs for comprehensive vehicle damage claims by approximately 27 percent in recent years
- Insurers lost nine cents for every dollar of coverage sold in 2025
“Data from MSA Research, an independent and impartial analytical research firm focused on the Canadian insurance industry, shows that between 2013 and 2024, insurers lost money on the sale of auto insurance in Alberta every year except 2021 and 2022, when there was a dramatic decrease in claims during the COVID-19 pandemic,” the report stated.
Sutherland noted that “the financial pain” recorded last year has not affected everybody.
“As in previous years, the AIRB’s report highlights that legal costs remain the most significant cost pressure underlying drivers’ premiums and trial lawyers continue to play a costly role in the current system,” Sutherland said in the statement.
About care-first auto insurance
Alberta’s care-first auto insurance model takes effect on Jan. 1, 2027. According to the report, the care-first model represents a move away from litigation-driven compensation.
“By taking action to rein in out-of-control legal costs and lawsuit abuse, the government’s Care-First system will save drivers hundreds annually while providing the greatest level of care and recovery benefits in Canada for those injured in collisions,” Sutherland said in the statement.
More on Automobile Insurance Rate Board
An independent regulatory agency, the AIRB oversees and approves automobile insurance in Alberta.
The AIRB said it intends to balance consumer protection with market sustainability as the province shifts to the care-first system and deals with the resulting uncertainty amid the auto insurance market.
More news involving Alberta’s care-first reforms
Here are some other recent news stories relating to Alberta’s care-first reforms.
As shared by IBC last June, among Albertans responding to a survey conducted through a collaboration between Yorkville Strategies, Inc. and IBC, 62 percent expressed support for the provincial government’s care-first auto insurance reforms.
Last January, the Alberta Civil Trial Lawyers Association sent out a news release objecting to the proposed care-first auto insurance or other no-fault models or reforms requiring those with serious, life-altering injuries to trade their rights and access to justice for unproven claims of affordability.
In March 2025, the Alberta government said, if passed, its Automobile Insurance and Care-First Benefits Act would shift the focus away from costly and time-consuming litigation and toward ensuring that Albertans injured in vehicular collisions receive the care and support they need.
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