Are Quebecers insecure? Premium inflation certainly doesn’t help. A little nod to the world of insurance.
It can be said that the vast majority of homeowners have home insurance, if only because of lender requirements. On the other hand, the latest studies carried out by the Insurance Bureau of Canada (IBC) on home insurance for tenants calculated that just under 40% do not have tenant insurance. That was in 2017. Inflation has since crept into premiums.
In home insurance only, the financial product comparison platform HelloSafe uses data from Ratehub indicating that the average premium in Quebec increased from $709 in 2015 to $984 in 2023, for an overall increase of 39% in eight years. or the equivalent of an average surge of nearly 5% per year over the same period. Small consolation, Quebec is the fifth province with the most expensive home insurance premium, with Ontario coming first in 2022 with an average premium of $1,487.
From a broader perspective, a report from the Financial Markets Authority indicates that in damage insurance, direct premiums written in Quebec for all insurers were nearly $16 billion in 2022, compared to 14 .9 billion in 2021, for an increase of 7.2% year-on-year. “As a whole, the damage insurance industry in Quebec shows growth in its direct written premiums of 51.5% in four years […] which is explained in particular by the price increases initiated by damage insurers,” indicates the Authority.
These pressures cannot be dissociated from the reality that, on the horizon, natural disasters are ever more frequent and costly. “Quebec has been hit in recent years by several extreme weather events which have had significant consequences on the affected communities: the floods of spring 2017 and 2019, the tornadoes in Gatineau in September 2018, the violent winds and heavy rains of fall 2019 and finally the violent winds and heavy rains in August and December 2022, to name just a few. », listed the BAC. So last year, Quebec insurers paid $580 million just to cover insured damages caused by natural disasters, making it the second most expensive year in the last twenty.
There has been no break or lull this year. In its recent report, the BAC writes that the weather events that hit Quebec have generated insured damages reaching $680 million to date. This amount makes 2023 the costliest year for insurers in Quebec since the 1998 ice crisis. The most costly events were the ice storm of April 5 (213 million), and wind, rain and lightning of July 13 (200 million). For comparison, the insured cost of the summer forest fires amounts to 22 million.
Inflation is added to the equation, with a faster jump in the average cost of a home insurance claim, i.e. 43% in five years or almost 9% per year in the meantime. In Quebec it would have gone from $9,920 in 2015 to $14,177 in 2020.
This rise in extreme weather events is still not reflected in protective habits. The price (for 58.1% of respondents to a survey), the responsiveness of customer service (41.9%) and the reputation (32.3%) of the company remain the three main criteria for choosing Quebecers for insurance. dwelling. In contrast, extensive coverage was a determining factor for only 16.1% of them, adds HelloSafe.
As for the protection sought, that against fire clearly stands out with 61.3% of respondents mentioning this reason as a reason for subscribing. This is followed by protection against theft and civil liability coverage, each option having been cited by 41.9% of participants, and that against water damage, with 35.5% of respondents. On the other hand, and far behind, protection against natural disasters only represented 12.9% of responses.
Less covered in life insurance
Same observation in life insurance. At the Canadian level, the outstanding life insurance contracts stand at 5,500 billion in 2022, an increase of 14.6% between 2018 and 2022. As for premiums, Canadians paid a total of 27 billion, i.e. an increase of 21.6% in five years.
In the meantime, and still according to data collected by HelloSafe, the average life insurance protection of Canadian households has recorded a constant increase to reach $474,000 in 2022, an increase of 12.1%. A similar trend was observed in Quebec with an increase of 12.7% over the same period. At $391,000 last year, the average life insurance protection for Quebec households, however, remained 17.5% lower than the national average.
However, the median age of life insurance policy holders is comparable. At 43 years in Quebec, it is within the Canadian average, with variances ranging from 38 years to 48 years here and there depending on the provinces.
Their preferences are mainly for insurance held in the form of individual or collective term life, representing 40% and 35% respectively of the total outstanding. Individual universal life and whole life insurance policies take up the rest, representing 13% and 12% of the total, respectively.