14 Apr, 2024
1 min read

Zenith Insurance ends broker contract; Alberta Finance Minister quotes rates pause

Editor’s Note: On Friday July 21, 2023, Canadian Underwriter sent out an e-newsletter with an incorrect subject heading, implying that Zenith pulled out of auto insurance in Alberta. In fact, Zenith has only canceled a contract with a brokerage that wrote auto for Zenith, and is still writing auto insurance business in Alberta. Canadian Underwriter apologizes for the error in the subject heading.

Zenith Insurance Company has terminated its relationship with an Alberta brokerage that was selling its auto insurance, with Alberta’s Finance Minister suggesting the move was related to the province’s rate pause.

“Zenith Insurance Company made the decision to end our relationship with one of our personal lines brokers in Alberta, impacting a small number of customers,” a Zenith Insurance spokesperson told CU. “We remain committed to serving the personal automobile insurance needs of customers within the province and across Canada through our other partners.”

Due to privacy reasons, the company cannot comment on the name of the broker.

Zenith has a market share of 0.43% for Alberta private passenger vehicles, according to the Approved Automobile Insurance Rate Board Filings.

Across Canada, the company’s total auto claims ratio was 85.77% in 2022, although on the personal accident (auto benefits) side, it was 119.52% — meaning the company lost about nineteen cents for every premium dollar it brought in on the personal accident side, according to MSA Research stats published in Canadian Underwriter‘s 2023 Annual Stats Guide.

“We recommend that any questions regarding Alberta’s automobile rate pause or reform efforts be directed to the Insurance Bureau of Canada [IBC],” Zenith Insurance’s spokesperson said.

Insurers are facing increased vehicle repair costs and surges in legal fees. These factors — coupled with the rate of pause — are challenging insurers’ ability to remain viable, Aaron Sutherland,

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