The false promise of government auto insurance

The analysis suggests that, when calculated assuming comparable definitions for the data, the average cost of auto insurance tended to be high in the provinces with government auto insurance monopolies relative to the provinces with regulated competitive private sector auto insurance markets. [...] It is important to compare the cost of auto insurance in each of these provinces to verify the validity of published claims that provinces with government auto insurers pro- duce lower premiums for drivers than provinces that rely on private sector competition for the delivery of auto insurance (CAC, 2003). [...] In order to estimate and fairly compare the average cost of auto insurance in every province, this study applies (by estimation) the same data definitions that govern- ment regulators require from private sector insurers in six provinces, to the published data of the government auto insurance monopolies in four provinces. [...] The main research question of this study is: Assuming that the actual number of annual- ized risk exposures per population in the provinces with government auto insurance monopolies is roughly proportional to the average of the provinces for which appropriate data is provided, what is the estimated average cost of auto insurance premiums in each province? [...] Conclusions When average auto insurance premiums are calculated assuming that the actual number of annualized risk exposures per population in the provinces with government auto insurance monopolies is roughly proportional to the average of the provinces for which appropriate data is provided, the results suggest that in 2004 and 2005, premium costs under government auto insurance monopolies tende