Insurers generate income and ensure they have enough money to pay claims through the premiums drivers pay and investments income. With 69% of investments in low-risk bonds, insurers generally see low investment income. Investment returns in 2018 were at 2.0%*, the lowest on record, while inflation was at 1.9%.

When filing for a rate change with the Alberta Insurance Rate Board (AIRB), insurers must factor in their own expected investment return. Given today’s low interest rates, the Alberta Insurance Rate Board (AIRB) is currently using a benchmark investment return rate of 2.84%.**

*IBC 2019 Fact Book (page 14).
**https://airb.alberta.ca