This study is the first effort by The Fraser Institute to measure and compare the performance of auto insurance markets across international jurisdictions.
Previous Institute studies have only compared Canadian provinces with each other. However, this paper assesses the performance of automobile insurance markets in 10 Canadian provinces, 50 American states, and the United Kingdom in 2002 - the most recent year for which complete data were available across all jurisdictions.
Data were collected on 15 variables describing the regulatory policy environments and outcomes in each jurisdiction using comparable measurement units. From these 15 variables, five indices were constructed that comparatively measure market quality and regulatory severity across international jurisdictions. Two indices measure market quality outcomes from the perspective of consumers regarding cost and choice; one index gauges market quality outcomes from the perspective of insurers regarding the business climate for auto insurance; a fourth index measures the regulatory severity of auto insurance policy in each market; and the fifth index measures overall market quality combining the scores for each jurisdiction across all 15 variables. This study also examines statistical correlations between variables that can be conceptually separated into distinctly dependent and independent categories.
