The impact of the Harmonized Sales Tax (HST) on Ontario and B.C. property and casualty insurers' reserves in 2009 -- estimated to be $268 million -- is equivalent to that of a large catastrophic loss, according to the Insurance Bureau of Canada (IBC).
Barbara Sulzenko-Laurie, IBC's vice president of policy, noted the effects of the HST in slides she presented at the 2010 Swiss Re Breakfast in Toronto.
Her remarks were part of a wide-ranging discussion on the broader state of the Canadian P&C insurance industry in 2009.
One IBC slide showed a number of projected effects of the HST on Ontario and B.C. insurers between 2010 and 2015.
For example, retail sales tax (RST) on claims and operating costs for Ontario and B.C. insurers in 2010 is projected to total $436 million.
But add an additional $34 million in operating expenses due to the HST, as well as an extra $83 million in claims costs due to the HST, IBC figures show.

Suddenly, total RST paid, as well as increases to operating expenses and claims costs due to the HST, balloon up to $553 million in 2010.
IBC figures show the effects of the HST are even more pronounced in 2015.
In 2015, the IBC projects RST alone paid on claims and operating costs for Ontario and B.C. insurers would amount to $484 million.
Add the HST, however, and operating expenses would increase by $73 million in 2015. In addition, claims costs would increase by an extra $186 million.
And so in 2015, Ontario and B.C. insurers would pay an extra $259 million on top of the $484 million in RST alone, bringing the figure up to $743 million.
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