January 30, 2018 by Staff
On Monday, B.C. Attorney General David Eby called ICBC’s projected $1.3 billion net loss for the current fiscal year a “financial dumpster fire.”
In a news release, ICBC announced on Sunday that it posted a net loss of $935 million through the first nine months of the fiscal year (April 1 to December 31, 2017). The Crown corporation said it pays close to $3 billion a year in injury claim costs, and reported an 80% increase in large loss claims with an average cost of $450,000 over the past 12 months.
Industry reaction to ICBC’s financial situation was swift.
“Under the ICBC monopoly, drivers in British Columbia are paying the highest auto insurance premiums in Canada,” Aaron Sutherland, vice-president of the Insurance Bureau of Canada’s (IBC) Pacific region, said in a statement.
A newly released report commissioned by IBC and prepared by MNP LLP argues that opening B.C.’s insurance market to competition would lower premiums for drivers.
“Given the significant challenges facing our auto insurance system, British Columbians deserve to be able to choose the auto insurance provider that best meets their needs,” Sutherland said. “Canada’s private auto insurers are ready and eager to bring choice and savings to B.C. drivers.”
As a way of getting ICBC’s costs under control, the B.C. government said it plans to start capping payments for minor injuries sustained in collisions this spring—a proposal was that met with scorn by the Trial Lawyers of British Columbia (TLABC).
“No wonder ICBC is pointing fingers everywhere it can—quite simply, it has mismanaged its own activities for so long, and it no longer sees any way out except to introduce caps on what it calls ‘minor injuries’ and to dramatically increase insurance rates,” TLABC president Sonny Parhar said in a news release.
TLABC is calling for an independent review of ICBC’s finances.
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This story was originally published by Canadian Insurance Top Broker.