B.C. opposition calls for competition in auto insurance
October 7, 2019 by Greg Meckbach
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British Columbia’s Liberal Party, ousted from power in the 2017 election, is calling for an end to the monopoly that a Crown corporation has had on auto insurance since the 1970s.
“The B.C. Liberal Caucus believes introducing market competition will not only help B.C. drivers, but it will also help [Insurance Corporation of B.C.] find a way forward into the 21st century,” Jas Johal, the Liberal critic for jobs, trade and technology, told Canadian Underwriter Friday.
“ICBC is a 45-year-old, government-run monopoly that doesn’t work for British Columbians anymore,” Johal wrote in an email to Canadian Underwriter.
It’s a huge policy shift for the Liberal party, which had majority governments from 2001 through 2017. During its 16 years in power, the Liberals kept ICBC’s monopoly on basic mandatory private passenger auto insurance. The NDP took power in 2017 after the election left the Liberals with a minority and the Green Party agreed to support the NDP.
Johal told Canadian Underwriter Friday it is now time to “introduce choices in auto insurance” because rates in B.C. have been rising.
For its part, ICBC said Sept. 10 that “major improvements” have been made to the province’s auto insurance system, which have doubled care amounts for the injured and made underwriting rules fairer. For example, on June 6, ICBC said customers with frequent or serious driving convictions will pay more for their ICBC optional insurance coverage so that lower-risk drivers can pay less.
But the Insurance Bureau of Canada has been vocal – especially recently – in calling for competition to ICBC in basic mandatory coverage.
ICBC has lost over $3 billion in the last three years alone, Aaron Sutherland, IBC’s vice president of Pacific Region, said in an earlier interview.
“You are seeing the public attention on this file increasing because of that,” said Sutherland. “You are seeing the calls for choice happening more and more often, simply because you are seeing drivers are getting increasingly fed up with what they are seeing in B.C. and they are calling for another way.”
B.C.’s brokers have not traditionally been pushing for competition in auto insurance. In 2015, Vancouver area broker Lorne Perry told Canadian Underwriter that ICBC had been working very well with brokers. At the time, Perry had just become president of the Insurance Brokers Association of Canada. By day manager of Port Moody Insurance Services, Perry had been president of the Insurance Brokers Association of B.C. in 2008-09.
In the past, some brokers had questioned whether ICBC should have a monopoly on basic auto coverage in the province, Perry said at the time.
Insurance Brokers Association of B.C.’s CEO, Chuck Byrne, has been a vocal advocate of B.C.’s government-run auto insurance system in social media posts, noting that private auto insurance regimes in other areas of the country have had their own share of issues with profitability.
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I agree with Chuck Byrne. Competition in auto insurance? Why? For what purpose? Since the early 1970’s, when a Chev sedan could be insured for around $120.00, auto insurance in Ontario has been nothing but a losing proposition. I know – I’ve been in the business since 1952. Auto insurance simply doesn’t work because it’s un-underwritable. OK. I’ll give you this – if you’re able to climb into someone’s brain and get a good look at how they think, maybe. Otherwise, all the MVR’s and Autopluses and all the satisfactorily completed applications won’t do it. It can’t be helped – people aren’t like buildings where the broker can walk in, spend some time going over construction, areas of high hazard and exposure, determining where risk could be reduced or eliminated, and where loss control could be given added strength. Try applying these same controls to auto insurance.
The Government regulates auto insurance, provides licenses to those who want to drive, exacts penalties on bad driving, so let them provide the insurance they mandate, and particularly, let them get Accident Benefits off the backs of the private insurers who would then have enough to do with excess liability limits and vehicle physical damage. All it would mean then is getting the rates high enough to cover the additional cost of fixing an autonomous ‘computer’ on wheels. My idea. What’s yours?
The current system has gone awry. It’s much like Euclid’s theory of reducing solutions to an absurdity.
It always amazes me, the Liberal (previous Socred Party) repeated wants the end to the monopoly, when they are the ones that destroyed ICBC and its intent.
The Liberal (previous Socred Party) over the last 12 to 18 years is the Party that made ICBC a profit organization and then syphoned the funds from ICBC to Balance the BC Budget, and hid what they did from the public.
ICBC was a non profit crown corporation that worked, until the Liberal (previous Socred Party) found a way of getting cash from the crown corp and at the same time destroying it. AND FALSLY LETTING BRITISH COLUMBIANS THINK THEY WERE BALANCING THE BUDGET!!!
THESE ARE THE FACTS AND THE TRUTH.
If the Liberal (previous Socred Party) are so adament about allowing competition in auto, they have had the mandate at least 42 out of last 50 years to make this change, why didn’t they? Answer that!!!!