How pandemic impacted ICBC’s claim costs, investment income

VICTORIA – The COVID-19 pandemic has sideswiped British Columbia’s public vehicle insurer, but the attorney general says it’s too soon to assess the potential damage.

David Eby, who is also the minister responsible for the Insurance Corporation of B.C., said Thursday claim costs are down by about $160 million because there have been fewer accidents as drivers stay home. But he said plunging prices on global stock markets have hit the corporation’s investment portfolio.

“In the weeks leading up to (fiscal) year end, ICBC’s investments fluctuated by $1 billion as world stock markets collapsed,” Eby said at a news conference.

Accident claims started dropping as public restrictions and job losses took hold and more people were staying home, he said.

“With fewer vehicles on our roadways come fewer crashes,” said Eby. “Since the middle of March through to May 2 this has resulted in fewer claims than projected and an assessed savings of $158 million for ICBC.”

He said a clear picture of the pandemic’s effect on ICBC won’t be known until the end of the fiscal year in March 2021. Cost savings for claims could continue, contributing to further savings and markets could start to recover, Eby said.

“We simply don’t know how the year is going to end because of the remarkable and unprecedented nature of the pandemic,” he said. “It could be terrible or there could be a significant surplus.”

Eby said ICBC will be in a better position next year to decide whether drivers could receive a one-time rebate or if the money should be contributed to the corporation’s depleted surplus.

ICBC president Nicolas Jimenez said the corporation remains on track in implementing changes announced earlier this year that could save drivers about $400 a year.

The government has been trying to contain financial losses at the Crown-owned insurer that have exceeded a billion a year since 2018.

Changes were introduced earlier this year reforming the corporation away from a litigation-based system to a care-based model that would severely limit a person’s ability to sue drivers in a crash.

The government also promised a one-time 20 per cent rate cut by May next year.

Feature image via iStock.com/stockstudioX