November 5, 2002 by Canadian Underwriter
Provincial crown insurer, the Insurance Corp. of British Columbia (ICBC), reported net income of $15 million for the third quarter of this year, a stark contrast to the $7 million loss made for the same period a year prior. ICBC’s net income for the first nine months of this year clocked in at $24 million against the $38 million loss shown for the same period in 2001.
The insurer’s earned premiums for the third quarter rose 8% year-on-year to $686 million (3-Q 2001: $635 million), with price increases largely responsible for this gain, a company statement says. However, new policies sold over this period accounted for about 1.5% of this growth. In contrast, claims costs for the third quarter were up 6.2% to $630 million year-on-year, while investment income plummeted to $57 million from the $84 million made for the same period in 2001.
ICBC says that its “controllable costs” have been reduced by 22% over the past 12 months in a bid to enhance the company’s competitive standing. Notably, staff retention was reduced by 1,300 workers to just less than a total workforce of 5,200 since the corporation’s highest employment level achieved in April of last year. “ICBC is doing what it can to reduce its operating costs and continuing to invest in road safety to reduce the number of [auto] collisions. But, our ability to keep insurance rates low is being strongly impacted by rising claims costs and the decline the insurance industry is experiencing in investment income,” says president Nick Geer.