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ICBC profits down thus far in 2006


November 6, 2006   by Canadian Underwriter


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ICBC has reported net income of Cdn$175 million for the first nine months of 2006, compared to Cdn$195 million reported for the same period last year.
“Overall, ICBC is in a good financial position,” B.C.’s public insurance body said in a press release. “Earned premium revenue is growing, investment income remains strong, and operating costs continue to be low.
“However, growth in the cost of injury claims is an ongoing concern.”
Specifically, said Paul Taylor, ICBC’s president and CEO: “More than 80% of the total cost of all injury claims is covered by basic insurance. That’s where the cost pressures are and this will affect premiums for basic coverage.”
Net claims costs for the first nine months of 2006 were Cdn$2.03 billion, representing a 7.4% increase over the same period in 2005. This includes a Cdn$93-million increase to reserve for prior years’ claims.
Thus far, ICBC has invested Cdn$29 million in various road-safety and other loss management programs “to help keep insurance rates low and stable,” said Taylor.
Insurance premiums earned for the nine months ended Sept. 30, 2006, increased to Cdn$2.43 billion, up from the Cdn$2.34 billion for the same period in 2005.
ICBC said the increase reflects the 6.5% increase in rates for basic insurance that came into effect earlier this year. In addition, it reflects the Cdn$100-million reduction in rates for optional coverage that was implemented in 2005.
The number of insured vehicles on B.C. roads has increased by more than 3%, ICBC added in a press release.
“One area of good news is the decrease in claims costs related to auto theft due to the success of the Bait Car program and other ICBC-funded initiatives,” ICBC said in a statement. “Claims costs for auto theft in the first nine months of 2006 were Cdn$43 million down from Cdn$53 million for the same period in 2005 and Cdn$58 million in 2004.


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