ICBC reports $251 million loss in 2001

British Columbia’s public insurer is reporting a loss of $251 million last year, but is predicting a close to break-even 2002. This compares with a net income of $139 million in 2000 for the Insurance Corporation of B.C. (ICBC).
In fact, 2000 saw income of $357 million, but $219 million of this was paid back to motorists as a dividend in early 2001.
A good piece of the loss in 2001 is due to a financial hit on the corporation’s investment in a real estate venture in Surrey, B.C., with another $40 million due to restructuring costs as ICBC reduced its staff by almost 1,000. More than two-thirds of those staff members opted for voluntary severance packages.
The other increased cost was due to rising claims, which went up $105 million in 2001 as compared with 2000. Total claims rose 1.1 million, up almost 8% over the year prior, although little of the increase was in accident injury claims, which have hit other provinces hard. At the same time, positive claims development from prior years’ claims tailed out in 2001. While in 2000 the company saw income of $266 million, in 2001 it made a negative adjustment of $2 million for prior year’s claims.
Investment income also dropped last year, to $454 million, as compared with $626 million the year prior.
ICBC did introduce rate increases last year, averaging 7.4%, and expects those increases to show up in the bottom-line for 2002 and 2003. Added to that are the staff cuts and building closures, which the corporation expects to bring efficiencies in the coming year.