ICBC reports $30.4 million loss in Q1 2002

B.C.’s public insurer is reporting a net loss for the first quarter 2002 of $30.4 million. This compares with a loss of $39.1 million in the first three months of 2001 for the Insurance Corporation of B.C. (ICBC).
However, only $9 million of this loss is attributable to insurance operations, with $21 million coming from non-insurance operations, namely running its licencing and fines operations on behalf of the province.
For the insurance operations, earned premiums grew for the quarter ending March 31, 2002, to $614 million, up 5% from Q1 2001. “A substantial portion of premiums earned in the first quarter arose from policies sold in 2001,” notes an ICBC release. The crown corporation expects the average 7.4% rate increase instituted late last year to become more apparent in results later in 2002.
Claims costs grew 7% for the quarter, as compare with the same period last year. Car theft increase is a particular concern, says ICBC, as a 10% increase was seen in the same time frame. A 5% increase in theft from autos was also seen in the first quarter.
ICBC is also reporting that cost reductions begun last year, and including the reduction of 1,100 staff, have resulted in a drop of 25% for controllable costs (excludes external claims payments, premium taxes and commissions) compared with first quarter 2001.
Investment income, when compared along similar accounting principles, is up $16 million over first quarter 2001 to $110 million for first quarter 2002.
ICBC will be making further provisions for losses stemming from its involvement with a real estate development in Surrey, B.C., but has not yet divulged how much these further provisions will be.
The public insurer expects that rate increases and cost reductions will lead to a break-even financial year. “The Corporation’s primary goal for 2002 is to increase its competitiveness, while maintaining its focus on customer service. Containing costs will remain a priority with a financial objective of not less than a break-even year for 2002.”