ICBC reports strong profits, cites investment income as source

**CORRECTION** This item corrects the organization’s name that appeared in an item posted on August 25, 2008.

The Insurance Corporation of British Columbia (ICBC) reported a net income of Cdn$255 million for the first half of 2008, roughly the same as the Cdn$256 million reported for the first half of 2007.
ICBC’s expense ratio operating costs, broker commissions and premium taxes as a percentage of earned premiums was 18.4% for the first six months of 2008, a release says.
Premiums earned for the first six months of 2008 increased to Cdn$1.79 billion for the first six months of 2007, “in large part due to the increased number of insured vehicles on B.C.’s roads approximately 80,000 more in the first six months of 2008 compared to the same period last year,” the statement continues.
Auto theft claims dropped 17.4% for the first half of this year over the same period of 2007. ICBC cites the Bait Car program and other enforcement efforts, as well as the growing prevalence of immobilizers in vehicles, as reasons for the drop.
Claims costs continue to increase, but the cost of the average claim is rising at a slower rate as compared to recent experiences, primarily due to unusually dry weather do far this year, ICBC reports. For every $1 in premiums earned, ICBC incurs approximately $1.03 in claims and operating costs, offset by investment income, the company adds.
“With recent uncertainty in the financial markets and changing economic trends, we cannot rely on investment income to the same extent we have in the past,” said ICBC interim president and CEO Geri Prior. “The current downturn in the equity markets will have a negative impact on our investment income as we move forward through 2008.”