By: Luke Jones, Published on March 7, 2018 05:39 PM, Last Update on April 2, 2018 02:41 PM
The Insurance Corporation of British Columbia (ICBC) will lost $1.3 billion for its fiscal year 2017 as claims costs and collision frequencies have soared in British Columbia. A 2017 report suggested the Crown Corporation would have to increase auto premiums by up to 30% to break even and authorities have been searching for a way forward since.
Hitting customers with a 30% increase will not happen, but something must be done. In British Columbia, the ICBC is the public insurance provider with a monopoly on selling mandatory basic auto insurance to resident. Private insurance companies are available to provide additional benefits to a policy.
One mooted fix for the ICBC has been for the province to open the door for private companies to sell basic coverage, opening up competition in the market. However, the idea has largely been rejected and the head of the brokers association in the province says brokers are not pushing for such a change.
“Nobody [in B.C.] is particularly convinced that increased competition or even privatization or an open market would change things much,” Chuck Byrne, executive director of the Insurance Brokers Association of B.C., said Tuesday in an interview with Canadian Underwriter.
Brokers in the province say their customers are not calling for more choice, according to Byrne. “The reality is that no one believes there is a better system out there,” he noted. For example, the Ontario market is private and is arguably in a worse condition that B.C.
“Everyone would like a shot at the billions of dollars of auto insurance here, but I can tell you that the auto insurers in B.C. are losing their shirts.”