By: Luke Jones, Published on January 31, 2018 01:20 PM, Last Update on January 31, 2018 10:20 AM
Insurance Corporation of British Columbia (ICBC) is in the midst of a financial crisis as collisions and claims increase in the province. Raising auto premiums by 30% would help the company break even, but would make B.C. the most expensive market in Canada. The current government is continuing to look for other solutions.
Many has called for the monopoly held by the public insurer to end. That sentiment was again echoed by the Insurance Bureau of Canada (IBC) this week. The ICBC is a Crown corporation and the only way to get basic mandatory auto coverage in British Columbia. In a release, the IBC has followed other calls for private insurers to be allowed to offer basic protection to stimulate competition.
Currently, private insurers operate in B.C. offerings additional coverages and specialist solutions to customers. Attorney General David Eby (the overseer of the ICBC) said to Canadian Underwriter that opening the insurance market to competition “does not guarantee lower insurance rates, as Ontario shows.
“While there are significant financial and operational challenges to be addressed, we believe that public automobile insurance offers British Columbians excellent protection and access.”
Eby has said a 30% premium increase will not happen on his watch, but has offered no solution to solving the ICBC crisis. Last week, the insurance provider announced losses of $935 million for the first nine months of its fiscal year.
“ICBC is on the fast track towards insolvency with rapidly rising premiums,” Aaron Sutherland, VP of IBC, said Tuesday.
“Some considerations should be given to change B.C.’s rating system to one that focuses premiums more closely with risk, so that high risk drivers pay premiums that better reflect the risk that they bring and low risk drivers would then pay a reduced premium,” Sutherland said.