By: Luke Jones, Published on January 29, 2018 06:20 AM, Last Update on January 29, 2018 03:21 AM
The financial plight of the Insurance Corporation of British Columbia (ICBC) was highlighted on Monday, as the public auto insurance provider announced its latest round of financials. For its third quarter of the fiscal year (Q4, 2017), ICBC posted net losses of $935 million, with a prediction that net losses will increase to $1.3 billion by the end of the fiscal year (Q1, 2018).
The Crown Corporation describes the results as a “sizeable and significant loss” which is blames on a major raise in collisions and the cost of dealing with resulting claims.
“The number of crashes occurring across B.C. is continuing to escalate year-after-year. As a result, the number of claims we are receiving is growing by thousands each year,” the corporation said.
Both drivers were well known following a report last summer that exposed the financial trouble faced by the ICBC.
In the report, it was suggested the insurer would need to increase auto premiums by up to 30 per cent simply to offset losses. Such a move would make British Columbia the most expensive car insurance market in Canada. While rate increases of around 10 per cent will happen, authorities are still searching for a solution to solve the ICBC crisis.
The current government says its predecessor is to blame for taking nearly $2 billion from the company when there was a surplus. Among the mooted calls for action have been to reintroduce private insurance in B.C. to provide competition.
Dealing with injury claims costs around $3 billion per year, the corporation says, while the average loss payout is $450,000. These claims have increased by 80% over the last 12 months and there is now a claims backlog.
“This has particularly been the case with represented claims, which are taking even longer to settle. The longer a claim takes to settle, the more expensive it becomes,” the company said.