IBC calls for competition in British Columbia after hefty net loss for public insurer
Published: November 25, 2018
CATEGORY: Car Insurance
The Insurance Bureau of Canada (IBC) is continuing to urge British Columbia to adopt private competition in its auto insurance market. The latest recommendation from the industry representative follows a BC government announcement showing the Insurance Corporation of British Columbia (ICBC) posted a net loss of $582 million during the first six months of its fiscal year.
British Columbia employs a public model for auto insurance. The ICBC covers basic car insurance protection for motorists, with private insurers only sell additional non-mandatory coverages. In recent years, the public monopoly has been beset by financial issues amid rising claims and repair costs.
IBC has often argued a solution to the problem would be to introduce competition for basic coverage. While ICBC’s net loss for this first six months of the year is not a surprise, IBC argues it highlights the need for change.
“Today’s announcement is yet more evidence of the need for real reform – and real competition – in BC’s auto insurance marketplace,” said Aaron Sutherland, Vice-President, Pacific, Insurance Bureau of Canada.
“Under ICBC’s monopoly, British Columbians now pay more for auto insurance than drivers in the rest of Canada. In order to keep prices down and protect taxpayer dollars, the benefits of a more competitive marketplace must be included in future discussions about auto insurance in the province.” He added, “Canada’s private insurers are at the ready, and eager, to compete and better serve BC drivers.”
In a press release on Friday, IBC cited a recent poll that shows 78% of British Columbia motorists welcome more choice when buying auto insurance. Last week, the Bureau’s CEO described the current situation in British Columbia as “lose-lose”, even if the government introduces plans to cut costs within the ICBC.
IBC president and CEO Don Forgeron spoke at a recent Greater Vancouver Board of Trade event.
“Under Insurance Corporation of British Columbia’s (ICBC’s) monopoly, British Columbians pay the highest auto insurance premiums in Canada – hundreds more than nearly all other Canadians, and double what Canadians in some provinces pay,” Forgeron explained.
“Opening BC’s auto insurance market to competition could save drivers up to $325 annually,” he said. “Competition is a powerful incentive for any company to deliver the best service at the best price. Auto insurance is no exception to that rule, and opening ICBC to competition would make premiums more affordable in BC.”