IBC calls for private insurance to fill British Columbia ride-sharing gap
Published: July 20, 2018
While Uber has spread successfully to many Canadian provinces and cities, there are still numerous locations holding out. Metro Vancouver is the most notable as it is the largest region in North America that lacks ride-sharing services, whether from Uber or another company.
The Insurance Bureau of Canada (IBC) says it is clear customers want ride-sharing in the city but the Insurance Corporation of British Columbia (ICBC) has failed to create an insurance solution.
ICBC holds a monopoly in BC in regards to basic auto insurance coverage. Without the company, there is no path to auto insurance for Uber drivers. Interestingly, private auto insurance providers have had their own ride-sharing insurance solutions prepared for some time, but are unable to sell in BC.
In some ways, the situation reflects the wider problems faced by the ICBC. The insurance provider is in financial trouble amid mis-management, rising claims, and increased repair costs. On numerous occasions, the IBC has said introducing private competition in the market would help the ICBC.
One again, the bureau says private companies can help British Columbia, not least in covering its ride-sharing gap:
"The demand for ride-sharing services in BC is clear," said Aaron Sutherland, Vice-President, Pacific, Insurance Bureau of Canada (IBC). "Private Canadian insurers in Alberta, Ontario and Quebec have developed insurance products that cover the risk for ride-sharing companies and drivers, ensuring drivers and passengers are protected. If permitted, these insurers could quickly bring these products to British Columbia."
"Opening BC's auto insurance marketplace to competition could help facilitate the entry of ridesharing services in the province," added Sutherland. "Competition provides a powerful incentive for any company to deliver innovative products that meet customers evolving needs. Auto insurance is no exception to this rule, and Canada's private insurers are eager to better serve the BC marketplace."
Last year, a report highlighted the problems in the British Columbia car insurance market. it was suggested the B.C. standard auto insurance provider would have to increase premiums by 30% just to survive. During 2016-17, the ICBC lost a record $889 million, and projections for last year suggest the company will lose $1.3 billion when its financial year ends.
The loss will account for 23% of the company’s claims revenue. The situation has been blamed on rising claims costs and the frequency of collisions. The current NDP government in B.C. also laid the blame at the former liberal government for taking nearly $2 billion for ICBC when the company had a surplus.
Numerous policies have been set in motion to ease the burden on the company, such as capping minor injury claims, although the B.C. government has rejected calls to introduce private companies into the market to stimulate competition.