ICBC reveals it lost $500 million in six months
Published: November 26, 2018
Updated: November 27, 2018
Author: Luke Jones
CATEGORY: Car Insurance
The Insurance Corporation of British Columbia (ICBC) has released its latest fiscal financial results, highlighting the monetary troubles facing the public company. In its latest note, the provincial monopoly auto insurance provider posted a net loss of $582 million during the first six months of the current year.
Furthermore, ICBC says it is projecting a year-end financial net loss of $890 million for the 2018/19 year. During its 2017/18 fiscal year, the company reported a net loss of $1.3 billion. That means over the last two years, the ICBC has lost over $2 billion.
The financial situation surrounding the ICBC was first highlighted in an EY report in 2017. The current NDP government in British Columbia says part of the blame is on the previous Liberal government, which took money from the ICBC when there was a $2 billion surplus.
Rising claims and increased frequency of collisions has impacted the public company. In British Columbia, the ICBC provides all basic auto insurance for motorists as the monopoly provider. Private insurers are in BC, but only sell added benefits above basic coverage. The Insurance Bureau of Canada (IBC) has consistently called for the market to open to private insurers for basic policies, a call that was repeated this week.
“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 of the Insurance Bureau of Canada’s (IBC) Pacific region. “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.”
Through the financial woes of the ICBC, drivers in British Columbia have been affected and now pay the highest auto insurance premiums in Canada. According to data from IBC, average auto costs in BC were $1,680 in 2017, surpassing Ontario ($1,445) as the most expensive market.
“There are no signs that the ongoing and increasing claims cost pressures ICBC is experiencing will abate without the major reform to the auto insurance product in British Columbia, which government and ICBC are implementing,” the ICBC said. “While our current financial pressures are clearly serious, they have been caused by an auto insurance system which has long been in need of substantial modernization – something that is now, at last, happening.”