ICBC posts net loss of $582 million

ICBC reported today that it posted a net loss of $582 million for the first six months of the fiscal year.

ICBC reported Friday, that it has posted a net loss of $582 million for the first six months of the current fiscal year (April 1 to Sept. 30, 2018).

According to a statement from the Crown insurer the loss is “reflective of the continued pressure ICBC is under from the rising number and cost of claims”.

Attorney General David Eby went on to say that the primary reasons are higher bodily injury costs, as well as claims taking longer to resolve, which often result in higher claims costs. A key driver of these costs is a growing trend toward plaintiff lawyers strategically building the value of the claim – costs which have to be paid for by ICBC ratepayers.

“For too long, financial problems at ICBC were ignored and hidden from the public, resulting in a $1.3-billion net loss in 2017-18. Unfortunately, ICBC’s second-quarter results for 2018-19 show that its financial position remains serious,” said Eby.

“These trends are becoming more severe. Since March 2017, the dollar value of settlements demanded by plaintiff lawyers for litigated files increased by 27 per cent . The average cost of closed litigated injury claims for the first six months of ICBC’s fiscal year rose from $100,427 in 2017 to $121,686 in 2018, a 21 per cent increase. Plaintiff counsel are also spending more to build their files, increasing their average cost of experts and reports by 20 per cent.”

Read more: ICBC in ‘financial dumpster fire’: minister

Read more: ICBC claims hit 4,200 after acid spills on B.C. highway

Read more: ICBC warns shoppers of the high-accident season at mall parking lots

ICBC’s net claims incurred for the first six months of its fiscal year alone topped $3 billion, an increase of $634 million, or 26 per cent, over the same period last year.

“Given this situation, we are looking for ways to accelerate and add to our efforts to solve the financial problems at ICBC,” added Eby.

“Earlier this year, our government announced a suite of product changes to stem ICBC’s losses, provide enhanced care for people injured in crashes and to make insurance rates fairer. As a result of these changes, ICBC is projecting net savings of $1 billion annually. However, we won’t start seeing these savings until after most of the reforms take effect, starting April 1, 2019, after which we can expect more dramatic financial improvement.”

This significant financial loss comes after ICBC reported a net loss of $1.3 billion for its 2017/18 fiscal year, and means ICBC is now projecting to report a year-end financial net loss of $890 million for 2018/19.

“It is now clear that this government needs to look for even more ways – beyond what is already planned – to further reduce the escalating cost of claims,” said Eby.

“Our government is making different choices that will stem ICBC’s losses. We will continue to monitor ICBC’s financial situation and we are taking steps toward making B.C.’s auto insurance system work for people again.”

ICBC states that 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.

“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,” writes the auto insurer.

“These changes will shift the focus away from maximizing payouts to a care-based system – which makes taking care of people injured in a crash the top priority, with more money for the treatments and support they need to get better and less spent on legal costs.”

The government and ICBC are also modernizing ICBC’s 30 year-old insurance system to ensure all drivers pay premiums which more accurately reflect the risk they represent on the road.

In addition, a number of road safety initiatives are underway, aimed at lowering crashes and mitigating the current financial pressures on ICBC.

The growing claims costs pressures ICBC is facing will also need to be addressed with the next basic rate application which is due with the British Columbia Utilities Commission by December 15.

To report a typo, email:
newstips@kelownacapnews.com
.


@carmenweld
carmen.weld@bpdigital.ca

Like us on Facebook and follow us on Twitter.

Just Posted

Rachel Blaney ‘humbled’ as NDP incumbent earns second term

Blaney will remain MP in North Island-Powell River riding

Trudeau has won the most seats — but not a majority. What happens next?

Trudeau will have to deal with some of the implications of Monday’s result

LIVE MAP: Results in Canada’s 2019 federal election

Polls are now closed across the country

ELECTION 2019: Here are the results from our 12 B.C. races to watch

Incumbents mostly won our 12 key races, but there were a few upsets too

BREAKING: Canadian Press declares NDP’s Blaney winner in North Island-Powell River

Canadian Press is declaring NDP candidate Rachel Blaney as the winner in… Continue reading

Raptors Bling: NBA champions receive their rings in pre-game ceremony

There are over 650 diamonds — at a weight of 14 carats — in the 14-karat yellow gold ring

Faster response may have prevented fatal outcome at B.C. trampoline park

Coroner’s report rules Greater Victoria father Jay Greenwood’s death accidental

100-pound pumpkin stolen a second time from B.C. business

According to security footage, a man and woman took the pumpkin on Oct. 20 at 8:20 p.m.

Greta Thunberg declines invitation to Victoria due to time, not ferry emissions

Thunberg confirmed that she will be joining a climate strike at the Vancouver Art Gallery on Friday

‘Havoc and chaos:’ Alberta separatist group gains support as Liberals re-elected

The idea is getting interest from people in Saskatchewan, Manitoba and parts of British Columbia

Feds decriminalizing drugs possible if Jagmeet Singh pushes for it, expert says

National pharmacare was one of Singh’s most highly-touted platform policies

In the news: Wexit, Brexit and Trump sparks outrage

There’s been a surge of support for an Alberta separatist group

Horvat’s hat trick lifts Canucks to 5-2 win over Red Wings

First career three-goal game for Vancouver captain

Most Read