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

Convicted animal abuser to return to B.C. court May 21

Catherine Jessica Adams is facing a breach of probation charge

First Terrace Speedway race day of the year

The annual Mother’s Day Season Opening Races brought in crowds

Concerns over democracy as Senate committee votes to nix oil tanker ban

Critics of the Senate’s recommendation to kill Bill C-48 say it goes against popular will

Northwest Fire Centre open burn ban lifted

Recent rain, cooler temperatures have lowered the region’s fire risk

Telkwa pot plant application passes review

Cannabis company claims new Health Canada regulations are working in its favour

Kelowna RCMP interrogation video brings home reality in ‘visceral way’: former TRC chairman

Video of Mountie interrogating young Indigenous woman disclosing sexual abuse under fire

Canadian killed in Honduras plane crash

The crash happened in the Roatan Islands area, according to officials

B.C. ferry stops to let black bear swim past near Nanaimo

Queen of Oak Bay brakes for wildlife in Nanaimo’s Departure Bay

Mother dead, child in critical condition after carbon monoxide poisoning at Shuswap campground

The woman was found unresponsive insider her tent and the youth was taken via air ambulance to hospital

Canada’s parole officers say correctional system has reached breaking point

About half of Canada’s federal parole officers work inside penitentiaries and correctional institutions

Montreal researchers create audible hockey puck for visually impaired players

Three years ago, Gilles Ouellet came up with the idea for a puck that makes a continuous sound

Former B.C. Greyhound bus drivers head to Penticton for goodbye party

Big bash runs until Sunday, funded by drink cans left behind on busses over the years

Boy, 12, arrested after allegedly pulling a knife on another child at a Surrey park

The child was later released into his parents’ custody as Surrey RCMP continue their investigation

Full-scale search underway for missing kayaker on Okanagan Lake

Kelowna Paddle Centre member Zygmunt Janiewicz, 71, failed to return from his ‘daily kayak’ on the lake

Most Read