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

Tree lighting brings Christmas to Barriere

Barriere officially welcomed the Christmas season to town with a tree lighting… Continue reading

Children’s Christmas Shopping in Barriere is just for them

If you live in the Barriere area and have young children, you… Continue reading

Barriere Elementary collecting for Christmas hampers

Barriere Elementary report that they are embracing the seasonal spirit of giving… Continue reading

Terry Lake, former mayor and cabinet minister, to return to teaching at TRU

Lake ready to tackle the subject of business ethics beginning in January

Robotic building technology arrives at Louis Creek Industrial Park

Expect to see a buzz of activity on the site in Barriere, B.C., over the coming months

VIDEO: Octopus, bald eagle battle after bird ‘bites off more than it can chew’ in B.C. waters

B.C. crew films fight between the two feisty animals in Quatsino off north Vancouver Island

Process to identify those killed in Gabriola plane crash could take days

Canadian flight museum suggests Alex Bahlsen of Mill Bay died in Tuesday’s crash

‘Honest mistake:’ RCMP says B.C. cannabis shop can keep image of infamous Mountie

Sam Steele wearing military, not RCMP uniform in image depicted in Jimmy’s Cannabis window

B.C. conservation officers put down fawn blinded by pellet gun on Vancouver Island

Young deer found near construction site in Hammond Bay area in Nanaimo, B.C.

Laid-off forest workers converge on B.C. legislature

Loggers call for action on strike, provincial stumpage

B.C. guide fined $2K in first conviction under new federal whale protection laws

Scott Babcock found guilty of approaching a North Pacific humpback whale at less than 100 metres

Feds urge Air Canada to fix booking problems as travel season approaches

The airline introduced the new reservation system more than three weeks ago

Almost 14,000 Canadians killed by opioids since 2016: new national study

17,000 people have been hospitalized for opioid-related poisoning

Chevron’s move to exit Kitimat LNG project a dash of ‘cold water’ for gas industry

Canada Energy Regulator approved a 40-year licence to export natural gas for Kitimat LNG

Most Read