ICBC posts net loss of $582 million

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

The Kootenay International Junior Hockey League met for their AGM and announced a number of new initiatives, new awards and changes in their executive committee, as well as the starting date for the 2021-22 season. Paul Rodgers file.
KIJHL announces start dates for 2021-22 season

Season set to begin Oct. 1 with league still following all health guidelines

Calvin Dickson photo.
Severe thunderstorm watch in effect for East Kootenay

Conditions favourable for the development of thunderstorms, hail and heavy rain

The Independent Investigations Office of BC is looking into a Castlegar incident. File photo
Police watchdog investigating Castlegar incident

IIO: Woman sustained a reportedly self-inflicted injury

Mount Baker Secondary School in Cranbrook.
Graduation ceremony in the works for MBSS Class of 2021

The Mount Bake Secondary School Class of 2021 will have a graduation… Continue reading

After being forced to cancel in 2020 due to the pandemic, the Wasa Triathlon is being organized for August. Bulletin file photo.
Information released for Gerick Sports Wasa Triathlon scheduled for August

In 2020 the COVID pandemic forced the Gerick Sports Wasa Triathlon to… Continue reading

Canadian Prime Minister Justin Trudeau participates in a plenary session at the G7 Summit in Carbis Bay, England on Friday June 11, 2021. THE CANADIAN PRESS/Adrian Wyld
Canada donating 13M surplus COVID-19 vaccine doses to poor countries

Trudeau says the government will pay for 87 million shots to be distributed to poor countries

Kelowna-Lake Country MLA Norm Letnick, assistant deputy speaker at the B.C. legislature, presides over committee discussions. The legislature is completing its delayed spring session this week, with most MLAs participating by video conference. (Hansard TV)
B.C.’s daily COVID-19 infections dip below 100 over weekend

Only 68 new cases recorded Monday, four additional deaths

B.C. ambulance station in Revelstoke is expected to get a new system called the Scheduled On-Call (SOC) this fall. (Liam Harrap - Revelstoke Review)
B.C. ambulance changes could put Revelstoke residents at risk, warn local paramedics

Paramedics said to expect a substantial increase in ambulance response time starting this fall

The BC Ferries website went down for a short while Monday morning following a provincial announcement that recreational travel between health authorities can resume Tuesday. (Black Press Media file photo)
BC Ferries’ website crashes in wake of provincial reopening announcement

Website back up now, recreational travel between health regions to resume as of Tuesday

The Kamloops Indian Residential School is photographed using a drone in Kamloops, B.C., Monday, June, 14, 2021. The remains of 215 children were discovered buried near the former school earlier this month. THE CANADIAN PRESS/Jonathan Hayward
Communities grapple with what to do with former residential and day schools

Some tear them down as a tool to help healing, others repurpose them as tools for moving forward

FILE – Provincial health officer Dr. Bonnie Henry talks about B.C.’s plan to restart the province during a press conference at Legislature in Victoria, Tuesday, May 25, 2021. THE CANADIAN PRESS/Chad Hipolito
B.C. watching U.K.’s COVID struggles but don’t think province will see similar pitfalls

Studies show that one dose of vaccine is only 33 per cent effective in preventing B.1.617.2 spread

RCMP Const. Shelby Patton is shown in this undated handout photo. RCMP say that Patton was hit by an allegedly stolen truck that he had pulled over on Saturday morning in Wolseley, east of Regina. THE CANADIAN PRESS/HO, RCMP
Pair charged in Saskatchewan Mountie’s death make first court appearance

Const. Shelby Patton was hit by an allegedly stolen truck that he had pulled over Saturday morning

David and Collet Stephan leave for a break during an appeal hearing in Calgary on Thursday, March 9, 2017. THE CANADIAN PRESS/Todd Korol
Appeal Court rejects stay for Alberta couple facing third trial in son’s death

Pair accused in their earlier trials of not seeking medical attention for their son sooner

210615
The auto and the bike: A paean to them both

One becomes an extension of one’s self. The other offers the sensation of flight.

Most Read