ICBC continues to dig a deeper hole for itself.
The public insurance company has posted a net loss of $860 million for the first nine months of its current fiscal year (April 1st to December 31st, 2018) as the pressures caused by the rising cost of claims – particularly litigated injury claims – continues to escalate.
ICBC’s net claims incurred for the first nine months of its fiscal year are close to $5 billion. This is “an increase of approximately $600 million over the same period last year and ICBC is now projecting a year-end net loss of $1.18 billion” reads a statement.
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There is hope that new reforms coming into effect on April 1st will help with the financial losses.
Primarily, a limit on pain and suffering payouts for minor injury claims which, along with a new dispute resolution process, are projected to help save approximately $1 billion per year while also allowing for substantially increased care for anyone who is injured in a crash.
Back in November, the public insurance company reported that they posted a net loss of $582 million for the first six months of their current fiscal year (April 1st to September 30th, 2018).
ICBC’s ongoing financial net losses continue to be driven by “increased claims settlement costs which are much higher than anticipated, and aggressive pressure from plaintiff counsel which is leading to higher settlement demands and slower claims closure rates” continues the statement.
The rising cost of litigated injury claims is the single biggest pressure currently being put on ICBC and the insurance rates British Columbians are paying. The average cost of closed litigated injury claims has risen by 20 per cent from $101,920 in 2017 to $121,826 in 2018.
As of right now, ICBC has approximately 110,000 open injury claims which are estimated to total at least $7 billion.
In 2017, Attorney General David Eby stated that people were not made aware of just how bleak ICBC’s financial situation was.
Solutions For ICBC
The current government hopes to lessen this financial burden, and has made some steps to doing so; however, the challenge is daunting, to say the least. One measure taken has been increasing fines for distracted drivers. Distracting driving now causes more accidents than drunk driving. Likewise, two fines in a three year period will land offenders with a whopping $2000 fine.
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.