It just keeps getting worse for ICBC.
The public insurance company has posted a net loss of $582 million for the first six months of their current fiscal year (April 1 to September 30, 2018). This is reflective of the “continued pressure ICBC is under from the rising number and cost of claims”.
The number of claims being filed with ICBC and the cost of both injury and vehicle damage have been escalating in recent years, as widely reported.
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ICBC’s net claims incurred for the first six months of its fiscal year alone topped $3 billion. This is an increase of $634 million, or 26 per cent, over the same period last year ($2.4 billion).
During these six months, “ICBC’s claims settlement costs have continued to grow, with an increasing number of large loss claims which run into hundreds of thousands of dollars each, and continuing aggressive pressure from plaintiff counsel which is leading to slower claims closure rates and higher settlement demands”.
This significant financial loss comes after ICBC reported a net loss of $1.3 billion for its 2017/18 fiscal year. At this pace, ICBC is now projecting to report a year-end financial net loss of $890 million for 2018/19.
In 2017, Attorney General David Eby stated that people were not made aware of just how bleak ICBC’s financial situation was. He said that the liberal government concealed this information from the public, but did not stipulate the full magnitude of the difference.
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, and 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.
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