Last week, the provincial government allowed the Insurance Corp. of B.C. to quietly release its annual report for 2015. There was no fanfare and not even a press release from the government’s large and eager public-relations crew.
Why? Because our public auto insurer recorded one of its worst financial years on record. The compulsory basic insurance program lost $256 million, while the profit for the overpriced extension coverage rose by $100 million.
Is there greater carnage on our roads? ICBC reports that the number of reported claims actually declined by 9.5 per cent last year. Yet the cost of basic claims jumped by $320 million, or 14 per cent (up 26 per cent in three years), mainly as a result of the escalation in pain and suffering costs. The value of the corporation’s claims backlog climbed to $9 billion, and the corporation’s capital reserve fell to $3.1 billion, which is below the target deemed as safe by the ICBC board.
What is the government doing to address the growing financial crisis at ICBC, besides ordering the transfer of $450 million of optional policyholders capital to the basic program? It is actually making things worse by taking about $500 million in cash over the past three years, and suppressing basic rate increases. The cash helps to reduce the government’s direct debt, and the suppression of rates … well, there is an election in less than a year.
Richard McCandless
Saanich
