ICBC loses $935M in first 9 months of fiscal year,projects $1.3billion operating loss

[taco.vidal]

The government insurance company has a monopoly and still cant make things work.

The last quote there is going to be a sad reality for many especially those in the lower mainland . First they cant afford housing so they have to move and put up with significant commutes. Now they wont be able to commute to work because they wont be able to afford insurance.

The icing on the cake will be if the government does in fact have to bail out ICBC with taxpayer money.


https://globalnews.ca/news/3991969/t...f-fiscal-year/

The Insurance Corporation of B.C. (ICBC) said it has lost nearly $1 billion in the first nine months of the current fiscal year.

Between Apr. 1 and Dec. 31 2017, ICBC posted a net loss of $935 million, according to a statement.

The insurer says the loss “is further evidence of the growing financial pressures we are under from the rapid increase in the number of crashes occurring across B.C., the surge in claims and the massive growth in the costs of those claims.”

“Simply put, the amount of premiums we are collecting from customers is not covering the ever-increasing amounts we are paying out in claims costs,” ICBC said in a statement, noting the current system is “not sustainable.”

Meanwhile, the Canadian Taxpayers Federation says it’s time to take a second look at ICBC and open up the insurance market to the private sector.

“I won’t be surprised if they suddenly say we need to bail out ICBC,” spokesperson Kris Sims said. “But the problem there is that this won’t go away. They will continuously have to come back to us and say, ‘Oops, sorry. We need to bail out ICBC.'”

A rate increase could prevent some British Columbians from owning a vehicle and being able to get to work, especially as many can only afford to live on the outskirts, said Sims.

_

[Canehdianman]

Not really surprising, the government had been raiding ICBC for money for a while now.

[Northendzone]

so what is dring the bad experience? are people becoming worse drivers, or is it just the fact that even a "minor" fender bender likely costs $5,000+ these days

[Erick Estrada]

Originally Posted by Northendzone

so what is dring the bad experience? are people becoming worse drivers, or is it just the fact that even a "minor" fender bender likely costs $5,000+ these days

Well considering most large private insurance companies are in the black I chalk this up to government incompetence. The fact they can't balance the books of auto insurance is frightening when you consider that's a fraction of the taxpayer money they are mismanaging. The issue with government is that there isn't the accountability of private business so people that make bad decisions are allowed to continue their trail of incompetence.

[puckedoff]

Why is there a 'rapid increase in crashes across BC'? To me that doesn't make sense, I'm curious if ICBC realizes why they are losing money.

Is auto insurance any cheaper in BC than in AB?

[CorsiHockeyLeague]

Originally Posted by Erick Estrada

Well considering most large private insurance companies are in the black I chalk this up to government incompetence.

Well, that's great and all, but it doesn't answer the question - he's asking what the problem is exactly. ICBC has on average higher premiums than you spend in Alberta, for example. So if they're losing money, they must be paying out more claims, paying out higher on average, paying too many employees too much money, spending too much on overhead, or some combination.

I'm pretty curious too - you have a monopoly on a product that almost everyone needs, how are you losing money? What did you do wrong?

[skudr248]

Originally Posted by puckedoff

Why is there a 'rapid increase in crashes across BC'? To me that doesn't make sense, I'm curious if ICBC realizes why they are losing money.

Is auto insurance any cheaper in BC than in AB?

Auto insurance is certainly not cheaper than Alberta. Way higher here and motorcycle insurance is a complete joke and don’t even get me started about gas prices lmao

[81MC]

Yet ICBC pays at least 9 executives $300 000+ on a routine basis. Crown corporations in that province have done a really good job providing for a few and taking from the whole.
Also, FWIW, when I was 20? I insured a brand new mid level car with about as good insurance as possible through ICBC for $140. My folks, who have 30+ driving experience and the maximum 'discount' now pay more than that for their 2007 model vehicle through ICBC.
Criminals.

[rubecube]

Originally Posted by CorsiHockeyLeague

Well, that's great and all, but it doesn't answer the question - he's asking what the problem is exactly. ICBC has on average higher premiums than you spend in Alberta, for example. So if they're losing money, they must be paying out more claims, paying out higher on average, paying too many employees too much money, spending too much on overhead, or some combination.

I'm pretty curious too - you have a monopoly on a product that almost everyone needs, how are you losing money? What did you do wrong?

Nah, it has more to do with the fact that the BC Liberals were consistently raiding ICBC to fund their general budget in order to make it look like they were balancing budgets. It was a really good shell game for them and now the NDP will get the blame for the fallout and whatever unpopular move they're forced to make because of it.

[Locke]

Originally Posted by rubecube

Nah, it has more to do with the fact that the BC Liberals were consistently raiding ICBC to fund their general budget in order to make it look like they were balancing budgets. It was a really good shell game for them and now the NDP will get the blame for the fallout and whatever unpopular move they're forced to make because of it.

Now thats politics! Assuming that you'll maintain power but making sure the 'Poison Pill' is there if you ever need it!

[81MC]

Originally Posted by rubecube

Nah, it has more to do with the fact that the BC Liberals were consistently raiding ICBC to fund their general budget in order to make it look like they were balancing budgets. It was a really good shell game for them and now the NDP will get the blame for the fallout and whatever unpopular move they're forced to make because of it.

They did the same to BCHydro. And people fell for that.

[Slava]

Originally Posted by rubecube

Nah, it has more to do with the fact that the BC Liberals were consistently raiding ICBC to fund their general budget in order to make it look like they were balancing budgets. It was a really good shell game for them and now the NDP will get the blame for the fallout and whatever unpopular move they're forced to make because of it.

Yeah, that's exactly what it is. ICBC loss ratios look fine through 2014 (which is a few years out of date, but I didn't want to dig anymore). The ratios might be a little worse for 2017 because of the fires, but even so that's not going to be the telling factor. The government has taken billions in dividends from ICBC over the years though, and that's why they're facing this issue.

[OMG!WTF!]

[Kjesse]

Isn't ICBC motor vehicle insurance only? If they also have a monopoly on fire/home insurance that's just bad business.

[CroFlames]

Obviously my experience is anecdotal, but from living in BC I've heard tons of stories of people getting insane payouts for minor traffic incidents. Like a fender bender is a minimum $40,000 payout. Everyone there "knows a guy" who has hit the ICBC jackpot.

[Slava]

Originally Posted by Kjesse

Isn't ICBC motor vehicle insurance only? If they also have a monopoly on fire/home insurance that's just bad business.

I can't remember the specifics, but those are enormous insurance losses as a whole, and there is no doubt that vehicle losses piled up there as well as other property.

[puckedoff]

Originally Posted by Slava

Yeah, that's exactly what it is. ICBC loss ratios look fine through 2014 (which is a few years out of date, but I didn't want to dig anymore). The ratios might be a little worse for 2017 because of the fires, but even so that's not going to be the telling factor. The government has taken billions in dividends from ICBC over the years though, and that's why they're facing this issue.

Would have to think that the disappearing yields on bonds is impacting their ability to maintain a return on premiums too, especially if the Govt. reached in to reduce principal or distributions after recent spread compression. But I still do find it strange when the ICBC makes the culprit 'too many car crashes' rather than something that is more or less under their control.

[YYC in LAX]

Good opportunity to revisit this gem

NSFW due to youtube screenshot pic

NSFW!

[speede5]

The repair costs on vehicles aren't really a problem. It is all in the injury claims. It's the same reason motorcycle insurance has gone through the roof here in SK. The payout on the vehichles is only a small portion of what is paid out but the injury claims are the major cost driver.

Everyone always equates the cost of insurance to the vehicle, and it does effect the rate but that is a minor factor. Accident rates per type of vehicle will indicate that there is more chance of a liability claim and are the main driver in rates.

At least that's been my understanding watching SGI closely the last few years. It's kinda interesting reading their annual reports. There is no reason ICBC should be in such a pickle.

[opendoor]

I believe BC is the only province that isn't either a no fault system or a tort system with caps for certain injuries. That coupled with the previous government's raiding of their profits for years goes a long way to explaining the current situation. Alberta never used to have caps either, but insurance companies lobbied the government to introduce them because they were losing money due to injury claims.