By CRM Staff
Victoria, British Columbia — January 29, 2018 — The Insurance Corporation of British Columbia (ICBC), the public auto insurer for the province, saw losses hit $1.3 billion last year, according to expert extrapolations from a study of the first three-quarters of 2017.
What this means in the longer term for B.C. bodyshops remains an open question. While provincial efforts to stabilize the insurer may preserve the automotive repair industry’s fiscal integrity, the Green Party, which props up the governing NDP, could leverage its position to prevent such a move -potentially triggering a market shock.
The ICBC paid out more than $3 billion for 2017 claims, but was only able to bring in about $1 billion in premiums. Particularly damaging to the company’s bottom line was an increase in large payouts. 2017 saw an 80 percent increase in six-figure claims, which were paid out with an average settlement just shy of half-a-million dollars.
The influx of high-value settlements ended up taxing the insurers infrastructure. With so many large claims, the insurer was unable to manage claims as quickly as they had before – and the longer it takes for a settlement to be reached, the more expensive it becomes for the insurer.
“This has particularly been the case with represented claims, which are taking even longer to settle. The longer a claim takes to settle, the more expensive it becomes,” ICBC said.
In November, ICBC asked the province for permission to increase premiums for its customers by about $130 a year per driver – after releasing a overly optimistic report indicating the year’s losses would be about $200 million. With the actual losses estimated to be six times worse, ICBC management has been accused of extreme mismanagement.
