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ICBC Proposed Insurance Rate Hike: The Straight Goods on Why Its “Needed”
Earlier this week ICBC released their 3rd Quarter financial results with an accompanying press release stating that they will be seeking a modest increase in basic insurance coverage rates to counteract the consequences of “rising bodily injury costs and falling investment income“.
ICBC is looking at an annual rate increase of about $30. Â Yesterday ICBC’s CEO wrote an Open Letter To Customers stating that “Today, however, we are facing new pressures. Like other companies and individuals, the challenging world financial markets are negatively affecting us. While our investment returns continue to perform well against the markets, our investment income has dropped by $38 million compared to last year. Our best estimate is that our investment income at year-end will be $90 million less than in 2010.”
While it is true that ICBC’s investment income is down and claims  payouts fluctuate year to year, those reasons don’t explain why a rate hike is needed.  Historically ICBC is well managed and profitable, I’ve discussed this in the past.  They have generated hundreds of millions in net revenues year over year with the current premiums in place.  ICBC did what any financially responsible insurer does with such profits and built up substantial reserves to act as a safety net for leaner times.  The reserves were so significant that the Government decided to scoop 3/4 of a billion dollars from ICBC’s coffers.
With current rates ICBC can weather the storm of market volatility and the ups and downs of claims payouts year over year.  All this with net revenues significant enough to get the company through leaner years.  The Government is short on funds, they scooped money from ICBC and that is why motorists are faced with rate increases.
Tags: bc injury law, ICBC Insurance Rates, ICBC Rate Increase
This site is created by MacIsaac & Company, a British Columbia Personal Injury Lawfirm. This website is not affiliated in any way with the Insurance Corporation of British Columbia (ICBC).This web site is made possible through funding provided by the British Columbia law firm MacIsaac and Company. bc-injury-law.com is designed to empower individuals to better understand their ICBC Claim and the process involved in dealing with ICBC. This web site is offered for information only and is not claim-specific legal advice. Use of the site and sending or receiving information through it does not establish a solicitor / client relationship. Links to and from this website do not state or imply a relationship between MacIsaac and Company and the linked entity.
February 21st, 2012 at 9:44 pm
[…] fact, the BC system is so profitable for ICBC that not only has the Government raided ICBC’s coffers for hundreds of millions of dollars in recent years, the Governments current budget specifically looks to the Insurer for contribution to general […]
February 24th, 2012 at 8:13 am
[…] Government scoops and plans to continue to scoop ICBC’s profits while ICBC simultaneously applies for a rate hike.  I’m not talking about why this is politically acceptable, but rather the much more basic […]