Drivers in B.C. could be paying 30 per cent more on insurance premiums by the year 2019 if dramatic action isn't taken, according to an independent review of ICBC's finances.
A report prepared by Ernst & Young found that while ICBC's premiums are the second-highest in Canada, they're still not enough to cover claim costs that are being driven up, in part, by an increasing numbers of crashes and pricier vehicle repairs.
Without "significant reform" at the public insurer, the firm warns those costs are projected to exceed the amount collected in premiums by $1.1 billion within a couple years.
"The average driver in B.C. may need to pay almost $2,000 annual total premiums for auto insurance by 2019," Ernst & Young said in its report.
That's nearly a third more than the current average of $1,550 per vehicle.
To help avoid that outcome, the firm suggests bringing back photo radar, an automated system of ticketing speeders that was used in the province from 1996-2001, as well as capping payouts and making high-risk drivers pay more in premiums.
David Eby, the province's new attorney general and minister responsible for ICBC, said the NDP has already ruled out a return to photo radar, but hiking penalties further for bad drivers is one of several "obvious solutions" that were overlooked by the previous Liberal government.
“For some reason they failed to act to address these growing cost pressures,” Eby told reporters. “ICBC has careening toward a crisis for at least a couple of years.”
Beyond failing to fix the insurer’s increasingly troubled finances, Eby noted the Liberals transferred hundreds of millions of dollars from ICBC into the provincial coffers over recent years.
“The BC Liberals have been using ICBC as a bank machine, bringing money out of the corporation to claim better finances than are the case,” he said.
Ernst & Young's report, which ICBC ordered earlier this year, was completed two weeks ago but only released Monday at Eby's request.
“We will take the steps necessary to fix what’s happening in ICBC, to make British Columbia’s roads safer for British Columbians, and to ensure that rates are affordable for British Columbians, because clearly that is not where we are tracking right now,” Eby said.
But those reassuring messages amount to little more than "platitudes," according to Liberal MLA Andrew Wilkinson, who called on the NDP to clarify how they will be cleaning up the mess.
Wilkinson noted that Ernst & Young's review also suggests exploring no-fault insurance, a system designed to reduce the need for litigating crashes that was met with public backlash when B.C.'s last NDP regime tried to introduce one in the 1990s.
Eby said the current NDP government, which was sworn in just six days ago, is not considering that as a solution.
“We have no answers whatsoever from the NDP and what their plans are, only what they are not going to do. They need to come clean with British Columbians and what their plans are for ICBC,” Wilkinson said.
According to Wilkinson, the Liberals, who oversaw ICBC for the last 16 years, made recent efforts to relieve pressure on the insurer by doubling premiums for luxury vehicles and stiffening penalties for distracted drivers. Any further measures will be up to the NDP to come up with, he added.
“It’s up to them to come up with a viable plan for how to face the future with ICBC,” Wilkinson said.
To read Ernst & Young's full report on the state of ICBC's finances, click here.
The dire finances of @icbc were just a "worst-case scenario" according to @toddstonebc back in November... - https://t.co/YCsSXk07cV
— Jon Woodward (@ctv_jon) July 24, 2017