ICBC saves $158M from fewer crashes during pandemic, but no discounts for drivers yet
VANCOUVER -- After the pandemic hit and public health officials asked British Columbians to stay close to home, many people took that advice - resulting in 46 per cent fewer insurance claims compared to the same six-week period the year before.
The revelations come from a new report made public Thursday that looks at how the COVID-19 crisis has impacted ICBC’s bottom line.
B.C.'s public auto insurer estimates it has saved about $158 million in crash claims.
The review was prompted after questions arose about whether the insurer was seeing costs reduced as fewer people were on the roads.
But the province claims it's too soon to know whether the impact will result in savings for drivers due to a number of variables.
“In the worst case scenario, billion dollar loss .Best case scenario, billion dollar surplus," said Attorney General David Eby, adding that they're also looking at "everything in between."
One variable: The corporation says it has less money coming in as people change or cancel their policies.
ICBC said there was a $283 million dip in revenue due to those changes.
The report shows:
- 103,712 insurance cancellations - a 53 per cent jump from the same period last year
- 47,020 new storage policies were purchased as people park their vehicles during the pandemic
- 57,561 rate class changes
- a 41 per cent decrease in the number of new insurance policies bought compared to last year
The corporation's CEO says numbers for this fiscal year will be out in the summer. As the pandemic hit just before the year's end, he estimates the investments could have lost hundreds of millions of dollars. For the current year, he warned the hit could top a billion dollars.
Critics question lack of savings
Despite the NDP government's explanation of why rate reductions weren’t in order, Liberal critic Jas Johal said today’s announcement was disappointing.
“I think if there ever was a time for a public insurer to provide public benefit, it’s right now," he said.
Johal also questioned the investment numbers, saying insurance policy revenue is used to deal with claim payouts, while investment income is largely for administrative costs.
“For Mr. Eby to say investments are down, it’s irrelevant. It has nothing to do with investments and everything to do with helping everyday people who need the money today.”
Those thoughts were echoed by the Canadian Taxpayers Federation, which pointed out other insurers across the country also have investments, and many have offered discounts to drivers.
“Perhaps because they were in financial trouble before all this happened, they don’t think they should be giving rebates to drivers, but when you look at it fairly, other drivers in other parts of Canada are getting rebates," said Kris Sims, the federation's B.C. director.
Eby questioned those rebates, saying some may be exaggerated. Still, critics say rate relief in the range of 10 - 25 per cent would be appropriate.
Sims says for those upset with no relief, there is an option: to contact the provincial government, which she thinks has been quite responsive.
“Tell David Eby that, phone your local MLA and tell him or her that, and hopefully they will respond.”
ICBC saw back-to-back years of losses exceeding a billion dollars, and the goal was to roughly break even for the 2019/2020 year that ended on March 31. Eby had previously dubbed the financial situation “a dumpster fire.”
While both the province and the insurer say it’s too early to say what this year will bring - as there’s still 10 months left - they do vow to return any potential excess to drivers. It’s unclear if that means a rebate.