Re: “COLUMN: ICBC is not just broke, it’s broken” by Richard Truscott of the Canadian Federation of Independent Business, published Aug. 28, 2019
Richard Truscott’s attempts to position ICBC as a company that has failed to adapt and change do not stand up to the facts.
Under government’s direction, ICBC has undertaken the largest reforms in its history this year, including a significant shift to a care-based model with substantially increased benefits for British Columbians and a fundamental change to make our rate model fairer.
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Under this new model, more than half of our full-coverage customers – those who are safer, lower-risk drivers – will see their rates decrease. This is already showing itself to be true with the early renewals we’ve seen to date.
Drivers will also receive new discounts for driving less and for having their vehicle equipped with safety technology.
Importantly, contrary to Mr. Truscott’s attempts to position this as a negative thing, we’re increasing the rewards for drivers who continue to drive safely year after year. Whereas drivers’ basic discounts were capped at nine years of crash-free driving under the old model, discounts will now continue to get better every year for up to 40 years.
While Mr. Truscott also argues that ICBC “employs twice as many staff as any other Canadian insurer its size,” he fails to acknowledge what everyone knows – that ICBC is far more than just an auto insurer for three million drivers.
We also run the province’s driver licensing system, including road tests; we handle the processing of provincial violation tickets; and we invest millions every year in making our roads safer for hundreds of communities across the province.
Name a private insurer that does – or will – do this. Even when we do more than any other auto insurer would do, we still have operating costs that are significantly lower than the industry average.
While our large financial losses in recent years have made headlines, we are projecting a much smaller net loss this year as our reforms start to make an impact. And while we are optimistic, we are also realistic in recognizing the risks that still exist in these changes having their full desired impact.
For example, trial lawyers have brought court challenges that, if successful, would create a pressure of nearly half a billion dollars in additional claims and associated legal costs for ICBC over the next two fiscal years and put at risk our ability to continue to afford all of the increased care and recovery benefits our customers are now benefiting from.
READ MORE: ICBC expecting $1.18 billion annual loss as new injury caps take effect
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As his association represents private business, Mr. Truscott also makes the case that private insurance is the solution for B.C. His column didn’t acknowledge that some of the recent highest auto insurance rate increases in Canada have been happening in private-model jurisdictions (Alberta and Ontario) while public insurance models elsewhere (Manitoba and Saskatchewan) are thriving with much lower – or even no – rate increases.
Major improvements have already been made to B.C.’s auto insurance system, doubling care amounts for the injured and making the way we set rates fairer – these changes are working.
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Government and ICBC are focused on building on the success of the reforms made to date and are prepared to do more, as needed, to ensure we achieve the most important goal – affordable insurance rates for British Columbians.
Nicolas Jimenez is president and CEO of the Insurance Corporation of British Columbia
