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A financial summary released by the Insurance Corporation of British Columbia (ICBC) said that drivers in the province will see their premiums increase over the next three years, with the insurer hoping to turn a profit.
The insurer’s 2019 — 2022 Service Plan was presented earlier this week, Vancouver Sun reported. The summary assessed ICBC’s current financial status and outlined its strategy to get itself out of the red.
BC’s provincial government said that once premiums increases are implemented, ICBC would go from making a loss of $1.18 billion in the current financial year ending Mar. 31 to a profit of $148 million by the financial year ending March 31, 2022.
Finance Minister Carole James pointed out that operating changes, which will be introduced in the following months, will help make the turnaround possible. One such change is the recently implemented restriction on medical experts in auto injury cases, which should result in $400 million a year in savings.
ICBC spokesperson Lindsay Williams said that the insurer has projected savings of $1.2 billion a year if the operating changes are made.
While changes could help the struggling insurer, Insurance Bureau of Canada (IBC) vice-president Aaron Sutherland suggested that the main reason the insurer is expecting to turn a profit in three years is due to the proposed increase in premiums.
According to ICBC’s financial summary report, premiums collected in the current financial year will be $5.826 billion. By 2022, the insurer will collect $7.569 billion in premiums, after increases.
“This is a very large rate increase, to the tune of 25% when you factor in the growth in drivers,” Sutherland remarked.
ICBC’s report also revealed that the insurer is expecting claims costs to continue rising, from $7.54 billion this financial year to $8.24 billion in 2022. The insurer is also anticipating underwriting losses will rise, but is confident that increases in investment income will offset the hit.
