The Insurance Corporation of British Columbia (ICBC) is projected to see a financial loss of $298 million for the current fiscal year, according to the second quarterly report released by the Province of British Columbia last week.
The outlook for commercial Crown corporation net income was changed to $3.3 billion, $576 million lower than first quarter projections. This decline was attributed to ICBC’s “lower than expected net income,” revealed the report, with operating results down $625 million due to “unrealized investment losses.” By comparison, the previous quarter’s forecast had ICBC at $327 million.
Aaron Sutherland, vice president for Insurance Bureau of Canada’s (IBC) Western and Pacific regions, called these projections “incredibly disappointing news for ICBC's customers, as well as taxpayers in British Columbia who will ultimately bear the cost of these losses.”
The implementation of the no-fault regime was meant to help stabilize ICBC’s financial situation, noted Sutherland, pointing to how the model enabled ICBC to spend 30% less on what it provides to accident victims.
“Despite this, ICBC is once again forecasting a financial loss,” he said.
A previous report by IBC found that ICBC had paid $1.48 billion in injury claims during the 2021/2022 fiscal year. Before the no-fault regime was implemented in 2020/21, ICBC paid out $2.11 million in injury claims.
“British Columbians have a new auto insurance system, but it is the same old ICBC,” added Sutherland. “This update is yet another reminder of the cost of ICBC's monopoly, and the need to open the market to competition to give drivers a choice and taxpayers relief.”
ICBC’s financial results for the first half of the 2022/23 fiscal year reported that corporate net income had slid to $117 million, down $327 million from the same period last year. The insurer said this was due to investment markets being “higher than usual” in the previous year, whereas today’s investment markets has been characterized by volatility “driven largely by inflation and rising interest rates.”
