ICBC will not provide a rebate to drivers yet, even though crashes have been down substantially since the beginning of the COVID-19 pandemic, B.C.’s attorney general says.
The public insurer’s finances are incredibly volatile because of lower crash rates paired with a loss in investments and a large number of insurance cancellations, David Eby said.
“There has been calls for rate reductions because of the reduced number of vehicles on the road,” Eby acknowledged.
“The message is at this stage (is) we don’t know what the year-end will look like. We will be waiting to year-end before making any decisions about what to do with any surplus because we are not 100-per-cent sure there will be a surplus.”
ICBC has almost no capital reserves to withstand fluctuations and volatility in the markets, Eby said, and it is too early to determine whether the pandemic will result in benefits to pass on to drivers.
“There are more than 10 months to go in the fiscal year and many unknowns, but if ICBC’s bottom line ends up better than expected, any surplus will be used to benefit B.C. drivers.”
According to a report released Thursday by the province, 103,700 British Columbians have cancelled their ICBC policies since the start of the pandemic. The province recently waved the cancellation and re-plating fees.
Lowering the insurance rate class has also been popular, with 57,561 ICBC customers doing that since the beginning of the pandemic.
These two changes have resulted in a projected $283-million decline in written insurance premiums compared to what would normally be received for that period.
ICBC has opened 46 per cent fewer claims compared to the same time last year, with an average weekly reduction of 7,200 claims. This drop amounts to approximately $158 million in savings.
The corporation has seen a decrease in the value of its investment portfolio due to the unprecedented downturn in the financial markets, putting pressure on its bottom line. There is no firm number of the losses, but early indications suggest the impact could exceed $1 billion in fiscal year 2020 to 2021.
“ICBC waiving cancellation and re-plating fees alone during the pandemic has saved customers around $5 million and we will continue to work with those drivers facing financial hardship,” CEO Nicolas Jimenez said.
“We’re committed to delivering essential services and ensuring the safety of our customers, employees and partners. And given these uncertain times, we have a responsibility to consider many factors when making long-term decisions that could adversely affect ICBC’s bottom line – and customers’ insurance premiums – in the future.”
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