Even though ICBC has extinguished its financial “dumpster fire,” nearly $2 billion in profit this year are not expected to go back to drivers.
The public insurer’s CEO, Nicolas Jimenez, said the significant financial rebound will allow the company to replenish its capital shortfall.
Jimenez said years of financial losses have depleted ICBC’s capital fund, which is needed to support the company.
“All of the profits will go to capital which is really important because it creates a backstop in case things go really wrong,” Jimenez said in an interview.
“We are slowly on a path to rebuild our capital levels so the system can function like it supposed to.”
At three quarters through the 2021/22 fiscal year, ICBC is forecast to make $1.9 billion in profit. The dramatic increase is due to investments performing well and a decrease in costs due to no-fault insurance.
The switch to no-fault has also led to lower insurance premiums.
Public Safety Minister Mike Farnworth, who is also politically responsible for ICBC, said the company could consider a rebate or a further reduction in rates once the capital fund is restored.
But the province is watching the company’s investments closely and expects more volatility over the next few months.
“There is still some uncertainty in the financial markets as we go in the fourth quarter. The Ukraine situation has the ability to make things volatile,” Farnworth said.
In 2018/19 the insurer lost $1.15 billion, followed by a loss of $376 million in 2019/20.
Due to fewer crashes during the pandemic, the insurer made $1.54 billion in 2020/21. Of those profits, $900 million were returned to customers in the form of rebates.
Kris Sims, B.C. director of the Canadian Taxpayers Federation, said that whenever ICBC turns a substantial profit, that money should be returned to drivers.
“With ICBC being a forced monopoly we believe it should be as affordable as possible and this would be rebated to drivers,” Sims said.