Claims are down, but ICBC could lose $1 billion if market downturn continues

A report on the pandemic’s impact on ICBC was presented on Thursday by Attorney General David Eby and ICBC CEO and president Nicolas Jimenez and has no rate reductions for drivers

The graph above shows ICBC claims in March and April in 2019 and 2020.

The COVID-19 pandemic has had a serious impact on ICBC, but the long-term financial outlook of the province's public insurer remains unknown.

"It could be terrible or there could be a significant surplus," Attorney General David Eby said.

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A report on the pandemic’s impact on ICBC, presented on Thursday by Eby and ICBC CEO and president Nicolas Jimenez, revealed that while the insurer has saved about $158 million due to a dramatic drop in crash claims, its investments have also seen massive fluctuations in an uncertain market.

In fact, the report states that in the 2020-2021 fiscal year, ICBC could see a negative impact in excess of $1 billion if the market downturn continues. The insurer's fiscal year began on March 31, just weeks after public health orders created a dearth of traffic around the province.

The report examined a period of time between March 15 and May 2.

During that period, ICBC received 46 per cent fewer claims for vehicle damage and injuries compared to the same period last year. On average, ICBC processed 7,100 fewer claims each week. It also saw a number of cancellations, rate changes and new policies.

Over that period, 103,712 policies were cancelled, an increase of 53 per cent over last year.

An additional 57,561 policies were changed — the majority of which (31,299) were alterations from short or long commute rates to pleasure-use only rates, a savings for customers of between 10 and 20 per cent, according to Eby.

While the overall number of new policies fell 41 per cent compared to last year, the number of new storage policies purchased skyrocketed by 191 per cent as customers decided to park their vehicles during the pandemic.

There was also a 12 per cent decline in the number of policy renewals, the report states.

Jimenez said ICBC's recovery was headed in a positive direction prior to the pandemic. But now, all projections have "become irrelevant overnight," as Eby put it.

"We're just going to have to let this play out, but the business was trending upwards before the pandemic," Jimenez said.

© Kamloops This Week

 


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