ICBC posts $935M in net losses in first 9 months of fiscal year

The Insurance Corporation of B.C. is projecting net losses of $1.3 billion by the end of the current fiscal year.

Losses reveal premiums no longer covering the cost of payouts

The cost of injury claims is closing in on $3 billion annually, while the number of large loss claims, with an average payout of $450,000, has spiked by 80 per cent in the past 12 months, ICBC said. (David Horemans/CBC)

The financial crisis at British Columbia's public auto insurer is deepening, as $1.3 billion in net losses are now projected by the end of the current fiscal year.

The Insurance Corporation of B.C. said the "sizable and significant loss" is evidence of the growing financial pressures from a rapid increase in the number of collisions in the province, as well as the rising costs of those claims.

"The number of crashes occurring across B.C. is continuing to escalate year-after-year. As a result, the number of claims we are receiving is growing by thousands each year," the corporation said in a news release on Sunday.

$3B in claims annually

The cost of injury claims is closing in on $3 billion annually, ICBC said.

The number of large loss claims, with an average payout of $450,000, has also spiked by 80 per cent in the last 12 months.

The spike in the number of claims is also causing a slow-down in how quickly settlements are delivered.

"This has particularly been the case with represented claims, which are taking even longer to settle. The longer a claim takes to settle, the more expensive it becomes," ICBC said.

ICBC said $935 million in net losses have already accumulated between April 1 and Dec. 31 last year, signalling that premiums are not covering payouts.

The insurance provider asked the provincial utilities commission to hike basic and optional rates last fall to combat its financial crisis.

Trial lawyer doesn't trust numbers

John Rice, co-chair of the Trial Lawyers Association of B.C.'s ICBC committee, doesn't trust the numbers released by ICBC on Sunday.

Rice accused ICBC of presenting numbers that make the situation seem worse than it is. He said the only alternative is extreme mismanagement and incompetence.

"How can an insurance company that's being properly managed go from saying three months ago that basic insurance would suffer a $200-million loss to now apparently $1.3 billion?" Rice said.

Rice called on the government to commission an independent audit of ICBC by the auditor general before making any drastic policy decisions.

"British Columbians need information that we can count on, not these seemingly out-of-nowhere catastrophic pronouncements from ICBC," Rice said.

ICBC did not respond to a request for comment from CBC News.

Attorney general to respond Monday

Attorney General David Eby said in September that the rate hikes would mean the average driver can expect an annual increase of eight per cent or $130 per year on their insurance bill.

Eby has previously said the Crown corporation's financial problems are the fault of the former Liberal government for failing to address issues years ago.

He is expected to deliver his response to the latest losses Monday in Vancouver.

Finance Minister Carole James was not available for comment Sunday on how the loss will affect the upcoming provincial budget.

With files from Megan Batchelor.

Clarifications

  • The original version of this article contained a dated photo caption that pertained to a different story.
    Jan 29, 2018 11:13 AM PT