The Insurance Corporation of British Columbia is cutting optional automobile insurance rates by three per cent while leaving basic rates for 2009 unchanged.

The reduction comes despite ICBC's net income falling 23 per cent last year to $497 million, down $145 million from 2007.

Company president Jon Schubert said ICBC can afford to reduce optional rates because insurance claims are down and company investments have done well.

The investments generated a rate of return of just over one per cent last year amid the economic meltdown, he said.

In addition to cutting rates, ICBC will be able to sock away more money to help cushion customers' rates during what he calls volatile economic times, Schubert said Tuesday.

An ICBC proposal to freeze basic insurance rates still needs approval from the B.C. Utilities Commission.

ICBC is a provincial Crown corporation, which provides basic and optional auto insurance to B.C. motorists, as well as managing driver licensing, vehicle registration and licensing. Some private companies also offer the optional portion of automobile insurance in B.C.