COVID-19 throws ICBC's financial projections into disarray as claims, premium revenues decrease
Provincial auto insurer has waived fees and changed service delivery during pandemic
British Columbia's public auto insurer says COVID-19 has thrown its budget projections into disarray as people decrease or cancel their insurance and fewer people are on the roads.
Attorney General David Eby and ICBC CEO Nicholas Jimenez said on Thursday morning that a decrease in collision claims has resulted in $158 million in savings. But they also said ICBC has generated hundreds of millions less in revenues from fees and insurance premiums.
Eby said traffic, and thus collision claims and insurance premiums, were beginning to increase as the province slowly moves toward reopening its economy but it's still too soon to tell how the next few months will play out.
"We simply don't know how the year will end," Eby said. "It could be terrible or there could be a surplus."
Eby said the province is reserving any decisions about premium changes or rebates until the end of the year.
The NDP government has been working toward improving ICBC's financial situation after calling it a "dumpster fire" in 2018. Jimenez said ICBC's finances had been tracking more positively than projected until the public health emergency was declared at the end of March.
But Eby and Jimenez said the pandemic and the sweeping changes that have come along with it have put all of that progress into question.
According to a report ICBC released on Thursday, some of the impact of COVID-19 includes:
- A 46-per-cent reduction in accident claims compared to this time last year, resulting in about $158 million in savings.
- More than 150,000 customers reducing or cancelling their insurance, resulting in a $283 million decline in revenues.
- A potential loss of more than $1 billion from ICBC's investment portfolio, which it uses to offset premiums.
Eby used the media briefing to take another jab at the previous Liberal provincial government, saying it was their fault that ICBC had no finances set aside for a rainy day.
"There are no savings to cushion potential impacts," he said.
ICBC has temporarily waived some fees amid the pandemic. For instance, drivers who choose to suspend their insurance won't have to pay the usual $30 cancellation and $18 re-plating fees.
The public auto insurer has also reminded drivers to adjust their insurance if they're now driving less or not at all to work. Changing coverage and risk levels could lead to lower premiums.
Drivers can now renew their insurance over the phone.