ICBC on Sunday posted a net loss of $935 million for the first nine months of its current fiscal year (April 1 to December 31, 2017).
“This is obviously a sizeable and significant loss, and is further evidence of the growing financial pressures we are under from the rapid increase in the number of crashes occurring across B.C., the surge in claims and the massive growth in the costs of those claims. Our projected net loss for our full 12-month, fiscal year (ending March 31, 2018) now stands at almost $1.3 billion,” it said in a statement.
The number of crashes occurring across B.C. is continuing to escalate year-after-year. As a result, the number of claims ICBC is receiving is growing by thousands each year. On top of that, the costs of those claims are ballooning. After only breaking through the $2 billion threshold as recently as 2014, its injury claims costs are now closer to $3 billion a year. This is not to mention the increasing cost of vehicle repairs and the emergence of additional, major pressures, said ICBC.
In recent months, ICBC said it has seen the emergence of many more, large and extremely costly claims which run into hundreds of thousands of dollars each. In particular, older claims – some dating as far back as 2010 – which were initially presented as minor injury claims have since emerged as more complex and costly, large loss claims. Over the past 12 months, ICBC said it has experienced an unprecedented 80 per cent growth in large loss claims which have an average cost of $450,000 per claim.
“Added to this, despite substantially adding to our claims staff to help deal with the increasing volume of claims being reported to us, claims have been closing at a slower rate. 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,” said ICBC.
ICBC’s net claims costs for the first nine months of its current fiscal year totalled $4.25 billion.
“Simply put, the amount of premiums we are collecting from customers is not covering the ever-increasing amounts we are paying out in claims costs. This is not sustainable,” said ICBC.
“We are working hard alongside government to take the steps necessary to bring about long-term solutions which will put ICBC back on a stable financial footing, one that will create a sustainable auto insurance system for B.C.”