While some early trends have emerged, it’s still too soon to fully know what impact the COVID-19 health crisis will have on B.C.’s auto insurance rates.
Officials spoke Thursday of how driver habits have changed since the implementation of physical distancing and remote work, but said it was still too soon to predict what the financial future looked like for the Insurance Corporation of B.C.
Attorney General David Eby was accompanied by ICBC CEO and president Nicolas Jimenez at Thursday’s teleconference.
“As you know, government’s been working hard over the last two and a half years to deliver affordable insurance to British Columbians while we improve benefits and also try to get ICBC back to financial sustainability and I think we’ve made good progress,” said Eby.
“And then COVID-19 happened and many of the assumptions and projections, we were working on became irrelevant, almost overnight.”
Eby said he had asked the auto insurer to prepare a report examining early trends, and how the economic collapse could affect insurance rates in B.C. The report, details of which were shared for the first time Thursday, highlighted several key financial indicators, said Eby.
As a result of remote work and orders to stay at home to halt the spread of the virus, Eby said fewer cars were on the road, leading to fewer accidents and fewer claims being opened between mid-March to early May.
“And it’s been quite an obvious trend,” he said. “This has resulted in fewer claims that projected and an associated projected savings of $168 million for ICBC.”
While driver traffic has picked up since the initial sharp decline, Eby said it remained difficult to know when, how and whether historical accident and claim trends would re-establish, particularly if more people continue to telecommute in a post-pandemic world.
Eby said the report also projected a $283-million decline in written insurance premiums, as a result of waiving change fees for drivers who downgraded their coverage and others who cancelled their insurance outright during this time.
“So this number will change, and it is expected to improve as people get back behind the wheel and reinsure as public health restrictions are lifted and they return to work,” said Eby. “How rapidly it will change and whether ICBC will return to historic and the projected trends of insurance premium revenue this year is still a very open question.”
Eby also noted that ICBC has no capital reserves for a rainy day, a problem he pinned on the previous government.
“In fact, if these trends worsened over the next 10 months, any year-end losses would be subsidized by taxpayers directly,” he said. “There are no savings to cushion potential impacts because the previous government decided not to fix our broken insurance system, but decided instead to subsidize unsustainable insurance rates by pulling money out of ICBC savings.”
MLA Jas Johal, the Official Opposition’s critic for ICBC, questioned the numbers offered up Thursday and asked why ICBC couldn’t offer discounts, such as those offered by other insurers across North America.
“Since the state of emergency was declared by the government, Mr. Eby and ICBC have done nothing but slowed walk the rebate question to the detriment of the people of B.C.,” said Johal.
“This is a once-in-a-century pandemic, and if there ever was a need for a public insurer to step up, it’s now.
“On average, ICBC generates $16 million dollars a day in revenue. Since the state of emergency was announced on March 18, ICBC will have generated nearly a billion dollars in new revenue. A portion of those dollars should be returned to British Columbians who need the help now.”
More to come.
from Fournier Finishing – Wood Floors, Stairs & Trim https://fournierfinishingwoodfloorsstairstrim.blogspot.com/2020/05/covid-19-icbc-suffers-losses-but-still.html
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from Fournier Finishing – Wood Floors, Stairs & Trim https://fournierfinishingwoodfloorsstairstrim.wordpress.com/2020/05/15/covid-19-icbc-suffers-losses-but-still-too-soon-to-know-financial-future/
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