New data from the first year of the Insurance Corporation of British Columbia (ICBC) "Enhanced Care" no-fault regime shows that the Crown insurer's operating expenses exceeded what it provided in injury claims by $173 million in 2021/22.
According to its 2021/22 year-end financials, the switch to a pure no-fault system has allowed ICBC to reduce what it provides to accident victims by 30%. This, despite the fact that collisions were up significantly over that same time period.
In 2020/21, the year before no-fault came into effect, ICBC paid out $2.11 billion in injury claims to help individuals recover. In 2021/22, under the first year of no-fault, claims paid fell to $1.48 billion. In contrast, last year ICBC spent $1.62 billion in operating costs.
Source: ICBC 2021/22 Annual Service Plan Report
"The purpose of auto insurance is to ensure that people get the benefits they need to recover from injuries sustained in an accident," said Aaron Sutherland, Vice-President, Pacific and Western, Insurance Bureau of Canada (IBC). "ICBC's dramatic reduction in claims costs calls that key tenet of insurance into question. Rather than focusing on improving its own internal operations to find efficiencies and savings for drivers, it's appears that ICBC is balancing its books by reducing what it provides to those injured in collisions."
Over the past year, there has been a constant stream of media coverage detailing the plight of those injured in auto accidents in BC. It's clear that those who are seriously injured deserve legal recourse if they are not receiving the benefits they need to recover. It also strengthens the argument that drivers deserve a choice and the ability to shop around to find the auto insurance policy that is best for them.
"This reduction in care and recovery benefits illustrates the painful truth about ICBC's no-fault model, and those injured are suffering the consequences," said Sutherland. "Now, more than ever, drivers need a choice to ensure they are receiving the best insurance at the best price possible."
Over the coming weeks, IBC will continue to highlight the uncomfortable truth about ICBC and its new no-fault model. ICBC's own data clearly shows that the monopoly insurer has focused on reducing the amount it pays in benefits to help drivers recover, while ignoring its own internal problems and passing undue costs on to British Columbians.
Quick Links:
- ICBC's Current Year Injury Claims (inclusive of recovery benefits) have fallen from a high of $3.498 billion in 2018/19 to $1.482 billion in 2021/22. See ICBC 2021/22 Annual Service Plan Report (page 23) here: www.icbc.com/about-icbc/company-info/Documents/ar-22.pdf
- ICBC reported a 15% increase in collisions last year, the first year of no-fault. 260,000 collisions were reported in 2021, compared with 225,000 in 2020. See ICBC Quick Statistics here: https://public.tableau.com/app/profile/icbc/viz/QuickStatistics-Crashandcasualtycrashes/CrashesCasualtyCrashes
- ICBC's Operating Expenses in 2021/22 were $1.622 billion. See ICBC 2021/22 Annual Service Plan Report (page 66) here: https://www.icbc.com/about-icbc/company-info/Documents/ar-22.pdf
