A “rapid increase” in the number of accidents across British Columbia has contributed to ICBC’s projected $1.3 billion loss for this fiscal year, the provincial crown corporation says.
Other factors include a surge in claims and the “massive growth” in the costs of those claims.
The double whammy of more accidents with greater payouts means “the amount of premiums we are collecting from customers is not covering the ever-increasing amounts we are paying out in claims costs,” ICBC said in a press release issued Jan. 28 “It’s not sustainable.”
ICBC says the number of claims “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, our 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.”
Older claims that were initially presented as minor injury claims are turning out to have a much more costly impact. “Over the past 12 months, we have experienced an unprecedented 80 per cent growth in large loss claims which have an average cost of $450,000 per claim.
Even though ICBC has increased its workforce, it says its staff cannot keep up with the volume of claims. When lawyers become involved, the process gets slower. The longer a claim takes to settle, ICBC says, the more expensive it becomes.
ICBC’s net claims costs from April to December 2017 totalled $4.25 billion.
Attorney General David Eby is expected to host a press conference about ICBC’s losses on Jan. 29 at 11 a.m.
