ICBC reported Friday, that it has posted a net loss of $582 million for the first six months of the current fiscal year (April 1 to Sept. 30, 2018).

According to a statement from the Crown insurer the loss is B次元官网网址渞eflective of the continued pressure ICBC is under from the rising number and cost of claimsB次元官网网址�.

Attorney General David Eby went on to say that the primary reasons are higher bodily injury costs, as well as claims taking longer to resolve, which often result in higher claims costs. A key driver of these costs is a growing trend toward plaintiff lawyers strategically building the value of the claim B次元官网网址� costs which have to be paid for by ICBC ratepayers.

B次元官网网址淔or too long, financial problems at ICBC were ignored and hidden from the public, resulting in a $1.3-billion net loss in 2017-18. Unfortunately, ICBCB次元官网网址檚 second-quarter results for 2018-19 show that its financial position remains serious,B次元官网网址� said Eby.

B次元官网网址淭hese trends are becoming more severe. Since March 2017, the dollar value of settlements demanded by plaintiff lawyers for litigated files increased by 27 per cent . The average cost of closed litigated injury claims for the first six months of ICBCB次元官网网址檚 fiscal year rose from $100,427 in 2017 to $121,686 in 2018, a 21 per cent increase. Plaintiff counsel are also spending more to build their files, increasing their average cost of experts and reports by 20 per cent.B次元官网网址�

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ICBCB次元官网网址檚 net claims incurred for the first six months of its fiscal year alone topped $3 billion, an increase of $634 million, or 26 per cent, over the same period last year.

B次元官网网址淕iven this situation, we are looking for ways to accelerate and add to our efforts to solve the financial problems at ICBC,B次元官网网址� added Eby.

B次元官网网址淓arlier this year, our government announced a suite of product changes to stem ICBCB次元官网网址檚 losses, provide enhanced care for people injured in crashes and to make insurance rates fairer. As a result of these changes, ICBC is projecting net savings of $1 billion annually. However, we wonB次元官网网址檛 start seeing these savings until after most of the reforms take effect, starting April 1, 2019, after which we can expect more dramatic financial improvement.B次元官网网址�

This significant financial loss comes after ICBC reported a net loss of $1.3 billion for its 2017/18 fiscal year, and means ICBC is now projecting to report a year-end financial net loss of $890 million for 2018/19.

B次元官网网址淚t is now clear that this government needs to look for even more ways B次元官网网址� beyond what is already planned B次元官网网址� to further reduce the escalating cost of claims,B次元官网网址� said Eby.

B次元官网网址淥ur government is making different choices that will stem ICBCB次元官网网址檚 losses. We will continue to monitor ICBCB次元官网网址檚 financial situation and we are taking steps toward making B.C.B次元官网网址檚 auto insurance system work for people again.B次元官网网址�

ICBC states that there are no signs that the ongoing and increasing claims cost pressures ICBC is experiencing, will abate without the major reform to the auto insurance product in British Columbia which government and ICBC are implementing.

B次元官网网址淲hile our current financial pressures are clearly serious, they have been caused by an auto insurance system which has long been in need of substantial modernization B次元官网网址� something that is now, at last, happening,B次元官网网址� writes the auto insurer.

B次元官网网址淭hese changes will shift the focus away from maximizing payouts to a care-based system B次元官网网址� which makes taking care of people injured in a crash the top priority, with more money for the treatments and support they need to get better and less spent on legal costs.B次元官网网址�

The government and ICBC are also modernizing ICBCB次元官网网址檚 30 year-old insurance system to ensure all drivers pay premiums which more accurately reflect the risk they represent on the road.

In addition, a number of road safety initiatives are underway, aimed at lowering crashes and mitigating the current financial pressures on ICBC.

The growing claims costs pressures ICBC is facing will also need to be addressed with the next basic rate application which is due with the British Columbia Utilities Commission by December 15.

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carmen.weld@bpdigital.ca
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