Despite critics reporting that it is currently facing a financial meltdown, the Insurance Corporation of BC (ICBC) begs to differ.
“Clearly, we are under financial pressure on the basic side of the business due to the increasing number of crashes and resulting claims but what that means is being greatly exaggerated,” ICBC vice-president Steve Crombie told Global News.
The vice-president responded to claims made by one of ICBC’s staunchest critics, NDP-affiliated Vancouver-Kingsway MLA Adrian Dix. Dix maintained that not only did the ICBC miss its projected profits by a considerable $1.5bn, but the insurer had also laid off nearly 500 staff since a decade ago and had recently become more litigious.
Crombie explained that the ICBC “remains on a sound fiscal footing,” citing the corporation’s claim reserve fund of $10.6bn, its investment portfolio of $4.2bn, and operating capital of $2.6bn for this year.
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Although the numbers do suggest that the ICBC is still in the black, Crombie admits that the corporation is losing more money in settling accident claims that it can recoup through premiums. He reassured reporters that the problem is being assessed with the goal of finding a way to reverse the trend.
“We’re a long, long, long way from being broke or anything like that,” Crombie said. “What we have essentially is a cash flow problem and we’re confident we’re going to resolve that.”
Notably, Crombie also rejected Dix’s claim that the corporation had laid off numerous claims respondent staff over the years.
Crombie shot down the “news” that the ICBC plans to increase rates by 42% over the next few years. He explained that the number came from a scenario suggested by the BC Utilities Commission last summer.
“That was not our idea. Those are not our numbers,” he stated. “We would never even contemplate that kind of increase.”
He added that rate increases will be below 5%, and that an overall review of operations and rate structures may result in even lower annual increases.
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