The Insurance Corporation of British Columbia (ICBC) has been thrust into the spotlight ahead of the B.C. provincial election on May 09.
Between the looming threat of ICBC’s rates being jacked up by, in a worst-case scenario, 42% by 2020, and an NDP policy vowing to freeze the public auto insurer’s premiums, the issue has become a focal point of political debate.
Learn more about auto insurance here.
“A 42% rate increase by 2020 as a worst case scenario? That’s a pretty horrible worst case scenario,” said Chelsea Fitzpatrick, vice president of operations at Park Insurance Agency in Burnaby. “There’s going to be a lot of people who can’t afford to drive anymore. It could also lead to people just insuring with the bare minimum.
“When that person hits you and you sue them, because you’re injured, they’re going to have to pay you out of their own pocket now because ICBC only pays what’s on their insurance. That’s terrifying - the 42% rate increase would mean underinsured drivers everywhere.”
There is a movement towards modernization at ICBC, with individuals being priced rather than vehicles as part of an upgrade to analytics-based underwriting software, according to Fitzpatrick. However, its plans could also have a serious impact on brokers.
“ICBC promised they’ll be using brokers long term, even though our clients will be able to login online and renew their insurance without actually coming to see us,” she said. “There are a lot of brokerages that are scared of what’s going to happen - if ICBC is their bread and butter, it’s a really hard time for them because there’s a lot of unknown. From a broker’s standpoint it’s hard to feel confident in where everything’s going.”
Want the latest insurance industry news first? Sign up for our completely free newsletter service now.
Meanwhile, the NDP touting a rate-freeze is more of a political news-making exercise than it is a likely policy solution, according to Fitzpatrick.
“If they froze the rate-increase, then ICBC would be in a deficit and then we’d all be paying for it out-of-pocket somehow, I’m sure. If they’re going to freeze it for a little bit to figure things out, then sure, do that. I highly doubt they’ll be able to freeze it for four years,” Fitzpatrick said.
“Anytime that you incorporate ICBC into your campaign it’s just going to get you in the news because the majority of people (in British Columbia) have ICBC policies and it effects a lot of people. Same thing with bringing up hydro, same thing with bringing up Uber. When the election is all said and done and the dust has settled, whoever is left in power is still going to left with that mess.”
ICBC implements new underwriting and policy management solution
ICBC reintroduces free windshield chip repair