Distracted and impaired motorists – and not the ensuing legal costs – are the primary drivers of Insurance Corp. of British Columbia’s (ICBC’s) financial problems, say the insurance corporation and the association representing provincial trial lawyers.
Attorney General David Eby said Nov. 23 the provincial auto insurer saw a $1.3-billion net loss in 2017-18 with an expected loss of $890 million this fiscal year. He laid some blame on lawyers “strategically building injury claim values resulting in higher costs borne by ICBC ratepayers.”
But ICBC has pushed back on that assertion, continuing to place the blame on an increase in crashes, particularly those caused by reckless drivers. Growing vehicle sophistication also drives repair costs.
Last year, ICBC claims cost $1.40 for every insurance premium dollar collected. The corporation has also seen a steady decrease since 2014 in investment income on its portfolio currently valued at $15.8 billion. And, increasing staff levels to handle crash claims has added $402 million to costs in the past year, as have increased broker commissions and premium taxes paid to Victoria.
“ICBC is facing significant cost pressures that really start from one place — crashes,” said corporation CEO Nicolas Jimenez. “With crashes at an all-time high in our province, we’re committed to doing what we can to reduce claims costs and relieve the pressure on insurance rates.”
ICBC’s 2017-2018 annual report said insurance rates had not kept pace with cost pressures, key among which are an increase in collisions number of crashes, vehicle damage claims and rapidly rising injury costs.
The report noted Eby announced in September a 6.4 per cent rate increase. That would need to increase to 20 per cent to cover increases in crashes and claims, the report said.
The number of drivers who have retained lawyers has also increased, the report said. That, said Trial Lawyers Association of B.C. (BCTLA) spokesman John Rice, is pushed by ICBC challenging claims and driving people into lawyers’ offices. “Nobody wants to hire a lawyer,” he said. “People hire lawyers when they’re being bullied by ICBC.”
Rice said Eby taking a swipe at lawyers sworn to represent clients’ interests “brings the legal system into disrepute.” He said as minister responsible for the ICBC, Eby should be critical of its operations rather than blaming lawyers.
Rice said if Victoria did more to deal with distracted and impaired driving, accident costs would decrease.
Eby seemingly acknowledged that this week in announcing $2.4 million for traffic enforcement, topping up ICBC’s total for road safety traffic enforcement to $24.8 million.