Just to be completely clear, for the first 34 years ICBC worked well. Everyone got compensated ‘fairly’ as happens with a tort system and rates increased on average of only .8% per year between 1998 and 2008. It was only after the gross mismanagement of ICBC between 2008 and 2016 that we saw the structural problems that are now prompting a lot of panicked discussion about major changes to the system.
Financially, what needs to be done now, is for the government to pay back the $1.2 billion previously taken from ICBC and focus on the essential goal, which is the affordable delivery of timely and appropriate compensation to accident victims. It has demonstrated during the 34 years before the politicians started meddling with it in earnest, that it is perfectly capable of achieving that goal if allowed to act consistently within basic insurance principles and not being required to also fund schools, hospitals and sundry government pet projects.
From a public good perspective as well as financially, ICBC needs to be much more pro-active on reducing accident frequency. A 10% decrease in accident frequency would avoid a huge amount of human suffering as well as eliminate the need to collect $400 million a year in premium revenue (based on ICBC’s current gross revenue of about $4 billion). ICBC has actually overcome greater challenges vis a vis seat belt usage and public values on impaired driving.
Nick de Domenico
25 July 2017