It seems like the rising cost of claims is proving to be more than ICBC can handle.
The crown corporation just released a financial summary for December of 2018, which included posting a net loss of $860 million – and that’s only for the first nine months of the fiscal year.
Should this trend continue, ICBC is expecting a net loss of $1.18 billion at the end of the fiscal year.
The company explains in a release that the net losses stem from an increase in large loss claims and increased claims settlement costs, as well as “aggressive pressure from plaintiff counsel.”
The rising cost for a litigated injury claim is the “single biggest pressure” being put on the company, averaging in claims of over $120,000, it says.
ICBC has also stated that they have approximately 110,000 open injury claims, estimated to be a total of at least $7 billion.
The company’s estimate for unpaid injury claims, including claims which have not been filed yet, are expected to be in excess of $12 billion.
David Eby, Attorney General, has recently commented on ICBC’s third-quarter results and says that “losses of this magnitude are unsustainable and unacceptable.”
“They are especially frustrating given the opportunity British Columbia had to avoid these losses.”
The company expects to see major changes for auto insurance on April 1, 2019, when a limit on pain and suffering payouts is implemented. The changes, paired with a new dispute resolution process is expected to save $1 billion per year.
“In the coming days, we will have more details on how the government intends to respond to escalating legal administration expenses,” says Eby.
“Although ICBC’s financial challenges are significant, there should also be no doubt that ICBC remains a valuable public asset that provides important benefits for British Columbians.”