ICBC no long able to promise rate reduction under “No Fault” plan
Below is ICBC describes the challenges they face due to Covid-19. We could potentially hear at the end of the year that a rate reduction is not a viable option for ICBC’s bottom line. Could be be giving up our right to legal counsel for nothing?
(Image: Impacts of COVID-19 on ICBC report released)
The impact of the pandemic on ICBC and our customers has been wide-ranging and unprecedented with many unknowns still ahead. These impacts are ongoing and changing, as they are for businesses across the province.
· The most apparent impact is one we can all see – over the past two months, fewer people have been driving and that’s led to a reduction in the number of claims we would normally expect to receive. There are also impacts that aren’t as visible.
· We’ve seen significant reductions in premium revenue as our customers made changes to their insurance policies, held off on getting new policies or cancelled their policies altogether.
· While we know what has happened over the past two months, the pandemic has created new uncertainty going forward. We don’t know how long the decrease in claims and premium levels will last as restrictions start to lift and drivers get back in their cars.
· To add to the uncertainty, ICBC, like other insurers, uses an investment portfolio to help offset claims costs and reduce premiums, and the current global markets are unpredictable. Our investment portfolio has taken a significant hit and it’s not clear how long it will take to rebound.
· If ICBC’s net income results are better than forecast for 2020-21, any additional net income will benefit customers. Any decisions on the use of additional net income of ICBC for the year due to lower claims resulting from the pandemic will be made at the end of the fiscal year. Options could include rebuilding the financial capital health of ICBC to reduce longer-term pressure on rates, providing a one-time direct relief to customers or any combination thereof.
· In the meantime, we will continue to actively look at ways of supporting our customers, employees and stakeholders during this challenging time.