Hold Onto your wallets, ICBC rates may be rising!

The net income for ICBC is down over the fist six months of the year, sending an alarm bell that BC drivers may be paying a little more next time they renew their policies. While it’s a little early to say that a definite rise in rates is on the way, the seeds of a rate increase have been planted by ICBC officials.

The opinion 250 website has the details on the latest financial dealings with the province’s insurance industry and how it all may affect us.

ICBC Premiums May Increase if Trend Continues
By Anne Blanchard
Tuesday, August 01, 2006 03:25 PM

ICBC has reported net income of $110 million for the first half of 2006, down $50 million from the same period in 2005. The net cost of claims rose by about 10% in that same time period. ICBC says the average payout to customers with claims is increasing. As well, costs associated with prior year claims have continued to increase, resulting in a need for higher reserves.

It’s too early to say if premium costs will go up, but if things continue this way there will be a need for a 4-5% increase in basic premiums, to come into effect sometime next year, says Doug McClelland, Senior Manager of Media Relations for ICBC, though any decision on rate increases is still several months away. “The bottom line is if costs go up, there’s only one place to turn,” says McClelland. “Premium revenue must cover claims costs.”

The cost increases in the first six months of 2006 have been partly offset by increased revenues from premiums. A 6.5% increase for basic coverage came into effect on March 15, 2006, and there has been an increase in the number of basic policies sold in the first six months of 2006, as well as higher sales of optional coverage .

ICBC has a commitment to keeping rates low and stable, says McClelland, but costs have risen across the board, including payments for injuries and lost wages, for medical costs, and for general damage awards.

The biggest thing drivers can do to influence premium rates is to drive safely, says McClelland. The longer the safe driving record, the bigger the discount on premiums for customers.

Posted on Tuesday, August 01, 2006 03:25 PM in News by Anne Blanchard