The Insurance Corp. of B.C. has seen 46 per cent fewer accident and injury claims compared to last year due to the COVID-19 pandemic, but the impact on the B.C. auto insurance company’s bottom line is still unknown.
Attorney General David Eby and ICBC president Nicholas Jimenez released a report May 14 showing that 103,000 policies have been cancelled, and 57,000 vehicle owners lowered their coverage or switched to storage insurance as they were parked for the pandemic.
The drop in accident and injury claims during the seven weeks COVID-19 restrictions on travel and commuting have been in place represent a $158 million decrease over the same period last year, Jiminez said. But Eby warned that with ICBC having no capital reserves and $1 billion losses in the past two years, it is too soon to tell what the impact on the corporation will be as its investments take a beating in the world-wide slump.
“What we’re seeing is uncertainty,” Eby said. “It could be terrible, or there could be a significant surplus.”
ICBC’s report on COVID-19 examined a period from March 15 to May 2 after the provincial state of emergency was declared and people were advised to stay home. It found that after the initial public health measures, accident and injury claims fell sharply but have started to rise again.
Eby said amendments that were not passed as the B.C. legislature shut down due to COVID-19 are expected to be approved when it sits again, likely in June. That will prevent any future government from diverting ICBC surpluses if and when they return.
“ICBC has seen a decrease in the value of its investment portfolio due to the unprecedented downturn in financial markets, putting pressure on the bottom line,” the report found. “Some of this has already been seen at the end of ICBC’s 2019-20 fiscal year, and early indications suggest the impact could exceed $1 billion in 2020-21, depending on the length and scope of the global market downturn.”
Early in the pandemic, ICBC announced a 90-day deferral of payments and waived cancellation and re-plating fees for people taking vehicles off the road due to restrictions on business and personal travel. The cancellation and waiving of plate fees has saved customers around $5 million, Jiminez said.