Blog

Should the Government Return the $1.2 Billion Appropriated from ICBC Poilcyholders? April 20, 2018.

Between 2010 and 2015 the provincial government appropriated almost $1.2 billion of Optional policyholders' capital. Now -- with the province's finances healthy and the ICBC capital reserves almost eliminated -- would seem an appropriat time to return the funds. Occasional Paper No. 56 estimates the Basic and Optional capital shortfalls to 2021/22.

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Subsidizing Seniors: ICBC and BC Ferries. April 9, 2018.

The recent announcement of an increase in the fare subsidy for seniors on the BC Ferries prompted me to review an earlier estimate on the cost of the 25% seniors' subsidy at ICBC's Basic insurance. If the government funded the sudsidy it would relieve some of the pressure on Basic rates.

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ICBC Rate Re-Design; Evidence or Populism?

Occasional Paper No. 54 looks at the current design for pricing risk and some of the changes being suggested in the current public consultation.

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ICBC's Three-Year Forecast Raises Many Questions. February 27, 2018.

ICBC's 2017/18 to 2020/21 financial forecast shows the combined capital reserve falling to dangerously low levels. However many inconsistencies make the forecast suspect. Also included is Acting CEO Nicolas Jimenez's email of March 15th, my reply of March 19th and his reply of March 28th.

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The 'Transaction' Cost of the Tort Model. February 5, 2018.

This paper suggests that injury claimants received only 57% of the $2.0 billion paid by ICBC in 2015 for no-fault accident benefits and injury claims. The balance was absorbed in 'transaction' costs.

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New South Wales Adopts Hybrid No-Fault Scheme for Auto Injury Claims. January 30, 2018.

This paper discusses the auto injury claim models in the states of New South Wales and Victoria, and in New Zealand, with possible lessons for BC.

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ICBC's Second Quarter Report: More Bad News and Less Information. December 29. 2017.

ICBC recently posted its second quarter 'Statement of Oprations,' which is highly deficient as a quarterly report from such an important Crown corporation. Occasiona Paer No. 50 compares the results with Saskatchewan's compulsory insurance program in an attempt to understand the reasons for the continuing losses.

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ICBC's Capital Reserve Minimums Are Too High. December 21, 2017.

The government should lower the minimum capital targets to reduce the current and forecasted capital deficiency, Given the nature of the Basic monopoly, and the near monopoly enjoyed by the Optional program, the targets should be lower, thereby reducing the pressure on future rates.

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ICBC's Financial Crisis: How Did It Happen? December 17, 2017.

This paper provides a high-level review of how ICBC's costs out-stripped revenues from 2012 to 2016/17, and focusses in bodily injury claims costs.

The paper suggests that capping pain and suffering claims for minor soft tissue injury claims will not generate sufficient savings to treturn ICBC's finances and capital reerves to a satidfactory condition. 

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Fixing ICBC's Finances: Four Changes the Government Should Make. December 4, 2017.

The government is planning changes to ICBC's insurance model to reduce costs. Occasional Paper No. 47 discusses areas where the government should re-imburse ICBC policyholders for current programs or policies that benefit the taxpayer.

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ICBC's Capital Forecast: Finance Minister James Concerned. October 11, 2017.

ICBC does not publish multi-year financial forecasts, but Occasional paper No. 42 procides a scenario of the capital deletion to 31 march 2020. Little wonder that finance minister James is concerned.

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Capital Destuction at ICBC Continues September 29, 2017.

ICBC's forecast for 2017/18 shows a continuation in th loss of capital. Occasional Paer No. 41 traces the loss by program from 2010 to 2017/18, and confirms the structural deficit of approximately $400 million per year in the Basic program.

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Taxpayers Federation Wrong; BC Auto Rates Fourth Lowest, Not Second Highest. September 8, 2017.

Comparing auto insurance prices across provincial jurisdictions is a difficlut task. Occasional Paper No.40 shows that the methodology used by Mike Milke in a recent Canadian Taxpayer Federation report is flawed.

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Observations on ICBC's 2016/17 Annual Report. September 1, 2017.

The recently released 2016/17 annual report shows that the financial condition at the public insurer is going from bad to worse, as outlined in Occasional Paper No. 39.

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Further Questions About the Ernst Young Report on ICBC. August 20, 2017.

A more detailed review of the Ernst Young report raises serious concerns about the costing methodology, and the savings that might be achieved by capping pain and suffering awards on minor injury claims. The are discussed in Occasional Paper No.38. 

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Ernst Young Options to Increase Auto Insurance Affordability. August 6, 2017.

This paper reviews the Ernst Young report's options to increase the affordability of auto insurance. It questions some of the proposed cost savings and recoomends the adoption of Saskatchewan's dual Basic model.

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Comments on the Financial Aspects of the Ernst Young Report. July 31, 2017.

My comments on the financail aspects of the July 10, 2017 Ernst Young report on ICBC are included in Occasional Paper N0. 36, distributed on July 30, 2017.

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ICBC Capital Depletion and Claims Backlog. April 9, 2017.

This paper reviews the last four years capital depletion and the growth in the claims backlog at ICBC.

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ICBC Gets Tough on Bad Drivers, and Tougher on Good Drivers. March 5, 2017

ICBC announced a toughing of its Basic insurance discounts for 2018, which will result in higher insurance for at-fault drivers; good drivers will be big losers.

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New Government Must Fix ICBC's Finances Soon. March 30, 2017.

A detailed review of ICBC's three-year forecast shows alarming loss of capital; immediate and longer-term initiatives are suggested to restore ICBC's finances to a healthy condition. 

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ICBC's Worsening Finances Require Government Action. March 24, 2017.

The new provincial government must make the restoration of ICBC's financial health a priority, as capital reserves are now below the regulatory minimums,and rake shock looms.

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Cold and Snowy Winter Helps BC Hydro - Hammers ICBC. March 19, 2017.

A review of the financial impacts of the cold and snowy winter on the finances of BC Hydro and ICBC.

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ICBC Basic Claims Costs 2012 to 2015. 12 December 2016.

This Occasional Paper (No. 18) reviews ICBC claims data from 2012 to 2015 to attempt to identify cost drivers. The outlook for the medium term is as discussed.

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Thoughts on Recent ICBC Events. 27 November 2016.

My thoughts and comments on recent events concerning ICBC's rates and financial condition.

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Rate Suppression and Capital Destruction: ICBC Rate Shock Lurking. 17 November 2016.

This paper describes how the government's rate suppression policy has used ICBC's capital reserves to subsidize lower than required Basic program rates. In essence, the government is using policyholders' savings to keep the required rate increases from becoming an issue of public concern. Soon the capital reserve will be at minimum levels, and policyholders will be faced with the deferred bill.

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The Implications of ICBCs 2016 Rate Changes on Its Capital Reserves 31 August 2016

Possible negative implications of ICBCs 2016 rate changes on its Basic and Optional capital reserves. 31 August 2016.

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Government Financial Benefit from ICBC 30 March 2016

A short survey of the financial benefits the goverment receives from ICBC. 30 March 2016.

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Basic Insurance Part 7 Benefits 2 April 2016

Part 7 Benefits of ICBCs Basic insurance coverage include medical rehabilitation, wage loss, home care and death benefits; the maximum levels have not been increased since 1991. 2 April 2016.

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Impact on ICBC Bodily Injury Claims Costs of Proposed Civil Rules Tariff Changes 2 April 2016

This paper discusses how the 2016 proposed changes to the civil court rules tariff may increase Basic insurance costs. 2 April 2016.

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Caps on Pain and Suffering Awards 26 July 2016

The following provides a source of selected sources for further research on the issue of caps on non-pecuniary (pain and suffering) damage awards for vehicle insurance claims. 26 July 2016.

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The Greying of ICBCs Policyholders 22 August 2016

What are the implications of the aging demographic of ICBC policyholders on the future price of auto insurance? 22 August 2016.

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The Recent Growth in ICBC Claims Costs 30 July 2016

The causes and effects of the recent increase in ICBC's claim costs are reviewed. 30 July 2016.

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ICBC's Declining Capital Reserve Levels 30 July 2016

ICBCs First Quarter 2016 financial results confirm that rising claims costs and declining investment income are rapidly reducing its capital reserves, which are required to pay outstanding claims. 30 July 2016.

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ICBC Facing Severe Financial Pressure 30 July 2016

ICBC's poor 2015 financial results should be of concern to the government and to policyholders. 30 July 2016.

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