Tuesday, August 21, 2007

ICBC rates up a slap in the face

Ratepayers in BC got a slap in the face last week with ICBC announced its 132% increase in profit in the first half of 2007. ICBC said it was because more people are insuring vehicles. True but ...

Average car insurance rates in BC have increased over the past three years and will probably increase again this year. Basic rates are going up 3.3%, and even though optional rates are going down 3.8%, 56% of ICBC's business is in basic insurance.

According to data from the General Insurance Statistical Agency, between 2003 and 2007, average auto insurance premiums fell by almost 16% in Ontario, 14% in Alberta, 24% in Nova Scotia, 37% in New Brunswick, 15.5% in Prince Edward Island, and 21% in Newfoundland. Meanwhile in BC, average premiums rose 5.1% between 2003 and 2006. BC's 2007 premium data is not yet available but given the recent announcement of a 3.3% increase in basic rates coupled with a 3.8% decrease in optional rates, average premiums will likely increase, as about 56% of ICBC's insurance business is basic insurance.

When profits go up, that should translate into lower rates, not increased executive bonues as happened last year. Their priorities are distorted. It's time for ICBC's auto insurance monopoly to end.

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