ICBC Raises Rates Despite Profits

Some are calling it a set-up for privatization, others are just saying it’s corporate greed regardless of which the owner is, but ICBC bosses are raising car insurance rates, in spite of the firm’s posting of a $77 million profit last year.

Corporation President Nick Geer says the increase this year, of 1.4 per cent for basic coverage, is needed to offset inflationary costs and to strengthen the firm’s capital reserves. He says another increase is being planned.

“We will be requesting an increase but we expect that increase will be below inflation,” he told reporters earlier this month.

The announcement sparked angry responses from consumer, labour and public interest organizations, with some speculating that this may be the start of another privatization scam by the BC Liberal regime.

The Liberals’ attempt to sell off the corporation were thwarted last year after it was revealed that ICBC’s insurance rates were far cheaper that those of private sector insurance firms.

Meanwhile, the Consumers Association of Canada wants the firm to lower its rates, especially in the wake of the substantial profit the firm made last year.

Yesterday, ICBC reported profits of about $77 million for the first half of the year. The company credits good spring weather and low overhead for increasing returns.

The group says ICBC was set up mainly as a public service to provide affordable insurance rates and guaranteed coverage for car owners. It was not supposed to be a profit-maximizing venture.

Association spokespersons say they support public auto insurance, but that the firm should lower it rates after posting such large profits. But Geer says much of those profits were realized mainly due to cost saving measures in the firm’s administration and the sale of some of its former claim centre properties.