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
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
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