November Provincial News Releases

ICBC puts bad drivers on notice — November 29
Backgrounder - Driver Risk Premium Targets High-Risk Drivers — November 29
ICBC Third Quarter Report — November 8
Time change this weekend means all road users need to use more caution — November 2
Driving school out of business — November 1

ICBC puts bad drivers on notice — November 29

High-risk drivers could pay thousands more

ICBC is putting BC's high-risk drivers on notice to clean up their driving or pay more.

The warning comes after the BC Utilities Commission's (BCUC) recent approval of ICBC's proposal to target high-risk drivers, charging them hundreds and in some cases thousands of dollars more each year.

"High-risk drivers are currently not paying enough given the risk they pose on the roads. Charging bad drivers more is one way that ICBC is working to keep rates low and stable for safer drivers," said Paul Taylor, ICBC's president and CEO.

The new Driver Risk Premium will apply to offences that occur on or after January 1, 2008. Beginning in January 2009, drivers who have motor vehicle convictions, roadside suspensions, and/or a Criminal Code driving-related conviction will pay a Driver Risk Premium. Bad drivers have to pay the additional annual premium for up to three years.

High-risk drivers - those who engage in activities like excessive speed, drinking and driving, running red lights and other forms of dangerous driving - have a crash rate of more than twice that of other BC drivers.

Approximately 120,000 drivers - about five percent of the province's licensed drivers - will soon receive warning letters from ICBC. The letters are being sent to drivers whose past driving experience would result in an additional Driver Risk Premium if their bad driving habits continue into the future.

The Driver Risk Premium is tied to the driver's licence and will have to be paid regardless of whether the driver owns or insures a vehicle. The additional premium will be paid on top of the yearly cost of auto insurance, with those with Criminal Code convictions paying the most.

"The Driver Risk Premium targets those drivers who are most likely to get into crashes which have a direct impact on claims costs," said Taylor. "The new premium holds drivers more accountable for their actions on our roads and the revenue generated will be used to offset premiums for good drivers."

Drivers who receive a Criminal Code conviction, like impaired driving or dangerous driving, will be the hardest hit with an annual Driver Risk Premium of $905, adding up to $2,715 over three years. Drivers with multiple convictions will pay even more.

The new program will also identify and penalize those drivers who show a history of high-risk driving habits. An example of this would be a driver who receives three speeding tickets over a three-year period. That driver would have to pay an additional premium of $350 annually.

The Driver Risk Premium will be phased in over three years so that eventually the annual scan will include three full years of a driving record. The Driver Penalty Point program will be phased out over the same three-year period and replaced with the Driver Risk Premium. The two programs will run parallel during that time and drivers with penalty points will pay the higher of the two premiums.

MEDIA CONTACTS:
Doug McClelland: 604-982-2476
Doug Henderson: 604-982-1332

Backgrounder

Driver Risk Premium Targets High-Risk Drivers

Earlier this year ICBC and government announced a new approach to target high-risk driving. The Driver Risk Premium has now been approved by the BC Utilities Commission.

• Starting January 1, 2008 all convictions and/or roadside suspensions will be included in an annual scan of each driver's licence. Drivers are being put on notice so that they have an opportunity to change how they drive in order to avoid paying the Driver Risk Premium.

• The Driver Risk Premium will apply to offences that occur on or after January 1, 2008. Beginning in January 2009, drivers who have motor vehicle convictions, roadside suspensions, and/or a Criminal Code driving-related conviction will pay a Driver Risk Premium. Bad drivers will have to pay the additional annual premium for up to three years.

• The Driver Risk Premium is tied to the driver's licence and will have to be paid regardless of whether the driver owns or insures a vehicle.

• Approximately one month prior to their date of birth, drivers with convictions will receive a Driver Risk Premium bill in the mail. It is estimated that the average Driver Risk Premium payment per year for three years will be $500, on top of the cost of insurance.

• There will be a three-year transition to replace the current Driver Penalty Points program with the Driver Risk Premium. The two programs will run parallel during the transition and for this time period drivers with offences will pay the higher of the two premiums, on top of the yearly cost of auto insurance.

• The Driver Risk Premium is focused on high-risk drivers and will mean some drivers with convictions and/or roadside suspensions will pay hundreds or even thousands of dollars. Approximately 5% of all drivers are considered "high-risk".

• Revenue from the Driver Risk Premium will be used to offset basic insurance premiums for good drivers.
  

  Minimum Driver Risk Premiums by Type of Conviction

  Type of Conviction	Minimum Number of Convictions to Trigger Driver Risk Premium	Annual Driver Risk Premium, Paid for 3 years
  Criminal Code conviction (e.g. impaired driving, dangerous driving)	1	$905
  Excessive speeding conviction	1	$320
  24 hour roadside suspension	2	$370
  Motor vehicle related offence (e.g. speeding, disobeying signal)	3	$350

ICBC Third Quarter Report — November 8

Investment income up, crashes up

ICBC has reported strong financial results and high customer satisfaction scores for the first nine months of 2007. However there are discouraging numbers on the claims front including increases in the number and cost of crashes.

To help address concerns about rising claims costs, ICBC continues to invest in proven road safety programs to reduce the number and severity of crashes, and to look for ways to make higher-risk drivers more accountable for the additional costs they represent.

“There are too many injuries and fatalities; and too many families are affected by the increase in crashes,” said Paul Taylor, ICBC’s president and CEO. “More claims, more crashes and higher claims costs ultimately translate into higher rates. ICBC believes crashes are preventable and that’s why we’re focusing on getting bad drivers to either change their behaviour or pay more for their insurance.”

On average this year, for every $1.00 in premium revenue, ICBC’s claims and operating costs have been approximately $1.02. However, rates remain low and stable as customers continue to benefit from ICBC’s strong investment income. Equity gains and the sale of the Central City development in Surrey were the primary factors contributing to increased investment income. These circumstances cannot be counted on every year.

Crashes and claims costs on the rise

• There were 6,000 more crashes in the first nine months of this year compared to last year – the largest increase in five years. This contributed to a six per cent increase in the number of claims.
• Increases in the average cost of payouts for customers with injury claims have continued, although the rate of increase has moderated. Claims reserves (money set aside for claims which have occurred but not yet been paid out) are subject to volatility. In 2005 and 2006, there were negative adjustments for unpaid injury claims totalling approximately $600 million.
• Increases in the number of crashes and increases in the average cost of claims put pressure on insurance rates.

Bad driving habits affect everyone’s insurance rates

• ICBC invests in road safety because safer roads reduce claims costs and help keep rates low and stable.
• ICBC makes significant annual investments in road safety. These initiatives save lives and reduce injuries, and result in financial savings by lowering claims costs. Examples include support for enhance police enforcement, road improvements at high-crash intersections, and public awareness campaigns.

Rate stability continues in 2007

• Rate changes were implemented in May, and for more than half of customers who choose ICBC, rates in 2007 were the same or lower than they were in 2004.
• The average premium for optional coverage decreased by $26, or 3.8 per cent.
• The average premium for basic coverage increased by $21, or 3.3 per cent (subject to final approval by the BCUC).
• Over the last five years, the average combined increase in rates has been about the rate of inflation.

Investment income drives profitability

• Investment income for the first nine months of 2007 was $526 million, an increase of $142 million compared to last year. The turnaround and sale of the Central City development contributed $133 million to the increase.
• Net income for the first nine months of 2007 was $513 million, or $380 million excluding the impact from the sale of the Central City development in Surrey .
• Operating costs (overhead) remain low – ICBC continues to be a leader in the industry for low operating costs.

Customer satisfaction targets exceeded

• As of the end of September 2007, all customer satisfaction measures are better than the annual targets.
• High levels of customer satisfaction were confirmed by an independent third-party organization. Levels of customer satisfaction for:
  • Insurance services 93%
  • Claims services 84%
  • Driver licensing services 91%
• Customers are continuing to choose ICBC’s combination of price, product and service for their optional coverage. Currently, more than 2.1 million customers have chosen ICBC for their optional insurance.

Looking ahead

• BCUC’s final decisions on 2007 rates for basic insurance and other adjustments to the way rates are set are expected by year-end.
• Rates for 2008 will be reviewed after year-end, and any future changes will be based on forecasted claims costs.

MEDIA CONTACTS:
Doug McClelland: 604-982-2476
Doug Henderson: 604-982-1332

Time change this weekend means all road users need to use more caution — November 2

British Columbians will be setting back their clocks this Sunday, a week later than usual after the province adopted changes to Daylight Saving Time (DST) that aligns us with the United States and much of Canada. With the time change, drivers should remember to use caution and leave extra time to get to their destinations — particularly during the Monday commute.

"With nightfall arriving earlier, starting next week your commute home from work or school will likely be in the dark in most areas of the province," says John Les, Minister of Public Safety and Solicitor general. "Combined with the adjustment in waking time, our internal clocks can be thrown off temporarily. We're asking anyone that's driving, cycling or walking to be extra careful."

Les added that worsening weather and road conditions can also make this week's commute more dangerous than usual. "Slowing down in poor weather and properly equipping your vehicle for winter driving conditions is essential to staying safer on our roads," he said.

Crash statistics illustrate the higher driving risk the first work day after Daylight Savings ends. Looking at the Monday following the fall time change in 2006, there were 790 crash incidents, compared to 640 incidents the Monday before the time change.

On average, the first Monday after the fall time change saw an 18 per cent increase in crash incidents, and 20 per cent increase in injuries, compared to the Monday before the time change (2003-2006). The average cost to ICBC customers for crash incidents following the fall time change (2003-2006) was $8 million.

Here are some fall season driving tips:

• Reduced light conditions can make it more difficult to see pedestrians, cyclists and other road users. Drivers need to be especially vigilant.
• Slow down and keep your distance. It takes longer to stop on wet pavement or on pavement covered with leaves or mud.
• Use your headlights at all times to ensure you are visible to pedestrians and other vehicles.
• To avoid being blinded by the headlights of an approaching vehicle, look toward the right side of your lane until the approaching car passes.

MEDIA CONTACTS:
Kate Best : 604-982-2480
Alyson Gourley-Cramer (North Central): (250) 561-5006
Ryan Detwiller (Southern Interior): (250) 979-4612
Tamara McLean (Vancouver Island): (250) 414-7883

Driving school out of business — November 1

ICBC acts to keep roads safe

Southwest Driving Academy has surrendered its driving school licence following a coordinated investigation by ICBC and the RCMP into an alleged scheme that included allegations that fabricated driver experience letters were being provided to students getting their class 1 commercial drivers licence.

The scheme received public attention earlier this year when a search warrant was served on the school. While the investigation into whether charges may be laid is ongoing, ICBC took the steps to cancel the driving school's licence as well as the owner's instructor's licence.

"I am glad to see that ICBC is taking this matter very seriously," said Solicitor General John Les. "The provincial government's priority is to ensure that we have safe drivers with secure licences on BC roads."

ICBC has also taken action against a number of drivers who used fabricated driver experience letters to help obtain their commercial drivers licence. Where there has been strong evidence that people may have used fabricated letters ICBC has asked those people to provide further proof of their driving experience with an original document issued by the licensing authority where their driving experience was gained.

In cases where drivers have not been able to provide sufficient evidence, their class 1 driver licence has been identified as being invalid. So far 123 people have been sent letters asking them to provide further evidence of their driving experience. Of those, 22 people have been identified as having a class one driver licence that is invalid. This number may increase if others are not able to provide further proof of their driving experience. The review of driver experience letters included letters used by students of Southwest Driving Academy and all other driving schools that provide class 1 training.

"ICBC has a zero tolerance policy for this type of behaviour," said Mark Withenshaw, ICBC Vice-President of Driver Licensing. "We actively work to protect the integrity of the driver licensing system and have a comprehensive plan in place to identify any potential fraud vulnerabilities in the driver licencing process."

To qualify for a class 1 drivers licence in BC, the driver must have three years of regular class 5 driving experience, less than four penalty point incidents in the previous two years, have no vehicle-related Criminal code convictions in the previous three years and pass the Class 1 knowledge and road test.

ICBC has the ability to check individual driving records for drivers in Canada and the US through electronic record exchange systems. For drivers outside North America, ICBC requires the individual to provide written proof of their driving experience from the licensing authority where their experience was gained.

ICBC has taken further steps to ensure the authenticity of driver experience letters, including only accepting original documentation and enhancing training for certified document fraud investigators.

MEDIA CONTACTS:
Doug Henderson: 604-982-1332

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