ICBC posts second quarter results
November 26, 2019
At the conclusion of the second quarter to September 2019, ICBC is forecasting a year-end net loss of $91 million, an increase of $41 million from the Budget 2019 year-end forecasted net loss of $50 million.
The increase is largely due to higher-than-expected large bodily injury claims from past years. While we believe ICBC is moving in the right direction after consecutive years of billion-dollar net losses, we continue to be concerned about claims from crashes that happened before the April 1, 2019, reforms went into effect.
Recent changes at ICBC increased care and recovery benefits for anyone injured in a crash on or after April 1, expanded the scope of the Civil Resolution Tribunal to handle certain ICBC claim disputes and introduced a limit on pain and suffering payouts for minor injuries. There are more than 100,000 claims outstanding from crashes prior to April 1, 2019, and we are seeing the monetary value of those claims rise substantially, especially large loss claims.
On October 24, 2019, the BC Supreme Court ruled that changes made to the Rules of Court limiting the number of experts and expert reports to be unconstitutional. ICBC is in the process of assessing the impact of that decision and any mitigation measures government intends to introduce. These year-to-date financial results, as of September 30, 2019, and the Q2 year-end forecast net loss of $91 million, do not yet reflect the impact of that ruling. Any impacts will be reflected in future results and forecasts.
B.C.'s Attorney General recently announced an intention to introduce changes to the Evidence Act in Spring 2020, including limits to the number of adversarial expert reports, and judicial discretion to allow additional experts in appropriate cases. ICBC will assess the potential impacts of these changes to its forecast for this year and future results.
At the end of Q2, ICBC posted a net loss of $87 million for the first six months of our current fiscal year (April 1 to September 30, 2019), which is $495 million better compared to the same period last year. Total claims costs decreased by $243 million compared to the same period last year.
We attribute the improvements largely to the reforms introduced on April 1, as well as a lower rate of crashes.