ICBC posts first quarter financial results for fiscal year 2019-2020
September 10, 2019
ICBC's Q1 financial results show a net income of $55 million for the first three months of our current fiscal year (April 1 to June 30, 2019).
Reporting a net income is notable given the significant, and very widely-publicized, net losses we've experienced over the last two fiscal years. However, this modest net income is largely down to strong investment returns from real estate sales and bond gains, which won't be replicated again throughout the year.
We are also cautiously optimistic that we are seeing some positive early results from the reforms made to our auto insurance system, which came into effect on April 1. However, more time will be needed to determine the full outcomes of those changes.
As we look forward to the remaining nine months of our fiscal year, we have to be realistic in recognizing the risks that still exist in these changes having their desired impact.
Trial lawyers have brought two court challenges against the reforms. If successful, it could put at risk our ability to continue to afford the increased care and recovery benefits our customers are now benefitting from. For example, losing just one of the challenges would create a pressure of nearly half a billion dollars in additional claims and associated legal costs for ICBC.
We also continue to be concerned about injury claims made prior to April 1, 2019 – we currently have more than one hundred thousand of these claims open, representing approximately $12 billion in costs still to be paid. While we are continuing to manage and close these open claims, we are seeing the costs increase. In particular, we are seeing a growing trend towards six-figure awards for future earning capacity, which our reforms do not address.
Major improvements have already been made to B.C.'s auto insurance system, which have doubled care amounts for the injured and made the way we set rates fairer for British Columbians – these changes are working but challenges still remain.
Government and ICBC are focused on building on the success of the reforms made to date and are prepared to do more, as needed, to ensure we achieve the most important goal – affordable insurance rates for British Columbians.