$775 million: the total amount insurer members of the Insurance Bureau of Canada (IBC) returned to Canadian drivers since the start of the COVID-19 pandemic.

When it disclosed this amount last week, the IBC jabbed at the Insurance Corporation of British Columbia (ICBC), the public organization in charge of the automobile insurance market in that province.

The IBC accused the ICBC of not giving back to drivers, unlike other private insurers throughout the country. British Columbia stands out in this respect. The IBC estimates the average amount returned to Canadian drivers who are clients of an insurer member of its organization at $280. It adds that the only relief measures that British Columbians received was the waiving of the $30 fee to cancel insurance coverage, and permission to use their car to make some deliveries during the pandemic.

"ICBC has realized significant savings due to reduced claims and a drop in collisions, but has turned its back on drivers in the province by refusing to provide financial relief to British Columbians," said Aaron Sutherland, Vice-President, Pacific, IBC. "It is yet the latest example of the need to end ICBC's monopoly, and give British Columbians a choice when it comes to car insurance."

ICBC reacts

Asked to comment on the IBC’s statement, ICBC spokesperson Brent Shearer explained to the Insurance Portal in an email that: “The impact of the COVID-19 pandemic on ICBC and our customers has been wide-ranging and unprecedented with many unknowns still ahead. While we’ve experienced a reduction in claims costs over the past four months with fewer people driving, we’ve also seen significant reductions in premium revenue as our customers made changes to their insurance policies, held off on getting new policies or cancelled their policies altogether.”

Adding to the uncertainty, Shearer continues, the investment portfolio, which the public insurer uses to help offset claims costs and reduce premiums, has been “significantly impacted” by the market downturn. “How COVID-19 will impact the year ahead for ICBC is still uncertain, but the BC Government has passed a law requiring that if the corporation’s net income results are better than forecast, any additional net income will benefit customers,” he says.

Shearer went on to outline the measures that ICBC took since the start of the pandemic, which are described as similar to those taken by private insurers in the other provinces:

  • Offering 90-day deferrals with options for customers to set up extended payment plans;

  • Temporarily waiving cancellation and re-plating fees;

  • Encouraging customers to consider changing their rate class if their driving habits have changed. “There are no fees for this and it can offer policy holders considerable savings,” Shearer says;

  • Allowing fleet customers to suspend insurance on vehicles they are not driving;

  • Providing a temporary exemption to customers insured for personal use, to allow them to deliver food and medical products.

Political response in the works?

In its position statement, the IBC includes a quote from the Minister responsible for ICBC operations, David Eby. Regarding auto insurance rates paid by British Columbians, Eby commented that “it's been a difficult time for British Columbians to remember why we have a public insurer,” a statement with which the IBC agrees completely.

On August 3rd, the regional publication the New Westminster Record reported that the MLA for Richmond-Queensborough, Jas Johal, introduced a bill to the legislative assembly of British Columbia entitled the Insurance Corporation Amendment Act, 2020. Johal aims to encourage the ICBC to offer rebates to British Columbians during the pandemic, especially given its lower operating costs. The provincial Liberals argue that this measure would let the government reallocate $158 M to British Columbians.

Tense relations

This is not the first clash between the two organizations. An EY report commissioned by the British Columbia government sparked the dispute.

The IBC then commissioned its first report on the question in early 2018. It took up the cause several times since, notably in fall 2019, contending that British Columbians were paying too much for their insurance premiums.

Insurers maintain measures

Lately, insurers have announced that they would extend their measures introduced at the start of the pandemic. Examples include Travelers Canada, Desjardins Insurance and Allstate Canada.

Notably, Desjardins estimates that it returned $150 million to its auto insurance clients since the start of the crisis. Allstate puts its total at about $60 million.