Article content continued

“There is absolutely nothing we like about having to ask our customers to pay more but these external pressures are very real and they have created a perfect storm which we are struggling to hold off,” said Mark Blucher, ICBC’s CEO.

“We’ve worked hard to get this rate increase lower than last year’s but the amount of basic premiums we collect will still not cover the increasing amount we’re paying out in basic claims costs.”

Last year, the company increased rates 5.5 per cent.

In support of this year’s application, the insurance giant pointed to increases in nearly all of its claims costs and precipitous declines in its earnings.

Blucher said the increase would have been much higher if not for ICBC’s trimming of operating expenses and the government giving up the dividend.

Stone said the government was also directing ICBC to use $472 million generated by its optional insurance business to reduce the cost of the basic service.

“It’s a lower increase than was faced last year,” the minister said.

The increase would have been 15.5 per cent, or an average $134 a year, without the steps that are being taken, he said.

“Government is forgoing the dividend in the current fiscal year plan and that’s a critical component (of capping the rate increase),” Stone explained, noting it has received about $514 million from ICBC since 2012.

The number of crashes across the province jumped by 15 per cent in the past two years to 300,000 in 2015 from 260,000 in 2013, Blucher said.