Article content continued

However, Aaron Sutherland, vice-president of the Insurance Bureau of Canada, has highlighted another massive reason ICBC expects to turn a profit in the coming years — increased premiums.

According to financial information in ICBC’s 2019 — 2022 Service Plan, premiums collected in the current financial year will be $5.826 billion. By 2022, ICBC will collect $7.569 billion in premiums.

“This is a very large rate increase, to the tune of 25 per cent when you factor in the growth in drivers,” Sutherland said.

The financial document also shows that ICBC expects claims costs to keep rising, from $7.54 billion this financial year to $8.24 billion in 2022. Underwriting losses will also continue, however, the insurer anticipates increases in investment income will compensate for that.

“They expect to make up for the underwriting loss with an increase in investment income,” Sutherland said. The statement shows investment income will be $804 million in 2022 compared to $544 million this financial year.

“I don’t know what they are invested in, but they are expecting better returns in future years.”

Operating costs are expected to increase from $1.23 billion this year, to $1.88 billion by 2022.

Sutherland makes no secret of the reason he has highlighted the staggering premium hikes coming.

His association wants more competition permitted in B.C.’s auto insurance market.

“Drivers are being asked to pay more and more and more to try to get ICBC back to solvency,” he said. “Why not look elsewhere and look at other Canadian auto insurers and ask them to come to B.C.? We pay more in British Columbia than anywhere else in the country and a big reason for that is who delivers the products here. We haven’t seen the innovations here or the efficiencies that can come with a competitive market place that drives down internal costs. We think there is a lot to be gained looking outside the province and if you opened ICBC up to competition drivers could save significantly in the years ahead.”

ICBC has a monopoly on basic insurance, however, the optional auto insurance market is competitive.

According to the latest service plan, ICBC is planning to change the way it sets basic insurance premiums “to ensure they better reflect the risk a driver represents so that lower-risk drivers do not pay the same premiums as high-risk drivers.”

dcarrigg@postmedia.com

twitter.com/davidcarrigg