ICBC well-capitalized despite increase in bodily injury claims and costs
ICBC has released its financial report for 2010, a year which saw a reduction in both basic and optional insurance rates.
The optional insurance rate reduction of three per cent means that ICBC’s optional insurance premiums have gone down by approximately 20 per cent over the past six years. “The basic insurance rate reduction of 2.4 per cent was perhaps even more significant as it was the first time in more than a decade that we were able to reduce our basic rates,” a statement from ICBC said.
ICBC said despite the rate reductions, it still maintains a “healthy financial position.” Net income, supported by a strong performance from our investment portfolio, was $361 million for the year, down from $563 million in 2009.
The $200 million drop in net income was due in large part to a continued increase in claims costs, which were up more than $100 million over last year. Net income was also impacted by the rate reductions in 2010, which resulted in flat premium revenues.
“The increase in bodily injury claims in 2010 is a particular area of concern,” the statement said. “We saw an increase last year in both the number of bodily injury claims as well as the costs associated with those claims. The increase in the number of bodily injury claims was a reversal of the previous few years which saw the numbers declining steadily. An increase of only one bodily injury claim per 1,000 vehicles insured translates into approximately $100 million in additional claims costs.”
For more details on ICBC’s 2010 year-end financial report, see their Statement of Operations. (PDF)
