ICBC’s latest strategy for restoring its finances? Rate cuts for glass repairs

Victoria, B.C. — June 12, 2018 — The Insurance Company of British Columbia (ICBC), a publicly owned auto insurer, announced it will lower the amount it pays glass repairers by 25 percent, a move that has caused an outcry from members of the automotive community.
With a virtual monopoly on B.C. automotive insurance, the move is just the latest of a series of cost-saving policies adopted by the organization after a financial review revealed that the crown corporation had lost $1.3 billion in 2017. 
In a statement, the ICBC justified the drastic cuts with some eye-brow raising numbers, saying that “ICBC payments for glass repair and replacements have increased by 140 percent over the last decade, from approximately $40 million in 2008 to $96 million in 2017, fuelled by an increase in both the number of claims being made and the average cost of those claims.”
While the numbers do point to a precipitous increase in real terms, it is notable that the ICBC chose to neither adjust for inflation nor for the increase in the number of drivers in the province. When described in today’s dollars in a per-driver basis, the numbers are far less dramatic. In the past decade, that number has only risen from about $18 dollars-per-head to about $34.
In response to the announcement, the British Columbia Auto Recycler’s Association called for B.C. dealers and repairers to petition the government to stand against the move. In a statement written by the organization’s industry advisor Darren Cox, the BC ARA appealed to its membership to write to their provincial representatives.
“We need you to contact your MLA to show the government who you are, your business, the people your business supports and how your business will be impacted, the negative consequences resulting from the proposed ICBC changes,” Cox said.
In a draft letter prepared for BC ARA petitioners, the ICBC describes the rate cut as equivalent to a $100,000 annual cut to the bottom-line of an average glass repairing business, one that could result in widespread industry layoffs.
For more information visit ara.bc.ca

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