Despite stakeholder objections, the ICBC interim basic insurance rate increase of 11.2 per cent beginning next year was approved by the British Columbia Utilities Commission (BCUC).
An ICBC release states its reported net income in the first nine months of 2011 was $52 million, down from $331 million the previous year, while claim costs rose to $2.47 billion.
ICBC president and CEO Jon Schubert said bodily injury costs will be approximately $1.7 billion, and this increase is "not sustainable" without a rate increase.
"After four years of not having to increase our rates, we now unfortunately face a different reality. We're not happy that we need to increase our rates, but the majority of our customers will be paying just a few dollars more, on average, than they did in 2008."
However, British Columbians currently pay the second highest auto insurance rates in Canada.
While the BCUC approved the interim increase effective on or after Feb. 1, 2012, with certain exceptions (including fleet insurance), the commission noted in its decision that none of the six stakeholder submissions it received supported ICBC's request for an interim rate increase.
Among the objections, the Automobile Insurance Committee (AIC) outlined its preliminary concerns about the impact of the increase, including some relating to ICBC's increased bodily injury claims calculations, noting ICBC's profitability and ability to withstand normal fluctuations in the claims costs.
The Insurance Bureau of Canada (IBC) also expressed its concerns about the "very significant increase" of 11.2 per cent and stated it "should not be imposed on British Columbia drivers on an interim basis unless it is very clear that ICBC needs that increase."
IBC also noted ICBC's past-filed loss forecasts have turned out to be "much different than predicted."
The increase was granted, however, despite the stakeholder concerns and what the BCUC deemed in the decision document, as "the immediate unfortunate impact that will have on policyholders."
The document stated that, in its decision, the commission panel found "the longer term financial stability of ICBC is paramount and in the best interest of policyholders."
The fiscal figures in the province's three-year budget and fiscal plans reveal the B.C. Liberal government is collecting revenues from ICBC to the tune of $520 million for 2009/10, and $361 million for 2010/11.
BC Conservative Party Leader John Cummins says, "enough is enough" with insurance costs and gasoline taxes.
"British Columbians are tired of being nickel and dimed to death."
The BCUC's review of the full basic insurance rate application is not expected to be completed until sometime later next year.
To review the decision and the stakeholder comments, download the BCUC document at http://www.bcuc.com/Documents/Proceedings/2011/DOC_29352_A-3_Interim-Rates_Reg-Timetable_G-221-11.pdf.