ICBC applying to raise basic rates

VANCOUVER (NEWS1130) – We knew it was a possibility this summer and now it’s official. ICBC is applying to raise its basic rates.

President and CEO Jon Schubert says thanks to a skidding global economy its investments have taken a beating, and bodily injury claims are up to $1.7 billion. That’s $350 million more than five years ago.

“Our investment income has been strong enough to help keep our rates down but this is no longer the case and we cannot rely on this income to the same extent as we have in previous years.”

Schubert adds that their net income for the first nine months of the year was $52 million, down from $331 million last year.

ICBC hasn’t raised rates in four years, but later this week it will apply for about a three per cent increase, or an extra $30 a year for the average driver.  The new rates would go into effect Feb. 1, 2012, should the BC Utilities Commission accept the application.

Schubert says if you want the rates to decrease then the number of accidents needs to go down, but an economist says ICBC should also be looking at its own practices, which have tied insurance rates to the global economy.

Seth Klein with the Canadian Centre for Policy Alternatives instead of investing in world markets Crown corporations should use at least some of their financial reserves on local projects. He argues that using Crown reserves would be cheaper than building roads and bridges using public-private partnerships.

“It becomes a public-public partnership in some ways, where we’re using the capital reserves of some institutions to provide credit and financing to the other things we need to borrow for,” he says.

“Canada Pension Plan and ICBC should be buying up bonds to invest in our infrastructure and a new green infrastructure… A Crown corporation should be a savings account, and not some account for speculation where one person or a group of individuals can drastically affect our insurance rates.”