B.C. opposition calls for competition in auto insurance

British Columbia’s Liberal Party, ousted from power in the 2017 election, is calling for an end to the monopoly that a Crown corporation has had on auto insurance since the 1970s.

“The B.C. Liberal Caucus believes introducing market competition will not only help B.C. drivers, but it will also help [Insurance Corporation of B.C.] find a way forward into the 21st century,” Jas Johal, the Liberal critic for jobs, trade and technology, told Canadian Underwriter Friday.

“ICBC is a 45-year-old, government-run monopoly that doesn’t work for British Columbians anymore,” Johal wrote in an email to Canadian Underwriter.

It’s a huge policy shift for the Liberal party, which had majority governments from 2001 through 2017. During its 16 years in power, the Liberals kept ICBC’s monopoly on basic mandatory private passenger auto insurance. The NDP took power in 2017 after the election left the Liberals with a minority and the Green Party agreed to support the NDP.

Johal told Canadian Underwriter Friday it is now time to “introduce choices in auto insurance” because rates in B.C. have been rising.

For its part, ICBC said Sept. 10 that “major improvements” have been made to the province’s auto insurance system, which have doubled care amounts for the injured and made underwriting rules fairer. For example, on June 6, ICBC said customers with frequent or serious driving convictions will pay more for their ICBC optional insurance coverage so that lower-risk drivers can pay less.

But the Insurance Bureau of Canada has been vocal – especially recently – in calling for competition to ICBC in basic mandatory coverage.

ICBC has lost over $3 billion in the last three years alone, Aaron Sutherland, IBC’s vice president of Pacific Region, said in an earlier interview.

“You are seeing the public attention on this file increasing because of that,” said Sutherland. “You are seeing the calls for choice happening more and more often, simply because you are seeing drivers are getting increasingly fed up with what they are seeing in B.C. and they are calling for another way.”

B.C.’s brokers have not traditionally been pushing for competition in auto insurance. In 2015, Vancouver area broker Lorne Perry told Canadian Underwriter that ICBC had been working very well with brokers. At the time, Perry had just become president of the Insurance Brokers Association of Canada. By day manager of Port Moody Insurance Services, Perry had been president of the Insurance Brokers Association of B.C. in 2008-09.

In the past, some brokers had questioned whether ICBC should have a monopoly on basic auto coverage in the province, Perry said at the time.

Insurance Brokers Association of B.C.’s CEO, Chuck Byrne, has been a vocal advocate of B.C.’s government-run auto insurance system in social media posts, noting that private auto insurance regimes in other areas of the country have had their own share of issues with profitability.