Intact has ‘lost hope’ in this market

Intact Insurance could potentially re-enter the British Columbia auto market, but not if it is restricted to offering only optional coverages while competing against a government monopoly, CEO Charles Brindamour said this past Tuesday.

During an earnings call, Intact Financial Corp. executives were asked about their decision to exit the B.C. auto market, whether there was any discussion with the provincial government, and what Intact would need to see before re-entering that market.

“It’s probably the only part of the organization where hope was part of the strategy. And I would say in the last year, we lost hope,” Brindamour replied.

The Insurance Corporation of B.C., which was founded in 1973, has a monopoly in the province on basic auto coverage – including $200,000 in liability, $300,000 in first-party medical and rehabilitation benefits as well as a number of other accident benefits. Private insurers may compete with ICBC to provide optional additional coverages such as extended third party liability, comprehensive, collision and loss of use. Intact was one of those private insurers but recently announced it is leaving the B.C. market.

In the Oct. 24 provincial election, British Columbians elected the New Democratic Party to power with a majority government.  The opposition Liberals (who maintained ICBC’s monopoly while they held power until 2017) started advocating in 2019 for open competition in auto insurance.

As part of their 2020 election platform, the Liberals promised that if they were returned to power, they would let motorists buy coverage for collision, comprehensive, specified perils and liability insurance from the private market. They would also give clients the choice to purchase the best rate for accident benefits coverage for bodily harm and injury from either ICBC under a no-fault system or from the private market under a tort system.

“We thought people would realize that the best thing for drivers in British Columbia would be to open up competition,” Brindamour said Nov. 4 during Intact Financial Corp.’s conference call discussing its financial results for the quarter ending Sept. 30.

“We decided to redirect our efforts where private markets operate effectively.”

Intact reported this week its direct premiums written increased from $3.012 billion in 2019 Q3 to $3.264 billion in the latest quarter. The combined ratio improved 5.2 points, from 92.3% in 2019 Q3 to 87% in the latest quarter.

Direct premiums written were $2.724 billion in personal auto, $1.214 billion in personal property and $791 million in commercial.

Feature image via iStock.com/powerofforever