Growth and Hope

When the Insurance Bureau of Canada (IBC) first began to seriously undertake a project to bring about open competition in B.C.’s auto insurance market four years ago, there was no shortage of skeptics, both inside and outside the industry. The Insurance Corporation of British Columbia (ICBC), the government owned auto insurance monopoly, was thought to be politically untouchable, and any campaign to challenge it to be foolhardy. In choosing to launch the B.C. Coalition for Private Auto Insurance, the IBC and its member companies were given points for chutzpah, but little else.

We felt, however, that it was a battle worth fighting. First and foremost, it was because we believe in competition and choice, and that monopolies of any stripe are inherently bad for consumers. We also believed that government should not be involved in an industry where the private sector is both willing and able to deliver the desired product.

Despite the fact that our campaign was, and in many ways still is, an underdog effort, we came away comforted by a few key facts:

Public opinion was firmly on our side, with fully 81% of British Columbians supporting full competition and choice in auto insurance;

There was recognition by the public, media and some elected officials that the world economy had fundamentally changed, and that the worldwide trend was towards competition and choice and consumer empowerment;

British Columbians, weary from a prolonged recession exacerbated by a troubled, anti-business government, were willing to consider bold innovations and challenges to the status quo.

With these facts, we developed a theme – “Putting Consumers at the Wheel”. We determined that our campaign had to be focussed on the needs and desires of consumers, and that everything else was secondary. “Competition and choice” became our theme, because we knew that is what consumers wanted and needed. From there, we launched what can best be described as a “guerilla media” campaign. We simply did not have the money to compete with ICBC’s multi-million dollar yearly advertising budget. Indeed, a strong argument can be made that we did not want to compete with that kind of advertising budget, even if we had the resources to do so.

Media voice

Despite ICBC’s heavy and frequent advertising, support for competition and choice remained strong, and ICBC’s approval ratings in public opinion polls remained mediocre. Through these numbers, the public was indicating its disapproval of a crown monopoly engaging in such an overt effort to justify its own existence.

Rather, we took our message directly to the media, where we enjoyed great success in becoming the “alternative voice” in B.C. on the subject of automobile insurance. We were determined to challenge all insurance myths and assumptions about the value of public auto insurance.

In addition to media and the talk radio circuit, we also took our message to community and professional groups. We toured every region of the province, talking to Chambers of Commerce, brokers, and regional media. We found support for our views amongst other organizations that shared our desire for greater economic freedom in B.C. The Canadian Taxpayers Federation surveyed their membership and found overwhelming support for our campaign. The Canadian Federation of Independent Business did the same, and also found near unanimous support amongst their membership. Both of these groups have since been very public voices speaking out on our behalf.

We also began taking our message directly to elected officials, particularly those MLAs serving in the then-opposition BC Liberal Party, our request to brief the governing NDP’s caucus having gone unanswered. The BC Liberals had a pro-free market inclination but, like most politicians, were instinctively wary of the auto insurance issue. They had to be convinced that the overwhelming majority of British Columbians supported our platform, and that our companies could be trusted to do the job following change in B.C. Their reluctance was completely understandable – auto insurance is a volatile issue at the best of times, and our member companies did not have a great deal of profile in B.C. due to the presence of the government monopoly.

Break-through

After a concerted effort spanning almost four years, the dam finally broke during the 2001 provincial election campaign. In April 2001, the BC Liberal Party put a clear and unequivocal commitment in their platform document regarding competition and choice in auto insurance. While in opposition, premier Gordon Campbell had talked about increased competition in auto insurance for a couple of years, but the “conventional wisdom” was that he and the Liberals would never commit themselves to the policy on paper. As often is the case, the conventional wisdom was wrong. Not only was it in the platform document, but Campbell further clarified his position by reiterating that it meant full competition, right from dollar one onward. This led to a front-page headline in the Vancouver newspapers, stating that, “Campbell Says He’ll Smash ICBC Monopoly”.

What did B.C. voters think of Campbell’s policy platform? The answer came May 16, 2001 with the landslide victory by the B.C. Liberal Party. Campbell and his team took 77 of 79 seats, and now has a sweeping mandate to implement their vision for B.C. The new premier has continued to insist that all of the commitments in the campaign platform will be met, and auto insurance is front and center amongst those commitments.

Maintaining action

While the new government develops its priorities, we continue to solidify support for our initiative amongst elected officials and other business groups. We also expect that, given the grim financial situation inherited by the new government, this issue will move quickly up the government’s agenda in the coming months. Our team is looking to the government to make an early policy statement so that work can be undertaken to make the transition to a competitive system as smooth as possible for the consumers of B.C.

In the meantime, there are a number of steps to be taken by the new government, including an independent actuarial review of ICBC. Already, we have learned that the corporation will post at least a $150 million loss for the year, a far cry from the $75 million “paper profit” that was predicted mere months ago in the dying days of the old government. It is in everyone’s best interests to ensure that ICBC’s house is in order before moving to an open market.

One important step has already been taken. The new government recently appointed a new chairman of the board for ICBC, tapping respected B.C. businessman Nick Geer for the post. Geer has been exceptionally busy since taking over his new role, making a number of key changes at ICBC and consulting with his board on preparing the corporation for a competitive future. He will soon give a report to the government on the potential options for reform, a report that B.C. consumers anxiously await.

We stand on the edge of tremendous change, one that will have strong benefits for both consumers and the overall business climate in B.C. In expanding the horizons of our member companies, we will have also expanded the scope of private sector investment and employment in B.C., and helped put the province back on the road of economic growth and hope.