The “Battle of B.C Auto”

It appears that, as private insurers, we underestimated just how firmly entrenched crown corporations have become in the province’s economy – and how aggressively they would dig in their heels when faced with the possibility of change.

While this political “heel dragging” has been taking place primarily behind closed doors, another battle has been raging in the public arena. The fear mongering has been all encompassing and often contradictory. While the proponents behind these crown interests sang the praises of ICBC’s alleged “efficiency” versus that of private sector companies, they also warned of massive job losses that would be the result of the introduction of competition and choice. This “air assault” included union sponsored radio ads, while the ground effort was complete with advertisements on bus shelters and billboards.

BATTLE OF THE ADS

Was this advertising campaign blitz successful in moving public opinion away from competition and choice? Between this campaign and the rapidly changing post-election political climate in B.C., it seemed prudent that a scientific read on the public’s view of auto insurance was required.

In a survey conducted by Pollara, the largest Canadian-owned public opinion research firm, many of the questions from similar polls conducted in 1997 and 2000 on issues surrounding competition and choice were asked once again. The most remarkable finding is that 72% of British Columbians support full competition between ICBC and private insurers.

And, in spite of all the negative publicity targeted at private insurers, and the B.C. government’s cuts and changes that affected virtually every citizen, the overwhelming majority of citizens are still looking for meaningful change to the current auto insurance system. The Pollara survey found that 71% of British Columbians believe that full competition would be best for the B.C. economy, demonstrating a clear understanding of the need and desirability of private sector investment in the province.

This makes sense, given that B.C. was “dead last” among provinces for private sector capital investment during the “dismal decade” of 1991-2001. Government policies that discourage private sector investment are foolish and shortsighted, and nowhere is that policy more evident than in the artificial monopoly that has been created in B.C. auto insurance.

PUBLIC DEBATE

Other standout findings from the poll: ICBC’s supporters often point to its “non-discriminatory” rating criteria as being a key reason for retaining the monopoly. The Insurance Bureau of Canada (IBC) maintains that ICBC’s approach simply amounts to forced cross-subsidization, and has created an environment in which B.C.’s record for accidents and road deaths is among the highest in Canada.

So who is right? Pollara found that, while 44% of British Columbians agree with ICBC’s policy of not considering age when determining insurance rates, 49% were opposed to this policy. A divisive issue, to be sure, but a majority of respondents who have had to live under this policy for years do not agree with the policy.

ICBC’s “ownership” of driver licensing and road safety functions is also cited as a good reason to keep the status-quo, even though the province’s road safety record has not bettered and, in some ways, not matched other jurisdictions. Do B.C. citizens believe that ICBC is the most appropriate purveyor of these functions? The answer is “no”. The poll suggests that 56% of British Columbians believe that driver licensing should be the responsibility of government, with just 27% of respondents believing both functions should remain with crown insurer.

BATTLE CONTINUES

Making the case for full competition and choice – especially in the shadow of the current tight market conditions – has been a battle. The IBC believes, however, this is a battle worth fighting. The Canadian property and casualty insurance industry stands by clear and concise principles: we believe in free markets. We also believe in “level playing-fields”. Only by standing firm on these values will we earn the respect of consumers, governments, and the media.