Review of ICBC finds $60 million in savings: province
Posted February 9, 2018 3:21 pm.
This article is more than 5 years old.
VICTORIA (NEWS 1130) – After painting a dire picture of its finances a couple of weeks ago, there have been growing concerns drivers would see a bump in their ICBC premiums to help the public insurer get out of debt, but it looks like they can save money.
A government-directed independent review of ICBC shows there are over $60 million in potential savings available at ICBC.
“This review is an important step in assessing the current operational situation at ICBC,” says Attorney General David Eby in a statement. “We must ensure the corporation is viable and efficient, and that the cost of insurance to British Columbians is more fair and affordable.”
He adds the review, conducted by PwC Canada, assessed ICBC’s business areas of claims, finance and driver training, and it reviewed a bunch of random claims files and damage estimates. Interviews were also done with front-line staff with a direct mandate to look for any waste, fraud and overbilling.
The report found that ICBC operations — including how it handles fraud — is meeting average industry standards, and “confirmed the greatest opportunity for significant savings at ICBC was in terms of the product reforms announced by government this week.”
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The review also looked for possible opportunities to tweak existing operations to make them more efficient.
“The report identified that savings could be realized through optimizing vendor management and strategic sources, improving salvage and subrogation management, shifting to proactive injury-care model and enhancing automation and predictive analytics,” the statement goes on to say.
The province says now that this report is out, ICBC will start discussions with the material damage industry on “redesigning the corporation’s current vendor-management programs” and that will include working with collision repair shops.
“The report indicated that if all recommendations were implemented, ICBC could realize annual savings in the tens of millions,” said Eby. “We know that these changes alone aren’t enough to make ICBC financially sustainable. However, when coupled with the product reform changes that take effect April 1, 2019, we are making every effort to ensure rates are affordable for British Columbians.”
Following ICBC’s disclosure that it would see a loss of about $1 billion in this fiscal year, Eby described the situation as a “dumpster fire,” while blaming the former BC Liberal government for ignoring red flags while in power.
Earlier this week, he outlined several legal changes that include: a cap of $5,500 on payouts for pain and suffering for minor injuries, effective April 1, 2019. Eby also confirmed ICBC will have to develop a clear, legal definition of what constitutes a minor injury.
The province also plans to double the lifetime allowance of medical care and recovery costs for those “catastrophically injured” in a car accident from $150,000 to $300,000. This change will be made retroactive to Jan. 1, 2018.
According to the province, injury claims totalled $2.7 billion in 2016, which marked an increase of 80 per cent in seven years.
Rates last jumped in November by 6.4 per cent.
Eby previously said if things don’t change at ICBC, drivers could potentially see a hike in their premiums of $400.
