VANCOUVER (NEWS 1130) – ICBC lost $860 million in the first nine months of the fiscal year, and the insurance company is saying lawsuits are one of the main reasons.
Its net claims during the same time period are close to $5 billion, up almost $600 million over the same period last year.
ICBC is now projecting a year-end net loss of $1.18 billion.
The company hopes to save about a billion dollars with changes on April 1, primarily a limit on pain and suffering payouts for minor injury claims and a new dispute resolution process.
“We’ve seen the rising costs of litigated injury claims in particular, they’ve risen by 20 per cent in just a year,” says Adam Grossman with ICBC. “There’s no logical sense that tells us that people are getting 20 per cent more injured or that the value of an injury claim is 20 per cent higher than it was a year ago.”
He says the Crown corporation has seen increasingly aggressive behaviour from plaintiff lawyers.
“Lawyer advertising is up by about 20 per cent in the past year, we’ve seen settlement demands in plaintiff counsel up by 30 per cent,” he adds.
“The only way you can cover 20 per cent increases in costs is to rate increases of that similar magnitude which is not something that would be acceptable to anybody.”
Grossman calls the situation frustrating, but says changes coming into effect soon will help save about $1 billion a year.
But Attorney General David Eby calls the losses “unacceptable” and “unsustainable.”
He’s still hopeful that reforms set to kick in will help, but he continues to blame escalating costs on personal injury settlements, which rose more than 40 per cent over the last five years.
“Currently still operating with the old system. It’s not stable, it’s actually getting worse. So there are two major pieces of work that we’re going to have to do to bring some stability to the old system, which will be dealing with for a while for all accidents up until April 1st,” he adds.
He says more reform measures will be announced soon.
“The reforms are projected to have a billion-dollar impact, and that’s after increasing benefits for British Columbians who were injured in a crash, so these are really huge reforms that affect about 80 per cent of the claims in the province going forward.”
Eby calls it a “broken system” that needs to get under control.
-With files from Lasia Kretzel and Marcella Bernardo