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October 27, 2017 9:21 pm

Car Crashes Up? Not So Fast

Sunday, September 4, 2016 @ 6:45 AM

By  Dermod Travis

It’s here somewhere.

Licence, car registration fees to drop 35 per cent in 2016. No, that’s Quebec.

Average passenger vehicle owner would pay an additional $17 a year in premiums. Nope, that’s Manitoba.

Auto Fund rate stabilization reserve hits $377 million – highest ever, $65 million profit in 2015. No, that’s Saskatchewan.

Here it is: ICBC applying for basic rate increase of 4.9 per cent.

Vastly different story lines among Canada’s four public auto insurers.

Just like ICBC’s mishmash of eight different date-to-date comparisons in its news release last week in support of the corporation’s rate application.

Cherry picked to suit, actual dollars cited when useful, percentages when not, but no ratios since they wouldn’t be helpful at all.

There’s an eerie sense of déjà vu to the release.

Example: “The external pressures on insurance rates in B.C. are very real and they’re accelerating, including an escalation in the number of crashes, the number of claims being filed and the cost of settling those claims.

Here’s what ICBC said in 2002 to justify its then rate application: “Claims costs are up, with no sign of relief to come…These trends show no sign of abating.”

According to its release, the number of crashes across B.C. “jumped by 15 per cent in two years from 260,000 in 2013 to 300,000 in 2015.”

Why 2013 and not some other year, say 2007? The numbers wouldn’t fit the narrative.

In 2007, there were 281,000 crashes, reducing the jump to 6.8 per cent over nine years, but that’s just part of it.

Back then there were three million active driver licences in B.C. In 2014, 3.28 million (latest year posted to ICBC’s website).

Take the number of crashes per 100,000 active driver licenses and that jump turns to a drop, falling from 9,341 crashes for every 100,000 licenses to 9,146 in 2015 (using the undoubtedly lower 2014 license stat).

Against policies in force – up 25 per cent since 2007 – the ratio would drop even more.

They dip for injuries and fatalities as well.

According to Transport Canada, there were 13.9 fatalities per 100,000 licensed drivers in B.C. in 2007 and 8.9 in 2014. The injury rate dropped from 864.2 to 644.7.

When it comes to cost controls, ICBC was quite emphatic in 2002: “ICBC has reduced its controllable costs by 22 per cent and has reduced its costs substantially, so further savings will be much smaller.”

No kidding.

Last week, ICBC trumpeted the fact that its “executive team has decreased from 11 members in 2012 to just eight today. In 2015, total executive compensation was 46 per cent lower than it was in 2011.”

No actual dollars, just a percentage.

Relying on ICBC’s executive compensation filings, the corporation’s top five salaries totalled $2.2 million in 2011 and $1.83 million in 2015, a difference of $366,930.

That’s sure to put a dent – no pun intended – into the corporation’s costs.

It’s also irrelevant.

As ICBC’s media spokesperson Adam Grossman put it to the Vancouver Sun in 2014: “(managerial) cuts are unlikely to result in lower rates for customers, those are mainly driven by injury claims costs, which total about $2 billion each year.”

At least two of the corporation’s senior executives are being paid to stay at home, part of the 390 severance agreements ICBC has signed with non-union staff between 2009 and 2015, each for between two to 18 months.

Despite those cuts, employee salaries and benefits rose 6.7 per cent to $395.9 million between 2007 and 2015, payments to suppliers of goods and services rose 38.9 per cent to $215.9 million and claims by 29.5 per cent to $3.3 billion.

ICBC is now on a hiring spree to cope with its self-inflicted backlog of claims and plans to add another 180 claims positions to its 4,700 employees.

Back in 2002, ICBC was put under the government’s microscope. According to the core review’s findings: “It is clear that decisions regarding auto insurance rates and operations should be based on sound business principles and not political considerations.”

Funny coincidence. In 2005 and 2009 – both election years – the rate increases at ICBC were zero.

ICBC is tops in one area among Canada’s four public insurers: highest premiums.


Dermod Travis is the executive director of IntegrityBC.


Something I will sure to remember come election day

One of the drivers behind the rate increases according to ICBC is the high cost of repairs to vehicles. Apparently these costs have risen significantly. Would be interesting to know if in fact that was true.

One would assume that the BC Public Utilities Commission would be able to see that these increase are not justified and not allow them. We will have to wait and see.

This is vintage Liberal slight of hand politics. Lets keep in mind that ICBC transfers in excess of $100 million to the BC Government every year as a so called dividend. They also get hundreds of millions from BC Hydro of these so called dividends, and in the case of Hydro they will have to borrow money to pay the dividends.

The Liberals are counting on the apathy of BC voters to pull off these types of shenanigans and still get elected. So far it seems to work for them.

Its rather interesting that a Government in power can do absolutely nothing for the people it represents and still get elected.

    The reason that this Government in power can do absolutely nothing for the people it represents and still get elected is that the alternative is the NDP who are notorious for doing unpleasant things TO the people.

    It is true, to paint a box side – just the box side mind you not the vehicle or any labour to remove mud flaps or bumper for access to it – is over 900 with taxes. I was hit in the box, a moderate dent, and with the removal of the items and some body work the bill to ICBC was over 2,500 when I signed the paperwork

    Keep in mind the NDP are the ones to start the dividend process for crown corps

Get rid of ICBC and go back to private insurance. ICBC is just a cash cow for the Liberal government, well all elected governments when you think about it ever since ICBC was incorporated.

Before people start yelling for private insurance some information is missing in this article’

He states “ICBC is tops in one area among Canada’s four public insurers: highest premiums”, Okay where is the comparison with private insurance? Seems fishy there is no comparison with public and private in this article but lots of complaining about public.

Just saying not a defense.

    I agree. Seems to me to be a very slanted article.

Actually, it’s not just the top executives who get bonuses. I have a relative who is a manager at ICBC, and they also get an annual bonus in addition to a much higher salary rate than the equivalent in the public sector, a difference of 30 – 40K a year more and with less post secondary education then most equivalent public sector professionals.


    It used to be that bonuses were given when a business had a profitable year and the management/owner wanted to share the benefits for good work with the employees.

    Then again, it also used to be that bonuses were an expected benefit with a relatively common 2 weeks extra pay. That eventually gave way to a Xmas turkey.

    So why is it that if ICBC is supposed to be doing well and thus giving bonuses, are they raising fees? Is it across the board, or is it for specific class of drivers, those who receive too many traffic tickets, for instance?

      A lot of companies use performance bonuses to entice people to work harder… or smarter. It is not based on bottom line but the employee

If anybody is seriously thinking about switching to the other party – the one that invented ICBC – better think twice! The NDP used ICBC for a cash cow as well. Does anybody think that another government is going to stop doing that?

“Licence, car registration fees to drop 35 per cent in 2016. No, that’s Quebec.”

And this has what to do with insurance rates?

Why should I read further, other than with considerable skepticism and the need to explore it myself?

Talk about cherry picking!!!!

Travis is up to his usual level of drivel.

“payments to suppliers of goods and services rose 38.9 per cent to $215.9 million and claims by 29.5 per cent to $3.3 billion.”

There is the real meat of the comparison. So where do we see what happened in the other provinces? Why do we not see those? Would we see lower increases in other provinces.

I would expect so. And then we need to know why that is so.

Mr. Travis, do your job!!!!!

    There are so many other things to consider in how insurance rates are arrived at, Mr. Travis certainly shows his political leanings & really did not do his homework. No fault insurance vs at fault, liability coverage, deductibles, third party liability…when a lot of this is factored in suddenly ICBC looks a whole lot more palateable than the other public insurers. Add to that what gopg2015, yes Mr. Travis certainly needs to research & present better.

Currently BC’s automobile insurance rate is the second highest in Canada, and with this 4.9% increase, BC will have the highest insurance rate in the country… thank you Christy Clark Liberals!

ht tps://insureye.com/auto-insurance-rates-by-province/

    Sorry posted on the wrong article but now corrected

    I call you on this one. It all depends on the persons discount and in a lot of provinces driving record. They do not show you how they came up with their numbers in that report but this one by Deloitte does

    ht tp://www.insurancebusiness.ca/news/auto/ranked-yearly-auto-insurance-costs-by-province-196447.aspx

    BC here is ranked #4

    Don’t drink the Galt’s koolaid!

      Baaa Haaaw, of course you are going to get another story from the insurance companies themselves. I leave it up to the rest of the readers to choose which source is more “independent” and “reliable”.

      Last time I checked Deloitte was not in the insurance business

      Did you really think that JGalt would know that Deloitte is an audit, tax consulting and financial advisory consulting firm and does not an insurance firm and is thus eminently qualified to provide objective reports on the insurance and other businesses.

      I would not have expected him/her to know that.

      gopg2015 (Gus); you mean Deloitte being in the same business as KPMG; a company that is alleged to have counselled the rich 1% Canadians, and corporations, on how to avoid paying taxes in Canada via the use of off-shore tax shelters?

      But then again, I would not have expected you to know that gopg2015! ;-)

Turn ICBC into a ‘mutual’ insurance company, where the driving public policy holders also, (really, not through the ‘government’, own the insurer. If ICBC has a good year, the policy/share holders get a dividend. Either directly, and/or through a reduction in premium rates. That way there’s an incentive towards safe driving, and a dis-incentive for milking the system. And governments can’t do what all governments are wont to do, tap into funds for which they don’t have to get, or worry about getting, approval from the taxpayers.

ICBC Insurance premiums should be used strictly for the purpose for which they are collected! They should not be used for paying for improvements to highway intersections to make them safer! That should be the responsibility of the ministry which looks after highways and transportation.

These are the 2014 figures for fatalities per 1 Billion Vehicle KM by province and territory from greatest to least

1 NU 108.1
2 NT 10.3
3 SK 9.5
4 BC 7.7
5 NB 7.1
6 AB 6.3
7 YT 6.3
8 NL 5.8
9 NS 5.0
10 MB 4.9
11 QC 4.6
12 ON 3.6
13 PE 3.5

These are the injuries for the same vehicle distance

1 NU 1270.3
2 MB 820.3
3 BC 560.0
4 QC 493.3
5 SK 423.0
6 NL 413.7
7 PE 358.9
8 NS 356.2
9 ON 352.1
10 NB 326.5
11 AB 317.8
12 YT 280.6
13 NT 228.8

SO, BC is 4th highest and 3rd highest.

If anyone wonders how come BC has a high insurance cost, that would be one of the better indicators. We simply do not drive as safely as people in most other provinces.


Now, why could this Travis fella not think of that?

    Actually I forgot about one other key factor. Provinces such as Ontario and Quebec have a higher urban population than many of the other provinces compared to the vastness of their land base.

    The earlier crashes are detected and the closer one is to a trauma centre and the better the system of transporting the injured to a trauma centre by rapid transportation such as helicopters, the greater the chances of survival with a serious life-threatening injury.

    So, the ratio of remote roads to urban multilane highways is an indicator of fatalities.

    That data is not provided in the Stats Canada report.

    What is going on in Nunavut? They hitting polar bears and getting ripped apart or something? 108 deaths per billion km? Must be like playing bumper cars up there, 1 out of ever 1,831 licensed drivers is going to die every year – compare that with 1 out of every 13,513 for the rest of Canada – you are 7 times more likely to die as a licensed motorist in Nunavut than anywhere else

Here is the source document:


Wow gopg2015, so you source fatalities and injuries statistics, yet ignore the vast MAJORITY of accidents that are responsible for billions of dollars in insurance claims… those being minor fender benders in the 5 grand or under category.

    WOW JGalt, so you have not provided those stats that you point to.

    Why not?

    Why do you think that the number of fatal crashes and injury crashes are not representative to the number of fender benders?

    Notice that there are no $ values attached to the cost of the crashes. yet you introduce $ values and make a statement for which you provide no backup.

    SSDD from you.


    Read that dear Galt, an example of your minor fender bender, as you call it. What makes that minor fender bender costly is the injuries purportedly or actually caused by them.

    In fall 2009, a four-door Toyota Avalon was rear-ended in the GTA, its right rear bumper scratched. Two occupants were injured in what an insurance source termed a “relatively minor accident.”

    Based on similar collisions, refinishing the bumper as well as assessment and whiplash treatments for the driver and passenger might hit $10,000.

    But more than 100 accident benefit claims were submitted on their behalf to their insurance company, including 42 applications for medical assessments of injuries and 66 separate plans for treating the injuries.

    Among the deluge of documents — known in the insurance business as “papering” and meant to swamp busy claims adjusters — were claims for several medical aids, including a “portable supersonic muscle relief device.”

    The fender benders are nothing as far as car repairs go ….. it is the injuries, be they ever so minor, which cost the big bucks.

    Even though Canada has medical insurance, when it comes to injuries from car crashes, the provincial health agencies make sure that the vehicle insurance pays for those injuries.

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