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The future of auto insurance in B.C.

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New auto insurance for British Columbia

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Why are we doing this?

Improve the affordability of insurance

Better, more certain, less stressful care for the


seriously injured

Refocus ICBC as a more customer-centric service agency

Key consideration: must continue to ensure that fault


matters and dangerous drivers are held accountable

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(Un)Affordability

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Basic arithmetic of insurance

Vehicle damage costs


+
Compensation for injuries
Total +
= Administrative costs
premiums
+
Legal costs
+
Profits
-
Investment income

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Premiums have been rising

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Past dumpster fire and future risks?
Net income/loss with premiums rising at the rate
of inflation from 2021 going forward
(Projected1: FY2020-FY2026)

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Insurance rates for 2020

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Affordability worsens without action

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Better care for
the injured

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System doesn’t do enough to help seriously injured

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Refocusing ICBC
on customer care

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ICBC forced to become its customers’ adversary

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Tort system diverts costs from care to courts

• Claimants are incented to build a larger claim

• ICBC compelled to counter to maintain rate affordability

• ICBC legal costs rise

• ICBC ends up focused on legal proceedings rather than customer care

• ICBC premiums increase to pay higher legal fees

This dynamic is the primary impediment


to have a fully customer-focused ICBC

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The ICBC Trilemma

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Enhanced Care coverage, coming Spring 2021

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More affordable insurance rates

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Breaking down the savings (by coverage)

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Breaking down the savings (by experience)

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Significantly enhanced care

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Scenario: Catastrophically injured child

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Scenario: Catastrophically injured adult (at-fault)

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How is cheaper and better possible?

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Fault still matters

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Why not privatize?

Public insurance has a strong public benefit:

Everyone can access insurance (no discrimination)

Intergenerational equity (youth are not charged


strict actuarial rates)

Keep road safety (crash prevention) at the heart of


insurance system

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A Look Across Canada

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EY report shows
rates across Canada

Premiums chosen are the most expensive city identified in that province. 27
EY report shows
rates across Canada

Premiums chosen are the most expensive city identified in that province. 28
Roadmap to 2021

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New policy direction recap

Public Insurance with limited tort (for fault) provides:

• More affordable premiums for all drivers

• Best care programs for those seriously injured

• More customer-focused ICBC with checks and oversight

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Wage loss payments increase under Enhanced Care

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More care for the most seriously injured

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Customized care recovery plans, led by your doctor

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Costs removed from the system

$8,000

Care & recovery benefits $700m More than $1.5b


will be used to lower rates
Legal costs $960m On average, $400 savings for drivers
$6,000
Pain & suffering payouts $940m
$1.9b
Injury claim $1.3b $100m
settlement
$4,000 costs
$90m
$130m
Vehicle damage
$2,000

Operating expenses

Broker commissions
$0

Today's Autoplan Enhanced Care


in 2022 in 2022
Ensuring ICBC is kept accountable

Entitlement to benefits set out in legislation;


ICBC must assist

Civil Resolution Tribunal

Still exceptions to allow for legal action

Care decisions made by your doctor

New Fairness Office

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