Customers' smart driving helps to lower rates and control claims costs
VANCOUVER, Aug. 17 /CNW/ - ICBC reported its financial results for the first six months of 2010 with net income for the first half of the year at $232 million, down from $277 million for the same period in 2009.
"Our customers' smart driving has made a major contribution to our financial results and we have asked for permission to reduce basic insurance rates by 1.9%. This would be in addition to the 3.3% reduction in 2009 optional insurance rates our customers are currently benefiting from," said Jon Schubert, ICBC's President and CEO.
"This 1.9% reduction is a significant filing with BCUC - if approved, it will be the first time in more than a decade that we have been able to reduce our basic insurance rates."
Claims and related costs for the first six months of 2010 were $1.48 billion compared to $1.46 billion for the same period last year. The number of vehicle damage claims has dropped due to our customers' smart driving decisions and supporting VANOC's goal of reducing traffic during the 2010 Winter Games. However, while the number of claims has gone down the cost of the average claim continues to increase - particularly due to an upward trend in bodily injury costs.
ICBC's investment portfolio continues to make a strong contribution to its net income, with investment income being consistent at $251 million for the first half of the year compared to $253 million for the first six months of 2009.
Another factor that has contributed to ICBC's second quarter financial results is a slight increase in premiums written - representing new or renewed insurance policies - up to $1.87 billion from $1.85 billion for the same period in 2009.
ICBC's operating costs remain low and well managed. Operating costs were $285 million during the first half of 2010 compared to $267 million for the same period in 2009. A portion of that increase is due to ICBC making much-needed reinvestments in the business for the benefit of our customers. Operating costs will likely continue to increase in the second half of the year as this is a multi-year investment that is focused on improving our customers' experience and upgrading ICBC's technology systems to increase efficiency.
Note: ICBC's Statement of Operations for the three months ending June 30, 2010, accompanies this news release and is available at: http://www.icbc.com/about-ICBC/Newsroom/Stmt_Ops_Jun_10.pdf.
At ICBC, we have more than 5,000 employees committed to our 3.1 million customers and their safety on the road. We license and insure drivers and vehicles across the province through our service centres, plus a network of more than 900 independent brokers and government agent offices. Claims customers are served through local offices and our award-winning Dial-a-Claim call centre. We add value to B.C. communities - our road safety investments help create safer roads, lead to fewer crashes, and help keep our rates stable. To find out more, visit icbc.com.
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For further information: For further information: Media contacts: Adam Grossman, 604-786-2579