No-Fault Shouldn’t Mean No Choice: ICBC Financials Suggest Savings May Be Short-Lived

March 4, 2020 (VANCOUVER) – Today, the Government of British Columbia announced legislation that, if passed, would eliminate the ability for drivers to sue to ensure they are receiving the benefits they need to recover, and would transform auto insurance in the province to a no-fault system.

Insurance Corporation of British Columbia (ICBC) has suggested that a switch to no-fault insurance will reduce premiums for drivers. However, ICBC's financial statements call the financial viability of this into question and suggest that premiums could increase significantly after the next election:

  • By reducing rates, ICBC will lose $713 million on the sale of insurance over the next three years, posting significant underwriting losses. ICBC's financials are only balanced due to its projected investment income, which may be challenged due the increasing worldwide economic uncertainty.
  • According to ICBC's most recent Service Plan, the changes introduced today will increase ICBC expenses relative to premiums. ICBC's operating expense ratio is projected to increase by 45% between 2018 and 20221, further calling into question the long-term viability of its premium reductions.
  • According to ICBC's Service Plan, the government insurer's capital reserves are significantly depleted and its capital levels are "well under ICBC's management and regulatory capital targets." As a result, this year ICBC has ceased projecting its Minimum Capital Test (MCT), which measures its capital adequacy. Previously, ICBC forecast its MCT publicly as part of its three-year financial plan. Government's Special Direction IC2 requires ICBC to return to capital adequacy after 2021. ICBC will have to raise rates significantly to achieve this.  

Car insurance exists so that accident victims have access to the benefits they need to recover. Each injury is unique. But under a no-fault system, accident victims have no right to sue or seek legal recourse if they feel they are not receiving the benefits they need to recover. Under ICBC's no-fault system, some accident victims could receive less than they do today.

BC drivers currently pay the highest auto insurance rates in Canada. A comparison of rates shows that British Columbians pay up to 42% more for their auto insurance than their neighbours in Alberta pay for similar coverage, far more than the expected savings from a move to no-fault. If the BC government truly wanted to save drivers money, it should allow competition and choice in the auto insurance market.

"Despite repeated promises and reforms, ICBC has failed to provide affordable auto insurance to drivers, and British Columbians have lost trust in their Crown auto insurer," said Aaron Sutherland, Vice-President, Pacific, Insurance Bureau of Canada. "With a shift to no-fault, the question remains: Why should British Columbians trust ICBC this time?"

For more information visit

1From 19% in 2018/19 to 28% in 2022/23

​About Insurance Bureau of Canada

Insurance Bureau of Canada (IBC) is the national industry association representing Canada's private home, auto and business insurers. Its member companies make up 90% of the property and casualty (P&C) insurance market in Canada. For more than 50 years, IBC has worked with governments across the country to help make affordable home, auto and business insurance available for all Canadians. IBC supports the vision of consumers and governments trusting, valuing and supporting the private P&C insurance industry. It champions key issues and helps educate consumers on how best to protect their homes, cars, businesses and properties.

P&C insurance touches the lives of nearly every Canadian and plays a critical role in keeping businesses safe and the Canadian economy strong. It employs more than 128,000 Canadians, pays $9.4 billion in taxes and has a total premium base of $59.6 billion.

For media releases and more information, visit IBC's Media Centre at Follow us on Twitter @IBC_Pacific or like us on Facebook. If you have a question about home, auto or business insurance, contact IBC's Consumer Information Centre at 1-844-2ask-IBC.