Thursday, August 13, 2009

ICBC Earns $277,000,000

ICBC reports second quarter results

ICBC's financial performance is allowing the corporation to reduce rates, increase its commitment to road safety funding, and invest in much-needed customer service systems upgrades.

Reported net income at ICBC for the first six months of 2009 is $277 million, up from $255 million for the same period in 2008. The increase is the result of continued encouraging trends on claims, while ICBC is also managing its overall costs well. Claims and related costs at ICBC dropped by $50 million to $1.46 billion for the first half of 2009 compared to $1.51 billion for the first six months of 2008.

ICBC's approximate $40 million yearly commitment in road safety and auto crime prevention has contributed to the decline in claims for the corporation – a major factor in its strong second quarter performance. ICBC is also increasing its investment in enhanced traffic enforcement, which supports dedicated police enforcement of traffic safety across British Columbia.

The increased funding for enhanced enforcement – which has allowed police to successfully carry out their targeted enforcement – combined with significant investments in awareness campaigns such as CounterAttack, have contributed to a reduction in the number of crashes – particularly those involving injury and death.

"We are continuing to see a decline in the number and total cost of injury claims, and for that we thank our customers for driving safely," said Jon Schubert, ICBC's President and CEO. "We continue to manage our business well during these tough times which has put us in a healthy financial position to keep basic rates unchanged overall and to reduce optional rates for 2009 by an average of three percent, effective October 1, 2009."

Good weather, improved claims-handling procedures and a moderation in the growth of the number of vehicles on the road have also played a role in keeping claims costs down.

Premiums written at ICBC picked up during the months of May and June after a slow start to the year. ICBC's premiums were $1.85 billion for the first six months of the year, down slightly from $1.86 billion for the same period in 2008.

While reducing rates, ICBC will also be investing in much-needed customer service systems upgrades. This investment will focus on further improving the customer’s experience and streamlining ICBC’s technology systems to increase efficiency.

ICBC's investment income for the first half of 2009 was $253 million compared to $269 million for the same period last year, and is reflective of a well-managed and diversified portfolio. Despite a tough economic environment, ICBC is continuing to manage its costs well. Operating costs remain low and consistent with last year. Similar to previous years, approximately just four cents of every premium dollar will be used for administrative costs to operate its insurance business in 2009.

Editor's Note: With profits of $277,000,000.00 you might think 'our' insurance company could pass on more savings to safe drivers by way of much lower premiums.


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