ICBC president and CEO Nicolas Jimenez. (Black Press File photo)

ICBC president and CEO Nicolas Jimenez. (Black Press File photo)

‘They were out of date’: ICBC president says company is trying to correct stale rate model

Nicolas Jimenez gave a presentation to council on Feb. 11

Nicolas Jimenez isn’t trying to cover it up.

According to the Insurance Corporation of British Columbia (ICBC) CEO, a number of recent changes the Crown corporation has implemented with regard to how insurance rates are calculated reflect much-needed updates to an old insurance model.

“They were out of date, they were largely predicated — until we made the change — on a view of the world that represented 2007.”

Jimenez was recently in Smithers at the Town’s Feb. 11 council meeting to provide an update on how ICBC is trying to reduce the rates drivers (especially safe ones) pay in rural areas like the Bulkley Valley.

READ MORE: Smithers Council asks ICBC to come up and answer questions

The ICBC president made the trip up to Smithers after a number of submissions to council by former Telkwa mayor Darcy Repen, who began a freedom of information (FOI) campaign into the disparities between total premium and claim costs for rural and urban postal codes and whether the former is subsidizing a disproportionate amount of claims for the latter.

He told council the changes made by ICBC reflect a concerted effort to make car insurance work for more people in the province.

“In 2017 it was recognized by the government that we had a bit of a crisis,” he said. “Auto insurance was costing about a billion dollars more than we were collecting in premiums to pay for them so this was clearly unsustainable.”

Jimenez said the result was a complete revamping of costing for insurance policies, including things like a financial cap on pain and suffering for minor issues and working to invest in road safety. Jimenez spent most of his time discussing rate design, the main purview of Repen’s FOI.

He said the company spent over a year trying to design a system that would fix some of its chronic problems, once again acknowledging the territorial system needed a revamp.

“We needed to recognize that changes can occur [in] communities so that the territory component of having set premiums was woefully out of date, so to was how you used the vehicle.”

Jimenez said changes to how ICBC calculates territorial rates, which took effect in September 2019, will reduce the average driver’s premiums relative to that factor by 35 per cent.

The decrease is independent from things like high-risk drivers and only applies to the territorial component of how insurance is calculated.

While he acknowledged it wasn’t perfect, Jimenez said the new system is being taken from a utilitarian approach that works for most and will reward things like safe driving or people who use their cars relatively less than others.

But as he explained, restructuring doesn’t mean less overall payments into ICBC.

“In order to return premium to those who are safer without shrinking the pie you have to re-portion that risk to people who present higher risk,” he said.

“Many drivers they’ve been pleasantly surprised when they renewed and for many drivers they’ve been … upset because they’ve been experiencing significant increases in what they have to pay.”

He said ICBC is committed to providing British Columbians with an affordable system.

Recently the Crown corporation announced a number of additional reforms to their system, including regulatory changes to help those in accidents resolve their claims quicker.



trevor.hewitt@interior-news.com

Like us on Facebook and follow us on Twitter

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

(BC Hydro photo)
BC Hydro planned power outages to darken downtown Smithers for most of day Sunday, Jan 17

Replacement of poles will affect approximately 250 customers in downtown core from 10 a.m. to 4 p.m.

Smithers Local Health Area reported 25 new cases of COVID-19 Jan. 3 - 9. (BC CDC graphic)
Weekly new cases of COVID-19 rise to 25 in Smithers LHA Jan. 3 – 9

Northern Health reported 49 new daily cases for 497 active, 44 hospitalized, 13 in critical care

The first of two massive turbines headed from Prince Rupert for the Site C Dam near Fort St. John on Jan 10. (Photo: Supplied by Tasha McKenzie)
Massive turbines begin trek across Northwestern B.C.

Hydro-Electric turbines headed from Prince Rupert to Site C Dam week of Jan. 10 to 14

Justin Kripps of Summerland and his team have competed in Olympic action and World Cup competitions in bobsleigh. (Jason Ransom-Canadian Olympic Comittee).
QUIZ: Are you ready for some winter sports?

It’s cold outside, but there are plenty of recreation opportunities in the winter months

A health-care worker prepares a dose of the Pfizer-BioNTech COVID-19 vaccine at a UHN COVID-19 vaccine clinic in Toronto on Thursday, January 7, 2021. THE CANADIAN PRESS/Nathan Denette
COVID-19: Provinces work on revised plans as Pfizer-BioNTech shipments to slow down

Anita Anand said she understands and shares Canadians’ concerns about the drug company’s decision

Tourists take photographs outside the British Columbia Legislature in Victoria, B.C., on Friday August 26, 2011. A coalition of British Columbia tourism industry groups is urging the provincial government to not pursue plans to ban domestic travel to fight the spread of COVID-19. THE CANADIAN PRESS/Darryl Dyck
B.C. travel ban will harm struggling tourism sector, says industry coalition

B.C. government would have to show evidence a travel ban is necessary

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

(Phil McLachlan - Capital News)
‘Targeted’ shooting in Coquitlam leaves woman in hospital

The woman suffered non-life threatening injuries in what police believe to be a targeted shooting Saturday morning

JaHyung Lee, “Canada’s oldest senior” at 110 years old, received his first dose of the COVID-19 vaccine on Thursday, Jan. 14, 2021. He lives at Amenida Seniors Community in Newton. (Submitted photo: Amenida Seniors Community)
A unique-looking deer has been visiting a Nanoose Bay property with its mother. (Frieda Van der Ree photo)
A deer with 3 ears? Unique animal routinely visits B.C. property

Experts say interesting look may be result of an injury rather than an odd birth defect

Standardized foundation skills assessment tests in B.C. schools will be going ahead later than usual, from Feb. 16 to March 12 for students in Grades 4 and 7. (Black Press Media file photo)
B.C. teachers say COVID-affected school year perfect time to end standardized tests

Foundational skills testing of Grade 4 and 7 students planned for February ad March

Sooke’s Jim Bottomley is among a handful of futurists based in Canada. “I want to help people understand the future of humanity.” (Aaron Guillen - Sooke News Mirror)
No crystal ball: B.C. man reveals how he makes his living predicting the future

63-year-old has worked analytical magic for politicians, car brands, and cosmetic companies

Most Read