Due to positive performance and strong fiscal management, ICBC’s preliminary net income for the fiscal year 2023-24 is an estimated $1.5 billion. The total amount of the rebate is roughly $398 million, equivalent to $110 per eligible insurance policy. The cost to process and distribute the rebate is $3.9 million. Following legislative reforms, the net income balance will stay with ICBC, helping to stabilize rates for drivers over the long term. The final, audited net income figure, along with a full financial summary of the fiscal year, will be released this summer.
On average, since government enacted major ICBC reforms, customers with full ICBC basic and optional coverage have received $530 in four separate rebates and saved $490 per year on their insurance with the implementation of the Enhanced Care model.
The list of rebates with the average amounts is as follows:
- April 2021 – first COVID-19 rebate: $190
- July 2021 – second COVID-19 rebate: $120
- 2022 – relief rebate: $110 (flat)
- 2024 – ICBC rebate: $110 (flat)
ICBC basic rate:
In May 2021, ICBC transitioned from a legal-based insurance system to its care-based model called Enhanced Care. This lower-cost model not only provides better care and recovery benefits to people injured in crashes, but it has also lowered insurance rates and allowed ICBC to build back its capital reserves. In the first year under the new model, the basic insurance rate decreased by 15% and has been flat since then with no increases.
An insurer’s capital reserves are measured by a ratio called the minimum capital test (MCT). ICBC’s basic insurance MCT reached a low of -18% in fiscal year 2019-20. Since then, with government and ICBC actions such as the implementation of Enhanced Care, ICBC’s estimate for its basic MCT is above 160% and projected to be strong going forward.
ICBC rebate:
ICBC has roughly $18 billion in investments, which are managed by the British Columbia Investment Management Corporation (BCI). When ICBC’s investment portfolio does well, it has investment income to help offset claims costs, and higher investment returns in the future help reduce the need for rate increases.
At the beginning of fiscal 2024-25, much of the forecasting community was predicting a challenging year for equity markets. ICBC’s planned investment income for the fiscal year was $134 million. However, the global equity market had a remarkable bull run between November 2023 and March 2024, which drove ICBC’s unaudited net investment income up substantially higher than anticipated to $1.2 billion.
The improvement in investment income along with favourable claims costs compared to its third quarter estimates are the key drivers behind ICBC’s preliminary net income of approximately $1.5 billion. Four hundred million dollars will be rebated to eligible customers through a one-time rebate and the remainder will go toward building capital reserves, ensuring ICBC remains on solid financial ground.
Rebate eligibility:
Roughly 3.6 million customer policies are eligible for the rebate. All personal and commercial customers who had an active eligible basic insurance policy in February 2024 will receive the rebate. Keeping in mind that one driver can hold multiple polices, ICBC estimates nearly 2.7 million drivers will receive the rebate. Some vehicles with an average basic premium of less than $250 over a two-year period will not be eligible for the rebate. These include golf carts, off-road vehicles, utility vehicles, limited-speed motorcycles, trailers and vehicles insured in a collector rate class, among others. Temporary operating permits and storage policies are also not eligible. More information about the rebate, including eligibility and timelines, is available here: https://icbc.com/
