Belair Direct, the auto insurance arm of Intact Insurance has announced that it will stop selling auto policies in BC effective December 1, 2020 and renewing policies on January 1, 2021. They see ICBC’s recent regulatory changes and the province’s current auto insurance market conditions as having reduced opportunities for the private sector to compete.
The Fraser Institute has released a report titled Reforming BC Auto Insurance to Bene fit Consumers that explains:
Unfortunately, ICBC has placed a major obstacle to competition by its unwillingness to share drivers’ records with other insurers. Such records are vital to insurers trying to sort bad drivers from good. This lack of information sharing has already stifled the competition from private insurers allowed to do business in the optional market. It will do the same if competition is permitted in the larger basic market. Unless this obstacle is removed, private insurers cannot be significant competitors in the basic insurance mar-ket and may avoid the market entirely. Information sharing among insurers must be part of any reform to introduce competition.
ICBC surrently permits drivers to download a driving history and a claims record on line. This could be provided to private insurers when applying for or renewing a policy.
BC Policy Perspectives:
“ICBC has placed a major obstacle to competition by its unwillingness to share driver’s records with other insurers. Such records are vital to insurers trying to sort bad drivers from good.”
There are two areas of interest to an auto insurance company pertaining to a driver’s history. Their driving violation history and their driving claims history.
The first question that jumps out at me pertains to auto insurance claims history. In private auto insurance jurisdictions, do private companies share this data ? That would be important to know, and I would think if they did share data, the author of the report, the Fraser Institute, would have stated something to the effect: “unlike in private jurisdictions, where private auto insurance companies freely share driver’s claims history”, ICBC refuses to do so……”
I would have thought such a strong negative fact, if true, would be included. Did the Fraser Institute prepare a report that avoids to point out that no private auto insurance company shares loss information to other auto insurance companies ?
Of course such release of personal information except for exceptional circumstances is prohibited by PIPA (Personal Information Protection Act) of BC. So stating “ICBC has placed a major obstacle to competition…” certainly sounds like a smear campaign, and certainly, if not completely untrue, very misleading.
You quite correctly point out that “ICBC currently permits drivers to download a driving history and a claims record on line., which could be provided to private insurers when applying for or renewing a policy.” So that would leave us to wonder, “Where is the problem ?”.
We can expect more of these one sided “infomercials”. From this author “The Fraser Institute” and from the other pro-private auto insurance organization, who’s name sounds like a government department [and isn’t], “The Insurance Bureau of Canada”. The Insurance Bureau of Canada is a private company funded by fees paid by private auto insurance companies and frequently releases information of the same “quality” and "accuracy" as The Fraser Institute.
These “concerned”, “independent” organizations generally promote the fallacy that “if there was competition, prices would come down”.
The truth being that court awards and legal costs in BC are amounting to more money going out than is coming in. All the competition in the world isn’t going to change that. Just look at Alberta. They implemented a “Threshold No Fault” system several years ago. The scheme was implemented to reduce insurance premiums by placing a $4000 cap on awards unless someone suffered catastrophic injuries.
Even with the threshold no fault system in Alberta, their auto premiums are still climbing out of control and they appear to be headed to a full no fault system. One would have thought that the threashold no fault system, in capping awards would have put the Alberta insurance industry in good stead, but many companies started leaving the province, and the remaining were refusing to sell to all but the lowest risk drivers. So how's full competition working you so far ??
If anyone is interested in the Fraser Institute’s history of accomplishments they should read the Fraser Institute’s 1999 report entitled “The IPA’s Betrayal of Science and Policy”, which highlighted the absence of any scientific evidence for linking cancer with second-hand smoke. The privately funded Fraser Institute was reported to have received, at the time of that report, funding from Rothmans International and Philip Morris.
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Interesting article quoting the Fraser Institute's Report