ICBC operational review identifies additional savings
Victoria: A government-directed independent review of ICBC has identified over $60 million in potential savings to the public insurer. This follows on the product reforms announced earlier this week by Attorney General David Eby.
“This review is an important step in assessing the current operational situation at ICBC,” said Eby. “We must ensure the corporation is viable and efficient, and that the cost of insurance to British Columbians is more fair and affordable.”
The PwC Canada review assessed ICBC’s business areas of claims, finance and driver training, and it reviewed a selection of random claims files and material damage estimates. Interviews were held with front-line staff with a mandate to look for waste, fraud and overbilling.
The report found that ICBC operations – including how it manages fraud – are performing at, or above, industry average standards, and confirmed that the greatest opportunity for significant savings at ICBC was in terms of the product reforms announced by government this week.
The review also looked for opportunities to reform existing operations to make them more efficient and improve the quality of service for ICBC’s customers. The report identified that savings could be realized through optimizing vendor management and strategic sources, improving salvage and subrogation management, shifting to proactive injury-care model and enhancing automation and predictive analytics.
In response to the report, ICBC will begin discussions with the material damage industry on redesigning the corporation’s current vendor-management programs. This will include working with collision repair shops and industry associations to modernize ICBC’s tiering of shops. This will help improve efficiencies and ensure customers receive the highest standards of vehicle repairs at the best market value.
“The report indicated that if all recommendations were implemented, ICBC could realize annual savings in the tens of millions,” said Eby. “We know that these changes alone aren’t enough to make ICBC financially sustainable. However, when coupled with the product reform changes that take effect April 1, 2019, we are making every effort to ensure rates are affordable for British Columbians.”
In November 2017, following a competitive process, PwC Canada was selected to conduct an evidence-based operational review of ICBC to identify opportunities to reduce costs at the insurer. ICBC is on track for a projected loss of $1.3 billion in fiscal 2017/18.