VICTORIA, B.C. — The Insurance Corp. of B.C. (ICBC) took it on the chin last year, reporting a net loss of $251 million for the year ended Dec. 31, 2001.
That compares to a net income of $139 million over the previous year.
The struggling Crown Corporation has already begun to trim the fat in an effort to restore it to profitability, including reducing its workforce by nearly 1,000 people and vacating officers. While those moves should save the company money in the long term, it was a $40 million expense that helped drag down last year’s numbers.
ICBC is confident the savings resulting from the restructuring will start to become evident this year.
Another factor leading to ICBC’s tough year, is a decrease in investment revenue, which was restored to normal levels after a couple years of surreal investment income.
Claims and related costs jumped by $105 million last year, while premiums were raised by $60 million, altogether. There were a total of 1.1 million claims, which was up 7.7 per cent from 2000. Greater traffic volume is to blame, suggests ICBC.
Despite the staggering losses recorded in 2001, ICBC is predicting it will nearly break even by the end of 2002. With the current Liberal regime at the helm in B.C., the Crown Corporation may have little choice but to do so, or face more cutbacks and possibly even competition within the insurance industry.
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