ICBC Pays Millions Each Year for Brokers

Auto insurance brokers can be seen as an essential asset for any automotive insurance company, but recent reports show a spike in the amount brokers are being paid. The Insurance Company of British Columbia (ICBC’s) is regulated by the government (crown) and is the main option for auto glass repair, as it has hundreds of shops across the province. Its financial reports for the 15 months that ended in March of 2017 are significantly higher than the insurance company’s financial results from 2012.

It’s mandatory for all British Columbian drivers and motorists have basic coverage with ICBC to ensure every driver has coverage in the event of an accident. ICBC is billed and pays millions of dollars annually to its brokers who communicate its policies to insured drivers.

An automotive insurance broker’s primary responsibility is to guide its consumers or automotive policy holders through their automotive coverage. Many can agree that auto insurance isn’t always easy to understand, especially when there are several options to consider when a driver is trying to find the best policy that will meet their needs. But can the amount of money the government is paying for brokers affect taxpayers?

“The Corporation’s Basic and Optional insurance products are distributed by approximately 900 independent brokers located throughout the Province of B.C. The Corporation has the power and capacity to act as an insurer and reinsurer in all classes of insurance; however, the Corporation currently only acts as a vehicle insurer”, a section of the 2017 report reads.

According to the financial report with a 15 month end on March 31, 2017, amounts brokers charged the company ranged from hundreds of thousands to millions of dollars, the chart below lists five brokers from ICBC’s report.

Broker’s Name Amount Billed to ICBC
Carson Insurance Broker Ltd. $487,156
Keystone Insurance Brokers Ltd. $655,572
ICARE Insurance Brokers Ltd. $1,002,441
Pacific Coast Insurance Brokers Inc. $1,350,342
RHC Insurance Brokers Ltd. $4,144,615

The chart below represents the financial information from the same brokerage companies from ICBC’s end of year report for 2012.

Broker’s Name Amount Billed to ICBC
Carson Insurance Broker Ltd. $401,168
Keystone Insurance Brokers Ltd. $354,567
ICARE Insurance Brokers Ltd. $715,487
Pacific Coast Insurance Brokers Inc. $622,059
RHC Insurance Brokers Ltd. $2,759,321

There can be a variety of reasons why a broker increases the amount billed to ICBC. A main reason could involve how people decide to renew their auto insurance. Although many choose to renew the same policy from the previous year, many decide to change the amount or type of coverage they have. According to ICBC, the company has hundreds of thousands of people who change their insurance policies annually. Each change has the potential to bring added questions and a need for understanding in relation to new policies.

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