Petition to end ICBC monopoly
Hardly a year goes by without the government-run monopoly-the Insurance Corporation of British Columbia (ICBC)-demonstrating its absolute arrogance and incompetence. And this year was no different: just as customers are digging deeper to pay for their basic auto insurance, ICBC announces another round of staff bonuses. The monopoly kicked back an incredible $12.8 million in staff bonuses last year, ranging from $1,000 to $60,000!
Astonishingly, ICBC calls the handouts "performance bonuses." Is that, good performance or bad performance, it's hard to tell. Last year the monopoly catastrophically miscalculated anticipated profits as well as claims costs, and ranked pretty low on the customer satisfaction front. By any of these "performance" benchmarks, ICBC should be giving money back to its customers and asking for forgiveness. But as a government run monopoly customers are simply a necessary evil, not a priority.
And in case you didn't know, all unionized employees at ICBC, some 4,400 will, also receive the $3,500 "signing bonus"-courtesy of taxpayers-because they reached a labour deal before March 31, 2006.
Nominated for this year's provincial Teddy-the Canadian Taxpayers Federation waste award-ICBC has a record of being wrong but still handing out cash bonuses. Last year, ICBC's unionized workers cleaned up with average bonuses of $1,645 and its 852 managers raked in $13,800 each.
It's tough for average British Columbians to put these figures into perspective. For most of the 1990s, real incomes fell in BC and there has only been nominal increases in the past four years. So, while most workers in the province have seen little difference in their disposable income, government unions and government monopolies have been taking a bigger and bigger piece of the pie.
And this is precisely ICBC's problem: it no longer (if ever) provides a public good or protects some mythical notion of public interest; it protects and provides only for itself.
In 2001, the BC Liberals promised to introduce greater competition in the auto insurance industry. Not much has changed, however, and may have actually gotten worse. At one time there was the promise of a level playing field for the private sector to compete for optional insurance but the government has failed to proclaim provisions in ICBC related legislation that would accomplish this. The result: ICBC retains a monopoly on data and insurance statistics and cross subsidizes optional insurance rates to prevent the private sector from fairly competing.
The BC Liberals have entrenched ICBC's monopoly over basic insurance and now helps them maintain dominance in optional insurance. Gee, thanks.
Motorists will not doubt recall that ICBC promised a rate freeze on basic auto insurance for 2006. Then came an announcement of a substantial reduction for its optional insurance customers. It left many wondering why only the optional customers Why not basic auto insurance customers Simply put: they don't have to work to get basic insurance customers. They have a monopoly. But they do face some nominal competition on the optional side. In keeping with typical monopolistic behaviour, ICBC is trying to push out the competition. Oh yes, that's certainly serving the public good!
ICBC has extracted almost a billion dollars in profits over the past three years and is still trying to get more. Only a government monopoly could hit customers with a rate hike while posting record profits.
Some quick number crunching reveals: 6.4 per cent of the monopoly's profit this year was kicked back to employees; while drivers were slammed with a 6.5 per cent rate increase.
It's time to end the auto insurance monopoly in BC. Just as government has no business in the sale of booze, food or microwave ovens it has no right being in the auto insurance business. The CTF has been leading the charge to open auto insurance to competition in British Columbia. A petition is on our website at: www.taxpayer.com.