ICBC facing severe financial pressure

by Richard C. McCandless

In late May 2016 the government released ICBC’s annual report for the 2015 fiscal year. The report was made public without a media release shortly after the Legislature completed the spring 2016 sitting, and confirmed that ICBC suffered a $257 million loss of net income in the compulsory Basic program compared to the prior year.

The highly profitable Optional insurance program actually recorded a $100 million increase in year over year net income but, after the government extracted $138 million in “excess” capital equity, ICBC’s total capital reserve declined by approximately $506 million. The risk-weighted capital ratio fell from 193% in 2014 to 157% in 2015, some $255 million below the board of directors’ target of 185%.

 

Occasional Paper No.1 30 July 2016