volume ii of ii – table of contents...reduced 2012 forecast does not contribute to the rate...

ICBC’s December 1, 2011 Filing with the BC Utilities Commission

Volume II of II – Table of Contents

Insurance Corporation of British Columbia TOC-i December 1, 2011

CHAPTER 7 OPERATING EXPENSES AND ALLOCATION INFORMATION

A Overview ........................................................................................................ 7-1

B ICBC’s Corporate Operating Expenses ............................................................ 7-2

C Historical Context and Impact on Rates ......................................................... 7-5

D Operating Expenses for Actuarial Rate Indication .......................................... 7-7

D.1 Unique Items ............................................................................................ 7-10 D.2 Base Operating Expenses ........................................................................... 7-13

D.2.1 Compensation ................................................................................ 7-13 D.2.1.1 Number of FTEs ................................................................. 7-15 D.2.1.2 FTE Mix ............................................................................ 7-16 D.2.1.3 Compensation Level Changes .............................................. 7-17

D.2.2 Projects ......................................................................................... 7-19 D.2.3 Depreciation .................................................................................. 7-19 D.2.4 Other Categories ............................................................................ 7-21

D.2.4.1 Road Improvements and Other Traffic Safety Programs .......... 7-21 D.2.4.2 Building Costs ................................................................... 7-21 D.2.4.3 Computer Costs ................................................................. 7-22 D.2.4.4 Professional Services .......................................................... 7-22 D.2.4.5 Printing Stationery and Supplies .......................................... 7-22 D.2.4.6 Staff Related Expenses Including Training ............................. 7-22 D.2.4.7 Other Operating Expenses .................................................. 7-23

D.3 Government Initiatives .............................................................................. 7-23

E Allocation of Operating Expenses for Actuarial Rate Indication to Basic Insurance ..................................................................................................... 7-26

E.1 Financial Reporting View of Operating Expenses ............................................ 7-26 E.2 Impact of Increase in 2012 Forecast on Actuarial Rate Indication .................... 7-28 E.3 Year to Year Basic Insurance Allocation Percentages ...................................... 7-30

F Conclusion .................................................................................................... 7-31

Appendix 7 A Cost Allocation Tables .................................................................... 7A

Appendix 7 B Historical Information ................................................................... 7B

CHAPTER 8 REPORTING ON GOVERNMENT INITIATIVES

A Introduction ................................................................................................... 8-1

B Regulatory Context Applicable to Government Initiatives .............................. 8-2

C Government Initiatives .................................................................................. 8-3

C.1 Government Initiatives Funded By ICBC......................................................... 8-3

454 Pages B-1-1

markhuds

ICBC 2012 REVENUE REQUIREMENTS


Insurance Corporation of British Columbia TOC-ii December 1, 2011

C.2 Government Initiatives Funded By User Fees or Cost Recovery ......................... 8-4

D Reporting for Government Initiatives ............................................................. 8-6

Appendix 8 A – Service Agreement Addendum for 2010...................................... 8-A

Appendix 8 B – Canadian Driver Licensing Agreement ........................................ 8-B

Appendix 8 C – Impaired Driving Initiative ......................................................... 8-C

Appendix 8 D – Service Agreement Appendices .................................................. 8-D

CHAPTER 9 PERFORMANCE MEASURES

A Performance Measures Overview ................................................................... 9-1

B Performance Measures Explanatory Notes ..................................................... 9-3

B.1 Service Measures ........................................................................................ 9-3 B.1.1 Insurance Services Satisfaction .......................................................... 9-3 B.1.2 Driver Licensing Satisfaction .............................................................. 9-4 B.1.3 Claims Services Satisfaction (BCUC) ................................................... 9-4 B.1.4 New Claims Initiation ........................................................................ 9-5 B.1.5 Customer Contact Service Level ......................................................... 9-6 B.1.6 Customer Approval Index .................................................................. 9-7 B.1.7 Legal Representation Rate ................................................................. 9-7 B.1.8 Complaints Heard by the Fairness Commissioner .................................. 9-8

B.2 Financial Measures ...................................................................................... 9-8 B.2.1 Basic Loss Ratio ............................................................................... 9-8 B.2.2 Basic Insurance Expense Ratio ........................................................... 9-9 B.2.3 Basic Non-insurance Expense Ratio ................................................... 9-10 B.2.4 Investment Return .......................................................................... 9-11 B.2.5 Injury Paid Severity ........................................................................ 9-11

B.3 Efficiency Measures ................................................................................... 9-13 B.3.1 Cost Per Policy in Force ................................................................... 9-13 B.3.2 Claims Efficiency Ratio .................................................................... 9-14

B.4 Directional Indicators ................................................................................ 9-15


Insurance Corporation of British Columbia TOC-iii December 1, 2011

CHAPTER 10 ROAD SAFETY

A Introduction ................................................................................................. 10-1

B Background .................................................................................................. 10-2

C Comprehensive Review of Education and Awareness Programs ................... 10-5

D Annual Planning Process .............................................................................. 10-8

D.1 Current State Assessment .......................................................................... 10-8 D.2 Key Assumptions and Principles .................................................................. 10-9 D.3 Strategic Framework ............................................................................... 10-10 D.4 Prioritizing Road Safety Issues .................................................................. 10-11 D.5 2011 Road Safety Programs ..................................................................... 10-13 D.6 Objectives and Measurement Plans ........................................................... 10-15

E Road Safety Investment And Allocation of Costs ........................................ 10-17

E.1 Road Safety Investment .......................................................................... 10-17 E.2 Allocation of Road Safety Expenditures ...................................................... 10-20

F Road Safety Reporting ............................................................................... 10-22

G Conclusion .................................................................................................. 10-23

Appendix 10 A – Letter Dated September 15, 2010 from Commission to the Insurance Bureau of Canada..... ................................................................... 10-A

Appendix 10 B – 2011 Road Safety Business Plan ............................................. 10-B

Appendix 10 C – Survey of Select Road Safety Public and Private Programs ..... 10-C

Appendix 10 D – Rationale for Integrated, Multi-Component Road Safety Programs ..................................................................................................................... 10-D

Appendix 10 E – Programs/Tactics Discontinued or Transitioned as part of the 2007/2008 Road Safety Strategic Review .................................................... 10-E

CHAPTER 11 GENERAL APPENDICES

Appendix 11 A – Basic Insurance Information Sharing ..................................... 11-A

Appendix 11 B – Service Plan 2011 - 2013 ........................................................ 11-B

Appendix 11 C – 2010 ICBC Annual Report ....................................................... 11-C


Insurance Corporation of British Columbia TOF-i December 1, 2011

Volume II of II – Table of Figures


Figure 7.1 – Components of Corporate Operating Expenses (excluding TP) per Original 2011 Plan ................................................................................................................. 7-3

Figure 7.2 – Comparison of Corporate Operating Expenses Between Plan as Revised and Original Plan per the Service Plan (excluding TP) ................................................... 7-4

Figure 7.3 – Corporate Operating Expenses (excluding TP) ........................................... 7-5 Figure 7.4 – Operating Expenses by Expense Category ................................................ 7-9 Figure 7.5 – Unique Items...................................................................................... 7-11 Figure 7.6 – Compensation by Employee Group ........................................................ 7-14 Figure 7.7 – FTEs by Employee Group...................................................................... 7-15 Figure 7.8 – Average Compensation for ICBC Employees............................................ 7-17 Figure 7.9 – Depreciation of Capital Expenditures...................................................... 7-20 Figure 7.10 – Government Initiatives....................................................................... 7-24 Figure 7.11 – Financial Reporting View of Operating Expenses for 2012 and Allocation to

Basic Insurance............................................................................................... 7-26 Figure 7.12 – Tie-in of Basic Operating Expenses to Actuarial Rate Indication Analysis

Excerpt ($000’s).............................................................................................. 7-28 Figure 7.13 – Calculation of Impact of Increase in Operating Expenses on Actuarial Rate

Indication ....................................................................................................... 7-29 Figure 7.14 – Year to Year Basic Insurance Allocation Percentages .............................. 7-30


Figure 9.1 – Performance Measures Results, 2011 Forecast and 2011 Outlook ................ 9-2 Figure 9.2 – Claims Services Satisfaction (BCUC) ........................................................ 9-5 Figure 9.3 – Cost Per Policy In Force........................................................................ 9-13

CHAPTER 10 ROAD SAFETY

Figure 10.1 – Outcomes of Road Safety Strategic Review........................................... 10-4 Figure 10.2 – Best Practices in Road Safety Programs Focusing on Drivers and ICBC

Response........................................................................................................ 10-7 Figure 10.3 – 2011 Key Assumptions and Principles................................................... 10-9 Figure 10.4 – 2011 Road Safety Strategic Framework.............................................. 10-10 Figure 10.5 – Criteria and Rationale in Determining Road Safety Priorities.................. 10-12 Figure 10.6 – 2011 Road Safety Programs.............................................................. 10-13 Figure 10.7 – Summary of Road Safety Investments from 2007 Actual to 2011 Forecast

($000’s) ....................................................................................................... 10-18 Figure 10.8 – Allocation of 2010 Road Safety Costs ($000’s) ................................ .... 10-20

Insurance Corporation of British Columbia December 1, 2011



Insurance Corporation of British Columbia 7-i December 1, 2011

Table of Contents A Overview ........................................................................................................ 7-1

B ICBC’s Corporate Operating Expenses ............................................................ 7-2

C Historical Context and Impact on Rates ......................................................... 7-5

D Operating Expenses for Actuarial Rate Indication .......................................... 7-7

D.1 Unique Items ............................................................................................ 7-10 D.2 Base Operating Expenses ........................................................................... 7-13

D.2.1 Compensation ................................................................................ 7-13 D.2.1.1 Number of FTEs ................................................................. 7-15 D.2.1.2 FTE Mix ............................................................................ 7-16 D.2.1.3 Compensation Level Changes .............................................. 7-17

D.2.2 Projects ......................................................................................... 7-19 D.2.3 Depreciation .................................................................................. 7-19 D.2.4 Other Categories ............................................................................ 7-21

D.2.4.1 Road Improvements and Other Traffic Safety Programs .......... 7-21 D.2.4.2 Building Costs ................................................................... 7-21 D.2.4.3 Computer Costs ................................................................. 7-22 D.2.4.4 Professional Services .......................................................... 7-22 D.2.4.5 Printing Stationery and Supplies .......................................... 7-22 D.2.4.6 Staff Related Expenses Including Training ............................. 7-22 D.2.4.7 Other Operating Expenses .................................................. 7-23

D.3 Government Initiatives .............................................................................. 7-23

E Allocation of Operating Expenses for Actuarial Rate Indication to Basic Insurance ..................................................................................................... 7-26

E.1 Financial Reporting View of Operating Expenses ............................................ 7-26 E.2 Impact of Increase in 2012 Forecast on Actuarial Rate Indication .................... 7-28 E.3 Year to Year Basic Insurance Allocation Percentages ...................................... 7-30

F Conclusion .................................................................................................... 7-31

Appendix 7A Cost Allocation Tables..................................................................... 7A

Appendix 7B Historical Information .................................................................... 7B


Insurance Corporation of British Columbia 7-ii December 1, 2011

Table of Figures Figure 7.1 – Components of Corporate Operating Expenses (excluding TP) per Original 2011

Plan ................................................................................................................. 7-3

Figure 7.2 – Comparison of Corporate Operating Expenses Between Plan as Revised and Original Plan per the Service Plan (excluding TP) ................................................... 7-4

Figure 7.3 – Corporate Operating Expenses (excluding TP) ........................................... 7-5

Figure 7.4 – Operating Expenses by Expense Category ................................................ 7-9

Figure 7.5 – Unique Items ...................................................................................... 7-11

Figure 7.6 – Compensation by Employee Group ........................................................ 7-14

Figure 7.7 – FTEs by Employee Group ...................................................................... 7-15

Figure 7.8 – Average Compensation for ICBC Employees ............................................ 7-17

Figure 7.9 – Depreciation of Capital Expenditures ...................................................... 7-20

Figure 7.10 – Government Initiatives ....................................................................... 7-24

Figure 7.11 – Financial Reporting View of Operating Expenses for 2012 and Allocation to Basic Insurance ............................................................................................... 7-26

Figure 7.12 – Tie-in of Basic Operating Expenses to Actuarial Rate Indication Analysis Excerpt ($000’s) .............................................................................................. 7-28

Figure 7.13 – Calculation of Impact of Increase in Operating Expenses on Actuarial Rate Indication ....................................................................................................... 7-29

Figure 7.14 – Year to Year Basic Insurance Allocation Percentages .............................. 7-30


Insurance Corporation of British Columbia 7-1 December 1, 2011

A OVERVIEW

1. As discussed in Chapter 2, ICBC identified in the first part of 2011 that the number

of bodily injury claims was higher than forecast in the 2010 Streamlined Revenue

Requirements Application. This was putting pressure on Basic insurance rates. At that

time, ICBC decided to delay the filing of its revenue requirements application in order to

enable it to examine options to reduce a rate increase for its customers. One of the areas

where ICBC saw opportunities to effect short-term cost savings was its operating expenses.

ICBC therefore, as part of its 2012 budgeting cycle, determined that it needed to re-

evaluate the planned expenditures and take action to reduce or minimize the impact on the

actuarial rate indication from operating expenses.

2. As part of this re-evaluation process ICBC initiated a suite of cost control measures,

which has had the short-term impact of reducing corporate operating expenses for 2011 by

$26 million in comparison to the original 2011 plan as represented in ICBC’s 2011-2013

Service Plan.1

3. As a result of these cost control measures, operating expenses do not contribute to

the rate increase requirement for the 2012 policy year.

For the 2012 forecast, these cost control measures are expected to contain

corporate operating expense increases below the level of inflation.

4. This Chapter sets out the following:

• Section B demonstrates the impact of the cost control measures on the 2011

outlook and 2012 forecast for ICBC’s corporate operating expenses.

• Section C puts these changes into historical context and explains how the

reduced 2012 forecast does not contribute to the rate increase requirement for

the 2012 policy year.

• Section D discusses the changes in the 2011 outlook and 2012 forecast relative

to the 2010 actual expenses.

• Section E describes the allocation of the operating expenses between Basic and

Optional insurance and how the Basic insurance portion of the 2012 forecast

operating expenses is taken into account in the actuarial analysis in Chapter 3.

• Section F contains concluding remarks.

1 ICBC’s 2011-2013 Service Plan was tabled in Legislature on February 15, 2011 and is provided in Appendix 11 B.



B ICBC’S CORPORATE OPERATING EXPENSES

5. As a Crown corporation, ICBC operates within a legislative framework that requires

planning and accountability to the provincial government and the general public. ICBC’s

annual planning involves the Board of Directors providing strategic direction and setting

goals for corporate performance. Through formalized processes of monitoring and

reporting, progress against these goals is reviewed throughout the year. Management

practices are in place to monitor financial performance and operating expenditures monthly,

quarterly, and on an annual basis. ICBC maintains its commitment to operate efficiently

and to manage costs in a fiscally prudent manner.

6. As part of its annual planning process, ICBC provided a Summary Financial Outlook

in the 2011-2013 Service Plan, which was tabled in the Legislature on February 15, 2011.

This Service Plan is provided as Appendix 11 B. A Summary Financial Performance and

Forecast was also reflected in ICBC’s 2010 Annual Report provided as Appendix 11 C.

7. Corporate operating expenses are all costs (compensation and other costs) to run

ICBC’s Insurance and Non-insurance businesses with the exception of claims payments,

broker commissions, and premium taxes. These are the costs which ICBC has the ability to

manage and control. Operating expenses represent a small percentage of ICBC’s total costs

(approximately 16%). In comparison, claims incurred, which is the largest portion of total

costs represents approximately 71%. Broker commissions and premium taxes make up the

balance of the costs.

8. Beginning in 2010 ICBC started the Transformation Program (TP) which pursuant to

the Government Directive regarding the Transformation Program is to be funded 100% by

Optional insurance. TP is a suite of projects that involves transformational changes

supporting ICBC’s business strategy including the introduction of new systems,

improvements to business processes, and giving employees the tools they need to be

successful. The scope of TP is specified in the Government Directive regarding the

Transformation Program. The suite of projects includes the modernization of claims and

insurance product sales processes and systems, building and managing customer

relationships, and making rates more reflective of driver risk. The costs covered by

Optional insurance are also specified in the Government Directive regarding the

Transformation Program and include project operational costs and depreciation expenses

associated with TP project capital costs. TP is expected to be a major enabler in fulfilling

ICBC’s corporate strategy for customers, partners, and employees.



9. Actual and planned corporate operating expenses as of the beginning of 2011 (the

original 2011 plan, before cost control measures were initiated) are represented in both the

Summary Financial Outlook in the 2011-2013 Service Plan and the Summary Financial

Performance and Forecast in the 2010 Annual Report (Appendices 11 B and 11 C). For

convenience, the relevant line items are reproduced in Figure 7.1. The costs associated

with TP, which are provided as a separate line item in the 2010 Annual Report, have been

excluded.

Figure 7.1 – Components of Corporate Operating Expenses (excluding TP) per Original 2011 Plan

($ millions) 2009

Actual (CGAAP)

2010 Actual

(CGAAP)

2010 Actual

(IFRS)2

2011 Forecast (IFRS)



Claims services and loss management

320 323 330 331 337 340

Insurance operations expenses

169 172 177 206 206 211

Non-insurance operations expenses

80 82 84 93 94 96

Corporate operating expenses (excluding TP)

569 577 591 630 637 647

10. The 2009 and 2010 Actual operating expenses in Figure 7.1 are shown under CGAAP

and from 2011 onward the Forecast operating expenses are shown under IFRS. As

discussed in Chapter 4, there is an increase of $14 million between the 2010 operating

expenses under IFRS in comparison to that under CGAAP. The impact of the change in

accounting standards from CGAAP to IFRS is an increase to the pension and post-retirement

benefit expense base, which will be ongoing for 2011 and future years.

11. As indicated in Section A, ICBC re-evaluated its expenditures in the second half of

2011 and initiated a suite of cost control measures, which has had the short-term impact of

2 ICBC’s corporate operating expenses under CGAAP, as presented in the 2010 Annual Report provided as Appendix 11 C, have been restated under IFRS for better comparison to 2011-2013 forecast, as presented in the 2011-2013 Service Plan provided as Appendix 11 B.



saving $26 million in comparison to the original 2011 plan shown in Figure 7.1. These cost

control measures include, for example:

• Conducting detailed budget reviews to search for cost savings opportunities

across ICBC right down to the cost centre and cost element levels.

• A strategic approach to prioritizing projects and managing project scope and

costs. ICBC has centralized its corporate planning process to ensure stronger

executive leadership oversight and accountability for cross-corporate project

prioritization and results delivery. This re-prioritization process is designed to

reduce the number of projects and help to control the associated costs.

• Management of staffing vacancies. ICBC now requires executive approval for all

hiring and ensures that new staff is only hired to fill vital positions, such as

replacement of staff upon attrition or in response to business demand.

12. For the 2012 forecast, these and other cost control measures are expected to contain

the increases in corporate operating expenses below the level of inflation. The projected

corporate operating expenses (Plan as Revised) for 2011 and 2012 are shown in Figure 7.2

relative to the Original Plan per the Service Plan.

Figure 7.2 – Comparison of Corporate Operating Expenses Between Plan as Revised and Original Plan per the Service Plan (excluding TP)

($ millions)

2010 Actual (IFRS)

2011 Outlook (IFRS)

2012 Revised Forecast (IFRS)

Original Plan per the Service Plan 591 630 637

Plan as Revised 591 604 615

Cost Savings - 26 22

13. The average annual increase in corporate operating expenses from 2009 to 2012

forecast (exclusive of the 2011 accounting change from CGAAP to IFRS) is expected to be

below inflation at 1.8%.



14. As further discussed in Section D, there is a difference between corporate operating

expenses as reflected in Figures 7.1 and 7.2 and the operating expenses used for the

actuarial rate indication. For application in the actuarial rate indication, ICBC excludes

operating expenses that are 100% funded by Optional insurance and do not impact Basic

insurance rates. The 100% Optional insurance-funded programs are: TP, which started in

2010, and ICBC’s Olympic sponsorship in 2009 and 2010. For the 2011 outlook and 2012

forecast, ICBC has also excluded certain adjustments to pension expenses.

C HISTORICAL CONTEXT AND IMPACT ON RATES

15. In this Section, ICBC’s corporate operating expenses per the Plan as Revised are put

into historical context.

16. In 2001, ICBC conducted a major financial review, reducing operating expenses and

staffing levels by 25%. As shown in Figure 7.3, for the 2002 to 2010 period ICBC was able,

on average, to maintain year to year operating expense increases at about the rate of

inflation.

Figure 7.3 – Corporate Operating Expenses (excluding TP)

17. The 2010 fiscal year represented a turning point for ICBC as it launched TP. During

2010 ICBC did significant work to scope and prioritize these projects to ensure that they

met the requirements expressed in the Government Directive regarding the Transformation

Program. Appropriate governance mechanisms were also established. Some of the core

$647$582

$482 $496 $508 $515 $512 $523 $538 $569 $577 $591 $604 $615

-

150

300

450

600

750

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010(CGAAP)

2010(IFRS)

2011Outlook

2012Forecast

Cor

pora

te o

pera

ting

expe

nses

($ m

illio

ns)



staff from the existing lines of business participated in the initial phases of TP and their

costs were covered by Optional insurance. ICBC put a high priority on this work in order to

engage appropriate resources.

18. The operating expenses forecast used in the 2010 Streamlined Revenue

Requirements Application reflected the dual requirements that core operations be

maintained in relation to the level of business volume and further that ICBC should build

capacity in order to effectively transition to the transformed business model. The

corresponding impact of the 2010 forecast on the actuarial rate indication was 1.5

percentage points, determined by comparing it with the forecast used in the 2007 Revenue

Requirements Application.

19. The Commission in the August 2010 Decision ordered a reduction in the Basic

insurance rate, modifying ICBC’s Application for a 1.9% Basic insurance rate reduction to a

2.4% rate reduction for the 2010 policy year. The 0.5 percentage point reduction in the

Basic insurance rate was based on a 2.8% reduction in the 2010 forecast operating

expenses used in the actuarial analysis. The Commission explained that “…2.8 percent is a

reasonable estimate of the likely extent of ICBC’s over-estimated operating expenses for PY

2010.”3

20. As discussed in Section B, the operating expenses outlook for 2011 is a cost savings

of $26 million in comparison to the original 2011 plan, and the 2012 forecast is projected to

increase below the level of inflation. The 2011 outlook and 2012 forecast provided in Figure

7.2 are also shown in Figure 7.3. Certain adjustments are made to the 2012 forecast for

use in the actuarial rate indication including:

• Excluding an amount of $10 million relating to the annual pension and post-

retirement benefit adjustment, which arises from the variation in the rate which

is used to discount pension liabilities. This exclusion also applies to the 2011

outlook. This is further discussed in Section D.

• Applying the Commission-approved financial allocation methodology to allocate

the 2012 forecast between Basic and Optional insurance. This is further

discussed in Section E. ICBC demonstrates in Section E.2 that operating

expenses do not contribute to the Basic insurance rate increase requirement for

3 November 2010 Reasons for Decision, page 12.



the 2012 policy year. As shown in Figure 7.13, the impact of the 2012 forecast

operating expenses used in the actuarial analysis in Chapter 3, as compared to

the 2010 forecast approved by the Commission, represents a net zero percentage

point impact on the actuarial rate indication.

21. In addition, 2009 and 2010 actual operating expenses differ from the amounts

reported in Figures 7.1, 7.2, and 7.3 due to the exclusion of the costs associated with

ICBC’s Olympic sponsorship in 2009 and 2010, which were funded by Optional insurance.

D OPERATING EXPENSES FOR ACTUARIAL RATE INDICATION

22. In this Section, ICBC discusses the operating expenses used for the actuarial rate

indication (before allocation to Basic insurance).

23. The three main components of operating expenses for the actuarial rate indication

include: unique items, base operating expenses, and government initiatives.

• Unique items include pension and post-retirement benefit adjustments and one-

off non-recurring items. These unique items, which are addressed in Section D.1,

are segregated from base operating expenses to avoid skewing the normal trends

in operating expenses. The impact of the changes in accounting standards from

CGAAP to IFRS, in regards to pension and post-retirement benefit expenses, is

described. Also, for the 2011 outlook and 2012 forecast, ICBC has excluded from

each year a $10 million amount relating to the annual pension and post-

retirement benefit adjustment, which arises from the variation in the rate which

is used to discount pension liabilities.

• Base operating expenses represent ICBC’s core operations and are presented

exclusive of TP costs beginning in 2010 and the Olympic sponsorship costs for

2009 and 2010. The primary drivers of the increase in operating expenses for

the 2011 outlook and 2012 forecast are compensation, project expenses, and

depreciation. Section D.2 includes discussion of each of these factors and also

describes each of the other expense categories.

• The government initiatives category represents costs incurred by ICBC in support

of provincial or federal government initiatives. In some cases, ICBC has been

directed to pay the full costs of the program. Any costs to ICBC for these



government initiatives are funded 100% from Basic insurance in accordance with

Special Direction IC2. More detail on these costs is provided in Section D.3 and

descriptions of the various government initiatives are provided in Chapter 8.

24. Figure 7.4 provides the breakdown of operating expenses by these components and

for base operating expenses, segmented by expense category. Each of these amounts must

be allocated pursuant to the Commission-approved financial allocation methodology to

determine the portion recoverable through Basic insurance rates. For the actuarial analysis

in Chapter 3, ICBC expects the operating expenses for 2011 outlook to be $594 million and

for 2012 forecast to be $605 million.



Figure 7.4 – Operating Expenses by Expense Category

($ millions)

Expense Category* 2007

Actual (CGAAP)

2008 Actual

(CGAAP)

2009 Actual

(CGAAP)

2010 Actual

(CGAAP)

2010 Actual (IFRS)

2011 Outlook (IFRS)


Compensation (Figures 7.6, 7.7, 7.8) $ 360 $ 378 $ 389 $ 402 $ 402 $ 409 $ 416

Projects 32 30 31 20 20 23 23

Depreciation Expenses (Figure 7.9) 15 14 15 14 14 17 22

Road Improvements and Other Traffic Safety programs 11 10 9 10 10 10 11

Building Operating Expenses 27 28 30 32 32 32 32

Computer Costs 16 15 17 16 16 15 15

Professional Services 12 13 13 16 16 14 14

Printing Stationery and Supplies 12 11 10 10 10 10 10

Staff Related Expenses including Training 9 10 10 11 11 10 9

Other Operating Expenses 13 16 15 13 13 13 13

Base Operating Expenses** $ 507 $ 525 $ 539 $ 544 $ 544 $ 553 $ 565

Government Initiatives (Figure 7.10) 19 21 28 33 33 36 35

Unique Items (Figure 7.5) (4) (9) (7) (2) 12 5 5

Operating Expenses*** $ 522 $ 537 $ 560 $ 575 $ 589 $ 594 $ 605

Operating Expenses % Increase 2.9% 4.3% 2.7% 0.8% 1.9% * Some of the figures have been restated to conform to the current year’s presentation. ** Base operating expenses are total corporate operating expenses excluding Olympics and TP, less government initiatives and unique items. *** For the 2011 outlook and 2012 forecast, ICBC has excluded from each year a $10 million amount relating to the annual pension and post-retirement

benefit adjustment which arises from the variation in the rate which is used to discount pension liabilities.



25. Operating expenses shown in Figure 7.4 are prepared under CGAAP for 2007 to

2010. The 2009 and 2010 actual operating expenses under CGAAP differ from those shown

in Figures 7.1 and 7.2 due to the exclusion of ICBC’s Olympics Sponsorship in 2009 and

2010.

26. The 2011 outlook and 2012 forecast are reported under IFRS and are based on the

Plan as Revised provided in Figure 7.2. The 2010 actual operating expenses have been

restated on a comparable IFRS basis with the 2011 outlook and the 2012 forecast. It can

be seen that there is an increase of $14 million under unique items between the 2010

operating expenses under IFRS in comparison to that under CGAAP. As discussed in

Chapter 4, this increase is due to the change in accounting standards as they pertain to

pension and post-retirement benefit expenses.

27. The 2011 outlook and 2012 forecast differ from the equivalent operating expenses in

Figure 7.2 due to further exclusion of an adjustment to pension expenses which will be

applied from 2011 and in future years as explained in Section D.1.

28. The 2011 outlook under IFRS, at $594 million, is an increase of $5 million (0.8%)

over the 2010 actual operating expenses restated under IFRS. This moderate increase

reflects ICBC’s cost control measures implemented during the second half of 2011. The

increase in the 2012 forecast over the 2011 outlook is $11 million and reflects ICBC’s goal

of ensuring that increases in operating expenses are managed within inflation. Just under

half of this increase is a result of an increase in depreciation expenses as further described

in Section D.2.3.

29. Since ICBC has not completed its budgeting process for the 2012 fiscal year, some of

the expenses for the 2012 forecast might move between expense categories. However,

ICBC is committed to maintaining the increase in the 2012 forecast below the level of

inflation.

D.1 UNIQUE ITEMS

30. Unique items include pension and post-retirement benefit adjustments and one-off

non-recurring items. The most significant unique items since 2007 are set out in Figure 7.5.



Figure 7.5 – Unique Items

($ millions) Expense (Recovery)4

2007 Actual

(CGAAP)

2008 Actual

(CGAAP)

2009 Actual

(CGAAP)

2010 Actual

(CGAAP)

2010 Actual (IFRS)

2011 Outlook (IFRS)


Description

Pension and Post- Retirement Benefit Adjustment

$ (2) $ (5) $ (11) $ (2) $ 12 $ 5 $ 5 The difference between the standard benefit rate as a percentage of salary charged to each user division and the actual cost of benefit to ICBC.5

Expense indicates actual cost is higher than the standard rate. Recovery indicates actual cost is lower than standard rate.

Facilities Exit Costs

(2) Related to termination of a leased property.

Surrey Goods and Services Tax

(3) 4 Goods and Services Tax liability and adjustment related to the lease termination settlement from the Surrey Central City development.

Other (1) Miscellaneous items.

Total $ (4) $ (9) $ (7) $ (2) $ 12 $ 5 $ 5

4 Expense indicates a cost to ICBC, whereas a recovery (negative) figure represents a miscellaneous income. 5 Pension and post-retirement benefit adjustment was explained in detail in the 2007 Revenue Requirements Application, Chapter 7.7, page 7.7-2.



31. The estimated cost of employee benefits including pensions is included under

compensation using a ratio associated with compensation dollars. At the end of every year,

the actual cost of employee benefits is reconciled and compared to the estimated cost. Any

excess or deficiency is largely due to changes in the prevailing interest rates which impact

the discounting of pension liabilities. Therefore, the excess or deficiency which fluctuates

considerably from year to year is beyond ICBC’s control. A decrease in the discount rate

increases the benefit expense because it increases the present value of the total amount of

benefits to be paid out in the future.6

32. From 2009 to 2010, there was a net increase in pension expenses (as indicated by a

lower recovery amount). The pension and post-retirement benefit adjustment for 2010 is

reflected in Figure 7.5 under the CGAAP accounting rules and also as restated under IFRS.

As discussed in Chapter 4, there is an increase of $14 million between the 2010 operating

expenses under IFRS in comparison to that under CGAAP. The impact of the change in

accounting standards from CGAAP to IFRS is an increase to the pension and post-retirement

benefit expense base for 2011 and future years. For the 2011 outlook and 2012 forecast,

the pension and post-retirement benefit adjustment is reflected under IFRS inclusive of the

higher expense base.

33. In both the 2011 outlook and 2012 forecast, ICBC has excluded from operating

expenses used for the actuarial rate indication a $10 million amount relating to the annual

pension and post-retirement benefit adjustment, which arises due to the variation in the

rate which is used to discount pension liabilities. This adjustment can fluctuate significantly

from year to year due to variations in the discount rate. The pension and post-retirement

liability is long-term. Payments are made to employees upon retirement and therefore are

spread over a long period of time. Meanwhile, the interest rate used to discount pension

liabilities may fluctuate up and down during this long period. ICBC believes that this

component of the pension and post-retirement benefit adjustment should be excluded from

operating expenses in order to remove the impact of this variability on Basic insurance

rates, to help keep rates more stable.

6 Present value represents the value of future benefits in today’s dollar. As discount rate decreases, a lower return is earned between today and when the benefit is paid. Therefore, it requires a higher expense today to fund the future benefits.



34. The decrease in the pension and post-retirement benefit adjustment under IFRS from

2010 actual to 2011 outlook is largely a result of this exclusion and it is assumed that the

adjustment will be the same for the 2012 forecast.

D.2 BASE OPERATING EXPENSES

35. The average growth in base operating expenses from 2007 to 2010 was 2.4% per

annum. Over this period, the biggest driver of the increase in base operating expenses was

compensation, which was impacted by the number of FTEs, employee mix, and

compensation level changes.

36. In comparison, for the 2011 outlook and 2012 forecast, base operating expenses are

projected to grow at a lower average annual rate of 1.9%. This is mostly due to the cost

control measures described in Section B. Compensation, which accounts for a significant

component of overall base operating expenses, is expected to grow at 1.7% over this

period, which is below the level of inflation. In the sections below the various expense

categories are discussed, with a focus on those that are cost drivers for the 2012 forecast.

In addition, where relevant, the expected impact of cost control measures is explained.

D.2.1 COMPENSATION

37. The compensation expense category includes salaries, benefits, and performance-

based incentive pay. Key benefits include employer contributions of pensions, medical and

dental benefits, WorkSafe BC, Employment Insurance, and Canada Pension Plan costs. The

compensation expense category represents approximately 74% of the base operating

expenses.

38. Figure 7.6 summarizes total compensation for the years between 2007 and 2012

forecast. It also breaks down the total compensation by employee group.



Figure 7.6 – Compensation by Employee Group

Employee Group

($ millions)

2007 Actual

2008 Actual

2009 Actual

2010 Actual

2011 Outlook

2012 Forecast

Bargaining Unit $ 264 $ 273 $ 275 $ 273 $ 272 $ 278

Management and Confidential 103 112 124 135 144 147

Employee Compensation $ 367 $ 385 $ 399 $ 408 $ 416 $ 425

Charged to Projects7 (7) (7) (10) (6) (7) (9)

Net Compensation $ 360 $ 378 $ 389 $ 402 $ 409 $ 416

39. Employees who are members of the Bargaining Unit (BU) belong to the Canadian

Office and Professional Employees Union (COPE), Local 378. The Management and

Confidential employee group represents all employees who are non-BU members such as

management, executives, professionals, and staff handling confidential information.

40. Compensation costs for BU employees account for approximately 70% of employee

compensation and have been consistent for the years 2007 to 2010. Compensation levels

and performance-based incentive pay (i.e., gainsharing) have been in accordance with the

terms of the 2006 to 2010 Collective Agreement with COPE.

41. Management and Confidential compensation costs have been increasing from 2007

mainly due to an increase in the number of FTEs in this employee group, and ICBC’s

adoption of a labour market position for total compensation based on the markets in which

ICBC competes for talent.

42. The compensation cost increase projected for 2011 outlook and 2012 forecast is

attributed mainly to a combination of changes in the number of FTEs and employee mix. As

there is a net zero compensation rate increase mandate set by the Public Sector Employers'

Council (PSEC), compensation level changes include only BU length-of-service and

Management and Confidential performance-based wage adjustments, together with

expected changes in performance-based incentive pay. The overall projected increase in

compensation in 2011 and 2012 is expected to average 1.7% per annum.

7 Employees and contractors who work on corporate projects are charged to the “project” category in Figure 7.4 and therefore excluded from the compensation category.



43. In the sections below, ICBC discusses the major drivers impacting compensation for

the 2011 outlook and 2012 forecast, based on number of FTEs, employee mix, and

compensation level changes.

D.2.1.1 NUMBER OF FTES

44. Figure 7.7 below summarizes ICBC’s total FTEs between 2007 and 2012 forecast and

also breaks down the count by employee group.

Figure 7.7 – FTEs by Employee Group

Employee Group 2007 Actual

2008 Actual

2009 Actual

2010 Actual

2011 Outlook

2012 Forecast

Bargaining Unit (BU) 4,092 4,044 4,009 3,961 3,938 3,929

Management and Confidential 855 890 972 968 1,070 1,086

Total ICBC FTEs 4,947 4,934 4,981 4,929 5,008 5,015

Contractors 58 73 85 52 74 59

Total FTEs8 5,005 5,007 5,066 4,981 5,082 5,074

45. Over the period from 2007 to 2010, the total number of ICBC FTEs remained

relatively flat. Total FTEs, which include contractors, increased from 2007 to 2009 after

which in 2010 there was a marked dip.

46. The growth in the number of FTEs from 2007 to 2009 is discussed in the 2010

Streamlined Revenue Requirements Application. From 2007 to 2009 there was more

management oversight in the Claims Division in order to improve claims handling quality

and to effectively manage risk. At the same time, there was a reduction in BU staff in the

Claims Division due to the elimination of the examining adjuster position and vacancies left

unfilled as a result of lower claims volumes.

47. Over the same period, the Finance Division had additional staffing to increase

financial governance, enhance risk management, strengthen analytical capabilities, and

8 Total FTEs exclude employees and contractors who are seconded to support TP and Olympics, both funded 100% by Optional insurance. Total FTEs also exclude employees working on government initiatives which are cost recoverable.



support increased volume in supply management activities. The Driver Licensing Division

increased its number of FTEs to improve customer service, to reduce wait times, and to

address management span of control.

48. In 2010 there was a marked dip in the total number of FTEs largely due to the

commencement of TP that year. The number of BU FTEs decreased due to the secondment

of staff to work on TP projects. These FTEs are not shown in Figure 7.7 because their

compensation costs are charged to TP and therefore are covered by Optional insurance.

The BU FTEs diverted to TP projects included business analysts, business subject matter

experts, and information technology specialists. The further decrease in BU FTEs in the

2011 outlook is partially due to this same reason. Also, ICBC has not increased BU staffing

at this time as a result of the organizational change which the Claims Division is undergoing

as further discussed in Chapter 6.

49. Some Management and Confidential FTEs were seconded to support TP projects

during 2010 and either returned to their core positions in 2011 or were backfilled. The

2011 outlook also reflects an increase in Management and Confidential staff associated with

ICBC’s need to build new capabilities in the underlying infrastructure in support of more

sophisticated and diverse information technology. For example, in order to prepare for

attrition as well as the new business environment emergent from the TP mandate, the

Information Services Division is building a team to migrate to new technology and to effect

transfer of knowledge while at the same time continuing to support the current legacy

systems. Overall, the new Management and Confidential employees consist of FTEs who

possess technical or specialized skills, and managers who oversee and implement the

changes to ICBC’s current business model.

D.2.1.2 FTE MIX

50. FTE growth between 2007 and 2012 forecast is concentrated in the Management and

Confidential employee group. The remuneration of Management and Confidential

employees is, in general, greater than the remuneration of BU employees. As a result, the

change in the employee mix has contributed to the overall compensation cost increase

between 2007 and 2012 forecast.



D.2.1.3 COMPENSATION LEVEL CHANGES

51. ICBC’s compensation expenses are based on its business need to provide competitive

compensation and benefits in order to attract and retain a high calibre of employees. ICBC

has been in compliance with the net zero compensation rate increase mandate set by PSEC.

As a result, compensation level changes include only length-of-service and performance-

based wage adjustments, together with expected changes in performance-based incentive

pay.

52. Figure 7.8 shows the average compensation for ICBC FTEs. Since contractors are

predominantly charged to projects their costs are reflected in that cost category and not in

compensation.

Figure 7.8 – Average Compensation for ICBC Employees

2007 Actual

2008 Actual

2009 Actual

2010 Actual

2011 Outlook

2012 Forecast

Employee Compensation ($ millions)

$ 367 $ 385 $ 399 $ 408 $ 416 $ 425

Total ICBC FTEs 4,947 4,934 4,981 4,929 5,008 5,015

Average compensation per ICBC FTE9

$74,186

$78,030 $80,104 $82,775 $83,067 $84,746

53. From 2007 to 2010, BU employee salaries and performance-based incentive pay

increased in keeping with the terms of the 2006 to 2010 Collective Agreement with COPE.

54. During this same period, Management and Confidential compensation grew owing to

ICBC’s adoption of a labour market position for total compensation based on the markets in

which ICBC competes for talent. The compensation market position is stated as the market

median (P50) for similar positions within the following three, equally weighted comparator

groups:

• Canadian Insurance Companies with assets between $1 and $15 billion.

9 Average compensation per ICBC FTE is calculated using dollar amounts in the millions, as shown in Figures 7.6 and 7.8.



• Canadian Broad Industry with revenue between $1 and $10 billion.

• Canadian Government, Quasi-Government, and Crown Corporations.

This mix of market comparators most accurately reflects ICBC’s role as a Crown

corporation. It is in this market that ICBC competes for the talent necessary to run a

company with $3.7 billion in revenues, $13.1 billion in assets, and 5,200 employees.10

55. Over the period from 2007 to 2010 the average compensation increased partially due

to performance-based Management and Confidential wage adjustments within the wage

budget approved by the Board of Directors and PSEC on an annual basis. ICBC’s relatively

strong annual financial performance during this period influenced the level of performance-

based incentive pay for both Management and Confidential and BU employees.

56. Performance-based incentive pay for Management and Confidential employees is

determined by the performance level of corporate, divisional, and individual measures while

performance-based incentive pay (i.e., gainsharing) for BU employees was governed by the

Collective Agreement based on corporate measures only.

57. Performance-based compensation provides an incentive to employees to focus their

efforts on agreed-upon objectives which are important to customers and to the corporate

strategy. Performance-based compensation is common in public and private sector

organizations, including many insurance companies. During 2010 ICBC reviewed its

performance-based incentive pay policy for Management and Confidential staff by ensuring

that performance objectives and targets were more challenging to achieve.

58. For 2011 ICBC’s financial results are not likely to meet all targets. Performance-

based incentive payments are therefore expected to be lower than in 2010 for both groups

of employees. Since there is also currently a net zero compensation rate increase mandate

set by the PSEC, the 2011 average compensation per FTE is expected to show only a minor

increase from the 2010 level, mainly due to length-of-service and in-range performance-

based wage adjustments.

59. The 2012 average compensation level reflects a modest increase in performance-

based incentive pay from the 2011 level. The 2012 performance-based incentive pay is

based on the expectation that performance targets will likely be met for both groups of

10 From ICBC’s 2010 Annual Report provided as Appendix 11 C.



ICBC employees. For BU employees, gainsharing is expected to continue despite the

absence of a new collective agreement.

D.2.2 PROJECTS

60. The projects expense category reflects the cost of non-TP projects. TP projects are

not included in the operating expenses shown in Figure 7.4. Project costs include internal

costs (ICBC staff charged to projects) and external costs, such as professional fees,

computer, and contractor costs.

61. From 2007 to 2009, before the commencement of TP, ICBC funded projects at a

level of approximately 6% of total operating expenses. In 2010, ICBC conducted non-TP

projects at a much lower level than in the past, due to the simultaneous work on the

initiation of many TP projects and on formalizing the governance model for TP within ICBC.

62. In 2011, many of the TP projects are now well underway. Due to the project

prioritization process listed as one of the cost control measures in Section B, the level of

project costs for non-TP projects in 2011 and 2012 has been contained at $23 million, lower

than the pre-TP level in 2009 of $31 million.

D.2.3 DEPRECIATION

63. Depreciation expenses are associated with capital expenditures for non-TP projects

and government initiatives from current and prior years. Total depreciation for 2007 to

2012 resulting from capital expenditures is shown in Figure 7.9 below. The depreciation

associated with government initiatives is discussed in Section D.3 and is not reflected in

Figure 7.9.



Figure 7.9 – Depreciation of Capital Expenditures

($millions)

Project 2007 Actual

2008 Actual

2009 Actual

2010 Actual

2011 Outlook

2012 Forecast

Base Depreciation

Information Technology $ 9 $ 8 $ 9 $ 9 $ 9 $ 9

Facilities and Other Capital 6 6 6 5 6 7

Total Base Depreciation 15 14 15 14 15 16

Data Centre Relocation - - - - 1 2

Disaster Recovery Second Site (DRSS) - - - - - 1

Voice over Internet Protocol (VoIP) - - - - 1 2

Genesys Upgrade - - - - - 1

Total Depreciation $ 15 $ 14 $ 15 $ 14 $ 17 $ 22

64. In the past few years, ICBC has invested in the areas of information technology and

facilities capital projects. For the period from 2007 to 2010 depreciation has been in the

range of $14 to $15 million. The 2011 outlook reflects an increase of $3 million from 2010

actual mostly due to capital expenditure for the data centre relocation, facilities, and voice

over internet protocol (VoIP) projects. The 2012 forecast shows an increase of $5 million

over the 2011 outlook due to the data centre relocation, facilities, VoIP, plus two other

projects: the Disaster Recovery Second Site (DRSS) and the Genesys Upgrade.

65. The data centre relocation project involved the acquisition and installation of

computer equipment to equip and relocate ICBC’s primary data centre to a new site. The

previous site at ICBC’s head office was in excess of 25 years old and required significant

upgrading to maintain its level of reliability. Maintaining the data centre was not considered

a viable long-term solution due to the cost to maintain and upgrade the old data centre and

the risk to reliable daily business operations. In order to mitigate this risk, the relocation of

the data centre was initiated in 2009 and finalized during 2011 with depreciation

commencing in that year.

66. VoIP consists of the replacement of voice switches that are at or near end-of-life and

includes an upgrade to ICBC’s primary telephone switches and all telephone handsets to



VoIP in coordination with the Genesys Upgrade. The Genesys Upgrade is for the upgrade of

ICBC’s call-routing system used by its contact centres.

67. Capital investments related to facilities include modifications to existing facilities to

improve functional requirements for customers and staff and to optimize space, and repairs

to buildings. In addition, there are costs for the new Port Coquitlam driver licensing centre,

an ICBC-owned facility that replaced an outdated leased facility. Other facilities investments

consist of a number of other smaller projects. All of these costs are reflected as “Facilities

and Other Capital” in Figure 7.9.

68. In 2011, ICBC invested in a new disaster recovery program. The DRSS project

mitigates the increasing operational risk associated with ICBC’s transition away from

mainframe technology to commercial-off-the-shelf applications and distributed computing

systems. Depreciation of the associated capital costs commences in 2012 and is included in

the 2012 forecast.

D.2.4 OTHER CATEGORIES

69. In this Section the other expense categories indicated in Figure 7.4 are discussed

with reference to changes in the 2011 outlook and the 2012 forecast. These changes reflect

some decreases as a result of cost control measures as discussed in Section B.

D.2.4.1 ROAD IMPROVEMENTS AND OTHER TRAFFIC SAFETY PROGRAMS

70. Road improvements and other traffic safety programs are the costs incurred by the

Corporate Affairs Division for road improvements, advertising campaigns, and other

programs that help prevent traffic crashes and auto crime. The costs for the Traffic and

Law Enforcement Funding Memorandum of Understanding (Road Safety MOU) are reflected

in the Government Initiatives category. For the years 2007 to 2010, 2011 outlook, and

2012 forecast, expenditures on road improvements and other traffic safety programs range

from $9 to $11 million. The largest portion of this expense category is for road

improvements which have significant claims savings benefits as discussed in Chapter 10.

D.2.4.2 BUILDING COSTS

71. Building operating expenses are the costs incurred by ICBC to operate all properties

used for the Insurance and Non-insurance operations. Major expense categories include

rent, repairs, maintenance, security, utilities, property taxes, and janitorial services.



72. Building expenses are expected to be unchanged from 2010 through to the 2012

forecast. This will be achieved with better utilization of existing space and the initiation of

reduction in some leased space where possible.

D.2.4.3 COMPUTER COSTS

73. ICBC employs technology in support of its key business functions. Computer costs

include expenditures relating to computer software, hardware, internet, telephone, and

email systems.

74. For the 2007 to 2010 period, computer costs range from $15 to $17 million. The

2011 outlook and the 2012 forecast at $15 million reflect ICBC’s cost control measures to

manage spending in the area of technology.

D.2.4.4 PROFESSIONAL SERVICES

75. Professional services include the cost of outside legal, actuarial, audit, pension, and

strategic consulting expertise. The costs for these services increased to $16 million in 2010

due to the initiation of translator services in response to the needs of changing customer

demographics and an enhanced employee care management program to address employee

absenteeism.

76. The 2011 outlook and 2012 forecast for professional services are expected to

decrease to $14 million. This is reflective of ICBC’s cost management efforts to control

external service business expenditures.

D.2.4.5 PRINTING STATIONERY AND SUPPLIES

77. Printing stationery and supplies include the cost of general office supplies,

publication materials, photocopying, licence plates, and decals. For the 2011 outlook and

2012 forecast, these costs are expected to be $10 million, which is consistent with historical

norms.

D.2.4.6 STAFF RELATED EXPENSES INCLUDING TRAINING

78. This expense category includes employment expenses, professional dues, staff

relations, training, and travel related to training. Staff related costs such as training,

learning, and development, are necessary to support ICBC’s strategic objective of making

sure staff have the capabilities and competencies to serve customers and to keep current



with new business processes, systems, tools, and technology. In addition, this commitment

ICBC has made to providing appropriate training to staff in an evolving work environment

also assists in improving the employee experience.

79. ICBC has committed to limit spending in the area of travel and staff relations

expenses in order to control the growth of operating expenses. In 2011, the expenses in

this category are anticipated to decrease by $1 million from the 2010 actual results, with a

further decrease of $1 million projected for 2012.

D.2.4.7 OTHER OPERATING EXPENSES

80. Other operating expenses include miscellaneous expenses such as bad debt

expenses and recoveries, advertising, promotion, postage, severance costs, outside

information processing, telecommunications, vehicle expenses, and bank charges. For the

2011 outlook and 2012 forecast, these costs are expected to be $13 million which is

consistent with the 2010 actual results.

D.3 GOVERNMENT INITIATIVES

81. Government initiatives are expenses incurred by ICBC in support of provincial or

federal government initiatives. Figure 7.10 provides a summary of the government

initiatives funded through Basic insurance rates between 2007 and 2010, 2011 outlook, and

2012 forecast.



Figure 7.10 – Government Initiatives

($ millions)

Program 2007 Actual

2008 Actual

2009 Actual

2010 Actual

2011 Outlook

2012 Forecast

Program Description and Relevant Payment Arrangements

Road Safety MOU $ 17 $ 18 $ 25 $ 26 $ 26 $ 26

Payment based on percentage of Basic insurance premium earned. Increase in 2009 primarily due to increase of formula from 1% to 1.25%.

Helicopter for Enhanced Police Enforcement

2 Per government direction letter.

Intersection Safety Camera Program 2 2 3 5 4 Road safety program in which ICBC

participates.

Distracted Driving Campaign 2 1 1

Education and awareness campaign to support new legislation restricting the use of personal electronic communication devices in vehicles.

Canadian Driver Licence Agreement (CDLA)

2 Provincial agreement signed to support BC in meeting standards of CDLA.

Driver Licensing Security 1 1 1 1 1

Measures to enhance driver licensing security, such as digital picture identification technology, facial recognition and other security features for driver’s licences and ID cards.

Impaired Driving 1 3 1 Including new roadside prohibitions and changes to vehicle impoundment.

Total $ 19 $ 21 $ 28 $ 33 $ 36 $ 35



82. The costs in support of government initiatives rose significantly in 2009 mostly due

to an increase in the payment under the Road Safety MOU. The Road Safety MOU payment

is based on a percentage of Basic insurance premiums earned. In 2009 and later years, the

formula increased from 1% to 1.25%. ICBC is currently in discussion with government to

renegotiate the terms of the Road Safety MOU, including funding, as it expires on March 31,

2012.

83. In 2010, government initiatives increased due to the Distracted Driving campaign

and the implementation of impaired driving administrative sanctions, which included new

roadside prohibitions and changes to vehicle impoundment.

84. The 2011 outlook reflects higher spending in comparison to 2010 largely as a result

of depreciation costs associated with the intersection safety camera program. As discussed

in Chapter 3, claims savings from this program are included in the actuarial analysis. In

addition there has been a cost increase for the impaired driving administrative sanctions

programs, which is partially offset by a decrease in spending on the Distracted Driving

campaign. The 2012 forecast is expected to remain at approximately the same level as the

2011 outlook. Lower costs in the impaired driving administrative sanctions program are

offset by an increase in costs associated with the Canadian Driver Licence Agreement

initiative.

85. Figure 7.4 does not include government initiatives for which ICBC will recover costs

from user fees or through government funding, as these do not impact Basic insurance

rates. According to a funding framework agreed to with government, the funding for

government initiatives will be on a cost recovery basis unless there is a reasonable prospect

for claims savings or a direction letter from the government directing ICBC to bear costs.

Recoverable costs are recorded as accounts receivable so there is no impact to operating

expenses or Basic insurance rates. The accounts receivable is then reduced through user

fees, billing to government, or another manner if alternative arrangements have been

made. Further information on both categories of government initiatives (those which ICBC

funds and those for which ICBC will recover costs) is found in Chapter 8.



E ALLOCATION OF OPERATING EXPENSES FOR ACTUARIAL RATE INDICATION TO BASIC INSURANCE

E.1 FINANCIAL REPORTING VIEW OF OPERATING EXPENSES

86. The purpose of this Section is to show the amount of ICBC’s 2012 forecast operating

expenses that is allocated to Basic insurance lines of business, using the Commission-

approved financial allocation methodology and resulting allocation percentages.

87. Only the Basic insurance and Non-insurance portions of the 2012 operating expense

forecast have been incorporated in the actuarial rate indication. Figure 7.11 below shows

how the 2012 forecast of $605 million is segregated into the Basic insurance portion in the

view used for the actuarial rate indication (the financial reporting view).

Figure 7.11 – Financial Reporting View of Operating Expenses for 2012 and Allocation to Basic Insurance

($ millions) 2012 Forecast

Operating Expense Components Corporate

(A) Basic (B)

Basic % (B/A)

Claims Services $ 267 $ 162 61

Operating Expenses (Less Claims Services)

Road Safety and Loss Management Services 59 55 92

Administrative – Insurance 132 66 50

Insurance Services 58 30 52

Administrative – Non-insurance 34 34 100

Driver Licensing 55 55 100

Sub-Total Operating Expenses (Less Claims Services) 338 240 71

Operating Expenses for 2012 per Figure 7.4 $ 605 $ 402 66



88. The forecast operating expenses for Basic insurance (Column B) in each row of

Figure 7.11 are derived by applying the Commission-approved financial allocation

methodology at the cost centre level, then aggregating all of the cost centres that are

included in the specified operating expense components.

89. The Basic insurance operating expenses are expressed as a percentage of the 2012

forecast operating expenses. This is labeled as Basic % and is calculated as Basic $

(Column B) divided by Corporate $ (Column A). Rounding may affect percentages.

90. The Basic insurance actuarial rate indication analysis uses the forecast Basic

insurance operating expenses (other than claims services) as an input, and then translates

these operating expenses from a calendar year basis to a policy year basis using accepted

actuarial practice.

91. The Basic insurance claims services expenses are included in the actuarial rate

indication analysis and forecast to the 2012 policy year. This forecast is based on a

standard actuarial methodology and is discussed in Chapter 3. This is consistent with the

actuarial analysis as presented in previous revenue requirements applications.

92. Figure 7.12 below illustrates how the Basic insurance figures in Figure 7.11 are used

in the actuarial analysis in Chapter 3 (see Exhibit H.2). As illustrated in Figure 7.12, the

actuarial analysis rows (a, b, c, e, and f) agree to Column B in Figure 7.11. For 2013 and

2014, operating expenses are assumed to increase by 1.8% which is in line with ICBC’s

commitment to manage 2012 operating expenses within inflation.



Figure 7.12 – Tie-in of Basic Operating Expenses to Actuarial Rate Indication Analysis Excerpt ($000’s)

E.2 IMPACT OF INCREASE IN 2012 FORECAST ON ACTUARIAL RATE INDICATION

93. In the November 2010 Reasons for Decision the Commission ordered that “the

Application to decrease Basic insurance rates by 1.9 percent for the 2010 Policy Year is

modified to require a decrease of 2.4 percent, comprising the 1.9 percent applied-for rate

reduction plus a further 0.5 percent rate reduction for Commission determined adjustments

to operating costs.”11 The 0.5 percentage point reduction in the rate was based on a 2.8%

reduction in the 2010 forecast operating expenses used in the actuarial analysis. The

Commission explained that “…2.8 percent is a reasonable estimate of the likely extent of

ICBC’s over-estimated operating expenses for PY 2010.”12

11 November 2010 Reasons for Decision, pages 12-13.

12 Ibid, page 12.

Projected Policy Year (PY) 2012 Operating Expense Amounts Allocated to Basic Insurance Coverages($ 000's)

Calendar Year (CY) 2012 Basic ExpensesThird Party

Liability Part 7Third Party

Liability/Part 7Collision /

Specified PerilsBasic Totalsum[(1):(4)]

(1) (2) (1) (2) (3) (4) (5) (a) Road Safety and Loss Management Services 49,131 4,276 1,337 68 54,812

Insurance(b) Operating Costs - Admin. & Other 59,085 5,142 1,608 81 65,916(c) Operating Costs - Insurance Services 27,315 2,377 743 38 30,473(d) Insurance Total 86,399 7,519 2,352 119 96,389

Non-Insurance(e) Administrative & Other 30,791 2,680 838 42 34,351(f) Driver Licensing 49,053 4,269 1,335 68 54,725(g) Non-Insurance Total 0 0 79,844 6,949 2,173 110 89,076

(h) Total Basic Operating Expenses (a) + (d) + (g) 0 0 215,374 18,744 5,862 297 240,277

Building Policy Year 2012 Expenses from the Above CY 2012 ExpensesThird Party

Liability Part 7Third Party

Liability/Part 7Collision /

Specified Perils Basic Total(i) PY Expense Incurred in CY 2012: Total (h) * (m) 91,965 8,004 2,503 127 102,599 (j) PY Expense Incurred in CY 2013: Total (h) * (n) * (1+(p)) 123,438 10,743 3,360 170 137,711 (k) PY Expense Incurred in CY 2014: Total (h) * (o) * (1+(p)) * (1+(q)) 2,232 194 61 3 2,490 (l) Total Policy Year 2012 Basic Expense 217,635 18,941 5,924 300 242,800

Assumptions:

(m) % of 2012 calendar year expenses attributable to policies effective in PY 2012 42.7% From Exhibit H.3 Col (3) Row (i)(n) % of 2013 calendar year expenses attributable to policies effective in PY 2012 56.3% From Exhibit H.3 Col (5) Row (i)(o) % of 2014 calendar year expenses attributable to policies effective in PY 2012 1.0% From Exhibit H.3 Col (7) Row (i)(p) % anticipated annual operating expense increase to 2013 1.8%(q) % anticipated annual operating expense increase to 2014 1.8%

1.8%Note:

Plate Owner Manual

Plate Owner Manual

(a) through (h) Source: 2012 Plan provided by the Corporate Accounting Department



94. The derivation of the operating expenses used in the actuarial analysis of the 2010

Streamlined Revenue Requirements Application (2010 operating expenses before

adjustment) is based on the 2010 forecast operating expenses as shown in Exhibit H.1.13

95. In Figure 7.13 the 2010 operating expenses before adjustment are provided in line

1. Similarly the 2010 operating expenses adjusted by 2.8% as indicated above (the 2010

operating expenses after adjustment) are shown on line 2 and also reflected on a per policy

basis.

The 2010 forecast operating expenses are allocated to Basic insurance according to the

Commission-approved financial allocation methodology and are projected forward to the

2010 policy year.

Figure 7.13 – Calculation of Impact of Increase in Operating Expenses on Actuarial Rate Indication

Line Operating Expense Element Operating Expenses ($000’s)

Number of Policies14

Operating Expenses

($ per policy)

($000’s)

1 2010 Operating Expenses Before Adjustment 235,507

2 2010 Operating Expenses After Adjustment 228,913 2,935 78

3 2012 Operating Expenses Including IFRS Change 242,800

4 2012 Operating Expenses Excluding IFRS Change 234,121 2,996 78

5 IFRS Change 8,679 2,996 3

96. For the 2012 policy year the derivation of the operating expenses used in the

actuarial analysis in Chapter 3 (2012 operating expenses including IFRS change) are shown

in Figure 7.12. In Figure 7.13 the 2012 operating expenses including IFRS change are

shown in line 3. As discussed in Chapter 4, there is an increase in pension and post-

retirement benefit expenses as a result of the 2011 transition to IFRS. Line 4 shows the

2012 operating expenses excluding the IFRS impact and also the per policy value on a

comparative basis with line 2. It can be seen that on a per policy basis there is no dollar

13 From Exhibit H.1 of Chapter 3 of the 2010 Streamlined Revenue Requirements Application. 14 See Exhibit set B of the current Application and Exhibit Set B from the 2010 Streamlined Revenue Requirements Application.



difference between lines 2 and 4, representing a net zero percentage point impact on the

actuarial rate indication.

97. The impact of the IFRS change is isolated on line 5. The $3 per policy value

represents a 0.4 percentage point impact on the actuarial rate indication.

E.3 YEAR TO YEAR BASIC INSURANCE ALLOCATION PERCENTAGES

98. The purpose of Figure 7.14 is to illustrate the year to year Basic insurance

percentage of corporate expenses excluding TP over previous years, the 2011 outlook, and

the 2012 forecast. As indicated in Figure 7.14, the Basic insurance allocation percentage is

fairly consistent from year to year and is indicative that allocation does not have a material

impact on Basic insurance costs used in the actuarial rate indication analysis.

Figure 7.14 – Year to Year Basic Insurance Allocation Percentages

2009

Actual 2010

Actual 2011

Outlook 2012

Forecast

Claims Services 61% 61% 61% 61%

Road Safety and Loss Management 93% 93% 92% 92%

Administrative - Insurance 50% 50% 50% 50%

Insurance Services 55% 53% 53% 52%

Administrative - Non-insurance 100% 100% 100% 100%

Driver Licensing 100% 100% 100% 100%

Total 67% 67% 66% 66%

99. Slight variations in Basic insurance percentages are due to spending patterns unique

to the year and/or due to changes in Commission-approved financial allocation

methodology.

100. As a result of lower spending on Basic insurance projects (including the project to

initiate Driver Risk Premiums), the Basic insurance percentage for Insurance Services

decreased from 55% to 53% in 2010. However, as Insurance Services is approximately

10% of corporate expenses, it did not have a material impact on the total Basic insurance

percentage. Detailed cost allocation tables are provided in Appendix 7 A for the 2010 actual

corporate operating expenses.



101. The total Basic insurance percentage is expected to decrease slightly in 2011 from

67% to 66%. This is due to road safety programs that are allocated mostly to Basic

insurance (see Section E.1 of Chapter 10 on Road Safety), resulting in a decrease in the

overall Basic insurance percentage for Road Safety and Loss Management from 93% to

92%.

102. The total Basic insurance percentage is expected to remain level at 66% in 2012. A

small decrease in the Basic percentage for Insurance Services is forecast due to a general

provision for insurance-related costs allocated at a lower Basic insurance percentage.

However, as Insurance Services makes up only a small portion of corporate expenses, it

does not have a material impact on the total Basic insurance percentage.

103. The Claims Division is currently undergoing reorganization, moving from a

geographic-centric claims delivery service to a functional-centric service based on claim

type, risk, and complexity. The first step of the reorganization involved aligning the claims

organization structure within the new functional model with the goal of having the full

reorganization completed before implementation of the claims system changes. The interim

changes will not materially affect the Basic/Optional allocation.

104. On November 17, 2011, the Commission issued Letter L-87-11 indicating its

acceptance of ICBC’s Filing of the 2011 Regional Claim Centres Detailed Work Effort Study

(2011 Work Effort Study). The Filing included an updated Regional Claim Centres Allocation

(RCCA). Given the short time frame between the acceptance of the 2011 Work Effort Study

filing and this Application, there was insufficient time to include the updated RCCA in the

actuarial analysis.

F CONCLUSION

105. In this Chapter, ICBC has explained that higher bodily injury claims costs than

forecast identified in mid-2011 led to the initiation of a suite of operating cost control

measures. The 2011 outlook for operating expenses has been reduced by $26 million in

comparison to the original 2011 plan. For the 2012 forecast, ICBC is committed to

containing operating expense increases below the level of inflation as explained in Section

B.



106. Compensation, project costs, and depreciation are the main drivers of the expected

increase in operating expenses for 2011 and 2012 and ICBC has indicated where cost

control measures have been applied to achieve the lower levels of operating expenses.

107. Through ICBC’s cost control measures and management initiatives, operating

expenses will not contribute to the rate increase requested in this Application.


APPENDIX 7 A COST ALLOCATION TABLES


Insurance Corporation of British Columbia 7A-i December 1, 2011

Table of Figures Figure 7.A.1 – Allocator Description ......................................................................... 7A-1

Figure 7.A.2 – 2010 Approved Allocators Using 2010 Actual Cost Detail ....................... 7A-3


Insurance Corporation of British Columbia 7A-1 December 1, 2011

ALLOCATION TABLES

1. The purpose of Figure 7.A.1 and Figure 7.A.2 is to show detailed views of the amount

of ICBC’s 2010 corporate operating expenses excluding TP that are allocated to the Basic

insurance, Non-insurance, and Optional insurance lines of business, using the Commission-

approved financial allocation methodology and the resulting allocation percentages.

• Figure 7.A.1 describes the allocators used.

• Figure 7.A.2 shows the results of applying these allocators using 2010 actual cost

detail.

Figure 7.A.1 – Allocator Description

Allocator Description

Directly Attributable

Directly attributable to Basic Directly attributable to Basic insurance

Directly attributable to Non-insurance Directly attributable to Non-insurance

Directly attributable to Optional Directly attributable to Optional insurance

Work Effort

Work Effort Ratio based on analysis of underlying work activities within the cost centre

Work Effort – Provincial Litigation Based on volume of low value Bodily Injury files

100% Basic with Exceptions Directly attributable to Basic insurance, except for autocrime expenditures

Averages

Claims Division Average Weighted average of Claims cost centres

Insurance Division Average Weighted average of Insurance Services cost centres in the Insurance Division (Non-insurance charged to Basic)

Road Safety Division Average Weighted average of Road Safety and Loss Management cost centres

Square Footage Average of each business area weighted by square footage

Weighted Average – Projects Weighted average of projects undertaken by the cost centre

Weighted Average – Cost Centres Weighted average of cost centres that it supports

Weighted Average – Transactions Weighted average based on transactions processed

Weighted Average – Special Coverages Weighted average based on special coverage premiums

Weighted Average – FTE’s Weighted average based on number of Full Time Equivalent (FTE’s) staff performing a function



Allocator Description

Premiums

Premiums Written Based on annual Autoplan Premiums Written, adjusted for Non-insurance portion per January 2005 Decision

Premiums Written – with Exception Premiums written ratio except for certain expenses which are 100% Basic or 100% Optional

Commercial Vehicle Premiums Written Based on annual Commercial Vehicle Premiums Earned

Claims

Newly Opened Exposures – TCD Allocated based on newly opened exposures in Claims Contact Centre (formerly known as Telephone Claims Department)

Net Claims Costs – OOP Allocated based on Out of Province (OOP) net claims costs

Net Claims Costs – HOC Allocated based on average of Head Office Claims (HOC) incurred costs

Net Claims Costs – OOP AC Allocated based on average of Out of Province Aligned Claims (OOP AC) incurred costs

Net Claims Costs – MD Allocated based on corporate-wide net Material Damage (MD) claims costs

Net Claims Costs – HE Allocated based on net claims costs of Heavy Equipment (HE) department

Collision / Property Damage Split Allocated based on the relative volume of closed exposures for both Collision and Property Damage coverage as per Exhibit B-27 (October 2004 Oral Hearing)

Shared Services

Finance Shared Services Ratio Weighted average of Claims, Insurance, and Driver Licensing Divisions, with Non-insurance portion prorated between Basic and Optional

Finance Shared Services Ratio, modified by Commission Decision

Allocated equally between Basic and Optional per January 2005 Decision

Corporate Shared Services Ratio Weighted average of Claims, Insurance, and Driver Licensing Divisions

Corporate Shared Services Ratio – with Exception

Corporate Shared Services Ratio except for certain expenses which are 100% Basic or 100% Optional or Comprehensive Coverage – Market share

Others

Investment Income Ratio Ratio calculated based on sources of funds i.e., Unpaid Claims, Unearned premiums and retained earnings

Comprehensive Coverage – Market Share

Percentage of Comprehensive Insurance market share held by ICBC



Figure 7.A.2 – 2010 Approved Allocators Using 2010 Actual Cost Detail

Claims Services

Basicinsurance

Non-insurance

Optionalinsurance Total

Basicinsurance

Non-insurance


Regional Claim Centres Work Effort 83,784 - 50,669 134,453 62.3% 0.0% 37.7% 100.0%

Call Centre Department Newly Opened Exposures - TCD 9,119 - 13,122 22,241 41.0% 0.0% 59.0% 100.0%

Claims General Support Claims Division Average 12,296 8,159 20,455 60.1% 0.0% 39.9% 100.0%

Claims System Support Claims Division Average 10,666 7,077 17,743 60.1% 0.0% 39.9% 100.0%

In-House Counsel (Provincial Litigation Services)

Work Effort - Provincial Litigation 10,148 - 534 10,682 95.0% 0.0% 5.0% 100.0%

Centralized Estimating Facilities Net Claims Cost - MD 3,444 - 4,209 7,653 45.0% 0.0% 55.0% 100.0%

Head Office Claims 1 Net Claims Cost - HOC 3,026 - 3,973 6,999 43.2% 0.0% 56.8% 100.0%

Claims Administrative Support Weighted Average - Cost Centres 3,017 2 3,017 6,035 50.0% 0.0% 50.0% 100.0%

Material Damage Support Net Claims Cost - MD 2,656 - 3,246 5,902 45.0% 0.0% 55.0% 100.0%

Centralized Claims Injury Centre Directly attributable to Basic 4,780 - - 4,780 100.0% 0.0% 0.0% 100.0%

Heavy Equipment Net Claims Cost - HE 1,867 - 2,687 4,554 41.0% 0.0% 59.0% 100.0%

Salvage Net Claims Cost - MD 1,940 - 2,371 4,311 45.0% 0.0% 55.0% 100.0%

Rehabilitation Directly attributable to Basic 4,105 - - 4,105 100.0% 0.0% 0.0% 100.0%

Ongoing Claim Services 2 Net Claims Cost - OOP 1,702 - 1,000 2,702 63.0% 0.0% 37.0% 100.0%

Call Centre Support Weighted Average - Cost Centres 1,145 1,143 2,287 50.1% 0.0% 49.9% 100.0%

Claims Litigation Support Work Effort - Provincial Litigation 1,971 - 104 2,075 95.0% 0.0% 5.0% 100.0%

BI Support Work Effort 1,517 - 80 1,597 95.0% 0.0% 5.0% 100.0%

Optional Coverage (Claims) Directly attributable to Optional - - 1,410 1,410 0.0% 0.0% 100.0% 100.0%

Out of Province BI 2 Directly attributable to Basic 655 - - 655 100.0% 0.0% 0.0% 100.0%

Claims Dispute Resolution - MD Collision / Property Damage Split 145 - 291 436 33.2% 0.0% 66.8% 100.0%

Out of Province Aligned Claims 2 Net Claims Cost - OOP AC 94 - 225 319 29.4% 0.0% 70.6% 100.0%

Customer Advocacy Claims Division Average 184 122 306 60.1% 0.0% 39.9% 100.0%

Claims Dispute Resolution - BI Work Effort 268 - 33 301 89.0% 0.0% 11.0% 100.0%

Rehabilitation and Out of Province Claims

Weighted Average - Cost Centres 228 - 42 270 84.5% 0.0% 15.5% 100.0%

Claims Basic Projects Directly attributable to Basic 28 - - 28 100.0% 0.0% 0.0% 100.0%

158,784 2 103,514 262,299 60.5% 0.0% 39.5% 100.0%

158,784 103,514 262,297 60.5% 39.5% 100.0%

1 In a reorganization, Head Injury amalgamated with Head Office Claims.2 During 2010, Out of Province BI merged into Ongoing Claims Services and Out of Province Aligned Claims was formed to handle high-complexity out-of-province claims.3 Used to calculate Basic %, see Figure 7.14 describing Year to Year Basic Insurance Allocation Percentages.4 Rounding may affect totals and allocation percentages.

$ in thousands 4 Allocation % 4

Total Claims Services Excluding TP

Operating Costs - Claims Services Allocator

Claims Services Excluding TP Using Financial Statement View 3



Road Safety and Loss Management Services

Allocator Basicinsurance

Non-insurance

Optionalinsurance Total Basic

insuranceNon-

insuranceOptional

insurance Total

Road Safety Initiatives Directly attributable to Basic 46,709 - - 46,709 100.0% 0.0% 0.0% 100.0%

Fraud Management Weighted Average - Cost Centres 5,288 - 3,275 8,564 61.8% 0.0% 38.2% 100.0%

Regional Loss Prevention 100% Basic with Exceptions 1,690 - 331 2,022 83.6% 0.0% 16.4% 100.0%

Road Safety Project Ops Road Safety Division Average 1,563 - 106 1,669 93.7% 0.0% 6.3% 100.0%

Auto Crime Expenditures Comprehensive Coverage - Market Share

151 - 410 560 26.9% 0.0% 73.1% 100.0%

Optional Coverage (Road Safety) 1 Directly attributable to Optional - - 199 199 0.0% 0.0% 100.0% 100.0%

55,402 - 4,321 59,723 92.8% 0.0% 7.2% 100.0%

1 Optional Coverage (Road Safety) relates to claims mitigation programs for optional coverages.2 Used to calculate Basic %, see Figure 7.14 describing Year to Year Basic Insurance Allocation Percentages.3 Rounding may affect totals and allocation percentages.


Total Road Safety and Loss Management Excluding TP2

Operating Costs - Road Safety and Loss Management



Administrative - Insurance

Basicinsurance

Non-insurance


Basicinsurance

Non-insurance


ISD Shared Services: Insurance, Claims, Non-insurance

Corporate Shared Services Ratio 14,805 5,491 14,805 35,101 42.2% 15.6% 42.2% 100.0%

Corporate Costs (Admin) Finance Shared Services Ratio 7,646 - 7,646 15,292 50.0% 0.0% 50.0% 100.0%

Human Resources Division Corporate Shared Services Ratio 5,758 2,136 5,758 13,653 42.2% 15.6% 42.2% 100.0%

Facilities Management Square Footage 4,052 1,063 4,052 9,167 44.2% 11.6% 44.2% 100.0%

Infrastructure Expenditure Finance Shared Services Ratio 4,488 - 4,488 8,976 50.0% 0.0% 50.0% 100.0%

Finance Shared Services - Insurance Operations

Finance Shared Services Ratio 4,005 - 4,005 8,011 50.0% 0.0% 50.0% 100.0%

Customer Collections Weighted Average - Transactions 2,222 606 2,222 5,049 44.0% 12.0% 44.0% 100.0%

Executive Office Finance Shared Services Ratio 2,524 - 2,524 5,048 50.0% 0.0% 50.0% 100.0%

General Counsel Work Effort 1,832 751 1,832 4,415 41.5% 17.0% 41.5% 100.0%

Supply Management Department Work Effort 1,855 683 1,855 4,394 42.2% 15.5% 42.2% 100.0%

Finance Division Banking Operations Work Effort 2,191 - 2,191 4,382 50.0% 0.0% 50.0% 100.0%

Business Transformation Shared Services Corporate Shared Services Ratio 1,837 681 1,837 4,356 42.2% 15.6% 42.2% 100.0%

Document Services Square Footage 1,598 418 1,598 3,614 44.2% 11.6% 44.2% 100.0%

Customer Contact Call Centre Premiums Written 1,677 - 1,677 3,354 50.0% 0.0% 50.0% 100.0%

Facilities Management (Victoria) Square Footage 81 3,087 81 3,249 2.5% 95.0% 2.5% 100.0%

Investment Portfolio Management Investment Income Ratio 1,610 - 1,610 3,221 50.0% 0.0% 50.0% 100.0%

Freedom of Information Department Work Effort 1,552 - 1,552 3,103 50.0% 0.0% 50.0% 100.0%

Business Intelligence Work Effort and WeightedAverage - Cost Centres

1,318 404 1,318 3,040 43.4% 13.3% 43.4% 100.0%

Regulator Costs Directly attributable to Basic 925 - 925 1,851 50.0% 0.0% 50.0% 100.0%

Claims Support Claims Division Average 722 722 1,445 50.0% 0.0% 50.0% 100.0%

Insurance & Telephone Claims Training Insurance Division Average 551 - 551 1,102 50.0% 0.0% 50.0% 100.0%

External Corporate Communications Work Effort 479 143 479 1,101 43.5% 13.0% 43.5% 100.0%

Call Centres Support (Admin) Weighted Average - Cost Centres 442 184 442 1,067 41.4% 17.2% 41.4% 100.0%

Communication - Government relations Work Effort 358 239 358 955 37.5% 25.0% 37.5% 100.0%

Project Management Service Costs Finance Shared Services Ratio 398 398 796 50.0% 0.0% 50.0% 100.0%

Corporate Strategic Services Corporate Shared Services Ratio 225 83 225 533 42.2% 15.6% 42.2% 100.0%

Drivers Services Admin Directly attributable to Non-insurance 378 378 0.0% 100.0% 0.0% 100.0%

Fair Practices Review Work Effort - Provincial Litigation 167 167 333 50.0% 0.0% 50.0% 100.0%

Facility Projects (Admin) Corporate Shared Services Ratio 93 34 93 220 42.2% 15.6% 42.2% 100.0%

Material Damage Fees Net Claims Costs - MD (2,107) (2,107) (4,213) 50.0% 0.0% 50.0% 100.0%

Interest on Receivables Weighted Average - Transactions (5,090) (5,090) (10,179) 50.0% 0.0% 50.0% 100.0%

58,216 16,381 58,216 132,813 43.8% 12.3% 43.8% 100.0%

58,216 58,216 116,432 50.0% 50.0% 100.0%

2 Used to calculate Basic %, see Figure 7.14 describing Year to Year Basic Insurance Allocation Percentages.3 Rounding may affect totals and allocation percentages.

$ in thousands 3

1 Using the allocator indicated, a portion of the costs is allocated to Non-insurance . The remainder of the costs are allocated equally between Basic insurance and Optional insurance (see page 42 of the January 2005 Decision).

Allocation % 3

Total Administrative Excluding TP

Operating Costs - Administrative Allocator1

Administrative Excluding TP Using Financial Statement View 2



Insurance Services

Basicinsurance

Non-insurance


Basicinsurance

Non-insurance


Insurance System Support Premiums Written 4,909 - 4,082 8,992 54.6% 0.0% 45.4% 100.0%

Field Broker Support Work Effort 2,611 666 3,386 6,663 39.2% 10.0% 50.8% 100.0%

Marketing Communication Corporate Shared Services Ratio - With Exception

1,809 550 1,486 3,845 47.0% 14.3% 38.7% 100.0%

General Broker Support & Direct Sales

Premiums Written 2,069 - 1,720 3,789 54.6% 0.0% 45.4% 100.0%

Chief Underwriter Premiums Written - With Exception 1,807 - 1,685 3,492 51.7% 0.0% 48.3% 100.0%

Bad Debts & Allowances Weighted Average - Transactions 1,839 58 1,022 2,920 63.0% 2.0% 35.0% 100.0%

Insurance Project Expense Insurance Division Average 1,480 - 1,051 2,531 58.5% 0.0% 41.5% 100.0%

Actuarial Weighted Average - FTE 1,581 - 893 2,474 63.9% 0.0% 36.1% 100.0%

Garage & Fleet Weighted Average - FTE 1,132 72 820 2,024 56.0% 3.5% 40.5% 100.0%

Driver Accountability Premiums Written 970 - 806 1,776 54.6% 0.0% 45.4% 100.0%

Market Research Weighted Average - Projects 1,013 - 965 1,978 51.2% 0.0% 48.8% 100.0%

Insurance Corporate Cost Finance Shared Services Ratio, modified by Commission Decision

984 - 984 1,968 50.0% 0.0% 50.0% 100.0%

Internet Services Premiums Written 820 - 682 1,502 54.6% 0.0% 45.4% 100.0%

Insurance Services Applications Support

Insurance Division Average 832 - 591 1,422 58.5% 0.0% 41.5% 100.0%

Product Development Premiums Written 765 - 636 1,401 54.6% 0.0% 45.4% 100.0%

Specialty Lic & Ins Weighted Average - Special Coverages

93 585 689 1,367 6.8% 42.8% 50.4% 100.0%

Customer Accounting Weighted Average - Transactions 570 530 258 1,358 42.0% 39.0% 19.0% 100.0%

Regional Marketing Work Effort 617 62 556 1,234 50.0% 5.0% 45.0% 100.0%

ADP Technical Premiums Written 666 554 1,221 54.6% 0.0% 45.4% 100.0%

Optional Coverage (Autoplan) Directly attributable to Optional - - 1,184 1,184 0.0% 0.0% 100.0% 100.0%

Insurance Business Support Weighted Average - Cost Centres 404 241 471 1,117 36.2% 21.6% 42.2% 100.0%

Insurance Planning Work Effort 363 363 363 1,088 33.3% 33.3% 33.3% 100.0%

Corporate Web-Site Corporate Shared Services Ratio 541 170 373 1,084 49.9% 15.6% 34.4% 100.0%

Product Research Premiums Written 528 - 439 967 54.6% 0.0% 45.4% 100.0%

Insurance Basic Projects Directly attributable to Basic 137 - - 137 100.0% 0.0% 0.0% 100.0%

Mgr. Of Comm. Lines Commercial Vehicle Premiums Written

88 - 66 154 57.0% 0.0% 43.0% 100.0%

Funds Management Premiums Written 72 - 60 131 54.6% 0.0% 45.4% 100.0%

28,702 3,296 25,822 57,820 49.6% 5.7% 44.7% 100.0%

28,702 25,822 54,524 52.6% 47.4% 100.0%

1 Used to calculate Basic %, see Figure 7.14 describing Year to Year Basic Insurance Allocation Percentages.2 Rounding may affect totals and allocation percentages.

Total Insurance Services Excluding TP

Operating Costs - Insurance Services Allocator


Insurance Services Excluding TP Using Financial Statement View 1



Administrative-Non-insurance

Summary of Total Corporate Operating Expenses Excluding TP

Basicinsurance

Non-insurance


Basicinsurance

Non-insurance


Registration and Licensing Directly attributable to Non-insurance - 7,001 - 7,001 0.0% 100.0% 0.0% 100.0%

ISD Non-insurance Vehicle Application Directly attributable to Non-insurance - 1,417 - 1,417 0.0% 100.0% 0.0% 100.0%

Non-insurance Corporate Cost Directly attributable to Non-insurance - 1,232 - 1,232 0.0% 100.0% 0.0% 100.0%

Government Revenue Administration Directly attributable to Non-insurance - 914 - 914 0.0% 100.0% 0.0% 100.0%

Vehicle Records Directly attributable to Non-insurance - 635 - 635 0.0% 100.0% 0.0% 100.0%

Non-insurance Project Expense Directly attributable to Non-insurance - 325 - 325 0.0% 100.0% 0.0% 100.0%

Non-insurance (Victoria) Telephone Education

Directly attributable to Non-insurance - 117 - 117 0.0% 100.0% 0.0% 100.0%

- 11,641 - 11,641 0.0% 100.0% 0.0% 100.0%

1 Rounding may affect totals and allocation percentages.


Total Non-insurance Excluding TP

Operating Costs Administrative - Non-insurance Allocator

Basicinsurance

Non-insurance

Optionalinsurance Total Basic

insuranceNon-

insuranceOptional

insurance Total

Claims Services see Claims Services 158,784 2 103,514 262,299 60.5% 0.0% 39.5% 100.0%Road Safety and Loss Management

see Road Safety and Loss Management

55,402 4,321 59,723 92.8% 0.0% 7.2% 100.0%

Administrative - Insurance see Administrative - Insurance 58,216 16,381 58,216 132,813 43.8% 12.3% 43.8% 100.0%Insurance Services see Insurance Services 28,702 3,296 25,822 57,820 49.6% 5.7% 44.7% 100.0%Administrative - Non-insurance see Administrative - Non-insurance 11,641 11,641 100.0% 100.0%Driver Licensing 50,953 50,953 100.0% 100.0%

301,103 82,273 191,872 575,248 52.3% 14.3% 33.4% 100.0%

1 Rounding may affect totals and allocation percentages.


Total Corporate Operating Expenses Excluding TP per Figure 7.4

Corporate Operating Expenses Excluding TP


APPENDIX 7 B HISTORICAL INFORMATION


Insurance Corporation of British Columbia 7B-1 December 1, 2011

1. ICBC has provided the following historical information consistent with the April 2010

Decision on the Streamlined Regulatory Process.

2006 2007 2008 2009 20101

BASIC only

Net Premium Written ($000’s) $1,896,685 $2,013,721 $2,049,215 $2,071,259 $2,070,487

Net Premiums Earned ($000’s) $1,824,477 $1,957,078 $2,047,635 $2,061,254 $2,066,572 Vehicles insured 3,012,000 3,108,000 3,193,000 3,225,000 3,281,000 Average premium of a policy $ 619 $ 638 $ 641 $ 636 $ 630

Operating cost ($000’s) - Insurance $263,654 $274,188 $280,116 $295,742 $301,102

- Non-ins $78,128 $71,811 $80,243 $79,840 $82,273

Total $341,782 $345,999 $360,359 $375,581 $383,375 Expense Ratio 15.3% 14.9% 15.4% 15.8% 16.3% Loss Ratio 101.5% 95.6% 87.7% 93.6% 96.7% Combined Ratio 112.7% 107.9% 102.2% 109.5% 114.4% MCT at year-end 107%2 136% 3 141% 4 162% 5 164.6% 6

CORPORATE

Total FTEs7 4,965 (Figure 7.7) 5,005 5,007 5,066 4,981 Expense Ratio 18.7% 18.6% 18.8% 19.3% 20.8% Loss Ratio 90.4% 83.7% 77.6% 81.4% 83.8% Combined Ratio 106.4% 101.0% 95.9% 100.8% 105.4%

1 Financial information for 2006 to 2010 was prepared based on Canadian Generally Accepted Accounting Principles (CGAAP). 2 MCT based on OSFI guidelines dated July 2003. 3 MCT based on OSFI guidelines dated January 2007; significant change related to new financial instrument accounting standards. 4 MCT based on OSFI guidelines dated March 2008; no significant impact to ICBC due to changes in rules since January 2007. 5 Ibid. 6 Under IFRS, the MCT ratio at December 31, 2010 is 154.5%. 7 Excluding FTEs relating to Transformation Program, Olympics Sponsorship, and government initiatives, which are cost recoverable.


CHAPTER 8

REPORTING ON GOVERNMENT INITIATIVES



Table of Contents A Introduction ................................................................................................... 8-1

B Regulatory Context Applicable to Government Initiatives .............................. 8-2

C Government Initiatives .................................................................................. 8-3

C.1 Government Initiatives Funded By ICBC ......................................................... 8-3 C.2 Government Initiatives Funded By User Fees or Cost Recovery ......................... 8-4

D Reporting for Government Initiatives ............................................................. 8-6

Appendix 8 A – Service Agreement Addendum for 2010...................................... 8-A

Appendix 8 B – Canadian Driver Licensing Agreement ........................................ 8-B

Appendix 8 C – Impaired Driving Initiative ......................................................... 8-C

Appendix 8 D – Service Agreement Appendices .................................................. 8-D



A INTRODUCTION

1. In the September 2009 Amended Application for a Streamlined Regulatory Process

(2009 Streamlining Application), ICBC committed to provide additional reporting on

government initiatives. The Commission approved the reporting proposal in the April 2010

Decision on the Streamlined Regulatory Process. The goal of the reporting on government

initiatives is to provide transparency and timeliness of information as ICBC fulfills its

mandate as a Crown corporation.

2. The government initiatives to which the additional reporting applies are:

a. New programs as identified in annual Addenda to the Service Agreement between

ICBC and the Ministry of Public Safety and Solicitor General (the Service

Agreement) that ICBC undertakes on behalf of the Government.1

b. Changes in the funding formula in an updated Road Safety MOU.

c. One-off items that fall outside the Service Agreement and outside the Road

Safety MOU and as supported by a government directive.

3. Pursuant to the 2009 Streamlining Application, ICBC must file the following on an

annual basis:

a. A list and description of new government initiatives as part of the Addendum to

the Service Agreement and related planned budget for each initiative.

b. The updated Road Safety MOU, if the funding formula has changed.

c. For government initiatives with a total budget of $1 million or more a description

of the government initiative and a financial schedule itemizing development and

ongoing costs.

1 The Service Agreement is an agreement between ICBC and the Ministry of Public Safety and Solicitor General with an effective date of September 1, 2003 and revised on December 31, 2006 pursuant to amendments to the Insurance Corporation Act passed in 2003. This agreement documents the Non-insurance services that ICBC will deliver. The Addendum to the Service Agreement and the updated Appendices to the Service Agreement document any actual or proposed changes in service or service delivery that will substantially change the cost of delivering Non-insurance services and that have not been previously identified in any previous Addenda or Appendices.



4. In this Chapter ICBC describes the regulatory context applicable to government

initiatives, reports on government initiatives, describes the reporting included in this

Application, and the reporting anticipated subsequent to this Application. ICBC submits that

the information provided meets its commitments to the Commission stated in paragraphs 2

and 3. It also provides the necessary transparency regarding ICBC’s involvement in

government initiatives.

B REGULATORY CONTEXT APPLICABLE TO GOVERNMENT INITIATIVES

5. Given its mandate and status as a Crown corporation, ICBC is, from time to time

directed by government to provide certain incremental services or provide additional

funding, which may increase operating expenses in any given year. Unless funding is

provided from another source, the costs of these services are required to be recovered

through Basic insurance rates pursuant to Special Direction IC2. Special Direction IC2

provides, among other things, that the Commission must:

• Fix Basic insurance rates “on the basis of accepted actuarial practice” to allow

ICBC to collect sufficient revenue to pay for items identified in section 3(1)(c),

which include: certain road safety programs, vehicle and driver licensing and

other related costs, and costs incurred by ICBC under certain Memoranda of

Understanding with Government, including the Road Safety MOU.

• Regulate and fix Basic insurance rates in a manner that recognizes and accepts

actions taken by ICBC in compliance with government directives issued to ICBC.

6. Special Direction IC2 thus addresses operating expenses related to non-insurance

services as specified in the Service Agreement, and to road safety programs including

payments that ICBC makes under the Road Safety MOU. As described in Section A,

government initiatives include new programs indentified in the Addendum to the Service

Agreement (Appendix 8 A) and those which are government directives.



C GOVERNMENT INITIATIVES

7. Funding for the development and ongoing operating expenses of government

initiatives follow a funding framework and the costs may be handled in different ways, for

example:

• Funding from ICBC because the program will result in claims savings and

therefore will have demonstrable benefits for policyholders in terms of its impact

on rates.

• Funding from ICBC where there are no demonstrable claims savings and, as a

result, the government initiative is funded in accordance with a government

directive pursuant to an Order in Council.

• Funding from user fees.

• Funding from government on a cost recovery basis.

8. A number of the government initiatives have had an impact on operating expenses

as indicated in Figure 7.10 of Chapter 7. Some of the government initiatives are in an early

stage of development and require significant analysis to determine costs and appropriate

funding mechanisms for one-time and ongoing operating expenses.

9. In Sections C.1 and C.2 ICBC provides an update on costs and funding mechanisms

for government initiatives, most of which are identified in the Addendum to the Service

Agreement (Appendix 8 A).

C.1 GOVERNMENT INITIATIVES FUNDED BY ICBC

10. The government initiatives discussed in this section are funded by ICBC. As

indicated in Figure 7.10 of Chapter 7, the total amount of operating expense on these four

government initiatives is $4 million per annum for 2011 and 2012.

• A report for the Distracted Driving Campaign was included in Appendix 8 A of

Chapter 8 of the 2010 Streamlined Revenue Requirements Application and ICBC

has integrated distracted driving within its road safety program from 2010. The

Distracted Driving Campaign program is not included in the Service Agreement

and therefore is considered a one-off item as described in paragraph 2.c of

Section A.



• Canadian Driver Licence Agreement (CDLA) is a program that introduces

measures to support BC in meeting national licensing standards of the CDLA.

The CDLA program was first introduced in the Service Agreement Addendum for

the 2007 rate year filed as part of the 2007 Revenue Requirements Application.

The program has been delayed for a number of years and implementation is now

scheduled to start in 2012. As the cost for the program is expected to be in

excess of $1 million, ICBC has provided a summary report in Appendix 8 B as

required in paragraph 3.c. in Section A.

• Impaired Driving Initiative includes the new roadside prohibitions and

changes to vehicle impoundment introduced by government in 2010. Systems

and process changes to automate ICBC’s interface with the Office of

Superintendent of Motor Vehicles’ (OSMV) new core operating system are to be

implemented in 2012. Potential claims savings may exist, but it is anticipated

that it will take several years to be demonstrable. As the cost for the program is

expected to be in excess of $1 million, ICBC has provided a summary report in

Appendix 8 C as required in paragraph 3.c. in Section A.

• Medical Identifiers on Driver’s Licence is the implementation of a proposed

medical identifier for commercial drivers to meet changes in travel requirements

between Canada and the United States. The associated costs are expected to be

minor.

C.2 GOVERNMENT INITIATIVES FUNDED BY USER FEES OR COST RECOVERY

11. Costs for the following government initiatives are considered accounts receivable so

there is no impact to operating expenses or Basic insurance rates. The accounts receivable

is recovered through user fees, a billing to government or through another manner if

alternative arrangements2

• Enhanced Driver’s Licence and Enhanced Identification Card (EDL/EIC) is

an existing program originally designed to have development and ongoing

operating expenses fully recoverable from user fees. However, the volumes of

purchases have been significantly lower than originally planned and user fees

were insufficient to cover costs. ICBC received $5.6 million from the government

have been made.

2 Alternative funding arrangements include cost recovery from other government entities, including, for example, a Crown corporation.



to cover net start-up and operating losses to the end of 2010. This program is

expected to incur on-going operating losses. Discussions between ICBC and

government are ongoing to reduce on-going operating losses and determine an

appropriate funding mechanism.

• In 2005, the government implemented new initiatives to counteract Drinking

and Driving. Anticipating that these initiatives might generate claims savings,

ICBC and the government agreed to a funding arrangement for ICBC’s portion of

the cost of these changes. Under the funding arrangement ICBC was also to

complete an assessment of the program after five years to see if demonstrable

claims savings could be attributed to the new initiatives. The assessment of the

existence of claims savings is now complete and results are inconclusive. ICBC is

in discussion with government on funding.

• ICBC received funding from the government for one-time costs incurred for

preliminary work for the Motorcycle Safety Initiative in 2010. The extent of

the full program is still to be determined by government, along with any potential

future funding source.

• Off-Road Vehicle Framework involves the development of a new regulatory

framework for off-road vehicles. The costs are anticipated to be recovered from

user fees.

• ICBC continues to work with government on issues/initiatives pertaining to a new

Identity Management program. On May 19, 2011 government introduced

legislation to replace the BC CareCard with a more secure card, to be

implemented at the end of 2012. ICBC Driver Licensing offices, Government

Agents (Service BC), and Appointed Agents will be responsible for issuing the

new cards. Costs and funding agreements for 2011 are in progress.

• The Port Mann Bridge Tolling initiative was introduced to the Commission in

ICBC’s May 31, 2011 update. This government initiative involves the

implementation of systems and processes to support tolling and debt collection

for the Port Mann Bridge. This initiative is being funded through cost recovery

from the Transportation Investment Corporation, a Crown corporation established

to deliver and operate the Port Mann/Highway 1 Improvement Project.



D REPORTING FOR GOVERNMENT INITIATIVES

12. The reporting for this Application includes the recently updated Addendum to the

Service Agreement as Appendix 8 A. In addition, reports on the CDLA and the Impaired

Driving Initiative are provided as Appendices 8 B and 8 C. The updated Appendices to the

Service Agreement are provided as Appendix 8 D. At this time, there is no update to the

Road Safety MOU. ICBC is in discussion with government to renegotiate the provisions of

the Road Safety MOU, including the funding formula, as it expires March 31, 2012.

13. ICBC will provide further reporting to the Commission on those government-directed

initiatives identified in this Chapter when the costs and the funding mechanisms for the

relevant initiatives have been determined.

14. ICBC submits that the information provided meets its commitments to the

Commission stated in paragraphs 2 and 3. It also provides the necessary transparency

regarding ICBC’s involvement in government initiatives.


APPENDIX 8 A SERVICE AGREEMENT ADDENDUM

FOR 2010


APPENDIX 8 B CANADIAN DRIVER LICENCE

AGREEMENT


Insurance Corporation of British Columbia 8B-1 December 1, 2011

Canadian Driver Licence Agreement

Program description:

The Canadian Driver Licence Agreement (CDLA) formalizes the exchange of driver’s licences and records between Canadian jurisdictions and promotes the principle of one driver, one record, one licence. It also harmonizes driver licence security and identification requirements with those adopted in the United States.

Program objectives:

The objectives of the CDLA are to strengthen cooperation among Canadian member jurisdictions towards improving:

• Driver licence security by aligning BC’s driver licensing and identification requirements with those of other Canadian jurisdictions, including enhanced identification and card security requirements;

• Road safety by ensuring individuals are accountable for their full driving record and actions; and,

• Integrity of the BC driver’s licence by ensuring that it is only issued to those who are legally entitled to be in Canada and who reside in BC.

To support these program objectives ICBC will need to modify business processes and systems to support enhanced driver licence and identity card issuance processes and exchange information with other jurisdictions to assess a driving record based on the one record one licence concept. Implementation of the CDLA initiative is to commence in 2012.

Cost effective program delivery:

ICBC intended to implement CDLA in 2009. Implementation has since been deferred to start in 2012 due to other government priorities. ICBC consulted the Office of Superintendent of Motor Vehicles (OSMV) and the Canadian Council of Motor Transport Administrators to minimize operational impacts, such as initially instituting the more stringent requirements to prove BC residency for new drivers only.

Key risks and mitigation strategies:

Issue Risk Mitigation

CDLA implementation date

Availability of key OSMV resources will be required to support policy definition.

Consult with OSMV on project schedule as soon as possible to ensure support is available.

Budget schedule:

The following is a breakdown of the current estimated budget for the initiative:

• One-time expenses are estimated to be $3.3 million.

• Operating expenses are estimated to be $1.2 million annually.


APPENDIX 8 C IMPAIRED DRIVING INITIATIVE


Insurance Corporation of British Columbia 8C-1 December 1, 2011

Impaired Driving Initiative

Program description:

On April 27, 2010 the government introduced legislation for changes to the impaired driving provisions in the Motor Vehicle Act (MVA) which came into effect on September 20, 2010. The amendments to the MVA include new driving prohibition provisions (section 215.43) for additional and escalating roadside suspensions based on roadside screening device readings administered by law enforcement.

Program objectives:

ICBC is undertaking the following to support this initiative:

• Implemented changes to ICBC’s Driver Licensing systems and business processes to accommodate the new program by September 20, 2010.

• Automating the semi-manual processes and re-developing system interfaces between ICBC and the Office of the Superintendent of Motor Vehicles’ (OSMV) new core operating system in 2012.

ICBC also adapted impaired driving awareness initiatives in 2010 to reinforce legislative changes.

Cost effective program delivery:

ICBC is phasing in the required systems and business process changes over a period of time, as indicated above.

Key risks and mitigation strategies:

Issue Risk Mitigation

System changes

Aggressive timeline to meet implementation date.

Semi-manual processes were introduced by September 20, 2010. Full automation will be implemented in 2012.

Budget schedule:

The following is a breakdown of the current estimated budget for the initiative, commencing in 2010:

• One-time expenses are estimated to be $3 million.

• Operating expenses are estimated to be $800,000 annually.


APPENDIX 8 D SERVICE AGREEMENT

APPENDICES

APPENDICES

TO THE

SERVICE AGREEMENT

BETWEEN

THE MINISTRY OF PUBLIC SAFETY AND SOLICITOR GENERAL

AND

THE INSURANCE CORPORATION

OF BRITISH COLUMBIA

APPENDIX A: VEHICLE RELATED SERVICES APPENDIX B: DRIVER RELATED SERVICES APPENDIX C: VIOLATION TICKETS AND OTHER SERVICES APPENDIX D: COMMERCIAL VEHICLE SAFETY AND ENFORCEMENT APPENDIX E: REVENUE COLLECTION APPENDIX F: COST ESTIMATES APPENDIX G: OTHER AGREEMENTS

Effective Date: September 1, 2003 Amended on: July 6, 2004

August 8, 2005 December 31, 2006 December 31, 2007 December 31, 2009 December 31, 2010

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APPENDIX A: VEHICLE RELATED SERVICES

A1 INTRODUCTION

• Section 3 of the Motor Vehicle Act (MVA) requires that any motor vehicle or trailer be registered, licensed and insured before it is operated on publicly accessible roadways. In addition to providing the minimum required liability and optional insurance coverage, ICBC has the legislated mandate to act as the Province’s vehicle registration and licensing authority. As part of this role, ICBC strives to ensure and promote consumer protection in regards to the registration and licensing of vehicles.

• A network of Autoplan insurance and Government agents acting in the name of ICBC provide vehicle registration and licensing services to the motoring public. ICBC provides technical and operational support to these agents.

A2 REGISTRATION

• A vehicle cannot be licensed or insured without first being registered with ICBC. Vehicle registration involves the collection and recording of owner and vehicle identification information, such as the owner’s name and address, and a vehicle’s year of manufacture, make, model, colour, and vehicle identification number (VIN). In establishing a registration record, ICBC representatives must satisfy themselves as to a vehicle’s true identification and ownership. This is often achieved by physically inspecting a vehicle to confirm its VIN and ensuring that complete ownership documentation is presented. Table A.1 summarizes the vehicle registration services provided by ICBC.

• The existence of vehicle registration information benefits many parties, including vehicle owners, prospective purchasers, insurers, financial institutions, policing authorities, and Government. Having vehicle identification and ownership information centrally recorded and readily accessible establishes a reasonable level of certainty regarding ownership for the owner of record, any prospective buyer, and insurance companies. This information is also important in increasing the reliability of the private property lien registry and improves financial institutions’ ability to secure personal loans to their customers. Also, the registration records provide policing authorities with a valuable tool used for vehicle and owner identification in traffic enforcement, violation ticket administration, and investigation of crimes. Finally, the requirement to register vehicles and update the ownership records, such as when a vehicle is sold, provides Government with revenues. These revenues are derived from the collection of established registration-related fees and the Social Services Tax required to be paid whenever a vehicle is sold.

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TABLE A.1 VEHICLE REGISTRATION SERVICES

Service Description of Service Relevant Authority Classification of Service*

Vehicle Registration

• Creation of a record of vehicle ownership and description for each vehicle to be operated on provincial roadways.

• Registration records are updated whenever a vehicle is sold, repossessed, or otherwise seized for the purpose of changing ownership.

• Motor Vehicle Act and Regulations

• Commercial Transport Act and Regulations

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Snowmobile Registry Administration

• ICBC maintains an ownership registry for all snowmobiles in BC whether they operate on roadways or not.

• Service is provided by appointed agents, Government agents, and Driver Licensing Centres.

• Motor Vehicle (All Terrain) Act and Regulation

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BC Assigned VIN Program

• Whenever a vehicle’s primary vehicle identifier, the VIN, becomes damaged or otherwise requires replacement, a new VIN is created for the vehicle. The BC Assigned VIN is attached to the vehicle and the vehicle ownership records are updated.


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* See Section 7.2 of the Service Agreement for a definition of the classifications of service.

A3 VEHICLE LICENSING

• Even though a vehicle is registered with ICBC, it cannot legally be operated on provincial roadways until it is licensed and insured. The licensing of a vehicle is essentially synonymous with the granting of permission to operate a vehicle on a roadway accessible to the public. Unlike vehicle registration, which is a “one-time” transaction (unless some element of the record requires updating), licences can only be issued for periods of up to twelve months. Table A.2 summarizes the vehicle licensing services provided by ICBC.

• The Vehicle Licensing program fulfils the following objectives:

- Ensures that any applicable insurance, emissions, safety inspection, National Safety Code, or Passenger Transportation requirements are satisfied before a vehicle is operated on a roadway;

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- Establishes safety-related operational limitations on certain vehicles based on intended use or vehicle design;

- Provides a readily visible means of vehicle and owner identification through the use of licence plates linked to the registration records; and

- Provides a significant source of revenue through the collection of annual licence fees.

TABLE A.2 VEHICLE LICENSING SERVICES

Service Description of Service Relevant Authority Classification of Service

Vehicle Licensing

• Determination of a vehicle’s eligibility for on-road operation and type of vehicle licence.

• Issuance of an appropriate licence plate, annual validation decal, and documentation.

• Transferring of plates from one vehicle to another.

• Replacing vehicle registration, licensing and insurance certificates.

• Administration, manufacturing, storage, and distribution of licence plates and companion validation decals as proof of licence and insurance.

• Issuance of special licence plates to veterans.

• Issuance of special 2010 Winter Games licence plates.



• Canadian Agreement on Vehicle Registration

• International Registration Plan

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Specialised Licensing Frameworks

• Administration of specialised registration and licensing programs for Consular vehicles, and Collector, Modified Collector, Multi-Collector and Antique vehicles.

• Administration of specialised licensing programs based on special agreements, and the needs of vehicle manufacturers, dealers, repairers, and transporters.

• Administration of licensing for limited on-road operation of farm, industrial and non-conforming vehicles.


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Inter-jurisdictional Licensing Agreements and Financial Responsibility for Commercial Vehicles

• Administration of inter-jurisdictional licensing agreements.

• Billing, collection, and remission of licensing revenues to BC and other provincial and state authorities.

• Administration of the provincial requirements for financial responsibility obligations for all commercial vehicles entering BC.




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A4 OTHER SERVICES

• Table A.3 lists the other services provided by ICBC that support the Vehicle Registration and Licensing functions. Some of these services also provide complementary benefits to government agencies.

TABLE A.3 OTHER SERVICES


Vehicle Data Management

• Provision and maintenance of the computers and associated software used to capture, store, and access vehicle and ownership related data.

• Implementation of any systems modifications required as a result of legislative, regulatory, or business initiated changes.



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Policy Development and Implementation

• Works in partnership with government to respond to internal and external proposals for changes.

• Works in partnership with government to develop regulatory and legislative changes and leading them through the approval processes.

• Business policy and process change and implementation to comply with legislative / regulatory change and to improve operational efficiency.





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Vehicle and Ownership Information Searches

• Conducted for vehicle owners, governments, policing authorities, and other parties.


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Representation on Inter-jurisdictional Bodies

• Supports the Superintendent of Motor Vehicles as the voting member of BC on the CCMTA Board.

• Represents BC on the CCMTA standing committee and is the voting member for BC on the IRP, the BC signatory to CAVR, and represents BC on vehicle matters with AAMVA.



• Canadian Agreement on Vehicle Registration (CAVR)

• International Registration Plan (IRP)

• Canadian Council of Motor Transport Administrators (CCMTA)

• American Association of Motor Vehicle Administrators (AAMVA)

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A5 PROGRAM RELATED INITIATIVES

In addition to the functions described above, ICBC undertakes initiatives related to vehicle registration and licensing.

Initiatives currently under consideration or in progress include*: • Government Directed: Development of a new regulatory framework for all Off-Road

Vehicles (ORVs).

* Projects funded from the Change Management Fund, as provided for in the Service Agreement, are not included in this list.

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APPENDIX B: DRIVER RELATED SERVICES B1 INTRODUCTION

• Division 30 of the Motor Vehicle Act Regulations states that a driver must hold an appropriate class of licence for the vehicle that they operate on-road. To obtain a licence a person must first pass a knowledge and road test, vision and in some cases medical screening and pay the prescribed fees. New drivers have restrictions placed upon them and must graduate from the Graduated Licensing Program (GLP) before becoming full privilege drivers. ICBC is responsible for licensing qualified drivers.

• A person’s licence may be suspended or removed under certain prescribed circumstances. Under the delegated authority of the Superintendent of Motor Vehicles, ICBC helps administer the driver fitness program and programs that sanction drivers for unacceptable driving practices, including adjudicating driving records under the Driver Improvement Program.

• ICBC is also responsible for regulating driver training schools.

B2 DRIVER LICENSING

• ICBC is responsible for the creation, delivery and funding of driver licensing programs and services in British Columbia.

• Driver licences can be renewed at any of ICBC’s 22 Driver Licensing Centres, 69 Appointed Agents or 29 Government Agent offices across British Columbia.

• From the information collected at the time of licence issuance, ICBC creates a driver record with which it can record and track violations, outstanding debts, driving restrictions and other information used in the administration of issuing a licence. ICBC owns, maintains and updates the driver and client systems.

• A person who resides in the Province may apply for an identification card by delivering an application to ICBC in a form satisfactory to ICBC. This identification card is called a British Columbia Identification card (BCID).

• Table B.1 summarizes Driver Licensing Services provided by ICBC.

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TABLE B.1 DRIVER LICENSING SERVICES


Issues Driver Licences / BCID Cards

• Issues and renews driver licences and BCID cards, including reviewing licence applications and assessing accuracy and validity of forms and information submitted.

• Issues and renews, at certain locations, BC Enhanced Driver’s Licences/ Enhanced ID cards, including advanced screening processes, to ensure federal and U.S. requirements are met

• Through regulations sets driver licence classifications, including entry requirements, driving restrictions and vehicles included in each class.

• Sets driver testing standards and administers driver tests – applies driving restrictions resulting from testing.

• Researches, develops, implements, supports and evaluates new driver-related road safety programs.

• Manages BCDL and BCID card production contract.


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Support Services for Driver Licensing Function

• Maintains driver records to ensure they are accurate and comply with policy and legislation.

• Publishes and maintains driving guides.

• Investigates driver licensing fraud.

• Produces evidentiary packages for courts.

• Provides abstract for commercial drivers under the National Safety Code.

• Pre-screens for commercial licence applicants.

• Participates in interjurisdictional committees for driver programs.

• Bills, collects and remits licensing revenues to the


• National Safety Code

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provincial government. • Administers licence

cancellation, refuse to issue, short term licence, prohibitions, collection of driver licence fines for motor vehicle and related debt.

• Supports appointed agents, government agents and other agencies that deliver driver licensing services on ICBC’s behalf.

• Supports streamlining rules and processes to reduce the overall regulatory burden.

B3 SUPPORT TO THE OFFICE OF THE SUPERINTENDENT OF MOTOR VEHICLES • The Superintendent of Motor Vehicles is responsible for a variety of programs that

help ensure that persons unfit to drive and persons with a poor driving record do not hold a valid driver’s licence. Under delegated authority from the Superintendent, ICBC helps administer these programs. Details of ICBC’s role are provided in Table B.2.

TABLE B.2 SUPPORT TO OSMV


Driver Improvement Program

• Reviews and adjudicates driving records. Takes appropriate action such as a driver prohibition or suspension.

• Handles communications with drivers (e.g. warning, probation and prohibition letters).

• Marks up prohibitions from driver's acknowledgement.

• Reviews driving submissions on prohibitions of three months or less.

• Reviews submissions from drivers who are sent an intent to prohibit of any length of term.

• Processes certified extracts for court purposes.


• Delegated authority from Office of the Superintendent of Motor Vehicles (OSMV)

Delegated and Administrative

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• Processes suspensions by adding them to the driving record and adjudicating the record for a further prohibition.

• Processes Criminal Code of Canada convictions.

• Provides support to the ignition interlock and driver rehabilitation programs.

Driver Fitness Program

• Conducts vision screening and issues driver medical forms on behalf of the Superintendent.

• Issues medical notices to clients (under set guidelines and delegation from OSMV), and sends licence cancellation notices for failing to comply to a re-exam, medical or vision exam or for being medically unfit to drive.

• Cancels and refuses to issue licences, and identifies candidates for OSMV remedial treatment programs (alcohol and drug assessment/treatment).

• Handles communications with drivers (e.g. re-examination and vision screening letters).

• Requests drivers who have deceitfully obtained a BC drivers licence to complete an examination.


• Delegated authority from OSMV


Administrative Driving Prohibition (ADP) and Vehicle Impoundment

• Provides administrative support to the review process including scheduling reviews.

• Processes vehicle releases. • Provides certificates for

court on driving while prohibited under an ADP.


• Delegated authority from OSMV


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B4 DRIVER TRAINING REGULATION

• ICBC is responsible for administering the regulations on services provided by driver training schools and agencies that train and assess their own drivers. Table B.3 summarizes the functions of ICBC.

TABLE B.3 DRIVER TRAINING


Driver Training Regulation

• Administers licensing standards for driver training schools and instructors as set out in provincial regulations.

• Issues school and instructor licences and monitors compliance with standards.

• Sanctions non-compliant schools and instructors – upon request, the Superintendent of Motor Vehicles may conduct a show cause hearing to support de-licensing process.

• Administers and monitors curriculum standards.

• Administers standards and requirements for companies/agencies to train and assess their drivers (e.g., police).


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B5 DRIVER LICENSING INITIATIVES

In addition to the functions described above, ICBC undertakes initiatives related to Driver Licensing. Initiatives that have been implemented since December 31, 2009 include*: • Government Directed: Recent initiatives to address impaired driving, including new roadside

prohibitions and changes to vehicle impoundment. (Additional work to finalize changes to be completed in 2011.)

Initiatives currently under consideration or in progress include*: • Government Directed: Safety-related changes to licensing, training requirements, etc.

for motorcycles. • Government Directed: Assessment and development of measures to support BC’s

commitment to the Canadian Driver Licensing Agreement. • Government Directed: Work with government on issues/initiatives pertaining to

identity management. • Government Directed: Potential changes to accommodate changes in Canada - US medical

reciprocity. * Projects funded from the Change Management Fund, as provided for in the Service

Agreement, are not included in this list.

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APPENDIX C: VIOLATION TICKETS AND OTHER SERVICES

C1 VIOLATION TICKETS

• ICBC withholds issuance of a drivers licence or vehicle licence where a person has outstanding fines payable to the Government or Crown as a result of certain violation tickets issued under the Offence Act and the Liquor Control and Licensing Act. ICBC must ensure that the tickets are valid and in accordance with Legislation, Regulations and Attorney General Policy.

• There are four types of violation tickets ICBC deals with on behalf of the provincial government:

- Driver related moving violations - Driver related non-moving violations - Intersection Safety Camera violations - Provincial non-driver related (e.g. wildlife, public transit, liquor control and

licensing). • In addition, ICBC collects outstanding fines payable to the federal government under

the federal Contraventions Act, (e.g. marine, seaway property, national parks, environment, fisheries, wildlife, airport and government property, wild animal and plant trade, tobacco, radio communications and commercial vehicle drivers).

• Table C.1 describes the functions fulfilled by ICBC.

TABLE C.1 VIOLATION TICKETS


Violation Ticket Related

• Processes Violation Tickets (VT), enters VT information into the contraventions system (part of Client system-owned by ICBC), resolves and identifies errors on the VT, as well as court interface errors.

• Ensures the VTs processed are valid in accordance with legislation and regulations and Attorney General policy.

• Maintains the contraventions system.

• Reviews tickets for errors and enter information.

• Creates client record if none exists.

• Cancels VTs.

• The Assistant Deputy Attorney General gives the authority and directives for ICBC to carry out its responsibilities under the Offence Act and the federal Contraventions Act.

• Criminal Justice Branch gives the directive for ICBC to cancel violation tickets.

Administrative

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• Processes VT disputes and appeals.

• Prepares evidentiary packages for courts.

• Processes and investigates personation claims for violation tickets.

• Collects fines and debts on behalf of the federal and provincial governments and outstanding ICBC debts.

Intersection Safety Camera Program (ISC)

• Enters ISC violation tickets on the database.

• Creates client record if none exists.

• Produces tickets. • Sends for process serving

when applicable. • Tracks process serving

progress. • Prepares evidentiary

packages for courts.

See above Administrative

C2 OTHER SERVICES

• Other services include database maintenance and information sharing (e.g. the Traffic Accident System), Social Service Tax Collection, Harmonized Sales Tax Collection (after July 1, 2010) and the AirCare program. These services are described in Table C.2.

• In addition, ICBC assists the Family Maintenance Enforcement Program by refusing to issue a driver’s licence or vehicle licence/insurance to clients who owe money under that program.

• ICBC also assists TransLink in the collection of excessive toll debt related to the Golden Ears Bridge by providing address information for billing purposes and refusing to issue a driver’s licence or vehicle licence/insurance to clients with excessive debt to the toll commissionaire.

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TABLE C.2 OTHER SERVICES


Traffic Accident System

• Maintains the Traffic Accident System (TAS) that is shared with police and transport authorities.

• Enters accident report information into TAS that is received from police attending the accident.

• Motor Vehicle Act Administrative

Collection of Sales Tax

• Collects sales tax on behalf of the government when a vehicle is purchased.

• Social Services Tax Act • Consumption Tax Rebate

and Transition Act • Consumption Tax Rebate

and Transition Act • Motor Vehicle Act • Commercial Vehicle Act

Administrative

AirCare • AirCare certification is a condition of renewal of a vehicle licence in Greater Vancouver Regional District (GVRD) and parts of the Fraser Valley Regional District (FVRD).

• ICBC performs an oversight role for the program in the GVRD conjunction with the Greater Vancouver Transportation Authority and the Government.

• ICBC is responsible for the operation of two AirCare centres in the FVRD.


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Family Maintenance Enforcement

• Manages refusal to issue driver licences and vehicle licences/insurance for clients owing money under the FMEP.

• Family Maintenance Enforcement Act and Regulations

Administrative

Bridge Toll Debt

• Provides client address information for billing purposes.

• Manages refusal to issue of driver licences and vehicle licences/insurance for clients owing excessive toll debt.

• Transportation Investment Act

Administrative

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C3 VIOLATION TICKETS AND OTHER SERVICES - INITIATIVES

In addition to the functions described above, ICBC undertakes initiatives related to violation tickets and other services. One initiative is currently under development*: • Government Directed: Systems and processes to support tolling and debt collection for the

Port Mann Bridge. * Projects funded from the Change Management Fund, as provided for in the Service

Agreement, are not included in this list.

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APPENDIX D: COMMERCIAL VEHICLE SAFETY AND ENFORCEMENT SERVICES

D1 INTRODUCTION

• Prior to April 1, 2003, CVSE programs were provided through the Compliance Operations Division of ICBC. Along with an administrative unit in support of the Motor Carrier Commission, these programs were transferred to Government in 2002. Under a Memorandum of Understanding between ICBC and the Province, ICBC paid the Government up to $24.7 million per year, in cash or in kind, for three years, which ended on March 31, 2006, including interim systems support valued initially at $2.145 million as CVSE computer systems were migrated to the Province over two fiscal years.

• The relationship between ICBC and CVSE continues to be interdependent with long-standing systems and business links between registration, licensing and insurance systems and business processes and core provincial road safety systems and programs. In many cases these are real-time systems links on which the proper functioning of computer systems, business processes, customer service and ultimately the safety of BC’s roads, rely. To ensure Government and ICBC are able to discharge their respective responsibilities, the parties work together to determine the appropriate service levels, escalation procedures and remedies.

• This appendix describes the interrelated services of ICBC and Commercial Vehicle Safety and Enforcement (CVSE) and outlines the services that ICBC provides in support of CVSE programs.

• CVSE is part of the Ministry of Transportation and Infrastructure and is responsible for:

- enforcing provisions of the Motor Vehicle Act, Commercial Transport Act, Transport of Dangerous Goods Act, Passenger Transportation Act, Transportation Act and Motor Fuel Tax Act and applicable regulations;

- developing and promulgating safety regulations governing commercial transport, vehicle inspection, vehicle equipment regulations and carrier safety;

- maintaining and promoting road safety through the implementation and management of the National Safety Code Program, Commercial Vehicle Inspection Program, Private Vehicle Inspection Program, VIN Inspection Program, Registration Inspection Program, Weigh2Go, Commercial Transport Program, Transport of Dangerous Goods Program and Commercial Vehicle Safety Alliance; and,

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- participating on various national and international government road safety bodies to coordinate and harmonize commercial transport, vehicle equipment and safety standards.

D2 ICBC/CVSE RELATIONSHIP AND PROGRAM INTERDEPENDENCIES

• The responsibilities and objectives of CVSE and ICBC are interconnected, and

program delivery and compliance are often reliant on each other. CVSE shares responsibility with ICBC for vehicle-related requirements under the Commercial Transport Act and associated regulations, as well as the Motor Vehicle Act and associated regulations.

• CVSE oversees the inspection and safety programs for commercial vehicles operating in the province and enforces the necessary safety statutes, regulations and programs. These programs outline the conditions of vehicle operation on a provincial highway. Through the sharing of CVSE data, ICBC Autoplan Agents are able to determine at the time of registration and licensing, if a commercial vehicle has been prohibited from on-road operation as a result of non-compliance with statutory requirements and CVSE safety programs. Preventing non-complying vehicles from on-road operation serves both the public safety mandate of Government and ICBC’s role as an automobile insurer by reducing the risk of loss.

• A commercial vehicle that has met and satisfied the CVSE inspection and safety programs can be issued a vehicle licence by ICBC for operation on BC highways. Conversely, CVSE relies on ICBC data for enforcement of CVSE based safety programs.

D3 CVSE PROGRAMS SUPPORTED BY ICBC

• ICBC provides support to several CVSE programs, as outlined in Table D1.

TABLE D.1 ICBC ONGOING SERVICES TO SUPPORT CVSE


Commercial Transport Management System (CTMS)

CTMS provides a variety of functions to CVSE staff authorized under the MVA, Inspectors Authorization Regulation and/or appointed by the Director.

ICBC provides: • real time access to the Client

Application and Client Database;

• operation and maintenance of the Client Database;

• Commercial Vehicle Safety and Enforcement (CVSE) access to ICBC mainframe transactions;

• F/R filing inquiry (prorate, ensuring a company has a valid financial responsibility number).



• Motor Fuel Tax Act and Regulations

• Passenger Transportation Act and Regulations

Administrative

17

National Safety Code System (NSCS)

NSCS provides access to National Safety Code (NSC) Program Administration staff and other authorized staff, for a variety of systems, reports and databases, to monitor carrier performance and to allow exchange of information about inter-provincial carriers with other jurisdictions.

ICBC provides: • the Client Database; • the Contraventions Database; • the Driver Database; • transfer and transform a subset

of the Traffic Accidents System (TAS) for NSC to import into database;

• corrections to TAS database; • access to the Business

Information Warehouse (BIW) Claims data;

• remote data retrieval; • transmittal of Autoplan

Automated Data Capture (ADC) carrier/vehicle data for NSC database;

• Vehicle Database and Driver Licence retrieval for NSC Audit and on-line application;

• Updates for Motor Vehicle database;

• access to the ICBC national Safety Code & Motor Carrier Inquiry transaction;

• blocking licensing transactions to facilitate monitoring of regulatory vehicle inspections;

• data entry and microfilm Notice and Orders and maintain Notice and Order data base;

• support to monitoring of NSC safety certificate for each commercial vehicle during the licensing processing;

• access to vehicle data base for vehicle inspection information and to the driver licensing system for NSC audit and carrier profile; and

• access to vehicle file for on-line population of vehicle inspection forms.



Administrative

D4 COMMERCIAL VEHICLE SAFETY AND ENFORCEMENT - INITIATIVES

In addition to the functions described above, ICBC undertakes initiatives related to support for Commercial Vehicle Safety and Enforcement. There are no new initiatives under consideration or in progress at this time.

18

APPENDIX E: REVENUE COLLECTION • ICBC is responsible for collecting various forms of revenue on behalf of

Government, including various fees under the Motor Vehicle Act, the Commercial Transport Act and fines under the Offence Act – see Table E.1.

• ICBC also provides regular revenue reports to Government, including forecasts.

• Table E.1 provides a breakdown of actual revenue collected by type. In some circumstances, revenue is recorded net of commissions paid to collection agencies. Other commissions paid are included under ICBC expenditures – see Appendix F.

TABLE E.1 REVENUE COLLECTED IN ON BEHALF OF GOVERNMENT

Revenue by Type 2002 Actual

Revenue $000s

2003 Actual

Revenue $000s

2004 Actual

Revenue $000s

2005 Actual

Revenue $000s

2006 Actual

Revenue $000s

Net Motor Vehicle Act 200,345 206,877 215,290 223,980 234,943 Net Commercial Transport Act 149,151 153,088 161,599 162,806 174,352 Net Fines Revenue 66,659 59,113 72,989 82,224 83,074 Net Other Revenues 777 741 568 11 807 TOTAL NET REVENUE: 416,932 419,819 450,446 469,021 493,176

(continued) Revenue by Type

2007

Actual Revenue

$000s

2008 Actual

Revenue $000s

2009 Actual

Revenue $000s

2010 Actual

Revenue $000s

Net Motor Vehicle Act 246,369 253,044 254,056 262,644 Net Commercial Transport Act 182,441 185,493 181,307 187,533 Net Fines Revenue 88,292 80,779 81,505 80,554 Net Other Revenues 515 525 446 522 TOTAL NET REVENUE: 517,617 519,841 517,314 531,253

• Beginning in May 2006, ICBC assumed responsibility for collecting fines on behalf of the federal government for violations under the Contraventions Act and Regulations. The regulations designate numerous fines, such as: violations pertaining to environmental protection; federal and federally-regulated property such as seaways, airports and national parks; fish and wildlife; wild animal and plant trade; tobacco; radio communications; commercial vehicle drivers; and maritime violations.

The delivery of this service replicates the provincial model for non-motor vehicle fines and is to be delivered at no net cost to ICBC. ICBC collects fines owing under the federal Contraventions Act and Regulations and remits these to the provincial government. The costs of providing the service are deducted quarterly. If fines

19

collected are insufficient to cover costs, the provincial government is to provide reimbursement for costs in excess of fines collected. Financial implications associated with this service will be reported in future Service Agreement Addendums and amendments to the Appendices.

E1 REVENUE COLLECTION – INITIATIVES

In addition to the functions described above, ICBC works, from time to time, with Government on other initiatives related to revenue collection. Initiatives in other non-insurance areas may also have an impact on the process or the amount of revenue ICBC collects on behalf of Government.

20

APPENDIX F: COST ESTIMATES

F1 INTRODUCTION

• This Appendix provides an overview of the costs incurred by ICBC in delivering the non-insurance services covered by this Agreement based on an approach and methodology originally developed in June 2003 by ICBC and reviewed by an independent financial services company.1

• In deriving the cost of non-insurance services, three different concepts of cost can be used:

- The incremental cost to the organization of undertaking the services. - The average cost of delivering the service when integrated with the delivery of

insurance services. - The total cost of delivering the services on a stand-alone basis.

• These three approaches can give very different results, depending on the nature of the service and the degree to which it is integrated with the delivery of insurance services. ICBC has adopted the second of these approaches. Therefore, the cost estimates derived should not be interpreted as: the incremental cost savings that would accrue to ICBC if it no longer delivered non-insurance services; or, the incremental costs that Government would incur if it chose to deliver the services itself.

• ICBC provides Basic insurance, Optional insurance and Non-insurance services. Costs incurred by ICBC that are tracked separately and are clearly identifiable as basic, optional or non-insurance service costs are assigned directly to the appropriate service area. Where services are integrated, costs are allocated across the functions based on cost allocation methodologies developed as part of the BC Utilities Commission processes.

F2 THE ESTIMATED COST OF NON-INSURANCE SERVICES

• Table F.1 summarizes the cost of non-insurance services delivered by ICBC over the last four years. The table includes the costs of the Commercial Vehicle Safety and Enforcement services that were transferred to Government in April 2003 for which ICBC continued to provide funding until March 31, 2006. Costs for Vehicle Registration and Licensing activities are included in the sections labeled “Administration and Other” and “Commissions”.

• The figures include amortization costs, as well as an allocation of specific fees and commissions paid to brokers and agents. However, some commissions are recorded by ICBC as subtractions from revenue and are therefore included in Appendix E.

1 PriceWaterhouseCoopers “Revenue and Cost Allocation Evaluation” prepared in June 2003.

21

TABLE F.1 ESTIMATED COST OF NON-INSURANCE SERVICES

Actual Costs Type of Service 2002

(000s) 2003

(000s) 2004

(000s) 2005

(000s) 2006

(000s) Administrative and Other $27,023 $28,195 $29,365 $29,756 $31,092 Commissions $15,427 $16,085 $16,944 $17,699 $18,691 Commercial Vehicle Services $24,417 $22,671 $23,359 $24,827 $ 6,240 Driver Services $32,429 $35,650 $35,678 $36,477 $40,796

Total Non-Insurance Operations $99,296 $102,601 $105,346 $108,759 $96,819

(continued)

Actual Costs Type of Service 2007

(000s) 2008

(000s) 2009

(000s) 2010

(000s)

Administrative and Other 30,561 33,457 33,370 31,320 Commissions 21,124 23,596 24,418 25,821 Driver Services 41,250 46,787 46,470 50,953

Total Non-Insurance Services 92,935 103,840 104,258 108,094

22

APPENDIX G: OTHER AGREEMENTS • In addition to the Service Agreement itself, Table G.1 lists the agreements, contracts,

and memoranda of understanding (MOUs) in place concerning the non-insurance services provided by ICBC on behalf of Government. (Note: The list includes governing agreements with Government ministries and agencies – it does not include agreements with private companies and municipalities nor service level agreements.)

TABLE G.1 LIST OF AGREEMENTS, CONTRACTS AND MOUs

Agreement/Details Related Service 1 Superintendent/ICBC Delegation MOU

• Series of delegation instruments with the Office of Superintendent of Motor Vehicles (OSMV).

• Provides ICBC with authority to act on behalf of the Superintendent of Motor Vehicles in the administration of the driver improvement program, ADP-VI Program, records and prohibitions.

Driver Licensing

2 International Registration Plan (IRP) • Reciprocity agreement between the 10 Canadian provinces and all U.S.

states except Alaska and Hawaii providing for prorated/apportioned payment of licence fees on the basis of total distance operated in all jurisdictions. B.C. became a signatory to the IRP agreement in 1996.

Vehicle Registration and Licensing

3 Canadian Agreement on Vehicle Registration (CAVR) • Agreement between the 10 Canadian provinces regarding limited licensing

reciprocity for vehicles not covered under IRP. B.C. signed on to CAVR in 1981. The agreement was revised from a prorate agreement to a reciprocity agreement in 2001 when all Canadian provinces joined IRP.


4 Information Technology Agreement • Agreement with Shared Services BC (formerly Workplace Technology

Services). • Covers provision of mainframe data processing (drivers), network services,

and associated charges.

Driver Licensing

5 Access to Customer Information MOUs • MOUs exist with various Government ministries. • Covers sharing of ICBC customer information (e.g., name and address).

Driver Licensing

6 Elections BC/Elections Canada MOU • MOU with Elections BC and Elections Canada. • Covers sharing of ICBC customer address information (from driver’s

database).

Driver Licensing

7 Canadian Police Information Centre (CPIC) MOU • MOU with CPIC. • Covers categories I, II and III CPIC agency access to ICBC’s driver licence

data and vehicle information.

Driver Licensing

8 Access to ICBC’s Databases MOU • MOU with OSMV. • Covers OSMV access to ICBC’s databases.

Driver Licensing Vehicle Registration and Licensing

23

Agreement/Details Related Service 9 Refuse to Issue MOU (Family Maintenance)

• MOU with Ministry of Attorney General (Family Maintenance Program). • Establishes a protocol for ICBC refusing to issue (RTI) driver licences,

vehicle licences and insurance for FMEP arrears. Also contains an indemnity from government.

Driver Licensing

10 AirCare Information Sharing Agreement • Agreement with Greater Vancouver Transport Authority (GVTA).

Agreement shown as negotiated but not signed. • Covers ICBC allowing access to vehicle information.


11

Government Agent Information Systems Service Level Agreement • Agreement signed in 1999 with the then Ministry of Small Business

Tourism and Culture. Agreement is being reviewed. • Covers ownership, support and change management process for

technology/support (primarily for Driver Licensing Centre System) used by Government Agents Offices to deliver Driver Services, and the Revenue Management System used by Government Agents and ICBC to collect motor vehicle fines.

Information Services

12 Government Agent Service Standards Agreement • Agreement signed in 1999 with the then Ministry of Small Business

Tourism and Culture. • Covers customer service expectations for delivery of ICBC licensing and

revenue collection performed by Government Agents at points of service.

Driver Licensing

13 Service Level Agreement with Government Agents Branch • 2004 MOU (unsigned) with the then Ministry of Management Services.

Requires updating. • Covers the establishment of principles of cooperation and joint effort

relating to the delivery of ICBC services at Government Agents offices.

Driver Licensing

14 Drinking and Driving Initiative Memorandum of Understanding: • On Implementation Costs: MOU signed in February 2005 outlines the

process by which ICBC will recover its start up costs for this initiative. • On Ongoing Costs: MOU signed in March 2006 confirms the financial

agreements relating to ICBC’s operating costs for this initiative.

Driver Licensing

15 Federal Contraventions Act • LOU with the Province signed in December 2004 describes the services

that ICBC will provide to support this initiative and affirms that ICBC will realize full cost recovery for providing these services. This agreement is currently being reviewed.

Driver Licensing

16 Canadian Driver Licensing Agreement (CDLA) • In October 2005, the Minister of Transportation joined other Canadian

jurisdictions in signing an MOU committing to work towards signing the CDLA at the earliest possible opportunity.

Driver Licensing

17 Interprovincial Record Exchange • System of sharing information across Canadian and some US jurisdictions. • Managed by the Canadian Council of Motor Transport Administrators and

updated in 2006.

Driver Licensing and Vehicle Registration and Licensing

18 Applications Maintained on ICBC’s Mainframe

• Agreements on the transfer and ongoing operation/access for programs migrated from government to ICBC’s mainframe (completed in 2009).

Information Services Division

24

Agreement/Details Related Service 19 Protocol Agreement between ICBC and the Greater Vancouver

Transportation Authority • Agreement governing procedures and protocols for refusing to issue a

driver’s licence or vehicle licence for excessive toll debt, as defined in the agreement, for Golden Ears Bridge tolls.

Finance Division

20 Memorandum of Understanding between ICBC and the Province regarding tax collection

• Agreement governing procedures and protocols for managing the collection of taxes owing related to importing or transferring regulated vehicles

Finance Division



Table of Contents A Performance Measures Overview ................................................................... 9-1

B Performance Measures Explanatory Notes ..................................................... 9-3

B.1 Service Measures ........................................................................................ 9-3 B.1.1 Insurance Services Satisfaction ........................................................... 9-3 B.1.2 Driver Licensing Satisfaction ............................................................... 9-4 B.1.3 Claims Services Satisfaction (BCUC) .................................................... 9-4 B.1.4 New Claims Initiation ......................................................................... 9-5 B.1.5 Customer Contact Service Level .......................................................... 9-6 B.1.6 Customer Approval Index ................................................................... 9-7 B.1.7 Legal Representation Rate .................................................................. 9-7 B.1.8 Complaints Heard by the Fairness Commissioner ................................... 9-8

B.2 Financial Measures ...................................................................................... 9-8 B.2.1 Basic Loss Ratio ................................................................................ 9-8 B.2.2 Basic Insurance Expense Ratio ............................................................ 9-9 B.2.3 Basic Non-insurance Expense Ratio ................................................... 9-10 B.2.4 Investment Return .......................................................................... 9-11 B.2.5 Injury Paid Severity ......................................................................... 9-11

B.3 Efficiency Measures ................................................................................... 9-13 B.3.1 Cost Per Policy in Force .................................................................... 9-13 B.3.2 Claims Efficiency Ratio ..................................................................... 9-14

B.4 Directional Indicators ................................................................................. 9-15



Table of Figures Figure 9.1 – Performance Measures Results, 2011 Forecast and 2011 Outlook ................ 9-2

Figure 9.2 – Claims Services Satisfaction (BCUC) ........................................................ 9-5

Figure 9.3 – Cost Per Policy In Force ........................................................................ 9-13



A PERFORMANCE MEASURES OVERVIEW

1. This Chapter provides the 2010 actual and the 2011 forecast for the performance

measures as agreed to in the May 2004 Negotiated Settlement Agreement and modified per

the July 2006 Decision. The 2008 and 2009 actual results are also provided as a reference.

2. Each year, ICBC sets the forecast for most of its performance measures at the

beginning of the year and then assesses the actual performance of those measures at the

beginning of the following year. In 2011, the performance measure forecasts are based on

the financial forecast and assumptions used in ICBC’s Service Plan 2011-2013, which was

tabled in legislature on February 15, 2011.

3. ICBC operates as an integrated business and most performance measures presented

in this document are for the entire company, including both Basic insurance and Optional

insurance. ICBC’s Commission-approved financial allocation methodology enables the

insurance expense ratio, loss ratio, and non-insurance expense ratio to be shown for Basic

insurance only.

4. Where performance measures are presented for Basic insurance, the allocation is

based on the approved methodology as updated for the latest Commission-accepted

changes to certain allocators at the time when the financial statements were prepared.

5. ICBC’s performance measures are categorized into four general areas: Service,

Financial, Efficiency, and Directional. Figure 9.1 provides a summary table of the

performance measures historical results and the 2011 forecast where appropriate. It also

provides the 2011 outlook, based on September 2011 year-to-date results.

6. The rationale for the 2011 forecast and explanations for any significant prior year

variations or information required for context are provided in the explanatory notes in

Section B. In addition, information is provided for the performance measures where the

2011 outlook differs from the original 2011 forecast.



Figure 9.1 – Performance Measures Results, 2011 Forecast and 2011 Outlook

PERFORMANCE MEASURES 2008 Actual

2009 Actual

2010 Actual

2011 Forecast

2011 Outlook

Ser

vice

Insurance Services Satisfaction 93% 96% 97% 93% 96%

Driver Licensing Satisfaction 93% 93% 94% 93% 93%

Claims Services Satisfaction (BCUC) Accident Benefit Only (BCUC)

83% 66%

81% 70%

84% 76%

83% 73%

83% 73%

New Claims Initiation Calls answered in 210 seconds Calls answered in 120 seconds Calls answered in 100 seconds

87% 82% 80%

87% 82% 81%

89% 83% 82%

n/a n/a

80%

n/a n/a

80% Customer Contact Service Level

Calls answered in 90 seconds 72% 73% 74% 70% 75%

Customer Approval Index 56% 59% 59% n/a n/a

Legal Representation Rate 37% 39% 40% 40% 40%

Complaints Heard by the Fairness Commissioner 160 183 203 n/a n/a

Fina

ncia

l

Basic Loss Ratio* 87.7% 93.6% 96.7% 99.2% 106.8%

Basic Insurance Expense Ratio: Basic Administrative Cost Ratio*

Basic Premium Tax Ratio Basic Commissions Ratio

Basic Insurance Expense Ratio*

3.7% 4.4%

10.3% 2.2%

4.1% 4.4%

10.7% 2.2%

4.3% 4.4%

11.1% 2.4%

4.9% 4.4%

11.8% 2.5%

4.7% 4.4%

11.6% 2.5%

Basic Non-insurance Expense Ratio* 5.1% 5.1% 5.2% 5.7% 5.4%

Investment Return ** Benchmark +0.64%

Benchmark +0.55%

Benchmark +0.60%

Policy Market Benchmark

Return


Return

Injury Severity Bodily Injury Paid Severity

Below $40,000 Above $40,000

Accident Benefit Paid Severity

$27,563 $9,357

$134,137 $1,762

$29,256 $9,671

$132,451 $1,860

$32,072 $9,859

$141,167 $1,985***

$33,457

n/a n/a

$2,037***

$33,457

n/a n/a

$2,037***

Effic

ien

cy Cost Per Policy In Force* $334 $347 $354 $358 $357

Claims Efficiency Ratio 21.2% 21.6% 19.9% 20.1% 18.2%

Dir

ectio

na

l

New Driver Comparative Crash Rate 1.13 1.05 1.04 n/a n/a

Crash Rate 1,015 1,000 940 n/a n/a

Injured Person Rate 285 275 280 n/a n/a

* The 2011 forecast for the Basic financial ratios and the Cost Per Policy in Force measure were based on the financial forecast presented in ICBC’s 2011-2013 Service Plan provided in Appendix 11 B. These performance measures exclude Transformation Program costs, ICBC Olympic sponsorship and related costs, and certain adjustments to pension expenses. The results for 2010 and prior years are presented under Canadian Generally Accepted Accounting Principles (CGAAP), while the 2011 forecast and outlook are presented under International Financial Reporting Standards (IFRS).

** Starting in 2009, real estate returns have been included in total portfolio returns. Prior years’ returns have been restated.

*** Net of the impact of structured settlements purchased in 2010 and 2011.



B PERFORMANCE MEASURES EXPLANATORY NOTES

B.1 SERVICE MEASURES

7. A key performance measure is customer service, which is represented by the

percentage of satisfied customers. ICBC uses separate measures for each major transaction

type - insurance, driver licensing, and claims - in order to reflect the differences in the

nature of each transaction. An independent research firm is retained to conduct customer

surveys for the purposes of monitoring satisfaction.

B.1.1 INSURANCE SERVICES SATISFACTION

8. Independent insurance brokers process over three million policies each year. The

Insurance Services Satisfaction measure represents the percentage of customers satisfied

with a recent insurance purchase transaction and is based on surveys of approximately

4,000 customers over the course of a year. This measure is typically over 90% and

indicates a high level of customer satisfaction with the transaction.

9. The 2010 actual was 97%, a one percentage point improvement from 2009 actual

results and a four percentage point increase from 2008.

10. In 2011, ICBC set its target at 93%, which reflects historical satisfaction levels. It

also reflects that ICBC intended to maintain this high level of customer satisfaction while

preparing for the renewal of technology and the changes to business processes associated

with the Transformation Program. However, preparing for the renewal of technology has

not impacted the level of customer satisfaction to the extent originally planned and the

2011 outlook is currently higher than the forecast at 96%.

11. Paragraph 4.5 of the May 2004 Negotiated Settlement Agreement states:

ICBC will ask a question on the Autoplan Satisfaction Survey respecting whether the customer has purchased optional coverage from an insurer other than ICBC. Respondents will have the choice of a yes, no or don’t know response.



12. The following was the result of the 2010 survey which included responses to this

additional question:

Yes = 9.8% (352 / 3,607 customers)

No (only bought from ICBC) = 87.0 % (3,137 / 3,607 customers)

No (do not buy Optional Coverage) = 3.2 % (115 / 3,607 customers)

Don’t know = 0.00 % (2 / 3,607 customers)

Refused = 0.00 % (1 / 3,607 customers)

B.1.2 DRIVER LICENSING SATISFACTION

13. Each year, ICBC conducts approximately 1.5 million transactions relating to the

issuance of driver licences and driver exams. The Driver Licensing Satisfaction measure is

used to determine the percentage of customers satisfied with their transaction with ICBC,

which includes renewing a licence, taking a knowledge test, or undergoing a road test. This

measure is weighted by the number of transactions for each type of service and is drawn

from a sample of approximately 6,000 customers surveyed throughout the year.

14. The 2010 result for ICBC’s customer satisfaction for driver licensing was 94%, one

percentage point higher than the 2008 and 2009 actual results. For 2011, the target has

been set at 93%. ICBC anticipates that Driver Licensing Satisfaction will remain consistent

with historical norms reflective of ICBC’s continued commitment to customer service.

B.1.3 CLAIMS SERVICES SATISFACTION (BCUC)

15. In the May 2004 Negotiated Settlement Agreement, ICBC agreed to report on a

Claims Services Satisfaction score, which includes bodily injury claimants, accident benefit

claimants, and claimants under collision, property damage and glass coverages, and to

report on a separate Accident Benefit Only Satisfaction score which includes both accident

benefit claimants who have a bodily injury claim and accident benefit claimants who do not

have a bodily injury claim.

16. The satisfaction score set out in Figure 9.1 represents the response to a single

question on the customer satisfaction survey with respect to “overall” satisfaction. Set out



below in Figure 9.2 are the 2010 actual results with respect to the eight additional survey

questions as agreed in the May 2004 Negotiated Settlement Agreement, paragraph 4.7.

Figure 9.2 – Claims Services Satisfaction (BCUC)

Survey Question 2010 Actual Results (Claims Services Satisfaction)

Time it took 75%

Helpfulness 78%

Level of knowledge & expertise 83%

Fairness – claims handling 75%

Kept informed 69%

Needs accommodated 75%

Valued and respected 79%

Informed of coverage 76%

17. It is important to understand when looking at Claims Services and Accident Benefit

Only Satisfaction measures that bodily injury and accident benefit claims can be adversarial

and complex by nature, as they deal primarily with liability, extent of injury, and

entitlement to financial compensation through a tort claim. In particular, many of the

accident benefit claimants are the liable party in a motor vehicle crash.

18. ICBC measures Claims Services Satisfaction based on a representative sample of

over 7,000 customers, weighted based on transactional volumes.

B.1.4 NEW CLAIMS INITIATION

19. Claimants who call ICBC to place an insurance claim have their calls answered by a

Claims Contact Centre (CCC) claims adjuster. The CCC adjuster records all the details of

the crash, links the claim to the other party involved, advises the claimant of all insurance

coverages available under their insurance policy, identifies the cost of policy deductibles and

may assess liability, depending on the claim type.



20. The New Claims Initiation measure represents the percentage of CCC incoming calls

that are answered within a specified threshold. The measure is expressed as “X% of calls

answered within Y seconds.”

21. For information purposes, ICBC agreed as part of the May 2004 Negotiated

Settlement Agreement to provide new claims initiation performance statistics using both

210 and 120 second thresholds. As part of the 2006 Revenue Requirements Application,1

22. The 2010 actual result of 82% was slightly better than 2009 actual of 81% and 2008

actual of 80% of calls answered in 100 seconds. This is mainly due to lower call volumes

related in part to reduced traffic volume during the 2010 Olympics. The 210 second and

120 second results for 2010 (89% and 83% respectively) were slightly better than the

historical results (87% and 82% respectively).

ICBC indicated that it had made a business decision to implement an improved target of

80% of calls answered within 100 seconds, which is the business measure used by ICBC.

ICBC therefore does not develop a forecast for the 210 and 120 second measures.

23. The 2011 forecast is set at the target of 80% of calls answered in 100 seconds.

B.1.5 CUSTOMER CONTACT SERVICE LEVEL

24. This service level measure is an aggregate from the Insurance and Driver Licensing

call centres and is defined as the percentage of calls answered within 90 seconds.

25. In 2010, the Customer Contact Service Level increased to 74% as a result of

proactive management of attrition and improved training coordination.

26. The original 2011 forecast of 70% was made based on the expectation that the

Customer Contact Service Level would be impacted by various initiatives during the year.

For example, technology upgrades to the contact centres will require training and

familiarization which could impact service levels. These initiatives have not impacted the

Customer Contact Service Level as originally expected as their implementation only

commenced in the last quarter of 2011 and will continue throughout 2012. Therefore the

2011 outlook for the Customer Contact Service Level is 75% to reflect historical norms.

1 Update to the response to the information request 2006.1 BCUC.59.1, filed on March 30, 2006.



B.1.6 CUSTOMER APPROVAL INDEX

27. The Customer Approval Index survey includes general questions about rates, service,

and road safety. To qualify for the survey, the respondent must either hold an ICBC

insurance policy or a valid BC driver’s licence.

28. ICBC uses the Customer Approval Index results to better understand public

perception and to develop communications that promote informed opinions and a better

understanding of the value of ICBC.

29. The 2010 Customer Approval Index of 59% was consistent with 2009 actual results

and an improvement from 2008. ICBC does not set a corporate target for the Customer

Approval Index as it is a directional measure.

B.1.7 LEGAL REPRESENTATION RATE

30. The Legal Representation Rate is the ratio of newly represented bodily injury

exposures in the current year, regardless of the year of loss, to the number of newly opened

bodily injury exposures in the same year. The Legal Representation Rate reflects the

number of claimants who choose to retain counsel to represent them. The Legal

Representation Rate may provide some indication of service satisfaction related to bodily

injury claims but claimants may have reasons unconnected to service for retaining counsel.

31. The Legal Representation Rate includes both Basic insurance exposures and high-

complexity/high-risk exposures under Optional insurance that by their nature can be

expected to be represented.

32. The 2010 Legal Representation Rate of 40% has increased slightly from the 2009

actual of 39%. In 2011, ICBC expects to maintain the Legal Representation Rate at 40%,

which is consistent with 2010 actual results.

33. ICBC’s goal is to ensure that claims are resolved in a fair manner through effective

interactions between claimants and ICBC. ICBC continues to focus on the claimant’s

experience in the claims handling process.



B.1.8 COMPLAINTS HEARD BY THE FAIRNESS COMMISSIONER

34. The Complaints Heard by the ICBC Fairness Commissioner measure represents the

number of files where a complaint is received by the Fairness Commissioner and the

number of files closed in that year. ICBC does not set a target for this measure as it is not

considered indicative of overall service satisfaction.

35. In 2010, 52% of the complaints were related to Claims services, which was

consistent with the two previous years (49% of the total in 2008 and 55% in 2009).

36. With over 6 million transactions completed annually, the number of complaints

received by the Fairness Commissioner involves a relatively small number of customers. In

relative terms, the total number of complaints actually reviewed by the Fairness

Commissioner is very small. Of the 168 complaints directed to the Fairness Commissioner

in 2010, 64% of these were resolved internally by ICBC’s Customer Relations department

and therefore did not require involvement of the Fairness Commissioner. Therefore,

increases in this performance measure do not fully reflect the involvement of the Fairness

Commissioner.

B.2 FINANCIAL MEASURES

B.2.1 BASIC LOSS RATIO

37. The Basic Loss Ratio is a measure of the insurance product’s profitability. All other

things being equal, the lower the percentage is, the more profitable the product. This

measure is calculated as the ratio of the total Basic insurance claims and Basic insurance

claims-related costs including loss management and road safety costs, to Basic insurance

premium dollars earned.

38. The 2008 Basic Loss Ratio benefited from unusually low current year claims costs as

well as a favourable prior years’ claims adjustment. In comparison, 2009 claims costs were

higher as a result of the prior years’ claims adjustment.

39. The 2010 Basic Loss Ratio reflected an increase in current year claims costs due to

higher frequency and severity of bodily injury and accident benefit claims than prior years.

As well, 2010 premiums earned (the denominator) increased only marginally.



40. The 2011 forecast, at 99.2%, was calculated based on the claims costs forecast for

ICBC’s 2011-2013 Service Plan provided in Appendix 11 B. At that time, it was anticipated

that the 2011 forecast would be 2.5 percentage points higher than the 2010 actual result.

Since then, the 2011 outlook for the Basic Loss Ratio has increased significantly, to 106.8%.

This outlook is anticipated to be worse than the 2010 actual result by more than ten

percentage points. Basic claims costs are expected to be higher than both the original

forecast and prior years, due to higher frequency of bodily injury and accident benefits

claims and a lower discount rate used to discount claims.

B.2.2 BASIC INSURANCE EXPENSE RATIO

41. The insurance expense ratio is a standard measure to assess the operational

efficiency of an organization. This measure is calculated as the ratio of Basic insurance

expenses (other than claims and claims related costs) to Basic insurance premium dollars

earned. A lower insurance expense ratio is better, reflecting prudent management of

operating costs.

42. The Basic insurance expense ratio is broken down into the Basic Administrative Cost

Ratio, the Basic Premium Tax Ratio, and the Basic Commissions Ratio.

43. Basic Administrative Costs are general insurance operating costs not directly related

to servicing claims or providing non-insurance services. They include, for example, costs

associated with Human Resources, Finance including actuarial, Information Services, and

Insurance costs such as broker management and underwriting.

44. From 2008 to 2010 there has been a slight upward trend in the Basic Administrative

Cost Ratio. This is partially a result of the trend in premiums earned, which has shown only

a modest increase during this period. In spite of prudent cost management, ICBC’s

administrative expenses have shown inflationary and other increases.

45. The 2011 forecast of 4.9% reflected expectations about premium revenue growth

being lower than operating expense growth. ICBC has since then looked for opportunities

to save on operating costs, and implemented a number of cost control measures to limit

operating expense growth to within inflation, as further discussed in Chapter 7.

46. The 2011 outlook for the Basic Administrative Cost Ratio has decreased to 4.7%,

which is better than the original forecast. However, cost savings made are being offset by



lower than planned premiums earned. Instead of the original forecasted growth of 0.5%,

premiums earned are now expected to increase by only 0.1% from the 2010 actual result.

47. The Basic Premium Tax Ratio is the percentage of tax paid on insurance premiums

for the current year as set by the government. Premium tax, calculated at 4.4%, is

expensed when the premiums to which they relate are earned. The Basic Premium Tax

Ratio was constant at 4.4% for all years from 2008 to 2010, and 2011 forecast. The 2011

outlook remains unchanged from the original 2011 forecast.

48. The Basic Commissions Ratio is dependent on the number of new and renewal

policies for Basic insurance as the commissions paid to brokers are on a fee per policy basis.

ICBC has an agreement with its broker partners detailing the fee and broker compensation

criteria for the period of the agreement. As a result, the Basic Commissions Ratio increased

to 2.2% for both 2008 and 2009, and 2.4% for 2010. In 2011, the Basic Commissions

Ratio is expected to increase to 2.5% due to higher fees as a result of the agreement with

ICBC’s broker partners. The outlook remains unchanged from the original 2011 forecast.

49. Overall, it is expected that the cost control measures discussed in Chapter 7 will

result in a lower 2011 Basic insurance expense ratio. The current outlook, at 11.6%, is

expected to be better than the 2011 forecast.

B.2.3 BASIC NON-INSURANCE EXPENSE RATIO

50. As part of its operations, ICBC incurs Non-insurance expenses for the provision of

driver licensing, commercial vehicle services, vehicle registration and licensing, and

government fine collection. The Basic Non-insurance Expense Ratio represents the ratio of

the operations and administration costs of ICBC’s Non-insurance business to Basic insurance

premium dollars earned. It is a measure of the operational efficiency of providing these

services on behalf of the government; therefore a lower percentage is better.

51. In spite of operating cost challenges driven by inflationary increases, ICBC was able

to maintain this ratio at 5.1% for both 2008 and 2009, and 5.2% for 2010. The Basic Non-

insurance Expense Ratio was forecasted to increase to 5.7% in 2011. However, through

ICBC’s cost control measures, the 2011 outlook is expected to be more favourable than the

original forecast, at 5.4%. For a detailed discussion of ICBC’s 2011 operating expense

outlook, please refer to Chapter 7.



B.2.4 INVESTMENT RETURN

52. As at December 31, 2010 ICBC managed an investment portfolio with a carrying

value of approximately $11.5 billion to generate investment income used to reduce

premiums for the policyholder. ICBC measures the performance of each component of its

investment portfolio against a standard industry benchmark, and measures the total fund’s

performance against a weighted average of these benchmarks as dictated by ICBC’s target

investment asset mix. Industry benchmarks and target asset mix are explicitly outlined in

the Statement of Investment Policy and Procedures that is set by the Board of Directors.

ICBC’s portfolio market return of the investment portfolio is a combination of the net change

in market value and the income generated during the period.

53. ICBC’s investment return has consistently exceeded the policy market benchmark

return for 2008, 2009, and 2010.

54. For 2011 ICBC expects, at a minimum, to achieve the policy market benchmark

return for the four-year annualized investment portfolio performance result. ICBC’s

Investment Department does not forecast the policy market benchmark return, as the policy

market benchmark return is the result of market forces, which are beyond ICBC’s control.

B.2.5 INJURY PAID SEVERITY

55. Injury Paid Severity is the average injury payment based on the injury exposures

closed in a calendar year, regardless of year of loss. The average injury payment includes

all loss and expense payments from date of loss to date of settlement.

56. The Injury Paid Severity measure is intended to provide more information on the

management of injury costs. This measure provides an indication of overall handling quality

and effectiveness of programs introduced to help contain costs, but is also influenced by

external factors, such as inflation, the rate of employment, increases in court awards for

losses, and the mix and complexity of claims presented.

Bodily Injury Paid Severity

57. The Bodily Injury Paid Severity measure is an average based on total bodily injury

payments (both Basic and Optional) paid on bodily injury exposures closed in the current

year divided by the total number of bodily injury exposures closed in the current year,



regardless of the year of loss. Bodily injury payments include loss payments for pain and

suffering, future care, and past and future wage loss, as well as external expense payments

incurred to investigate and settle the claim.

58. The 2010 actual Bodily Injury Paid Severity of $32,072 was 9.6% above 2009 actual

of $29,256 mainly due to the higher number of exposures closed in the Above $40,000

payment range.

59. The 2011 Bodily Injury Paid Severity is forecast to be 4.3% higher than the 2010

actual. This forecast is based on five-year historical trends taking into account the number

of files closed and the change in average bodily injury payments during that period.

Accident Benefit Paid Severity

60. Accident Benefit Paid Severity is the average total accident benefit payments paid on

accident benefit exposures closed in the current year divided by the number of exposures

closed in the current year, regardless of the year of loss. Accident benefit payments include

medical, dental, and rehabilitation costs.

61. The 2010 actual Accident Benefit Paid Severity of $1,985 was 6.7% higher than 2009

actual. This was mainly due to the increased number of closures in 2010 of exposures

which had payments over an extended number of years.

62. In 2010, ICBC purchased structured settlements on a pilot basis to provide more

flexibility and payment options for some customers entitled to long-term disability benefits.

Including these structured settlements, the 2010 Accident Benefit Paid Severity is $2,139.

63. The 2011 Accident Benefit Paid Severity forecast is based on five-year historical

trends as to the number of files closed and the average payments during that five-year

period. The 2011 Accident Benefit Paid Severity forecast of $2,037 is 2.6% higher than

2010 actual. It is calculated net of the impact of the structured settlements purchased in

2010 and 2011.



B.3 EFFICIENCY MEASURES

B.3.1 COST PER POLICY IN FORCE

64. The cost per policy in force is a standard insurance industry measure for assessing

the overall costs of operating ICBC. This measure is calculated as the total of internal

operating costs, external expense payments incurred to investigate and settle claims, and

premium taxes and commissions incurred to acquire premiums, divided by the number of

policies in force.

Figure 9.3 – Cost Per Policy In Force

Cost Per Policy In Force* 2008 Actual

2009 Actual

2010 Actual

2011 Forecast

2011 Outlook

Internal Operating Costs $140 $145 $147 $154 $149

External Expenses 68 70 66 66 62

Premium Taxes and Commissions

131 131 132 134 135

Deferred Premium Acquisition Costs (DPAC) Adjustments**

(5) 1 9 4 11

Total $334 $347 $354 $358 $357

* The measure for 2010 and before is under CGAAP, while the 2011 forecast is under IFRS. ** Deferred Premium Acquisition Costs (DPAC) are commissions and premium taxes that are deferred and

charged against income when the related premiums are earned over the course of the year.

65. The 2011 forecast for the Cost Per Policy in Force, at $358, was calculated based on

the financial forecast for ICBC’s 2011-2013 Service Plan provided in Appendix 11 B. At that

time, it was anticipated that the 2011 forecast would be $4 per policy higher than the 2010

actual result. Since then, both the number of policies and the expense outlook have been

revised. The 2011 outlook for the Cost Per Policy in Force is now expected to be $357. The

changes to the various components are discussed below.

66. Internal operating costs are ICBC’s operating expenses including claims-related costs

and insurance operating expenses. The 2011 forecast internal operating costs were

expected to be $154 per policy, $7 higher than the 2010 actual result, primarily due to

compensation and other operating expense increases. Through ICBC’s cost control

measures, the 2011 outlook has been reduced to $149, a moderate increase of $2 per



policy from the 2010 actual result. The drivers of increases in operating expenses are

discussed in detail in Chapter 7.

67. External expenses consist primarily of outside legal counsel fees and disbursements,

medical and dental reports, private investigator costs, independent adjusters, and towing

fees. External costs facilitate the investigation and settlement of claims. In spite of

inflationary pressures, ICBC expected to maintain external expenses at $66 per policy in

2011, which was consistent with historical results. The 2011 outlook is anticipated to be

favourable, at $62 per policy, based on lower than expected external expenses.

68. ICBC has an agreement with its broker partners detailing the fee and broker

compensation criteria for the period of the agreement. As a result, commissions increased

by $1 per policy in 2010. The 2011 outlook reflects an expected increase of $3 per policy,

due to higher fees as per the agreement with ICBC’s broker partners.

69. In 2010, the DPAC adjustment increased to $9 per policy as a result of an increase in

expected future injury claims costs, which decreased the amount of deferrable expenses

allowed. Based on the financial forecast for ICBC’s 2011-2013 Service Plan, the DPAC

adjustment was expected to decrease to $4 per policy in 2011. However, due to the current

higher claims costs trends, the 2011 outlook is expected to increase to $11 per policy,

based on lower deferrable expenses allowed due to higher expected future claims costs.

B.3.2 CLAIMS EFFICIENCY RATIO

70. This measure is defined as the percentage of claims handling costs per dollar of

claims paid. It is calculated as the sum of claims services costs and external expenses

divided by claims paid net of external expenses. Claims services costs consist of salaries,

benefits, and operating expenses, while external expenses consist primarily of costs for

outside legal counsel, medical and dental reports, private investigators, independent

adjusters, and towing.

71. The Claims Efficiency Ratio should be assessed in conjunction with the Basic Loss

Ratio. Some claims handling costs within the current ICBC cost structure are fixed in nature

and thus cannot be readily changed. As such, an increase in claims payments may yield a

lower Claims Efficiency Ratio which is, in fact, adverse to ICBC’s objective of claims and loss

management (see Basic Loss Ratio).



72. In 2010, whereas claims handling costs remained consistent with 2009 actual

results, the increase in claims payments resulted in a lower Claims Efficiency Ratio of

19.9%, as compared to 21.6% in 2009 and 21.2% in 2008. The original 2011 forecast of

20.1% reflected moderate increases in both claims handling costs as well as claims

payments. The 2011 outlook for the Claims Efficiency Ratio is now expected to be 18.2%

due to lower claims handling costs as compared to higher claims payments, which is

indicative of current claims costs trends.

B.4 DIRECTIONAL INDICATORS

73. ICBC does not develop targets for New Driver Comparative Crash Rate, Crash Rate,

or Injured Person Rate as it uses them only as a high level indicator of the effectiveness of

road safety programs and not as a measure. The Crash Rate in 2010 (940) was lower than

in 2009 (1,000). The Injured Person Rate in 2010 (280) increased from 2009 (275) and the

New Driver Comparative Crash Rate in 2010 (1.04) decreased as compared to 2009 (1.05).

The increase in the Injured Person Rate appears to be continuing in 2011 and is consistent

with an increase in bodily injury and accident benefit claims frequencies in 2010 and 2011

compared to 2009, as indicated in Section B.2.1.


CHAPTER 10

ROAD SAFETY



Table of Contents A Introduction ................................................................................................. 10-1

B Background .................................................................................................. 10-2

C Comprehensive Review of Education and Awareness Programs ................... 10-5

D Annual Planning Process .............................................................................. 10-8

D.1 Current State Assessment .......................................................................... 10-8 D.2 Key Assumptions and Principles .................................................................. 10-9 D.3 Strategic Framework ............................................................................... 10-10 D.4 Prioritizing Road Safety Issues .................................................................. 10-11 D.5 2011 Road Safety Programs ..................................................................... 10-13 D.6 Objectives and Measurement Plans ............................................................ 10-15

E Road Safety Investment And Allocation of Costs ........................................ 10-17

E.1 Road Safety Investment ........................................................................... 10-17 E.2 Allocation of Road Safety Expenditures ...................................................... 10-20

F Road Safety Reporting ............................................................................... 10-22

G Conclusion .................................................................................................. 10-23

Appendix 10 A – Letter Dated September 15, 2010 from Commission to the

Insurance Bureau of Canada..... ................................................................... 10-A

Appendix 10 B – 2011 Road Safety Business Plan ............................................. 10-B

Appendix 10 C – Survey of Select Road Safety Public and Private Programs ..... 10-C

Appendix 10 D – Rationale for Integrated, Multi-Component Road Safety Programs

..................................................................................................................... 10-D

Appendix 10 E – Programs/Tactics Discontinued or Transitioned as part of the

2007/2008 Road Safety Strategic Review .................................................... 10-E



Table of Figures Figure 10.1 – Outcomes of Road Safety Strategic Review ........................................... 10-4

Figure 10.2 – Best Practices in Road Safety Programs Focusing on Drivers and ICBC Response ........................................................................................................ 10-7

Figure 10.3 – 2011 Key Assumptions and Principles ................................................... 10-9

Figure 10.4 – 2011 Road Safety Strategic Framework .............................................. 10-10

Figure 10.5 – Criteria and Rationale in Determining Road Safety Priorities .................. 10-12

Figure 10.6 – 2011 Road Safety Programs .............................................................. 10-13

Figure 10.7 – Summary of Road Safety Investments from 2007 Actual to 2011 Forecast ($000’s) ....................................................................................................... 10-18

Figure 10.8 – Allocation of 2010 Road Safety Costs ($000’s) .................................... 10-20



A INTRODUCTION

1. In a letter dated September 15, 2010 (2010 Letter),1

The Commission considers that the next full revenue requirements application by ICBC would be an appropriate time to review ICBC’s road safety programs for operational efficiency and effectiveness, education and awareness program costs, and cost allocation matters.

the Commission directed ICBC

to address road safety programs in the context of this Application stating:

By this letter, ICBC is advised to address road safety matters in its next full revenue requirements application.

The 2010 Letter is included as Appendix 10 A to this Chapter.

2. ICBC has provided the materials in this Chapter in compliance with the 2010 Letter.

This Chapter demonstrates that ICBC invests in road safety programs with measurable

objectives and that the levels of funding are appropriate. It also demonstrates that ICBC

allocates the costs in accordance with the legislative framework as well as the Commission-

approved allocation methodology, and that programs are subject to periodic evaluation in

accordance with their size and scope.

3. The information in this Chapter is organized as follows:

• Section B provides background regarding the history of road safety filings.

• Section C summarizes the context and results of ICBC’s 2008 comprehensive

review of education and awareness programs and the changes that were made.

• Section D describes the annual planning process. The 2011 Road Safety Business

Plan is included as Appendix 10 B to provide a description of road safety

programs funded.

• Section E describes the investment in road safety programs from 2007 to the

present and explains the allocation of the costs between Basic and Optional

insurance.

1 The Commission’s letter was addressed to the Insurance Bureau of Canada.



• Section F describes ICBC’s ongoing annual reporting regimen to the Commission

that provides information for the Commission to determine that ICBC is

managing its investment in road safety effectively.

• Section G provides concluding remarks.

B BACKGROUND

4. In the January 2008 Decision on Revenue Requirements, the Commission indicated

that:

The Commission Panel looks forward to receiving ICBC’s comprehensive review of its investment in education and awareness road safety programs. The Commission Panel expects the result of that review will set a course for “clear funding tests, targeted programs to produce measurable claims cost reduction outcomes, and periodic or post-project evaluation carried out in a manner appropriate to the program” as expressed in the 2005 Decision.2

5. ICBC filed the 2008 Road Safety Filing as a compliance filing in fulfillment of this

direction regarding education and awareness road safety programs. The 2008 Road Safety

Filing included a description of the more inclusive 2007/2008 Road Safety Strategic Review.

It also used the strategic framework developed in the context of that review to address the

direction in the January 2008 Decision on Revenue Requirements regarding its investment

in education and awareness road safety programs, the allocation of the costs for education

and awareness road safety programs between Basic and Optional insurance, and reporting

on road safety programs in the 2008 Road Safety Filing.

6. In the 2010 Letter, the Commission said that ICBC’s 2008 Road Safety Filing met the

requirements as set out in the January 2008 Decision on Revenue Requirements and that no

further regulatory process was required.

7. To address the specific questions asked by the Commission, it was necessary to

examine the foundations that underlie ICBC’s overall investment in road safety. Therefore

this review, conducted in 2007 and early 2008, examined all road safety programs and

included a comprehensive review of education and awareness programs and tactics. In this

context road safety programs and tactics are defined as follows:3

2 January 2008 Revenue Requirements Decision, page 53.

3 As accepted by the Commission in its July 2006 Decision.



• Road safety program: a set of strategies designed to address a specific road

safety issue such as impaired driving, road improvement, etc.

• Road safety tactic: a component of a road safety program to address the

specific road safety issue such as the campaign conducted in support of enhanced

enforcement associated with impaired driving.

8. In undertaking the Road Safety Strategic Review, the objectives were to establish an

annual process to:

• Ensure that ICBC’s investment in road safety is focused on the highest priority

risks.

• Ensure that all programs have clear measurable objectives.

• Identify opportunities to improve operational efficiency and effectiveness.

• Address Commission concerns about the effectiveness of education and

awareness programs.

9. The Road Safety Strategic Review revisited the strategic mandate of road safety. It

challenged many assumptions governing current programs, scrutinized every investment

within road safety, and examined measures used to gauge the success of program and

tactic outcomes.

10. The Road Safety Strategic Review’s major outcomes, therefore, addressed many

areas of interest to both ICBC and the Commission. The major outcomes of the review are

summarized in Figure 10.1.



Figure 10.1 – Outcomes of Road Safety Strategic Review

Concern Addressed Results

Clarified Road Safety’s strategic direction

Shifted away from a model that focuses on solutions (the “3E” model of engineering, enforcement, education) to a more holistic “Safe Systems” approach, which focuses on major causes of crashes (drivers, roads, and vehicles).

Ensured programs are targeted and yield measurable claims cost reduction outcomes

Targeted road safety priorities; focused on major causes of crashes.

Developed measurable objectives for every program.

Established clear funding test for all road safety investments

Prioritized programs to ensure a more focused set of road safety programs.

Examined tactics to determine the expenditure needed to achieve the objective established for each tactic.

Conducted a comprehensive review of education and awareness programs

Transitioned programs and tactics that no longer aligned to program priorities.

Focused on awareness tactics that can be enforced (like speed) and aligned them to an enforceable consequence (i.e., something police can enforce, something that affects an individual’s insurance premiums or driver’s licence, etc.).

Conducted regular evaluations appropriate with the program

Post-implementation reviews for all tactics, commensurate with their size and complexity.

Comprehensive evaluations of programs and tactics conducted periodically (e.g., road improvements, Intersection Safety Cameras).

Multi-year research to build a model to assist Road Safety in understanding effective interventions for motivating behaviour change will continue.

Improved the overall effectiveness of road safety

Consistent approach in the delivery of road safety programs by creating one road safety strategy and plan, and by clarifying roles for program development and implementation.

Improved efficiencies by identifying opportunities to develop and deliver programs with fewer resources and by eliminating and refocusing a number of programs and tactics.



11. ICBC has also used the outcomes of the Road Safety Strategic Review to guide its

annual planning process since 2008. These outcomes have been tested and refined during

the annual planning cycle. ICBC believes that the Road Safety Strategic Review has set a

course that will ensure appropriate levels of funding, programs with measurable objectives,

and evaluation reporting appropriate to the size and scope of the program.

C COMPREHENSIVE REVIEW OF EDUCATION AND AWARENESS PROGRAMS

12. In this Section ICBC describes the comprehensive review of education and awareness

programs conducted as part of the Road Safety Strategic Review and that formed the focus

of the 2008 Road Safety Filing. It summarizes the impact of the Road Safety Strategic

Review on education and awareness programs and tactics and highlights the changes that

ICBC made in response to the findings of the review, including:

• Eliminating stand-alone education and awareness programs.4

• Supporting driver programs that have enforceable consequences and focusing on

education and awareness tactics in support of these programs.

• Establishing measurable objectives for each program.

• Establishing measurable objectives for each tactic that is in support of a program.

• Conducting annual post-implementation reviews to ensure that the measurable

objectives for each tactic have been achieved.

• Conducting periodic comprehensive evaluations when sufficient data is available.

13. As part of the Road Safety Strategic Review process, ICBC shifted away from an

approach that focussed on solutions by classifying programs as engineering, enforcement,

or education (the “3E” model) to an approach which focuses on the major causes of

crashes: Drivers, Roads, and Vehicles (Safe Systems approach).

14. Under the previous “3E” model, ICBC invested in stand-alone education and

awareness programs which have the goal of changing driver behaviour. However, ICBC’s

4 Certain corporate initiatives, such as the “Share a Wave and Win” campaign, that do not meet ICBC’s and the Commission’s definition of Road Safety (see paragraph 59) are not considered road safety programs and are thus not allocated 100% to Basic insurance.



research into best practices followed by road safety practitioners in other jurisdictions

indicates that the most successful programs to change driver behaviour focus on

enforceable consequences. Examples of enforceable consequences include motor vehicle

related convictions, insurance premium discounts or increases, and loss of driving

privileges. Other jurisdictions use a combination of enforcement tactics (such as police

activity or legislation) and education and awareness tactics.

15. The above best practices also indicate that conducting education and awareness

programs in isolation is less effective. Therefore, ICBC focuses on education and awareness

tactics that can be tied to enforceable consequences. A key conclusion of the review

process was that ICBC should focus on using education and awareness tactics to support

driver programs that have enforceable consequences, positive or negative. This is one of

the key principles of ICBC investment in education and awareness tactics.

16. This research identified that a combination of enforcement and education are key

components of virtually all significant road safety programs around the world that focus on

driver behaviour. It also indicated that the evaluation of multi-component programs that

include education clearly shows that such programs are more effective in reducing crashes

and injuries. The research also identified practices for optimizing the benefits of road safety

education and awareness activities. Figure 10.2 describes these best practices and how

ICBC has incorporated these practices into the design and implementation of its education

and awareness tactics.5

5 See Appendices 10 C and 10 D.



Figure 10.2 – Best Practices in Road Safety Programs Focusing on Drivers and ICBC Response

Best Practice ICBC Response

Use multiple tactics in road safety programs, as no single approach has been shown to have a significant and sustained impact on road safety.

ICBC’s Road Safety Drivers programs use multiple tactics, combining education and enforcement.

There is no consistent evidence indicating that using education on its own, and in particular media advertising, has a significant and sustained impact on road safety.

ICBC will focus on education tactics that support enforcement.

Each road safety program and each target audience requires a specific and unique advertising strategy that is sensitive to the psychographics and socio-cultural context of the audience and the targeted behaviour.

Each ICBC advertising campaign is designed to reach a specific target audience.

Strategic integration of advertising with other program components is essential. Media advertising may not change driver attitudes or behaviours directly, but it can significantly impact other components such as enforcement or legislation if it is explicitly designed to support these components.

ICBC’s advertising supports other tactics, such as increased targeted enforcement, to raise awareness of specific driving problems and their consequences.

17. As part of the Road Safety Strategic Review, ICBC assessed all education and

awareness programs and tactics to determine if they should be maintained, changed, or

discontinued. This review process is described in more detail in Section D.4. As a result of

the conclusion that ICBC should focus on road safety programs that have enforceable

consequences, ICBC discontinued funding for a number of stand-alone education and

awareness programs as listed in Appendix 10 E.

18. After determining the road safety programs that would be supported, ICBC

established measurable objectives for each program. This process is described in Section

D.6 and the objectives for every program are provided in the 2011 Road Safety Business

Plan in Appendix 10 B. Up to 2010, the measurable objectives for drivers programs were

based on the casualty crash rate associated with the particular issue being addressed by the

program in addition to survey results regarding the relevant driver behaviour. Section D.6

outlines changes to this approach for 2011.



19. ICBC then conducted a prioritization process to determine the tactics needed to

achieve the program objectives.

20. Measurable objectives were established for each tactic by the process described in

Section D.6. The objectives for every tactic are provided in the 2011 Road Safety Business

Plan in Appendix 10 B. As discussed in Section D.5, every program and tactic undergoes an

annual operational review to determine whether the objectives have been achieved,

whether the program or tactic should be continued, and, if so, whether operational

improvements can be implemented.

21. In addition, ICBC periodically undertakes evaluations, when sufficient data are

available to analyze the specific impact of a program or tactic.

22. The Road Safety Strategic Review has resulted in the inclusion of education and

awareness tactics as part of the road safety programs where there are enforceable

consequences and elimination of stand-alone education and awareness programs.

D ANNUAL PLANNING PROCESS

23. ICBC has been using the outcomes of the Road Safety Strategic Review to guide its

annual planning processes since 2008. These outcomes have been tested and refined

during the annual planning cycle. This section describes the steps conducted in the annual

planning process based on the outcomes of the Road Safety Strategic Review, providing

information on the process and the results.

D.1 CURRENT STATE ASSESSMENT

24. The first step in the planning process is to understand the current state of road

safety. ICBC reviews BC police-reported crash data and ICBC claims data, and contacts

other organizations engaged in road safety to gather information on their strategies and

programs.

25. The results of this process involving other organizations and jurisdictions include:

• Crash rate comparisons.

• Review of strategies, targeting driver behaviour, roads, and vehicles.

• Major areas of focus (e.g., speeding, impaired driving), many of which are similar

to the risks on BC’s roads.



• Measuring the attribution of behavioural change to crash prevention outcomes

(this continues to be a challenge in all jurisdictions).

D.2 KEY ASSUMPTIONS AND PRINCIPLES

26. Based on the review of BC crash data and information from other jurisdictions, ICBC

develops key assumptions for renewing its road safety strategic framework. ICBC also

develops principles to guide the formulation of the road safety strategic framework. These

assumptions and principles are reviewed annually. The key assumptions and principles for

the 2011 annual planning process are summarized in Figure 10.3.

Figure 10.3 – 2011 Key Assumptions and Principles

2011 Key Assumptions

Road Safety and ICBC’s Customers • Road Safety is focused on protecting ICBC’s customers throughout the province.

• Road Safety investments are designed to protect customers from risk by preventing and minimizing the impact of crashes and crime. In so doing, insurance premiums remain low and stable, and customers are provided with protection and peace of mind.

• Road Safety programs are data driven and evidence based.

• Road Safety will support corporate goals and measures.

2011 Road Safety Principles

ICBC will:

• Be guided by a clear plan that considers both provincial and local needs.

• Deliver programs that target the most serious road safety risks and minimize the harm (injury, death, and property damage) to customers.

• Focus programs on delivering claims savings benefits.

• Proactively partner with stakeholders and individuals.

• Ensure that all programs and tactics have measurable objectives and appropriate evaluation plans.



D.3 STRATEGIC FRAMEWORK

27. Guided by the assumptions and the assessment of road safety’s current state, ICBC

develops an updated strategic framework. The strategic framework is reviewed during the

annual planning cycle and is updated annually. Figure 10.4 is the Road Safety Strategic

Framework as modified during the 2011 annual planning cycle. It describes the strategic

intent, the primary strategic outcomes that will determine success, the key areas of focus,

and the manner in which ICBC will pursue its road safety goals.

Figure 10.4 – 2011 Road Safety Strategic Framework

2011 Strategic FrameworkProtect customers from risks on the road by preventing

and minimizing the impact of crashes and crime

Fewer Crashes Caused

by Unsafe Driving

Support our customers to improve their unsafe driving

behaviours

Reduce vehicle-related safety and

crime vulnerabilities

Reduce road-related driving

hazards

1. Lead the development of programs that help customers understand the impact and consequences of their driving choices, and the accountability they have to improve the way they drive

2. Support the development and implementation of insurance, driver licensing and other interventions to increase safe driving

3. Support and promote enforcement strategies targeted to Road Safety issues

4. Support the development and implementation of legislation, sanctions and other means to protect customers to increase safe driving

6. Partner with others to improve vehicle safety so customers are protected from injury

7. Partner with others to improve vehicle security to protect customers from being victims of crime

5. Work with partners to:

− prevent crashes at targeted locations throughout BC

− maintain the priority of road safety infrastructure during roadway planning

Vehicles that Minimize

Impact of Crashes and Crime

Strategic Intent

StrategicOutcomes

Goals & Objectives

Attitude Changes, More

Accountability

Fewer Auto Crime Incidents

Safer, More Forgiving Roads

28. Key points to highlight in the framework in Figure 10.4 include:

• The framework focuses on drivers, roads, and vehicles, the three causes of

crashes recognized as components of a Safe Systems approach to road safety.

• Prior to 2008, ICBC classified work under the headings of the “3E”, enforcement,

education and engineering. These are strategies rather than the causes of



crashes. The new framework focuses first on the major causes of crashes, and

then identifies strategies to address those issues.

• Driver accountability recognizes ICBC’s move to driver-based pricing and the

need to help customers make safe driving choices.

• The “Roads” category includes the Road Improvement Program, in which ICBC

partners with municipal and provincial road authorities to help make roads safer.

• ”Vehicles” includes vehicle safety and auto crime reduction.

D.4 PRIORITIZING ROAD SAFETY ISSUES

29. Prior to the Road Safety Strategic Review, road safety programs addressed a range

of issues, including age groups (youth, seniors), driving behaviours (impaired driving,

distractions, fatigue), environmental factors (bad weather), vulnerable road users (cyclists,

pedestrians), and vehicle types (motorcycles, commercial vehicles). The Safe Systems

strategic framework focuses on the causes of crashes (drivers, roads, and vehicles),

recognized in other jurisdictions as a holistic approach to road safety.

30. ICBC has established criteria that assist management in assessing the relative

importance of the causes of crashes. Figure 10.5 provides examples of the criteria that

ICBC employs and ICBC’s rationale for including those criteria in the prioritization process.



Figure 10.5 – Criteria and Rationale in Determining Road Safety Priorities

Criteria Rationale

Crash Costs ■ Costs help provide context for the impact on claims costs and Basic insurance premiums.

Crash Frequency ■ Looking at the rate and incident numbers provides the relative size of the problem, which in turn impacts claims costs and premiums.

Casualty Frequency ■ Provides a view on the impact to ICBC’s customers, beyond the pure financial indicators of frequency/severity.

Trends ■ Examines data that might illustrate different perspectives on how a problem appears (i.e., depending on one’s perspective, progress could be measured by fewer fatalities and serious injuries, or simply on lower claims frequencies, or on lower severities, or on a combination of all three).

Ability to Effect Change ■ A qualitative assessment of ICBC’s ability to either directly or indirectly influence a change.

■ A useful indicator of whether short, medium, or long-term impacts could result from a road safety investment.

Support for related corporate initiatives

■ The extent to which a driving behaviour is also being targeted as a priority in another part of ICBC’s business (e.g., claims handling, driver licensing).

31. In addition, there are other considerations taken into account that relate to

government (e.g., is this a legislative priority?), stakeholders (e.g., are there

complementary partners to help support this work?), and customers (e.g., is this an issue

customers are concerned about? This helps assess how difficult it will be to effect

behavioural change).

32. ICBC focuses on key issues that represent the major road safety risks in the

province. For example, within the “Drivers” category, priority is given to those issues that

can be tied to enforceable consequences. The rationale is to increase the perception of the

risk of apprehension among BC drivers, in the form of getting fines, being subject to

premium increases, risk of losing one’s licence, etc. The intended outcome of these

interventions is to reduce crashes and save lives.

33. An example explains this rationale. The issue of fatigue has emerged as a significant

cause of crashes. However, there is no legislative framework in place to support effective



consequences (e.g., fines for driving while sleepy), which means ICBC would be limited to

public awareness activities only.

34. While ICBC measures the impact of awareness campaigns using survey tools,

research suggests change associated with problems such as fatigue (and others) will not

occur over the shorter term without complementary enforcement (see Appendix 10 D,

Rationale for Integrated, Multi-Component Road Safety Programs). Therefore ICBC does

not invest in a program to combat driver fatigue.

D.5 2011 ROAD SAFETY PROGRAMS

35. The 2011 annual planning process resulted in the funding for the road safety

programs as indicated in Figure 10.6.

Figure 10.6 – 2011 Road Safety Programs

2011 Road Safety Programs


by Unsafe Driving

Attitude Changes

Safer, More Forgiving Roads

Safer Vehicles

ROADS VEHICLESDRIVERSFewer Auto Crime

Incidents

Impaired DrivingSpeedingIntersection SafetyOccupant RestraintsDistractions

Road Improvement Program

Auto CrimeSafer Vehicles



36. These programs are discussed in detail in the 2011 Road Safety Business Plan

(Appendix 10 B); however, key points are summarized below.

a) DRIVERS

• Impaired driving and speeding behaviours are major causes of crashes. This is

consistent with the experience of other jurisdictions.

• Intersection Safety accounts for the driving behaviours that typically result in crashes at

intersections (where over 40% of all crashes occur), such as failing to yield and following

too closely.

• Occupant Restraints deals with the decisions customers make in regards to using

seatbelts and child restraint devices. BC has one of the highest rates of seatbelt usage,

with almost 97% of motorists buckling up. The program focuses on maintaining BC’s

high seatbelt usage.

• In January 2010, new provincial legislation took effect that limits/prohibits the use of

hand-held cell phones and personal electronic devices while driving. As an enforceable

driver behaviour, ICBC supported the introduction of the law by developing a public

awareness campaign focusing on the details of the law and the risk the behaviour poses.

b) ROADS

• The Road Improvement Program has generated claim saving benefits with a return of 5

to 12 times the investment by funding improvements such as traffic signals and

roundabouts at high crash locations across BC. Road engineering is used by jurisdictions

around the world to address road safety.

c) VEHICLES

• Auto crime includes vehicle theft, break-ins, and vandalism. The primary focus is

vehicle theft, given that this is a substantially larger share of total auto crime claims

costs and that ICBC and police have effective tactics to target at-risk vehicles and those

who aim to steal vehicles.

• Safer Vehicles is an area of potential opportunity. In the last 15 years, ICBC has been

involved with other insurers, governments, and vehicle manufacturers to address

aspects of vehicle design that will improve road safety outcomes.



D.6 OBJECTIVES AND MEASUREMENT PLANS

37. As part of the annual planning process ICBC develops specific objectives for each

program. Data, experience, the impact of individual tactics, and other considerations (e.g.,

the possibility of new legislation, government policy initiatives, policing plans, etc.) inform

the setting of targets for each program objective.

38. The development of targets for the driver programs has previously been based on

police-reported crashes in the Traffic Accident System (TAS). This is currently the only

source of observation information in BC about human factors that contribute to any specific

crash.

39. On July 1, 2008, collision reporting requirements for police were amended under the

Motor Vehicle Act (MVA) section 249 and it became no longer mandatory for drivers to

report crashes to police, or for police to submit MV6020 forms to ICBC for collisions that

were reported by drivers. Police only had to file reports on crashes they attended, and

attendance was left to their discretion. Since that change was introduced, the total number

of police reports has declined, particularly for property-damage-only and injury crashes.

40. In late 2010, after sufficient data had been collected following the MVA change, ICBC

conducted an internal analysis of TAS data. The analysis found that TAS data can no longer

be used to track changes in collisions over time, particularly when comparing data prior to

2008 with data post-2008. This has affected ICBC’s ability to use TAS data for driver-based

program measuring and monitoring.

41. However, current analysis indicates that the relative ranking of human factors

contributing to crashes remains unchanged (i.e., Road Safety continues to focus on the

most serious risks). ICBC will therefore during 2011 and 2012 explore the feasibility of

using other performance measures to design, measure, and monitor driver-based programs.

In the interim, driver-based program performance will be measured through the use of

driver attitudes, perceptions, and self-reported behavioural indicators. Crash rates and

casualty crash rates (based on ICBC data) will continue to be used as overall indicators for

ICBC’s Road Safety program.

42. ICBC also develops objectives for each tactic within each program. Tactics have a

combination of outcome objectives (where possible) and activity-based or output objectives

(where it is not possible to measure the short-term impact on crashes).



43. Each tactic undergoes an annual post-implementation review. This review

determines whether the annual objectives are achieved, whether the tactic should be

continued and if so, whether operational improvements can be implemented. In addition,

ICBC periodically undertakes evaluations, when sufficient data are available, to analyze the

specific impact of a program or tactic. These are filed as part of the annual Road Safety

filing (see Section F).

44. For example, since 1996, the Road Improvement Retrofits tactic, a large investment,

has been comprehensively evaluated seven times. The next evaluation is scheduled for

2014. Similarly, the Intersection Safety Camera tactic has undergone two comprehensive

evaluations since its initial introduction in 1999. The Road Safety Speaker Tour tactic, an

awareness tactic for high school age students, was comprehensively evaluated in 2007.

45. ICBC measures the effectiveness of awareness campaigns by tracking drivers’

perceptions of the risk of being caught if they engage in a risky driving behaviour (such as

speeding or driving while impaired) and tracking self-reported on-road behaviour.

Awareness campaigns are designed to change behaviours that are known to increase crash

risks, but this can take many years to achieve. If the desired behaviours do change over

time as a result of such campaigns then it follows that this should lead to reductions in

crashes and associated claims costs. However, ICBC cannot in isolation determine cost

savings benefits for awareness campaigns on a year to year basis and therefore combines

these tactics designed to produce long-term behavioural change with tactics producing

short-term crash prevention outcomes as previously discussed in Section D.4. This

strategic shift was made based on interviews with road safety program staff in other

jurisdictions and a thorough review of research documents.6

46. ICBC’s approach, where awareness tactics only support programs where a motorist

will experience consequences for behaving unsafely, coupled with an annual operational

review of achievement of tactical objectives, provides assurances that ICBC’s customers will see long-term benefits from this investment in awareness tactics.

6 Appendix 10 D, Rationale for Integrated, Multi-Component Road Safety Programs, contains references to many studies that have been conducted on this topic.



E ROAD SAFETY INVESTMENT AND ALLOCATION OF COSTS

47. In this section the road safety investment is described, as well as the allocation of

these costs between Basic and Optional insurance.

E.1 ROAD SAFETY INVESTMENT

48. Figure 10.7 shows a summary of the investment in Road Safety from 2007 through

2008 when the new road safety strategy was implemented and onward to the 2011

forecast. The investment summary is divided into Drivers, Roads, and Vehicles programs.

Costs are itemized at the tactical level and education and awareness tactics are grouped

under the relevant Drivers programs and the Auto Crime program.



Figure 10.7 – Summary of Road Safety Investments from 2007 Actual to 2011 Forecast ($000’s)

* Enhanced enforcement includes an amount of approximately $2 million per annum in the Vehicles category. ** The investment summary does not include the investment for the Intersection Safety Camera Upgrade tactic, which is funded from the Corporate Project Fund. The costs for this project are shown in Figure 7.10 of Chapter 7.

2007 2008 2009 2010 2011Actual Actual Actual Actual Forecast

DriversMOU

Enhanced Enforcement* $18,906 $18,159 $24,464 $25,615 $25,766

Impaired DrivingImpaired Driving Awareness Campaign $261 $1,249 $841 $681 $699Community Partnerships $21 $16 $72 $210 $610Subtotal Impaired Driving $282 $1,265 $913 $891 $1,309

SpeedingSpeed Awareness Campaign $892 $680 $950 $622 $952Roadside Speed Readerboards $107 $121 $177 $148 $178Youth Outreach $0 $198 $235 $275 $353Research $73 $72 $22 $0 $0Subtotal Speeding $1,072 $1,071 $1,384 $1,045 $1,483

Intersection SafetyIntersection Awareness Campaign $288 $412 $554 $475 $752Intersection Safety Camera Upgrade** $161 $0 $0 $0 $0Subtotal Intersection Safety $449 $412 $554 $475 $752

Commercial Vehicle SafetyStrategy Development $0 $22 $14 $0 $0

Driver DistractionsDriver Distractions Awareness Campaign $0 $0 $0 $2,129 $610

Occupant RestraintsOccupant Restraint Awareness Campaign $18 $2 $0 $0 $0Child Passenger Safety $387 $274 $188 $254 $177Subtotal Occupant Restraints $405 $276 $188 $254 $177

OtherPrograms discontinued in 2008 $1,155 $0 $0 $0 $0

SUBTOTAL DRIVERS $22,269 $21,205 $27,517 $30,409 $30,097

RoadsEngineering retrofits $8,987 $9,154 $8,645 $8,952 $8,400

SUBTOTAL ROADS $8,987 $9,154 $8,645 $8,952 $8,400

VehiclesSafer Vehicles

Safer Vehicles $0 $12 $14 $50 $285

Auto CrimeAuto Crime Awareness Campaigns $433 $315 $162 $181 $182High Risk Vehicle Immobilization $8 $156 $136 $199 $200High Risk Auto Crime Partnerships $801 $439 $319 $277 $300Subtotal Auto Crime $1,242 $910 $617 $657 $682

SUBTOTAL VEHICLES $1,242 $922 $631 $707 $967

TOTAL DIRECT EXPENSES $32,498 $31,281 $36,793 $40,068 $39,464

Research & Measurement Direct Expenses $248 $168 $144 $196 $235Compensation $5,226 $3,866 $4,224 $4,265 $4,458General Expenses $1,421 $1,374 $1,419 $1,227 $1,439

TOTAL ROAD SAFETY EXPENSES $39,393 $36,689 $42,580 $45,756 $45,596



49. ICBC’s investment in enhanced enforcement is managed through the Traffic and

Road Safety Law Enforcement Memorandum of Understanding (Road Safety MOU), which

sets an investment level of 1.25% of Basic insurance earned premium for the calendar year

two years prior to the current year. In addition, the Road Safety MOU funding supports the

operational costs for Intersection Safety Cameras and the Integrated Municipal Provincial

Auto Crime Team (IMPACT).

50. ICBC uses zero-based funding principles to determine the budget needed for every

tactic in every program. This starts with determining what human resources (e.g., salaries)

and expenses (e.g., advertising costs, volunteer expenses) are needed to successfully

implement each tactic, based on the timeframe, geographic location, and audience that has

been identified. Using this information, a budget for each tactic is developed.

51. The Road Improvement Program works in partnership with local and provincial

authorities, participating in engineering studies to assess local areas of concern and

assisting communities in undertaking engineering upgrades. ICBC’s investment in the Road

Improvement Program is limited by the ability of ICBC’s partners to contribute funds to

cost-shared projects; therefore, the investment is maintained at a fairly constant level.

52. Vehicles programs include the Auto Crime program which is undertaken in support of

enhanced enforcement and the Safer Vehicles program.

53. Reduced investment in 2008 relative to 2007 is a result of the changes brought

about by the Road Safety Strategic Review, including the discontinuation of funding for a

number of education and awareness programs and lower compensation costs as a result of

decreased support for these programs.

54. In 2009 the Road Safety MOU was amended and the investment in road safety

programs increased due to a change in payments owing. The funding formula changed from

1% to 1.25% of Basic insurance earned premiums.

55. In 2010 the increased investment in road safety programs was largely due to the

public awareness campaign to support new legislation restricting the use in vehicles of

handheld personal electronic devices such as cell phones. The 2011 forecast does not

indicate a significant change in the investment in road safety programs.



E.2 ALLOCATION OF ROAD SAFETY EXPENDITURES

56. This section provides information on the allocation of road safety expenditures

between Basic and Optional insurance, specifically regarding costs associated with education

and awareness tactics. The current allocation of road safety costs is shown in Figure 10.8.

Figure 10.8 – Allocation of 2010 Road Safety Costs ($000’s)

Cost Item Cost % Allocated to Basic Allocated to Basic

Allocated to Optional

Road Safety MOU - Enhanced Enforcement 25,615 100% 25,615 0

Drivers tactics 4,794 99.1%7 4,750 44

Road improvements 8,952 100% 8,952 0

Safer vehicles 50 100% 50 0

Auto Crime Awareness Campaigns and partnerships

458 26.9%8 123 335

High-Risk Vehicle immobilization 199 0% 0 199

Total 40,068 98.5% 39,490 578

57. In determining the allocation of costs associated with road safety programs, ICBC

takes its guidance from section 7(i) of the Insurance Corporation Act, which gives ICBC the

power and capacity to promote and improve highway safety, and from Special Direction IC2

which requires that all road safety expenditures be recovered through Basic insurance

premiums. Among other items, Special Direction IC2 provides that the Commission must:

Fix Basic insurance rates “on the basis of accepted actuarial practice” to allow ICBC to collect sufficient revenue to pay for items identified in section 3(1)(c), which include: certain road safety programs, vehicle and driver licensing costs, and costs incurred by ICBC under certain Memoranda of Understanding with Government, including the “Traffic and Road Safety Law Enforcement Funding Memorandum of Understanding.”

7 See Appendix 7 A of Chapter 7. These costs are variously allocated to “Directly Attributable to Basic”; “100% Basic with Exceptions”; and “Comprehensive Coverage-Market Share”. 8 See Appendix 7 A of Chapter 7. These costs are allocated to “Comprehensive Coverage-Market Share”.



58. ICBC’s investment in enhanced enforcement is included in the above Road Safety

MOU and therefore must be allocated 100% to Basic insurance. Furthermore, as discussed

in Section C, ICBC will invest in road safety education and awareness tactics in support of

programs where a driver will experience enforceable consequences for behaving unsafely.

All tactics for the Drivers programs are therefore in support of the investment in enhanced

enforcement and should also be allocated 100% to Basic insurance.

59. The Commission accepted ICBC’s definition of “Road Safety” in its July 2006

Decision, as:

Road Safety - Initiatives that are designed to promote or improve highway safety. This includes initiatives to prevent traffic crashes and initiatives to prevent injuries or reduce the severity of injuries resulting from traffic crashes.9

60. All road safety programs that ICBC funds conform to the above definition of Road

Safety and the associated costs should therefore be allocated 100% to Basic insurance.

This includes the Road Improvement Program which has measurable claims savings benefits

and the Safer Vehicles program. For driver behaviours, education and awareness tactics in

support of program objectives of reducing injuries or the severity of injuries are linked to

enforceable consequences.

10

61. ICBC funds a number of tactics for the Auto Crime program. As approved by the

Commission in the July 2006 Decision, costs for these tactics are allocated on the basis of

ICBC’s Comprehensive insurance market share. In 2010 the allocation of these costs to

Basic insurance was 26.9%.

62. ICBC believes that the allocation of the road safety costs is in accordance with

Special Direction IC2 and conforms to the definition of road safety accepted by the

Commission.

9 July 2006 Decision, page 73. 10 Other corporate initiatives that do not conform to ICBC’s definition of “Road Safety” (such as the “Share a Wave and Win contest” which is designed to raise awareness and engagement among customers of demonstrating courtesy while driving), are allocated differently.



F ROAD SAFETY REPORTING

63. This section describes the ongoing regimen of Road Safety reporting and program

evaluations that ICBC has applied in the past three years. This regimen enables the

Commission to determine that ICBC is managing its investment in road safety effectively.

64. ICBC was concerned that historical road safety reporting resulted in the Commission

receiving evaluation reports on an ad hoc basis, without the necessary contextual structure

and background for the Commission to understand the effectiveness of the applicable

programs. ICBC therefore proposed in 2008 an annual reporting regimen that would

include an annual Road Safety reporting filing (Road Safety filing) on or before September

30 of each year.

65. The Road Safety filing includes the annual plan for the current calendar year, similar

to the plan for 2011 found in Appendix 10 B. It also includes the following items:

• Any updates to the strategic framework described in Section D.3.

• For every program, updates to the following:

o Problem statement.

o Planning direction and strategies.

o Program objectives and their rationale.

o For every tactic, updated tactic description and objectives.

• An investment summary similar to that provided in Appendix 10 B, which

provides actual costs for the previous year, together with planned costs and

outlook for the current year.

66. The Road Safety filing also includes an annual report for the previous calendar year.

This describes progress towards achieving the objectives of each program and tactic,

including most recently available program data and information.

67. This report cannot be completed earlier in the year, as assessing the achievement of

objectives requires police and other data on the causes of crashes and this information is

not available until mid-summer each year.

68. The Road Safety filing also includes any comprehensive evaluation reports that ICBC

has completed in the previous year.



69. ICBC believes that this reporting regimen provides information for the Commission to

confirm that ICBC is managing its investment in road safety effectively.

G CONCLUSION

70. The Road Safety Strategic Review addressed many areas of interest to both ICBC

and the Commission, and resulted in a refinement of priorities to focus on the major causes

of crashes. Each program and tactic has measurable objectives and ICBC has a plan in

place to measure the achievement of these objectives.

71. ICBC believes that the Road Safety Strategic Review, and in particular the

comprehensive review of education and awareness programs, set a course that will ensure

appropriate levels of funding, programs with measurable objectives, and evaluation

reporting appropriate to the size and scope of the program. In addition ICBC believes that

it is allocating all road safety costs in compliance with the legislative framework.


APPENDIX 10 A LETTER DATED SPETEMBER 15,

2010 FROM COMMISSION TO THE INSURANCE BUREAU OF CANADA


APPENDIX 10 B 2011 ROAD SAFETY BUSINESS

PLAN

2011 road safety business plan

table of contents

i

Departmental overview .................................................................................................... 1

Key opportunities and challenges .................................................................................... 2

Opportunities .............................................................................................................. 2

Challenges .................................................................................................................. 3

Key assumptions and principles ....................................................................................... 4

Strategic framework ......................................................................................................... 5

Road safety objectives ...................................................................................................... 6

Crash prevention ......................................................................................................... 6

Crash projections for 2011 ................................................................................... 6

Auto crime prevention ................................................................................................ 7

Auto crime projections for 2011 ........................................................................... 7

Programs and tactics ........................................................................................................ 9

Driver programs ........................................................................................................ 10

Impaired driving ................................................................................................. 10

Speeding ............................................................................................................ 14

Intersection safety ............................................................................................... 19

Occupant restraints............................................................................................. 23

Driver distractions ............................................................................................... 27

Road programs ......................................................................................................... 29

Road improvement program .............................................................................. 29

Vehicle programs ...................................................................................................... 32

Safer vehicles ...................................................................................................... 32

Auto crime .......................................................................................................... 34

Research and strategy development .............................................................................. 38

Investment summary ...................................................................................................... 39


page 1

Departmental overviewThe Road Safety department develops and manages programs that help prevent traffi c crashes and auto crime. This provides a benefi t to ICBC customers by protecting them from risks on the road, helping to reduce injuries and fatalities caused by crashes, and helping to maintain low and stable insurance premiums. The department’s activities support the corporate objective of maintaining fi nancial stability by helping control claims costs.

Road Safety programs are focused on the safe systems approach, which considers the key factors impacting crashes, namely drivers, roads and vehicles. Programs have both short-term and long-term objectives, refl ecting the fact that some risks and challenges have different timeframes involved in effecting a positive change (e.g., roads can typically be re-engineered more quickly than changing an entrenched attitude or behaviour).

Road Safety goalProtect customers from risks on the road by preventing and minimizing the impact of crashes and crime.


page 2

Key opportunities and challenges

Opportunities

Internal• ICBC’s 2014 strategy1 identifi es fi nancial stability as a priority, which reinforces the

corporation’s commitment to evidence-based and targeted programs focused on crash prevention and claims savings.

• Road Safety’s continued focus on measurement and data will help direct the program’s investment in initiatives that drive its strategy and reinforce the change it is trying to bring about on B.C.’s roads.

External• Release of the fi rst B.C. Public Health Offi cer’s Report on Road Safety in Q4 of 2011

could raise awareness of the contribution of crash-related injuries to the overall health and societal costs of British Columbians, and encourage collaboration among health and road safety agencies to support the development of comprehensive programs.

• The Canadian Council of Motor Transport Administrators’ (CCMTA) Road Safety Strategy 20152 could raise national awareness of road safety issues, improve collaboration among road safety agencies, improve national road safety information in support of research and evaluation, and support enhanced enforcement.

• New federal regulations for electronic stability control (ESC) will be in place September 1, 2011. Data gathered by Transport Canada indicates a reduction of approximately 30% in the number of severe collisions involving loss of control for vehicles equipped with ESC. Manufacturers’ advertising could increase awareness of important vehicle safety features and change consumer patterns in the near term.

• The provincial government has taken steps to strengthen legislation and regulations with respect to certain road safety issues. Initiatives in recent years include new distractions legislation, stronger occupant restraint regulations, stronger administrative sanctions for impaired driving, new legislation dealing with emergency vehicles, ignition interlock enhancements, and improved standards for motorcycle helmets.

• In recent years, there has been more visible and active involvement of stakeholders in championing road safety issues and programs. This provides an opportunity to partner with others in communicating messages that help improve safety on B.C.’s roads and align with ICBC’s Road Safety program.

1 Vision 2014 defi nes ICBC’s strategic themes to improve customer perception, improve employee experience, and maintain fi nancial stability.

2 http://ccmta.ca/crss-2015/?lang=en_CA


page 3

Challenges

Internal• While research of multi-component programs that include education tactics clearly

shows that such programs reduce crashes and injuries, measuring the direct claims cost reduction benefi t of some programs remains a challenge. For example, initiatives aimed at increasing awareness may take several years to infl uence a measurable behaviour change, yet that behaviour may also be infl uenced by other factors such as economic conditions, weather, vehicle design, and fuel prices.

• Some programs depend on support from other ICBC departments where available resources may be limited.

External• External factors such as the economy, weather, and emerging technologies can have

signifi cant infl uences on crashes. For example, advances in fuel effi ciency in 2011 vehicle models may offset higher fuel prices and increase the average kilometres driven as compared to 2010.

• ICBC continues to face external pressures (from customers, stakeholders, etc.) to fund programs that fall outside its strategic mandate and/or do not produce strong crash prevention benefi ts.

• Partnering with external stakeholders will improve program quality, but may require more time for the program development process to ensure there is meaningful engagement in order to achieve positive road safety outcomes.

• Changes to the Motor Vehicle Act in July 2008 impacted the collision reporting requirements for police. This has resulted in a decline in the total number of police reports in the Traffi c Accident System (TAS) database. TAS data can no longer be used to track changes in collisions over time, which has affected ICBC’s ability to use TAS data for driver-based program measuring and monitoring. (See note on page 9.)


page 4

Key assumptions and principlesThe following assumptions and principles guide development of detailed program and tactical plans.

Key assumptions

• Road Safety is focused on protecting ICBC’s customers throughout the province.

• Road Safety investments are designed to protect customers from risk by preventing and minimizing the impact of crashes and crime. In so doing, insurance premiums remain low and stable, and customers are provided with protection and peace of mind.

• Road Safety programs are data driven and evidence based.

• Road Safety will support corporate goals and measures.

Road Safety principles

Road Safety will:

• Be guided by a clear plan that considers both provincial and local needs.

• Deliver programs that target the most serious road safety risks and minimize the harm (injury, death, and property damage) to customers.

• Focus programs on delivering claims savings benefi ts.

• Proactively partner with stakeholders and individuals.

• Ensure that all programs and tactics have measurable objectives and appropriate evaluation plans.


page 5

Strategic frameworkICBC uses the Safe Systems approach to classify all Road Safety programs into three categories, representing the major causes of crashes: Drivers, Roads and Vehicles.

Strategic Goal

Protect customers from risks on the road by preventing and minimizing the impact of crashes and crime

Strategic Outcomes


by Unsafe Driving

Attitude Changes, More Accountability

Safer, MoreForgiving Roads

Fewer Auto Crime

Incidents

Vehicles that Minimize Impact of

Crashes and Crime

Objectives DriversHelp our customers to improve their unsafe driving behaviours

1. Lead the development of programs that help customers understand the impact and consequences of their driving choices, and the accountability they have to improve the way they drive.

2. Support the development and implementation of insurance, driver licensing and other interventions to increase safe driving.

3. Support and promote enforcement strategies targeted to Road Safety issues.

4. Support the development and implementation of legislation, sanctions and other means to protect customers and increase safe driving.

RoadsReduce road-related

driving hazards

5. Work with partners to:

• prevent crashes at targeted locations throughout B.C.

• maintain the priority of road safety infrastructure during roadway planning.

VehiclesReduce vehicle-related

safety and crime vulnerabilities

6. Partner with others to improve vehicle safety so customers are protected from injury.

7. Partner with others to improve vehicle security to protect customers from being victims of crime.


page 6

Road Safety objectivesHelping prevent crashes and auto crime are the two main pillars of ICBC’s Road Safety program, as presented in the following sections.

For crashes, this includes programs directed towards supporting enforcement, improving roadway engineering, infl uencing driver attitudes and behaviours, and supporting policy and legislation.

For auto crime, this includes programs aimed at supporting enforcement, deterring criminals, and infl uencing customers to take preventive action.

Crash preventionICBC tracks crash and casualty crash rates over time as indicators of the safety of roadways throughout the province. The crash rate (number of crashes reported to ICBC per 10,000 Basic policy years earned)3 has fl uctuated over time, whereas the casualty crash rate (number of crashes resulting in injuries or fatalities, per 10,000 Basic policy years earned) shows a slight but steady decline.

Crash projections for 2011

Many factors affect the safety of road travel and therefore infl uence trends in crashes, injuries, and fatalities. Road Safety cannot directly infl uence all aspects of crash frequency and severity (like weather, the economy, the cost of fuel, and kilometres driven). Nevertheless, Road Safety programs can help mitigate some risks and infl uence driver attitudes and behaviours. With that in mind, Road Safety is making the following projections for 2011:

• The 2011 crash rate will remain the same compared to 2009.

• The 2011 casualty crash rate will decline by 5% compared to 2009.

3 Policy years earned are calculated on a per diem basis from the policy effective date up to and including the earlier of the policy expiry date and cancellation date (if any). The policy years earned for a policy effective from January 1 to December 31 is 1; the policy years earned for a policy effective April 1 to September 30 is 0.5; the policy years earned for a policy effective October 1 to September 30 of the following year is 0.25 for the fi rst year and 0.75 for the second year.

B.C. Trends

820

840

860

880

900

920

940

960

2004 2005 2006 2007 2008 2009

Num

ber

of

cras

hes

per

10,

00

0 P

YE

ICBC Reported Crash Rate

0

20

40

60

80

100

120

140

160

180

200

2004 2005 2006 2007 2008 2009

Num

ber

of

casu

alty

cra

shes

per

10

,00

0 P

YE

ICBC Reported Casualty Crash Rate

Source: ICBC Data as of December 31, 2010



page 7

Rationale:

• Early indications are that the crash rate declined in 2010, likely due to there being fewer people on the road during the Olympics and increased use of transit following the Olympics. In 2011, the crash rate is expected to return to the 2009 pre-Olympic level.

• In 2011, the negative long-term casualty crash trend is expected to continue due to a demographic shift as baby boomers enter safer driving years and improvements in vehicle safety design protect drivers and passengers from injury.

• Consistent investment in education, awareness, and support of enforcement by Road Safety will help promote positive attitudes towards safe driving and help drivers make smarter driving choices.

Auto crime preventionAuto crime includes theft of vehicles, theft of items from within vehicles, and vehicle-related vandalism. Road Safety focuses on reducing the theft of vehicles since it has the greatest impact on claims costs.

Auto crime projections for 2011

In B.C., according to the police, vehicle theft tends to be opportunistic and is often linked to drugs. The character of crime here differs from other provinces where there is often a stronger link to organized crime.

In 2004, the Bait Car program was introduced in B.C., operated by the Integrated Municipal Provincial Auto Crime Team (IMPACT). This program assists police in catching car thieves, and since 2004, the auto theft incident rate (number of auto theft incidents reported to ICBC per 10,000 Basic policy years earned) has been decreasing steadily.

B.C. Trends

0

10

20

30

40

50

60

70

80

90

2004 2005 2006 2007 2008 2009

The

ft in

cid

ents

per

10,

00

0 P

YE

ICBC Reported Auto Theft Incident Rate



page 8

As of September 2007, federal legislation requires Canadian automobile manufacturers to equip all new cars, vans, light trucks, and SUVs with an electronic immobilizer. As a result, the number of vehicles in B.C. that are equipped with immobilizers continues to increase as newer vehicles are added to B.C.’s vehicle population.

With that in mind, Road Safety is making the following projection for 2011:

• In 2011, the auto theft incident rate will decline by 15% compared to 2010.

Rationale:

• The incident rate has decreased more than 10% per year in each of the past fi ve years.

• Despite the steady decline, the auto theft rate in B.C. is higher than the Canadian national average.

• Police continue to make auto theft a priority. The Bait Car program will continue to be deployed throughout the province in response to the movement of car thieves. In 2011, the Bait Car program will be expanded to include high value trailers.

B.C. Trends

Mo

tor

vehi

cle

thef

t p

er 1

00,

00

0 p

op

ulat

ion

Motor Vehicle Theft Rate in B.C. vs. Canada

0

200

400

600

800

1000

2004 2005 2006 2007 2008 2009

B.C.

Canada

Source: Statistics Canada, Juristat: Police-reported crime statistics in Canada, for each year between 2004 and 2009


page 9

Programs and tacticsThe following sections summarize the 2011 plan for each Road Safety program. In each section, program details are presented including a brief overview of the problem, program objectives, changes for 2011, and a description of the tactics that will be implemented to achieve the program objectives.

The following sections are organized according to the Road Safety Strategic Framework and refl ect programs targeting drivers, roads, and vehicles.

Driver Programs Road Programs Vehicle Programs

Impaired driving

Speeding

Intersection safety

Occupant restraints

Driver distractions

Road improvements Safer vehicles

Auto crime

A Note about Data:

The development of targets for the driver programs has previously been based on police-reported crashes in the Traffi c Accident System (TAS). This is currently the only source of observation information in B.C. about human factors that contributed to any specifi c crash.

On July 1, 2008, collision reporting requirements for police were amended under the Motor Vehicle Act section 249 and it became no longer mandatory for drivers to report crashes to police, or for police to submit MV6020 forms to ICBC for collisions that were reported by drivers. Police only had to fi le reports on crashes they attended, and attendance was left to their discretion. Since that change was introduced, the total number of police reports has declined, particularly for property-damage-only and injury crashes.

An internal ICBC analysis of TAS data has found that TAS data can no longer be used to track changes in collisions over time, particularly when comparing data prior to 2008 with data post 2008. This has affected ICBC’s ability to use TAS data for driver-based program measuring and monitoring. ICBC will therefore during 2011 and 2012 explore the feasibility of using other performance measures to design, measure and monitor driver-based programs. In the interim, driver-based program performance will be measured through the use of driver attitudes, perceptions, and self-reported behavioural indicators. Crash rates and casualty crash rates (based on ICBC data) will continue to be used as overall indicators for ICBC’s Road Safety program.


page 10

Driver programs

Impaired driving

Alcohol:

In 1976, the year prior to the introduction of the Drinking and Driving CounterAttack program in B.C., more than 300 motor vehicle deaths involved drinking and driving. Since then, the number of alcohol-related fatalities has reduced by more than half. However, drinking and driving remains one of the leading causal factors in motor vehicle fatalities.

In September 2010, the B.C. government introduced stronger administrative sanctions for impaired driving, making them the toughest in Canada. Under the Motor Vehicle Act, police can now issue immediate roadside prohibitions (IRPs) to penalize impaired drivers, including those who are caught in the “warn” range (between 0.05 and 0.08 BAC).

Drugs:

In 2004, 27% of impaired-related fatalities involved drugs or a mixture of drugs and alcohol. By 2008, this had increased to 44%.4 In 2010, Road Safety supported the Canadian Centre on Substance Abuse’s Roadside Alcohol and Drug Survey in fi ve B.C. communities. The survey found that between the hours of 9 pm and 3 am, 9.9% of drivers tested positive for alcohol and 7.2% tested positive for drugs. Whereas the presence of alcohol was detected primarily in drivers aged 19-44 years, drugs were detected in drivers of all ages from 16 years to over age 55.

The CCMTA is currently developing a National Drug Impairment Strategy. In 2011, pending the completion of CCMTA’s strategy, Road Safety will conduct research and work with other partners to develop a B.C. strategy for impaired driving to include impairment by drugs.

4 BC Coroners Service. (2010). 2008 Annual Report. http://www.pssg.gov.bc.ca/coroners/publications/docs/annualreport2008.pdf

B.C. Trends

Driving within Two Hours after Consuming Alcohol

% B.C. Drivers

Agree Disagree

0% 25% 50% 75% 100%

Jun-09

Sep-09

Dec-09

Jun-10

Sep-10

Source: Road Safety Driver Surveys: Percent of B.C. drivers who agree or disagree with the statement, “On at least one occasion in the past six months, I have driven within two hours after consuming two or more drinks of alcohol.”


page 11

Program objectives, targets, and rationale

Objectives & targets Rationale Measurement source

In 2011, 77% of drivers disagree strongly/somewhat that they drive within two hours of consuming two or more drinks of alcohol, a maintenance of September 2010 results.

• A 3-year target was established in 2009 to change personal drinking and driving behaviours by 3% by the year 2011. At baseline in December 2009, 26% of survey respondents said that on at least one occasion in the past six months, they have driven within two hours of consuming two or more drinks of alcohol.

• In 2010, the B.C. government introduced harsher impaired driving legislation, resulting in an extraordinary profi le of the impaired driving issue in the public domain for most of the year, both controversial and supportive.

• The change in impaired driving legislation will continue to be in the public domain and have a spill-over effect into 2011.

• Paid media will remain at 2010 levels.

Road Safety Driver Survey

(Aug 2011)

On at least one occasion in the past six months I have driven within two hours after consuming two or more drinks of alcohol.


page 12

2011 impaired driving tactics

Tactic name and description

Tactic objective RationaleMeasurement source

Enhanced Enforcement

Funding for enhanced levels of impaired driving enforcement through Memorandum of Understanding (MOU).

In 2011, 19% of drivers believe it is likely that they would be stopped by the police if they drive within two hours of having two drinks, a maintenance of October 2010.

Comment: Police make independent operational decisions and therefore ICBC does not use operational targets for its plan. However, ICBC can use awareness measures as one proxy to assess perceptions of risk.

MOU will ensure visible, dedicated offi cers for impaired driving enforcement.

Strong focus on impaired driving and targeted partnerships with local enforcement will continue at a level similar to 2010.


(Aug 2011)

How likely is it that you will be stopped by the police if you drive within two hours of having two drinks?

Impaired Driving Awareness Campaign

Province-wide CounterAttack impaired driving awareness campaigns will be held in July and December through radio tags and miniboard advertising in bars and pubs across B.C. These campaigns will align with stepped-up enforcement during those periods.

In 2011, a baseline will be established for the per cent of drivers who say they have read, seen or heard the following slogan:“After a couple isn’t the time to choose the designated driver.”

In 2011, a baseline will be established for the per cent of drivers who agree somewhat/strongly that the slogan was relevant to them.

A baseline survey is required as the 2011 slogans were new for December 2010, and slogan recall and relevance were not measured.


(Aug 2011)

During the last month or two, can you recall reading, seeing or hearing the slogan “After a couple isn’t the time to choose the designated driver”?

Do you agree or disagree that the message contained in the slogan is relevant for you?


page 13



Designated Driver

This tactic builds on the CounterAttack Community Outreach tactic that works with municipalities to endorse the CounterAttack message.

The designated driver tactic reminds people that a true designated driver is a person who doesn’t drink in order to drive others home safely. Public awareness is delivered through multiple touch points, including media buys at local sports arenas, bars and pubs, campus pubs, and wineries.

In 2011, a baseline will be established for the per cent of drivers who can correctly defi ne a designated driver (a person who doesn’t drink in order to drive people home safely).

In 2011, the designated driver tactic will focus on providing the true defi nition of a designated driver to the public. A baseline is required to identify the level of awareness among B.C. drivers.


(Aug 2011)

Which of the following descriptions would you use to defi ne a designated driver?

Operation Red Nose (ORN)

A Christmas volunteer service to drive people and their vehicles home safely from parties or events where alcohol is served or where drivers are too tired to drive. Operation Red Nose (ORN) National operates the program. ICBC supports the program by providing insurance coverage for the volunteer ride vehicles and some promotional items.

Help ORN B.C. provide service to 12 community host groups during the 2011 season.

Program depends on volunteer involvement and weather.

ORN Volunteer tracking sheets


page 14

Speeding

Speeding includes driving over the posted speed limit, excessive speed (40 km/h or more over the limit), and driving too fast for conditions. In April 2010, a Road Safety survey found a majority of B.C. drivers agreed that speeding is a serious safety concern. However, a majority of drivers also agreed that they are fully in control when driving more than 10 km/h over the posted speed limit.

Drivers perceive the benefi ts of speeding as greatly outweighing the probability of adverse outcomes. Among those perceptions are that speeding enables drivers to ‘do more things’ in a shorter period of time.5 As drivers continue speeding without encountering any negative consequences (e.g., getting into a crash or receiving a violation ticket), these behaviours are reinforced.6

In September 2010, the B.C. government introduced changes to the Motor Vehicle Act to include tougher penalties for drivers who speed excessively. Those who are caught driving more than 40 km/h over the posted speed limit will receive bigger fi nes and have their vehicle impounded for seven days.

In 2011, tactics will highlight that the benefi ts of not speeding are more than just decreasing the chances of getting into a crash. Emphasis will be on non-monetary benefi ts (e.g., slowing down will allow you to see more of the road and enable you to stop at a shorter distance). Negative consequences will highlight loss of mobility or fl exibility (e.g., loss of licence, loss of vehicle).

An analysis of police data shows the number of casualty crashes due to driving too fast for conditions is signifi cantly higher in November and December of each year. Therefore, in 2011, an awareness campaign will be held in November to remind drivers to adjust their speed to suit B.C.’s various winter driving conditions. This will include wet driving conditions in the Lower Mainland and Vancouver Island and icy conditions in the North and Southern Interior.

5 Transport Canada. (2007). Driver Attitude to Speeding and Speed Management: A Quantitative and Qualitative Study – Final Report. http://www.tc.gc.ca/media/documents/roadsafety/TP14756E.pdf

6 Department for Transport. (2006). Effective Intervention for Speeding Motorists. http://www2.dft.gov.uk/pgr/roadsafety/research/rsrr/theme2/effectiveinterventionsforspe.pdf

B.C. Trends

0% 25% 50% 75% 100%

Jun-09

Sep-09

Dec-09

Jun-10

Sep-10

Dec-10

Fully in Control when 10 km/hOver the Posted Speed Limit

% B.C. Drivers

Agree Disagree

Source: Road Safety Driver Surveys: Percent of B.C. drivers who agree or disagree with the statement, “I am fully in control of my driving, even when I drive more than 10 km/h over the posted speed limit.”


page 15



In 2011, 33% of drivers will disagree somewhat/strongly that they are fully in control when travelling 10 km/h or more over the posted speed limit, an increase of three percentage points from June 2010.

• In 2010, the B.C. government introduced harsher excessive speeding legislation, resulting in an extraordinary profi le of the issue in the public domain for most of the year, both controversial and supportive.

• An increase from 2010 levels is expected due to consistency in messaging and tactics.


(June 2011)

I am fully in control of my driving even when I drive more than 10 km/h over the posted speed limit.

2011 Speeding Tactics


Objective RationaleMeasurement source


Funding for enhanced levels of speed enforcement through Memorandum of Understanding (MOU).

This is supported by advertising with the slogan: “That’s why we’ve stepped up enforcement in your community.”

In 2011, 43% of drivers believe it is likely that they would be caught if they speed, an increase of three percentage points from October 2010.


MOU will ensure visible, dedicated offi cers for traffi c enforcement at high crash locations.

The perceived risk of apprehension will increase because of consistency of enforcement and repetition of the message.


(June 2011)

How likely do you think it is that you will get caught if you speed?


page 16



Speed Awareness Campaign

An integrated province-wide campaign will be held in November through paid media (TV, radio and web advertising) and community activity. The campaign will focus on speeding and intersections as well as speeding in poor weather. The campaign will align with stepped-up enforcement during this period.

In 2011, 72% of drivers say that they have read, seen or heard the slogan, “When you slow down, you see more of the road”, an increase of three percentage points from December 2010.

In 2011, 79% of drivers will agree that the slogan “When you slow down, you see more of the road” is relevant for someone like them, an increase of three percentage points from December 2010.

2011 will be the third (and last) year of the current paid advertising campaign.

An increase in slogan recall is assumed as a result of consistent messaging.


(Dec 2011)

During the past year, can you recall reading, seeing or hearing the slogan: “When you slow down, you see more of the road.”


Speed Watch

Community volunteers use speed readerboards to raise awareness of the actual speeds drivers are travelling at targeted high crash locations. Enforcement may be present at these sites.

In 2011, there will be 1,600 Speed Watch deployments at high crash locations and/or corridors, an increase of 10% from 1,464 deployments in 2010.

An increase in the number of deployments is expected as 235 new Speed Watch volunteers were trained in 2010. An upgrade for up to 12 Speed Watch readerboards is also expected for 2011.

Speed Watch deployment tracking sheets


page 17



Fixed Speed Readerboards

Installation of pole mounted speed reader boards at or near high crash locations and corridors. Enforcement may be present at these sites.

In 2011, fi ve new partnership agreements will be completed, maintaining the 2010 objective.

4% decrease in mean speeds for vehicles travelling in currently operating Fixed Speed Readerboard deployment zones as compared with speeds when the boards are not activated.

Funding for this tactic will remain the same as 2010.

Initial results from 2010 indicated an average 4.25% reduction in vehicle speeds in a Fixed Speed Readerboard deployment zone as compared with speeds when the boards were not activated.

Total number of agreements signed

A comprehensive study to determine the immediate and sustained effect of fi xed speed readerboards in infl uencing vehicle speeds will be completed in 2011

ICBC Road Safety Speakers (formerly RoadSense Speakers)

Road Safety Speakers use their experiences to motivate youth to make safe driving decisions.

In 2011, there will be 180 school presentations, targeting grades 11 and 12, maintaining the 2010 (March-June) objective.

The level of resources for this tactic will remain the same as 2010, supporting 180 presentations.

Road Safety Speaker presentation tracking sheet

Premier Agenda Books (Your Ad Here Contest)

High school students throughout the province are invited to submit artwork portraying a road safety theme. This artwork is used as the back cover on student agendas, a year-round opportunity for prominent display of the road safety message.

Conclude 2010 Your Ad Here contest (February/March 2011).

Determine status of the 2011 contest for 2011/2012 school year.

Follow up on activities related to re-launch of this contest.

The 2010/2011 contest generated more than 150 submissions from students throughout the province.

A review of the Your Ad Here contest is required to determine the value of the contest and whether to continue this tactic. When a review is completed, a tactic plan for the next contest will be made accordingly.

Premier Agenda Books Post-Implementation Review


page 18



180 Short Film Contest

Young fi lmmakers aged 19-25 are invited to submit their short fi lms on road safety issues such as impaired driving and speed, with an opportunity to win prizes and receive exposure for their work.

In 2011, a promotion plan for the 2010 winning submissions will be developed and implemented.

A plan for the 2012 contest will be developed in 2011.

The 2010 contest generated more than 120 fi lm submissions. In 2011, the tactic will begin with the awards ceremony. The winning submission will be used to promote road safety awareness throughout 2011.

The next contest will be held in 2012. Recommendations from the 2010 contest review will be implemented.

180 Short Film Contest Post Implementation Review

Trade Off

This program targets young males enrolled in trades and technical post-secondary education programs to raise awareness of the career loss consequences of risky driving behaviours.

In 2011, there will be six Trade Off presentations targeting trades students, an increase of two presentations from 2010.

In 2010, Trade Off moved from the pilot stage to a province-wide rollout of the program. Survey results showed positive responses from students and post-secondary institutions have expressed interest in participating in the program.

Trade Off presentation tracking sheet


page 19

Intersection safety

Intersection safety describes a collection of driver actions that contribute to crashes at intersections. These actions include:

• ignoring a traffi c control device

• failing to yield the right of way

• following too closely.

ICBC claims data indicates that approximately 250 crashes occur at intersections each day in British Columbia.

Intersections are dangerous not only for drivers and their passengers, but also for pedestrians and other vulnerable road users. More than half of all crashes involving pedestrians occur at intersections. The common contributing behaviour to those crashes is failure to yield the right of way, whether by the driver or the pedestrian.



In 2011, a baseline will be established for the per cent of drivers who say they do not engage in each of the following behaviours: running a red light, turning left in front of oncoming traffi c (including on a yellow light), following too closely behind the vehicle in front (i.e., less than two seconds behind).

• A baseline survey is required as the focus on individual driving behaviours is new for 2011 and driving behaviours have not all been measured.


(June 2011)

On at least one occasion in the past three months, have you engaged in the following driving behaviours?

• running red lights

• turning left in front of oncoming traffi c (including on a yellow light)

• following too close behind the vehicle in front (i.e., less than two seconds behind)


page 20

2011 intersection safety tactics

NOTE: In 2011, in order to align with Road Safety’s police partners, the awareness campaign will include improper passing and speeding, along with the above intersection behaviours, and will be termed high risk driving.


Objective Rationale Measurement source


Funding for enhanced levels of high risk driving enforcement through Memorandum of Understanding (MOU).

This is supported by advertising with the slogan: “That’s why we’ve stepped up enforcement in your community.”

In 2011, a baseline will be established for the per cent of drivers who believe it is likely that they would get caught by the police if they engage in any of the following behaviours: running a red light, failing to yield right of way, following too close, passing improperly, and speeding.


MOU will ensure visible, dedicated offi cers for high risk driving enforcement.


(Oct 2011)

How likely do you think it is that you will get caught if you do any of the following behaviours:

• running a red light,

• turning left in front of oncoming traffi c (including on a yellow light),

• following too close behind the vehicle in front (i.e., less than two seconds behind),

• passing improperly (i.e., passing on right, failing to signal),

• speeding.


page 21



High Risk Driving Awareness Campaign

A province-wide awareness campaign linked to police enforcement will be held in May through TV and radio advertising. The campaign will align with stepped-up enforcement at intersections during this period to focus on high risk driving behaviours.

In 2011, 72% of drivers say that they have read, seen or heard the slogan, “When you slow down, you see more of the road”, an increase of three percentage points from December 2010.

In 2011, 79% of drivers will somewhat/strongly agree that the slogan “When you slow down, you see more of the road” is relevant for someone like them, an increase of three percentage points from December 2010.

Although the focus on high risk driving is new for 2011, the campaign slogan will remain the same as the last two years. 2011 will be the third (and last) year of current paid advertising campaign.

An increase in slogan recall is anticipated as a result of consistent messaging.


(June 2011)

During the past year, can you recall reading, seeing or hearing the slogan: “When you slow down, you see more of the road.”



page 22



Intersection Safety Camera Program Upgrade

An upgrade and expansion of the Intersection Safety Camera program.

140 sites will be installed and operational by Q3 2011.

An opt-in program will be developed for communities who wish to cost-share the installation, administration and maintenance of Intersection Safety Cameras.

Construction is expected to be completed by end of July 2011.

ICBC has committed to government that a program model will be in place for communities who wish to cost-share the installation, administration and maintenance of Intersection Safety Cameras.

2011 Intersection Safety Camera Post Implementation Review

Program evaluation and activation level study will be underway.

Pre-analysis will be completed in 2011 and a post analysis will be completed in 2012.

A program sustainment model is established.

A program sustainment model will clarify roles and responsibilities once the upgraded system has been fully implemented and is in operation.


page 23

Occupant restraints

Occupant restraints have been proven to reduce injuries and deaths due to crashes. The use of occupant restraints affects drivers and passengers in the circumstance of a crash; as such this behaviour (the choice to use or not use an occupant restraint) does not contribute to nor cause a crash. Nevertheless, when a crash occurs, wearing a seatbelt or ensuring that a child is properly restrained in a child passenger seat can vastly alter the outcome of that crash, reducing injuries and preventing fatalities.

Transport Canada’s Road Safety Vision 2010 targets included attaining a minimum seatbelt use rate of 95% and proper use of child restraints in all vehicles. Enforcement of seatbelt use has been a priority for B.C. police in recent years, and ICBC has supported these efforts to encourage B.C. drivers and passengers to buckle up. B.C.’s seatbelt wearing rate is almost 97%.7

In July 2008, new legislation for child booster seats was introduced in B.C. However, child restraint continues to be an issue among particular population groups. The problem is especially of concern for recent immigrants and First Nations communities. ICBC continues to partner with the BCAA Road Safety Foundation to provide the joint Child Passenger Safety program. Road Safety also continues to support an Aboriginal Outreach/First Nations Child Passenger Safety Initiative which ICBC has funded since 2003.

7 Transport Canada. (2011). Results of Transport Canada’s Rural and Urban Surveys of Seat Belt Use in Canada 2009-2010. http://www.tc.gc.ca/eng/roadsafety/tp-tp2436-rs201101-1149.htm

B.C. Trends

0% 25% 50% 75% 100%

Jun-08

Jun-09

Sep-09

Dec-09

Jun-10

Sep-10

% B.C. drivers

Per Cent of Time Seatbelts WornWhile in a Vehicle

100% of the time Less than 100% of the time

Source: Road Safety Driver Surveys: Percent of B.C. drivers who answered 100%, to the question, “In the past six months, what percentage of the time have you worn a seatbelt as a driver or passenger in a vehicle?”


page 24



In 2011, 88% of drivers say they wear their seatbelt all (100%) of the time, as a driver or passenger in a vehicle, maintaining the September 2010 level.

• Since B.C. has already realized a higher than average seatbelt wearing rate, there is little expectation that a change in attitudes or behaviours can be attained by increasing the effort. Therefore, no additional resources will be allocated in 2011.

• ICBC will support police enforcement campaigns with a moderate level of advertising and tactics, but will not have a year-round focus on occupant restraints.


(Oct 2011)

In the past six months, what percentage of time have you worn a seatbelt as a driver or passenger in a vehicle?

2011 occupant restraint tactics




Funding for enhanced levels of seatbelt enforcement through Memorandum of Understanding (MOU).

This is supported by a minor advertising buy, primarily radio tags, to support enforcement activity during the month of September.

In 2011, 41% of drivers believe it is likely that they will be caught if they do not wear a seatbelt, a maintenance of October 2010.


MOU will ensure visible, dedicated offi cers for seatbelt enforcement.


(Oct 2011)

How likely do you think it is that you will get caught if you don’t wear a seatbelt?


page 25



Curriculum Education (K-3, 4-7, 8, 9, 10)

Road safety educational materials are provided to elementary, middle and secondary schools across the province. Road safety is a mandatory learning outcome in the Health and Career Education (HCE) curriculum for Grades K – 9 and in Planning 10.

Teachers can order materials (available free of charge in B.C.) directly from icbc.com. Information promoting the materials is sent to schools at least once, and often twice a year.

In 2011, 500 packages (K – 3 and 4-7) will be distributed. Orders are requested by a minimum of 30% of B.C. elementary schools and 33% of B.C. school districts (based on 2009-2011 tracking).

In 2011, 300 packages (HCE 8, HCE 9 and Planning 10) will be distributed. Orders are requested by a minimum of 30% of B.C. secondary schools and 33% of B.C. school districts (based on 2009-2011 tracking).

New resource packages were developed in 2010. The packages will continue to attract orders in 2011 as these materials provide a creative and renewed approach to teaching road safety.

Objectives are based on the number of K-7 and secondary schools in B.C. and the number of new resources requested in 2010.

Curriculum order tracking sheets


page 26



Child Passenger Safety (CPS) Education and Awareness

Partnerships with BCAA’s Road Safety Foundation as well as Aboriginal communities to promote child passenger safety. Resources include a toll-free information line, child seat clinics, information sessions, technician/educator training, and child restraint training to police, health workers, and volunteers.

15 to 18 educators and technicians in Aboriginal communities will be trained in the CPS education model.

Six to eight current CPS educators/technicians in First Nations communities will be identifi ed to be mentored/trained as CPS instructors within the BCAA-RSF/Justice Institute education model.

All items in the 2010-2012 contract with BCAA Road Safety Foundation are delivered.

A review of the Aboriginal Outreach initiative was completed in 2010. Key recommendations include identifying the total number of educators and technicians as well as ensuring all CPS education follows the Justice Institute/BCAA-RSF education model.

Objectives are designed to build capacity in First Nations and immigrant communities, and ensure that a growing number of key people have the credentials to instruct, educate and enhance awareness for the CPS needs within their own communities, thus adding to the sustainability of the program.

Child Passenger Safety Post Implementation Review


page 27

Driver distractions

Driver distraction occurs when a driver’s focus is directed away from the primary task of operating a vehicle. Although there are considerable reasons for a driver to be inattentive to the driving task, some distractions affect the driver’s focus in a more signifi cant way by affecting perception/reaction time. The use of cell phones (to talk and to text) and other electronic devices (e.g., music players, GPS units) require the driver to interact with the technology, representing a signifi cant distraction as their use requires the driver to divert their attention from the task of driving.

The Offi ce of the Superintendent of Motor Vehicles (OSMV) estimates that driver distractions are involved in as many as 25% of crashes per year.8

In January 2010, new provincial legislation took effect that limits/prohibits the use of hand-held cell phones and other personal electronic devices (PEDs) while driving. ICBC supported the introduction of the law by developing a public awareness campaign focusing on the details of the law and the risk the behaviour poses. Within the fi rst year of implementing this legislation, more than 30,000 driver distraction violation tickets were processed.

In 2011, the Driver Distractions program will extend the focus on education, awareness and enforcement of the legislation introduced in 2010.

Objectives, targets, and rationale


In 2011, 78% of drivers say that they fully comply with the law that prohibits the use of a hand-held cell phone while driving, a three percentage point increase from the October 2010 level.

• In 2010, the B.C. government introduced new legislation, prohibiting the use of hand-held cell phones and PEDs while driving. Enforcement of the legislation will continue in 2011.

• Partnerships with WorkSafeBC as well as other stakeholders will take the distracted driving message to specifi c targeted audiences.


(Oct 2011)

Do you fully comply (100%) with the law banning the use of hand-held cell phones while driving?

8 Offi ce of the Superintendent of Motor Vehicles. (2009). Addressing the Problem of Distracted Driving and Its Impacts to Road Safety. http://www.drivecellsafe.com/_docs/2009-distracted-driver-cell-phone-discussion-paper.pdf

B.C. Trends

0% 25% 50% 75% 100%

Jan-10

Jun-10

Oct-10

Intent to Comply with Law BanningCell Phones While Driving

% B.C. drivers

Yes No/Don’t Know

Source: Road Safety Driver Surveys: Percent of B.C. drivers who answered yes or no/don’t know to the question, “Do you plan to fully comply (100%) with the new law banning the use of hand-held cell phones while driving?”


page 28

2011 driver distractions tactics




Funding for enhanced levels of distractions enforcement through Memorandum of Understanding (MOU).

In 2011, 31% of drivers believe it is likely that they would be caught if they use a hand-held cell phone or prohibited electronic device while driving, an increase of three percentage points from October 2010.


MOU will ensure visible, dedicated offi cers for distractions enforcement.

Strong focus on distracted driving enforcement messaging and targeted partnerships with local enforcement is expected for 2011.


(Oct 2011)

How likely do you think it is that you will get caught if you use a hand-held cell phone or prohibited electronic device, while driving?

Distracted Driving Awareness Campaign

A province-wide awareness campaign linked to police enforcement will be held in September through TV and radio advertising. The campaign will focus on distracted driving, explicitly the use of PEDs, and will align with stepped-up enforcement during this period.

In 2011, 57% of drivers say that they have read, seen or heard the slogan: “Using a cell phone while driving is not only illegal. It’s dangerous”, a maintenance of June 2010.

Paid media will remain at 2010 levels and continue to provide enforcement messaging for distracted driving.


(Oct 2011)

During the last month or two, can you recall reading, seeing or hearing the slogan, “Using a cell phone while driving is not only illegal. It’s dangerous.”?


page 29

Road programs

Road improvement program

Since the introduction of the Road Improvement Program (RIP) in 1989, ICBC has partnered with various road authorities to improve the safety of roads and intersections in B.C.

The program also works with community partners to ensure that safety is explicitly considered in the design and construction of new roads.

The partnership includes contributions from both the road authority and from ICBC, in order to complete the following:

• Identify locations that may be suitable candidates for improvement

• Investigate the causal factors of the safety problem(s) at the site

• Develop road improvement strategies/improvements

• Calculate the level of ICBC investment toward the project.

By working with local road authorities, safety projects are developed to reduce the frequency and severity of collisions, thereby reducing fatalities, injuries and insurance claims costs. These projects can range from short-term and low-cost safety improvements such as enhanced delineation and signing, to long-term, high-cost improvements such as roadway re-alignments and road widening.

In December 2009, an independent evaluation of ICBC-funded road improvements during the years 2004-2006 found that, measured over a 2-year period after a project’s completion, ICBC saves $5.6 in claims costs for every dollar invested (compared to a target of 3:1 during those years). Road users will continue to benefi t from these road improvements for many years.



Road Improvement Program achieves a minimum 50 per cent internal rate of return.

• This objective was set in 2006, based on previous evaluations.

• Investment levels are expected to remain fairly constant in 2011.

2014 program evaluation (which will review projects implemented in 2007, 2008, 2009, 2010, and 2011)


page 30

2011 road improvement tactics


Objective Rationale

Retrofi ts – MoTI

A cost sharing program with the Ministry of Transportation Infrastructure (MoTI) to improve safety of provincial road infrastructures.

In 2011, maintain investment in a minimum of 75 projects that meet the 50% IRR.

Allocation of program funding to MoTI will be maintained in 2011, with projects that meet the current investment standard criteria.

Retrofi t Post Implementation Review

Retrofi ts – Municipal

A partnership with municipal road authorities to improve safety at high crash locations.

In 2011, maintain investment in a minimum of 125 municipal infrastructure projects, providing a minimum 50% IRR.

Allocation of program funding to municipalities will be maintained in 2011, with projects that meet the current investment criteria.


Retrofi ts – Roundabouts

A cost sharing program with municipal road authorities to install modern roundabouts at intersections to reduce the frequency and severity of crashes.

In 2011, a minimum of three modern roundabouts that provide a minimum 50% IRR will form part of the RIP municipal investment portfolio.

Allocation of program funding to municipalities will be maintained in 2011, with projects that meet the current investment criteria.



page 31


Objective Rationale

Road Safety Audits

Review planned infrastructure projects to ensure safety is given priority during design/construction.

In 2011, conduct 15 road safety audits, maintaining 2010 levels.

In 2011, a minimum of 60% of recommendations are implemented, maintaining the 2010 objective.

The number of road safety audits is limited by available engineering time. In 2011, resources assigned to this tactic will be maintained.

A 2008 review of road safety audit implementation rate showed that approximately 75% of recommendations were implemented. Further, 90% of those implementations had a Benefi t Cost Ratio of over 1, indicating a positive ROI.

Road Safety Audits Post Implementation Review

New Technology Fund

Facilitate the assessment of new road improvement technology.

In 2011, identify and partner on one new technology by Q3.

Maintain current objective; there are limited opportunities for partnering on new technologies.

Partnership agreement


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Vehicle programs

Safer vehicles

Safety features and technologies in vehicles can help prevent crashes and reduce injuries in crashes. Over the past decade, numerous advances in vehicle technology were developed and many safety features became standard in vehicles sold in Canada. Vehicle safety features such as air bags, anti-lock braking systems (ABS), and, most recently, electronic stability controls (ESC) are examples of standard features in many vehicles sold in Canada. These safety features have proven successful in preventing crashes and decreasing the severity of injuries.

In keeping with its commitment to protect customers, Road Safety has identifi ed a need to inform drivers about the availability, effectiveness, and use of new vehicle technologies and safety features, and help support their decision-making when buying a vehicle.

The Safer Vehicles program is aimed at providing information on safety features to buyers of new and used passenger or light truck vehicles.



During 2011-2013, baselines will be established to monitor the penetration rates of safety features in passenger or light truck vehicles and the age distribution of passenger or light truck vehicles in the B.C. fl eet

• In 2011, the program will concentrate on raising awareness and increasing knowledge of safety features and technologies that have been proven to reduce injury or prevent crashes. The impact on the B.C. fl eet will only be refl ected in later years as it takes time for attitudes and behaviours to change.

• Newer vehicles are more likely to have improved safety features when compared to older vehicles. It is generally accepted that newer vehicles are safer.

• Baselines are required for future and ongoing measures and to monitor progress.

ICBC Actuaries monitor vehicle safety feature penetration rates of the fl eet as a part of their loss trending function


page 33

2011 safer vehicles tactics

Tactic name and description Objective RationaleMeasurement source

Safer Vehicle Awareness Campaign

Paid and earned media will be delivered throughout the year to inform customers of the benefi ts of vehicle safety features.

Information relating to vehicle safety will be provided through different mediums such as media events, print advertisements and websites.

In 2011, 32% of drivers who have bought or thought of buying a car mention safety as being in their ‘Top 3’ considerations when deciding which vehicle to buy, an increase of three percentage points from October 2010.

Activities and advertising are new for 2011.

Media events along with frequent exposure to marketing activities will help increase awareness and encourage safety as a top consideration for car purchasers.


(Oct 2011)

What are or what will be the top three things that you take into consideration when deciding which vehicle to buy?

Safer Vehicle Website

Launched in 2010, this website features information on the availability and importance of vehicle safety features.

In 2011, there will be 6,900 visits to the safer vehicle page on icbc.com, a 5% increase from the 2010 level.

Regular updates including adding new videos and the integration of the Rate My Vehicle tool onto the site will encourage people to visit the site.

The Safer Vehicle Awareness tactic activities will direct people to the site.

icbc.com web analytics from e-Business Services

Driver Examiner Head Restraints Education

Driver examiners provide head restraint safety education and correct adjustment of driver and passenger head restraints during Class 5 and 7 road tests.

Driver examiners continue to inspect and provide education on the correct adjustments of the driver and passenger head restraints for all Class 5 and 7 road tests.

The level of resources for this tactic will remain the same as 2010. Direct intervention in adjusting head restraints will continue to increase safety compliance and infl uence knowledge and attitude change.

Driving test reports from Driver Licensing


page 34

Auto crime

Auto crime includes theft of vehicles, theft of items from vehicles, and vehicle-related vandalism. On average, auto crime incidents cost ICBC policy holders over $100 million each year. A large proportion of auto crime costs are paid for theft of vehicle claims.

ICBC data shows that B.C.’s auto theft incident rate was at its highest in 2003 with more than 94 vehicles stolen per 10,000 Basic policy years earned. Since then, the auto theft incident rate has been declining at a steady rate of over 10% each year. The steady rate of decrease in auto theft incidents was partly due to:

• the introduction of the Bait Car program in 2004;

• continuing police support through Integrated Municipal and Provincial Auto Crime Team (IMPACT); and

• the passing of immobilizer legislation in 2007.

However, according to Statistics Canada, in 2009, the auto theft rate in B.C. was 440 incidents per 100,000 people,9 which remained above the Canadian national average.

Road Safety’s Auto Crime program will continue to support police efforts and other crime reduction strategies. However, some programs may be nearing end of life and will be reviewed as appropriate.

9 Statistics Canada. (2010). Juristat Article: Police-reported crime statistics in Canada, 2009. http://www.statcan.gc.ca/pub/85-002-x/2010002/article/11292-eng.pdf

B.C. Trends

ICBC Reported Auto Theft Incident Rate

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page 35



In 2011, the auto theft incident rate will decrease by 15% when compared to 2010.

• Over the past three years (between 2007 and 2009), due to successful enforcement strategies and increased vehicle immobilization, the auto theft incident rate has decreased by between 11% and 19% per year.

• Although this rate of improvement is not sustainable over the long run, early indications are that a 15% reduction in 2011 will be maintained.

ICBC claims data as of March 31, 2012

2011 auto crime tactics



Bait Car and Enforcement Advertising

Paid and earned media to maintain awareness of auto crime enforcement. This includes Bait Cars and targeted advertising in high risk locations to warn potential thieves that they will be caught.

In 2011, 60% of drivers say that they have read, seen or heard the slogan, “Steal a Bait Car, Go to Jail”, a decrease of no more than six percentage points from June 2010.

Over 60% of all existing vehicles and all new vehicles are immobilized which will result in ongoing reductions in auto theft. With auto theft continuing to decline, paid and earned media has been reduced accordingly. As a result, the public’s awareness of this issue is expected to decline.


(Jun 2011)

During the past year, can you recall reading, seeing or hearing the slogan “Steal a Bait Car. Go to Jail.”

Auto Crime Community Outreach

Funding for targeted community auto crime initiatives, such as rehabilitative programs and steering wheel club distribution.

Identify and fund a minimum of two auto crime reduction initiatives by the end of Q3 2011, maintenance of the 2010 objective.

The level of resources for this tactic will remain the same as 2010. With auto crime on the decline, limited opportunities exist but are currently being explored.

Community Outreach Post Implementation Review


page 36



Auto Crime Communications (Stolen Lives DVD, Signage)

Signage in parking lots educates and assists the public on preventing auto crime.

The Stolen Lives DVD is an educational resource for B.C. high schools with a focus on areas where there is a higher risk for auto crime.

In 2011, the provision of auto crime prevention signage will be maintained.

In 2011, the provision of Stolen Lives DVDs and teaching guides will be maintained.

The level of resources for this tactic will remain minimal.

Auto Crime signage will be provided on a request basis where the criteria for provision is met.

Stolen Lives DVDs and teaching guides will be provided on request.

Signage and Stolen Lives order tracking forms

Dedicated Bike Patrol

Co-funding for highly visible bike patrol program using private security to prevent and reduce auto crime in high crime locations where volunteer activity is not suffi cient. Funding is a private/public partnership with municipalities and local businesses.

In 2011, there will be a 20% reduction in patrol hours by dedicated bike patrols.

Interest and need for bike patrol programs is on the decline. A reduction in support for this tactic will correspond with a decrease in patrol hours.

Surrey Mobile Patrol will continue to provide a minimum of 1,000 hours of patrol time.

Bike Patrol volunteer tracking sheets


page 37



Volunteer Tactics

Funding for recognition and resources supporting community volunteer activities that prevent auto crime and assist in the recovery of stolen vehicles. Activities include Stolen Auto Recovery, Citizens on Patrol, and Lock Out Auto Crime.

In 2011, fi nancial support for volunteer programs is maintained.

With auto crime on the decline, volunteer activity is not needed at previous levels. The level of resources for this tactic will remain the same as 2010.

Budget tracking

Vehicle Immobilization

Awareness activity: owners of high risk vehicles (e.g., Ford F series vehicles) are sent letters offering free engine immobilizers.

In 2011, a needs assessment will be conducted for the Vehicle Immobilization program.

Fewer vehicles that meet ICBC’s criteria will be available for immobilization. A needs assessment is required before continuation of this program.

Program assessment


page 38

Research and strategy developmentThe Road Safety department regularly carries out anticipatory research and strategy development. The work in this area is guided by how it can be used for practical purposes. Periodically, the Road Safety department makes explorations of future road safety developments and updates research on current priorities.

In 2011, the Road Safety department will research and review the need for strategy on the following issues:

Issue Rationale Timeline

Drug impairment The CCMTA is developing a National Drug Impairment Strategy. When completed, Road Safety and other partners will develop a strategy for B.C.

Pending national strategy

Commercial vehicle safety

In 2008, commercial vehicles were involved in over 38,000 crashes in B.C., costing ICBC’s customers approximately $367 million. An analysis of the ICBC data in 2010 identifi ed the following target groups:

• Light commercial vehicles

• Long haul vehicles

• Taxis

In 2011, a strategy and plan will be developed.

By Q2 2011, a program strategy will be developed.

By Q4 2011, a program plan will be completed and preparation for 2012 implementation will commence.

Road Safety performance measures

The 2008 MVA change in police reporting requirements for non-fatal collisions has signifi cantly affected the number of police reported crashes. (See note on page 9.)

In 2011-2012 other existing indicators for measuring and monitoring driver programs will be explored.


page 39

Investment summaryOverall, ICBC’s 2011 investment in Road Safety will be about $160,000 less than the 2010 actual costs. The major factors are summarized below:

Drivers

• The total investment in Driver programs in 2011 will decrease by approximately $300,000. This is largely a result of reduced investment in tactics other than enhanced enforcement.

• The decrease in the total investment in Driver programs is primarily due to the substantial reduction in investment in the Driver Distractions program. In 2010 ICBC made an investment to support the new legislation restricting the use of handheld personal electronic devices, such as cell phones, while driving. In 2011 the focus will be limited to maintaining awareness through the distracted driving awareness campaigns.

• The increased investment in the impaired driving programs in 2011 is primarily to support the Designated Driver program.

• The increase in the investment in speeding and intersection safety programs in 2011 is primarily to develop new advertising. (The current paid advertising campaign has been running for three years and will be refreshed for 2012.)

• The total investment in enhanced enforcement will increase by approximately $150,000 in 2011. This is due to an increase in payments under the Traffi c and Law Enforcement Funding Memorandum of Understanding (MOU), which is a percentage of Basic premiums earned.

Roads

• The planned 2011 investment in the Road Improvement Program is the same as the planned investment for 2010. In 2010, the actual investment in the Road Improvement Program was higher than plan due to additional projects being undertaken.

Vehicles

• The increase in the planned 2011 investment in the Safer Vehicles programs is primarily to s upport a Safer Vehicle Awareness Campaign.

Compensation and general expenses

• General expenses are higher in 2011 by $405,000 mainly due to compensation and operating overhead increases.


page 40

2010-2011 Road Safety department expenses

The following table summarizes the planned investment to achieve the program and tactic objectives.

Road Safety Department Expenses ($000s) 2010 Actual

2011 Plan

Drivers MOU Enhanced Enforcement10 25,615 25,766

Impaired Driving Impaired Driving Awareness Campaign 681 699

Designated Driver/Community Outreach11 210 610

Subtotal Impaired Driving 891 1,309

Speeding Speed Awareness Campaign 622 952

Radar Speed Reader Boards12 148 178

Youth Outreach13 275 353

Subtotal Speeding 1,045 1,483

Intersection Safety* Intersection Awareness Campaign 475 752

Occupant Restraints Child Passenger Safety & Curriculum 254 177

Driver Distractions Distracted Driving Awareness Campaign 2,129 610

SUBTOTAL DRIVERS 30,409 30,097

Roads Roads Improvements Engineering Retrofi ts 8,952 8,400

SUBTOTAL ROADS 8,952 8,400

Vehicles Safer Vehicles Safer Vehicle Tactics14 10 35

Safer Vehicle Awareness Campaign 40 250

Subtotal Safer Vehicles 50 285

Auto Crime Auto Crime Awareness Campaign 181 182

High Risk Vehicle Immobilization 199 200

High Risk Auto Crime Partnerships 277 300

Subtotal Auto Crime 657 682

SUBTOTAL VEHICLES 707 967

TOTAL DIRECT EXPENSES 40,068 39,464

Research and Measurement Direct Expenses 196 235

Compensation 4,265 4,458

General Expenses 1,227 1,439

TOTAL ROAD SAFETY EXPENSES 45,756 45,596

TOTAL ROAD SAFETY FTEs 43.9 44.4

* The investment summary does not include the investment for the Intersection Safety Camera Upgrade tactic, which is funded from the Corporate Project Fund.

10 Enhanced Enforcement includes an amount of approx $2 million per annum in the Vehicles category.

11 Includes Operation Red Nose.

12 Includes Speed Watch.13 Includes Premier Agenda Books, Road Safety Speakers,

180 Short Film Contest, Trade Off.14 Includes Safer Vehicle Website, Driver Examiner

Head Restraints Education.

RS31 (092011)


APPENDIX 10 C SURVEY OF SELECT ROAD SAFETY PUBLIC AND PRIVATE PROGRAMS

Prepared by: ICBC Road Safety Department, July, 2007 1

Survey of Select Road Safety Public and Private Programs

Phone Survey Questions

Saskatchewan SGI

Manitoba MPI

(Auto crime only)

US, Illinois State Farm

Australia Transport Accident

Commission UK, London

Dept. of Transport

Sweden Swedish National Road Association

(SNRA)

Alberta Office of Traffic Safety

Budget

$12 million $13 million (of which $11 million is for immobilizer strategy)

No separate department or budget

Based on annual projects ranging from $1 million to $10 million each year

Total $89 million per year

$28-29 million per year for education, ads, enforcement

$60 million per year for engineering

Approximately $38 million per year (UK £17.5 million)

Road safety integrated into all activities by SNRA

Overall budget is $4 to $5 billion (not million) per year – approximately one third is road safety loss prevention-related

Current $2.4 million per year

Next 3 years extra $59 million to support national Vision 2010 (engineering, Traffic Sheriffs, community mobilization)

Average $21 million per year

Staff

Not provided 8 No road safety staff

Research and Public Affairs staff work on road safety projects

14 7 – Publicity

3 – Press Office

Very integrated

Of 6,000 employees, approximately 200-500 are more directly allocated to road safety

40 (400 if include commercial vehicle enforcement, research, and other ministry staff)

Rationale for Investment in Road Safety

Reduce number and severity of crashes

Reduce claims costs

Reduce auto crime

Reduce claims costs

Crash prevention

Social responsibility

Identify State Farm brand with positive road safety efforts

“Safe System” approach

Reduce frequency and severity of crashes

Claims savings

Mandate of UK Government

Save fatalities and serious injuries

Government mandate

Vision Zero – based on refusal to accept death or suffering as a result of road traffic

Reduce overall societal costs

Safe and secure communities

Enforcement Programs

$700,000-800,000 per annum primarily for capital expenditures such as reader boards

Public awareness campaigns

Couldn’t give dollar amount

Falls within the $2 million of their budget not allocated for immobilizers

Don’t invest in police enforcement; however have a strong legislative advocacy/lobbying program

No estimate available of annual dollar investment

$1.4 million per year

Overtime for enhanced enforcement

Speed cameras

Breath-testing equipment

Research

Yes, 3Es (no further info provided)

Provide police communication support on road safety topics (impaired, belts, speed)

Provide hardware for speed camera project ($100 million), 708 cameras

$8.2 million per year

Use government Traffic Safety sheriffs for enforcement

Focus on impaired, belts, speed / intersections

Measured by data (details not provided)

Measured by auto theft reduction in Winnipeg

Measured by tracking legislative momentum across states

No formal measurement program

Measured by number of tickets compared to a baseline

Anecdotal comments from police

Phone surveys before/after

No measurement program provided

Measured by action/performance indicators developed by SNRA; number of breathalyzer tests/results; number of communications, media tracking

No measurement plan in place yet

Prepared by: ICBC Road Safety Department, July, 2007 2

Phone Survey Questions

Saskatchewan SGI

Manitoba MPI

(Auto crime only)

US, Illinois State Farm

Australia Transport Accident

Commission UK, London

Dept. of Transport

Sweden Swedish National Road Association

(SNRA)

Alberta Office of Traffic Safety

Engineering Programs

Intersection safety

Changeable message signs

Corridor improvement

Road surface management

Wildlife

n/a Intersection safety in 1999 and 2001 only

Grants up to $100,000 per state for those 2 years only

Blackspot and Grayspot programs

Receive proposals from government and committee assigns per priorities

$3 million per year for innovation

Yes, 3Es

No further info provided

Retrofits $100-200 million per year

New infrastructure ($700-$800 million per year)

No dollar amount given

Blackspots, rumble strips, wildlife, Intelligent Transportation Systems, signage upgrades, research

Measured by crash and claims reductions

Measurement was n/a

Measurement was n/a Measured by formal evaluations for each project (conducted by local University Research Dept)

Each project evaluated based on benefit-cost ratio

Measurement not provided

Measured by establishing performance indicators; and communication and feedback with communities

Measured by post implementation crash studies

Education Programs

Not provided $500,000 and 2 staff

1. Teen driver research project (just launched)

2. Good Neighbour – local State Farm Public Affairs offices develop own local materials

$27 million annually

Increase awareness, create climate for positive behaviour change, create increased risk of apprehension

Measured by impact through both continuous and tracking surveys and annual road safety monitor

Plan to implement measures that assess: (a) scale of programs, (b) shift in behaviour and attitudes, (c) safety improvements across key areas of safer roads, vehicles and road users.

No breakdown given of the $38 million budget

Criteria: data, evidence of scale of problem behaviour, and audience insight

Measured by surveys to monitor attitudes to key messages and driving

Programs evaluated on an ongoing basis

$40 million for 3Es communication

Combine education with action with stakeholders

-TV/radio ads re: technologies (speed cameras, ignition interlocks, intelligent seatbelt reminders)

Currently $4 million per year. Target is to get $5-8 million per year

Calendar of events tied to enforcement programs

TV/radio ads

School programs for all ages


APPENDIX 10 D RATIONALE FOR INTEGRATED,

MULTI-COMPONENT ROAD SAFETY PROGRAMS

Rationale for Integrated, Multi-Component

Road Safety Programs

Prepared by Performance Analysis Services May 1, 2005

Rationale for Integrated, Multi-Component Road Safety Programs Prepared by Performance Analysis Services May 1, 2005

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TABLE OF CONTENTS

INTRODUCTION ......................................................................................................................................... 3 Executive Summary ...................................................................................................................... 3 Methodology ..................................................................................................................................... 5

1. WHAT ARE THE MOST COMMON ROAD SAFETY PROGRAM COMPONENTS, OR TACTICS? ............ 6 2. WHAT IS THE BASIC ARGUMENT FOR PROGRAMS WITH MULTIPLE TACTICS? ............................. 6 3. WHAT IS THE EMPIRICAL EVIDENCE THAT SUPPORTS PROGRAMS WITH MULTIPLE TACTICS? ... 6 4. WHAT EVIDENCE IS THERE FOR A UNIQUE CONTRIBUTION OF EDUCATION TACTICS,

PARTICULARLY MEDIA ADVERTISING, IN MULTI-COMPONENT PROGRAMS?................................. 9 5. WHAT KINDS OF EDUCATION TACTICS, PARTICULARLY ADVERTISING, HAVE BEEN SHOWN TO

BE EFFECTIVE?............................................................................................................................... 13 6. HOW IS THE IMPACT OF EDUCATIONAL TACTICS, PARTICULARLY MEDIA ADVERTISING,

GENERALLY EVALUATED?............................................................................................................... 20 7. WHAT ARE THE CURRENT VIEWPOINTS AND PRACTICES CONCERNING THE ROI OF

EDUCATIONAL PROGRAMS IN OTHER JURISDICTIONS?............................................................... 23 APPENDIX ................................................................................................................................................ 25 REFERENCES ........................................................................................................................................... 27


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Introduction

Executive Summary The purpose of this review was to address several key questions concerning the effectiveness of educational programs and in particular, media advertising for road safety:

1. What are the most common road safety program components, or tactics? 2. What is the basic argument for programs with multiple tactics? 3. What is the empirical evidence that supports programs with multiple tactics? 4. What evidence is there for a unique contribution of education tactics,

particularly media advertising, in multi-component programs? 5. What kinds of education tactics, particularly advertising, have been shown to

be effective? 6. How is the impact of educational tactics, particularly media advertising,

generally evaluated? 7. What are the current viewpoints and practices concerning the Return on

Investment of educational programs in other jurisdictions? In terms of the above questions, the review revealed the following: 1. Most road safety programs use multiple components and multiple tactics. Enforcement and education are the key components of virtually all significant programs around the world. Media advertising is the most common form of road safety education with television being regarded as the most effective media channel. 2. Multiple tactics and components are used by necessity since no single approach has been shown to have a significant and sustained impact on road safety. Combining multiple approaches, on the other hand, has strong empirical support in terms of meaningful crash reductions. 3. Evaluations of multi-component programs that include education tactics clearly show that such programs reduce crashes and injuries. The estimates vary widely, ranging from about 5 to 35% improvement in crashes related to the program targets. Program impact is heavily influenced by program design, evaluation rigour, choice of measures, and base rates of the targeted behaviours, among others. 4. The evidence for a unique contribution of education tactics, and in particular media advertising, is not consistent. While some studies report success of stand-alone media campaigns, others find no effect at all. Many estimates tend to be based on incomplete data or questionable evaluation methodologies but some of the more reliable reports suggest that education, and media advertising in particular, can enhance the overall impact of multi-component programs by up to 30%.


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5. While many recommendations for designing effective advertisements can be found, four main conclusions appear warranted:

a. The magnitude of the contribution advertising makes depends far more on how well informed the production is than on the production budget itself. Interventions based on explicit strategies, relevant theoretical models, and sound audience research consistently outperformed “trial and error” approaches (17% vs. 6% crash reductions, respectively).

b. Strategic integration of advertising with other program components is

essential. Media advertising may not change attitudes or behaviours directly, but it can significantly enhance the impact of other components such as enforcement or legislation if it is explicitly designed to support these components.

c. Each road safety issue and each target audience requires a specific and

unique advertising strategy that is sensitive to the psychographics and socio-cultural context of the audience and the targeted behaviour.

d. Consistent, long-term media campaigns that are also sensitive to wear-out

are most effective. 6. There is clearly a dearth of controlled evaluation studies on the impact of advertising. About 76% of the program evaluations rely on self-reports, 52% measure overt behaviour, 25% use crash data, and 16% include traffic offence statistics. The most common covariates, or factors that might influence crash rates independent of media campaigns, were found to be weather, average wages, gas prices, unemployment rates, and police enforcement. Most evaluations used a simple post-test-only design, while only the remaining 23% used a control group. Interrupted time series analysis, general linear models, and regression techniques are the most common methods for establishing an association between media campaigns and outcome measures while controlling for other confounding factors. 7. Only about 6% of campaign evaluations contain some cost-benefit information. Campaign costs for some programs and benefits for others were reported, but very few reliable cost-benefit analyses associated with a specific program exist. The available data indicate benefit/cost ratios ranging between 7:1 and 19:1 for multi-component programs. The review did not locate any reliable data or guidelines that could inform decisions about funding media advertising in a practical and defensible manner. Two main general principles gleaned from the review are that

a. more expensive advertisements are not necessarily more effective ones, and b. a significant investment is required for any effective media campaign because

TV air time is expensive but necessary, and because the length and intensity of ad exposure must be sufficient to produce meaningful results.


5

Methodology Most of the research used to create this report was conducted using the Internet, particularly focusing on the road safety and transportation-related web sites of university research departments, transportation authorities, governmental bodies, and special interest groups. The databases that were searched included: Transport, PsycINFO, Medline, and ERIC. Relevant reports and scientific journal articles were identified and either downloaded, requested directly from authors, or ordered from research institutions. Papers from a number of conference proceedings are also included in this report. Finally, we reviewed the bibliographies of journal articles and reports that were particularly noteworthy to obtain additional studies that may have been overlooked. While the emphasis of the review was on world wide literature, much of the literature originated from Australia and New Zealand.


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1. What are the most common road safety program components, or tactics?

Reviews of road safety programs reveal that the most common tactics employed around the world are education, enforcement, and engineering. Recently, evaluation is the fourth “E” being added to the mix. Education typically involves public media communication campaigns but can also include community activities, road safety materials for schools, and other “purposeful attempts to inform, persuade, or motivate safe driving attitudes and/or behaviours” (Rice & Atkin, 1994). As part of a large scale EU road safety initiative called Project GADGET, Delhomme et al (1999) reviewed 265 evaluation reports from 22 countries. They found that 24% of the reported interventions used mass media alone, 26% used media plus an education program, and 50% used mass media plus enforcement. Media channels included TV 68%, billboards/posters 66%, radio 57%, brochures 54%, and news articles or press releases 49%. The average length of a campaign was 178 days, 71% running in a single period. Most common educational tactics utilize messages that attempt to inform or persuade drivers to voluntarily behave in a certain way; however, educational strategies do not provide immediate reward or punishment, although they can inform people about them.

2. What is the basic argument for programs with multiple tactics?

Making the roads safer by modifying driver behaviour is a complex problem requiring multiple tactics. Like all over-learned, lifelong habits, driving behaviours are extremely difficult to change, and even more difficult to change permanently. No simple “magic bullets” exist, and no single tactic has ever been shown to result in a meaningful and measurable long-term behavioural change – not even enforcement, which has traditionally been considered one of the most effective road safety tools. This is because enforcement is a form of punishment which does not address the motives for unsafe driving. Consequently, unsafe driving behaviour is controlled only as long as the enforcement is present; when the enforcement diminishes or ceases, the targeted behaviour generally returns to baseline levels.

3. What is the empirical evidence that supports programs with multiple tactics?

There is mounting evidence from several large-scale international reviews that the most effective road safety programs are ones using multiple tactics (Transport Program of the European Commission, 1999 and 2001). The following is a summary of some of the key evidence supporting multi-tactic intervention programs. There have been many studies done to assess the road safety impacts of so-called STEPS (selective traffic enforcement programs) that typically combine public


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information and education (PI&E) with enforcement. While these have generally been shown to be successful (e.g. Mercer et al, 1996), few studies have been able to separate out the effects of the PI&E component. An early attempt was made by Mercer (1985) with respect to the BC CounterAttack Program in comparing the effect on drinking-driving crashes of enforcement both with and without extensive media support. While it appeared that media coverage was potentially an important element in differentiating successful from unsuccessful campaigns, the study was unable to quantify the specific marginal effect of PI&E. As noted by NHTSA reviewers (2001), there is a fairly wide range of impacts cited for education/enforcement campaigns but some of the stronger studies that have found higher levels of effect have been with campaigns having a substantial PI&E component. Three examples given in the NHTSA review were from 1995 (in Tennessee, Kansas, and Kentucky), 1997 (N. Carolina), and 1999 (Tennessee). The 1995 study found that programs not having both increased enforcement and strong supporting PI&E components were not effective as drinking-driving or speeding countermeasures while those with both were. The effects of the latter campaigns ranged from 10% to 35% in terms of target crash reduction. In the 1997 study a roadcheck enforcement blitz supported by extensive paid advertising was found to coincide with a 54% reduction in impaired drivers recorded in before-and-after roadside surveys. Unfortunately, there was no statistically significant evidence of accompanying sustained crash reduction. In contrast, a 20% reduction in alcohol-related crashes was attributed to the high-level education/enforcement campaign in Tennessee (1999 study). NHTSA (2004) also evaluated the use of paid media for a multi-state seatbelt campaign and concluded that awareness increased when paid advertisements were used and that TV was the most effective medium. However, in spite of increased awareness associated with paid advertisements, observed seat belt use rose only after enforcement activities were initiated. Awareness of police efforts to ticket was higher in states with paid media (often in combination with earned media) than in states using earned media alone. Awareness of enforcement was greatest when an enforcement-specific message was used. Paid media had a greater impact on the awareness of enforcement activity and perceptions of the level of aggressiveness of enforcement activity than earned media. Tay (2003) reported on a study in New Zealand where an anti-speeding publicity campaign was superimposed on pre-existing intensive speed limit enforcement such that the independent effects of both could be assessed. Using data on monthly crashes, “adstocks” (sum of population prior exposure to advertisements), and speeding tickets issued, statistical models were constructed from which it was estimated that 22 serious crashes per month had been saved per 1,000 adstocks independent of enforcement level. However, the results were complicated by the finding that there was a negative interaction between the enforcement and the advertising such that with the latter the marginal effect of enforcement on crashes was somewhat reduced. Nevertheless, while the precise relationship between the two components may be complex, the conclusion was that both were effective. Based on a systematic review of various media campaigns from Australia and New Zealand, Tay (2005) concluded that mass media campaigns on drinking-driving reduce alcohol-related crashes in the period during or after the campaign by an average of 13%. Mass media campaigns reduced crashes resulting in injury by an


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average of 10%, followed by large savings in medical costs, property damage, and productivity. Experience in New Zealand with an anti-drinking-driving campaign was reported on by both Tay (2003) and Miller et al (2004). Compulsory breath-testing (CBT) using “booze buses” was supplemented with community action programs and a $7 million advertisement campaign. The new advertisement campaign replaced a pre-existing non-aggressive education effort with hard-hitting publicity. Miller et al, using time-series models, estimated that enhanced media increased the overall program effect from a 22% reduction in single-vehicle-night time crashes to 34%. Tay studied this same period of drinking-driving intervention and concluded that each new media adstock (advertisement exposure measure) produced a further reduction, independent of enforcement, of 0.02 fatal crashes per month. Most recently, Turner et al (2005) have discussed the results of a review of past studies attempting to increase the use of child restraints through community-based programs. A total of 75 studies were assessed in depth, but only eight met the authors’ criteria for community-based involvement together with statistical design/analysis validity. Four of the eight involved new legislation (and thus presumably some potential for enforcement) and seven of the eight involved mass-media PI&E in addition to community programs. The authors reasoned that community intervention should promote a shared ownership of the injury problem and, therefore, joint responsibility for developing solutions that can lead to more effective (and adaptable) multi-strategy responses. With legislation supported by a mass-media campaign (n=4), targeted restraint use rose by an average of 13% and fatal/serious target injuries were reduced by 2% to 54%. With mass media but no legislation (n=3) the reduction in targeted fatal/serious injuries ranged from 0% to 24%. Indications were that community programs can be effective, but the effectiveness varies widely. It seemed that the most effective examples were where initial legislation was supported by both mass media and community activity. Elliott (1993) conducted a meta-analysis of 87 road safety campaigns utilizing mixed tactics comprising primarily education and enforcement (34% of the reviewed campaigns included enforcement, and an unspecified number also included legislative tactics). The outcome measures comprised awareness, knowledge, attitudes, self-reported motivations, and intentions, as well as self-reported and observed driving behaviour. The analysis indicated a 7.5% change in the desired direction across all measures of success ranging from awareness to crashes, and a 6% change if the awareness measures were left out. Cameron & Vulcan (1998) evaluated a two-year New Zealand campaign consisting of enforcement and media aimed at speeding, driving while under the influence (DWI), and seatbelt wearing. They found an overall reduction of serious casualty crashes of 10% the first year and 24% in the second. They did not isolate the effect of the media tactics from the overall impact. Williams et al (2000) evaluated a large-scale US seatbelt campaign (“Click It or Ticket”) which included media and enforcement. The prior belt wearing rate was 65%, during the campaign it rose to 80%, and seven months following the end of the campaign the rate fell to 73%, still significantly above the baseline. As noted above, enforcement alone would be expected to produce only short-term change, so


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the fact that a higher wearing rate was sustained suggests that the media component provided a unique contribution to the overall effect. The media cost of the campaign was reportedly about US $450,000. Elder et al (2004) conducted a review of DWI campaigns for the Centers for Disease Control. Common motivational themes used in drinking-driving campaigns are: fear of arrest and legal consequences of arrest, promotion of positive social norms, fear of harm to self, others, property, stigmatizing drinking drivers as irresponsible, and dangerous. On average, median decreases in crashes across all reviewed studies was 13%, in injury-producing crashes it was 10%, in roadside measured blood-alcohol current ratios (BAC) it was 158%, and in BAC suggesting impairment (>.08) the decrease was 30% of .05 - .08. There was no difference between the types of message (legal versus health). Delhomme et al (1999) conducted a very comprehensive meta-analysis of 265 multi-component road safety campaigns. On average, there was an 8.5% reduction in serious crashes during the campaign periods, and approximately a 14% cumulative crash reduction by the end of the campaign. In the same meta-analytic review of road safety programs around the world, Delhomme et al (1999) could not find an overall statistically significant impact of education alone on crash rates. On the other hand, programs that combined education and enforcement resulted, on average, in a 5.6% crash reduction during the campaign period. Programs utilizing education enforcement, plus other tactics including legislation resulted in an 8.5% reduction in crashes during the campaign, and about 14% cumulative reduction following the termination of the campaigns. The overall campaign impact varied across jurisdictions: an overall 10.6% crash reduction in Australia, 10.2% in the US, and 0.9% in the EU.

4. What evidence is there for a unique contribution of education tactics, particularly media advertising, in multi-component programs?

There is a wide consensus internationally that education, including mass media, plays a key supporting role, primarily to enforcement. In a recent comprehensive review of several dozen media campaigns, Delaney et al, (2004) concluded that “the available evaluations indicate that media campaigns are effective in improving road safety as measured by casualty crash frequency.” Most studies that have examined the impact of public education on its own to change crash risk have focussed on campaigns that adopt theory-based message types designed to address attitudes or behaviour on several levels. Road Safety Public Service Announcements (PSAs) in the early days were fairly unsophisticated attempts to tell people not to engage in a particular risky driving behaviour. They tended to be informational in nature but, as Beirness et al (1997) have noted in respect to the impaired driving problem, it is “unlikely that marginal increases in knowledge would have a major influence”. Some of the earliest work originated in the health field as opposed to the road safety application. In the late 1980s, Barber et al (1989) reported on the development and implementation of a TV advertisement aimed at reducing alcohol consumption. The


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30-second advertisement addressed (i) normative information regarding hazardous consumption levels, (ii) goal setting in terms of reducing intake levels, (iii) rate control ideas, and (iv) motivational prompting. The advertisement was shown in the communities of subjects who had previously demonstrated resistance to previous more conventional messages and a subset of the subjects was personally notified by letter just before the advertisements aired. Other subjects were not exposed to the advertisements at all. After 3 weeks the advertisement-plus-letter subjects reported the highest consumption decrease, followed by the advertisement-only drivers. Those not exposed reported consumption increases. One of the first major research efforts to design new, more effective road safety messages was by Cameron et al (1993) at Monash University in Australia. Their development of confrontational, “shock” style images became the blueprint for campaigns in the state of Victoria, Australia, and, subsequently, in New Zealand. Cameron et al concluded that the Victoria advertisements contributed significantly (about 15% of the total effect) to crash reductions resulting from a combined enforcement-education campaign. The same advertisement styles were subsequently implemented in New Zealand but, for some reason, without accompanying increases in enforcement. The New Zealand advertisements, addressing drinking-driving and featuring graphic scenes of crashes and injuries, were ineffective in reducing the number of drinking drivers as measured by the rate of positive police-administered BAC tests. However, the total number of breath tests administered went down during the campaign which raised the possibility that enforcement may have actually reduced. The only advertisements that appeared even marginally effective in addressing drinking-driving were the so-called “all-themes” advertisements that included other issues such as speeding as well as impairment, but the authors were dubious of this apparent connection. An attempt to change driver behaviour at intersections was documented by Koenig and Wu (1994). Advertisements were designed and aired in Victoria, B.C. in an attempt to have drivers exercise care to yield to pedestrians during left-turn manoeuvres. Because of the impracticality of having police stationed at intersections specifically to charge such occasional lapses, this is an issue that primarily lends itself to education as opposed to enforcement. The multi-media campaign lasted 6 weeks with radio, TV newspaper, busboards, etc. all being employed. Then, after a two-month hiatus, there was a further 4-week repeat of the TV coverage. Koenig and Wu found no immediate effect of the campaign on observed yielding but measured a 36% increase in yielding over a 8.5-month period beginning with the second TV session. Murry et al (1993 and 1996) assessed the effectiveness of anti-drinking-driving advertisements in a study designed to compare paid- vs. donated-media. Not surprisingly, they found that the effect on self-reported drinking-driving behaviour was not influenced by the nature of financial support but, additionally, the advertisements, which stressed responsibility among friends and vehicle/occupant consequences, turned out to be associated with a significant reduction (15%) in crashes. Depending on the nature of the original funding, the advertisements were judged to have had a benefit/cost ratio of between 9.0 and 13.5. Road safety benefits were estimated using economic, medical, and legal costs plus welfare losses (as in “willingness to pay”) associated with collisions.


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One of the more recent studies was undertaken by Stead et al (2005). The idea was to construct an educational campaign to target (i) the behavioural beliefs about speeding, (ii) normative beliefs about how drivers’ significant others feel about speeding, and (iii) perceived behavioural control in respect to speeding. The theoretical foundation for the advertisement design was the Theory of Reasoned Action and the concept of Perceived Behavioural Control (developed in 1975 and 1988 respectively). These led to a Theory of Planned Behaviour (TPB) which purports that behaviour is determined by intention which, in turn, is predicted by attitude towards the behaviour, subjective norms, and perceived behavioural control. Drivers’ exaggeration of their abilities contributes to speeding behaviour and the lack of social stigma against speeding acts to legitimize it. Five hundred and fifty drivers participated in a 4-year longitudinal cohort study in Renfrew, Scotland. The drivers were exposed to a series of 3 advertisements that dealt sequentially with attitude, subjective norms, and perceived behavioural control. Self-reported frequent speeders were found to identify (in surveys) with the advertisements more than did infrequent speeders. Also, in comparison with an unexposed control group, it was found that the advertisements were associated with significant positive changes in speed-related attitudes and beliefs. Cameron et al (1995) estimated that the contribution to crash reduction of a speed and concentration advertisement campaign developed in Australia in support of the introduction of speed cameras to be about 8% (compared to a total 31% crash reductions due to all the program components). For alcohol advertisements, the contribution was about 7%. In a more recent study, Cameron et al (1997) found that a media campaign in combination with random breath testing resulted in a 33% crash decrease. Breath testing alone was found to reduce crashes by only 22%. Interestingly, mid-level exposure highlighting enforcement was quite effective. Very high media exposure apparently caused drivers to avoid breath testing routes resulting in lower detection levels. Diamantopoulou et al (1998) found that the impact of mobile photo radar enforcement was significantly higher when accompanied by high publicity specific to speed and the associated enforcement activities. The impact of the combined tactics was a 28% crash reduction, compared to just 11% for enforcement alone. Newstead et al (1998) reported an average annual drop of 5 to 7% in serious casualty crashes that was statistically attributable to advertising campaigns in Australia between 1990 and 1996. Delaney et al (2004) measured the impact of advertisements on drivers’ awareness of targeted road safety issues. Long-term alcohol-related advertisement awareness was estimated to be about 26%. Furthermore, it was estimated that every 100 units of emotive alcohol-related adstock raised awareness by 4.3%, while 100 units of alcohol-related enforcement adstock raised awareness by 4%. In their evaluation of advertising for road safety in New Zealand, Tay et al (2000) concluded that a national advertisement campaign reduced fatal accidents in NZ related to alcohol, drugs and speed among male drivers aged 15-24, 25-34 and 35-54, and was also effective in reducing accidents among females 25-34.


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Cameron et al (1992) modeled the effect of advertising and photo radar on crashes in Australia. These researchers found a unique contribution of advertising above and beyond enforcement, while controlling for a variety of external factors such as unemployment and seasonal trends. They established a statistical relationship between TARPs (a measure of audience reach – see page 24) and crash frequency such that a 1% increase in TARPs was associated with a 0.008% decrease in casualty crashes. Wundersitz et al (2000) reported that 28% of drivers exposed to TV, radio, and newspaper advertisements promoting seatbelt use stated that the advertisements encouraged them to wear belts. Later, Cameron et al (1993) modeled speed and concentration advertisement TARPs as above and found even a stronger relationship between advertisement exposure and crash rates such that a one per cent increase in TARPS resulted in a 0.015% decrease in casualty crashes. Cameron at al then modeled alcohol ad impact using Adstock and TARPs together. Here the relationship was 0.017% to .038% decrease in crashes for each one per cent increase in the advertisement exposure measures. Finally, Cameron et al also evaluated impact of an advertisement media campaign (speeding and concentration theme) which did not include enforcement or any other supporting activity. They used a control group that was not exposed to the advertisements and did not find any significant impact on crash rates. In a recent evaluation study, Taylor et al (2001) concluded that “TV advertising at moderate intensity with supporting enforcement can reduce on-road speeds in the short term and, by extension, road trauma”. In this study police enforcement was controlled for by having police hold enforcement levels steady while the level of advertising was varied. Advertising alone reduced mean free speeds by 0.09 km/h overall, 0.15 km/h for the 85th percentiles, and 0.27km/h for the 95th speed percentiles. The researchers reported that “those who drive somewhat faster than the body of drivers had reduced their speed significantly immediately following advertising, while other drivers had reduced their speed by a smaller amount, if at all”. It is generally accepted that enforcement and media campaigns result in a greater overall impact than either component alone, but this assertion is not always supported by empirical evidence. The Monash University Accident Research Centre (MUARC 1996-2000, in Delaney et al, 2004) investigated the interaction between media and enforcement more systematically to determine if it might be additive, multiplicative, or nonexistent. Media exposure levels were measured by adstock and TARPs, enforcement was represented by 5 levels of speed enforcement intensity, and crashes by frequency and severity levels. Logistic Regression and General Linear Modeling revealed only a slight interaction that applied only to high speed enforcement and high awareness of enforcement-style publicity. The overall conclusion was that there was no evidence of an interaction between enforcement and advertising in terms of casualty crash reductions. According to these authors at least, “this research has questioned the strategic principles suggesting that speed enforcement and speed-related mass media publicity should operate together to produce maximum effect”. Woolley et al (2001), on the other hand, reached a different conclusion in an experimental design study aimed at measuring publicity effects independent of enforcement. They held enforcement level constant while varying the intensity of


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speed-related media advertising by three exposure levels, namely 0, 500, and 900 TARPs. The authors found small but statistically significant speed reductions at the mid-level of media intensity, specifically a 0.13 km/h reduction in mean speed and 0.31 km/h reduction in the 95th percentile speed which translated to an estimated 1.4% to 3.7% reduction in casualty crashes based on the mean speed drop and the 95th percentile drop respectively. However, they found no significant effects for high or low levels of advertising. We can therefore state very conservatively that education in general, and advertising in particular are necessary if not a sufficient tactics for improving road safety. It is unlikely that media advertising alone can lead to meaningful and lasting behavioural change but it also appears that other tactics are less effective without the support of advertising (Woolley, 2001; Dehomme, 2001). This conclusion appears to agree with that from the review by Delaney et al (2004) who stated that “collectively the published research confirms the conclusion that advertising has made an effective contribution to reducing road trauma”.

5. What kinds of education tactics, particularly advertising, have been shown to be effective?

Nation, Crusto, Wandersman, Kumpfer, Seybolt, & Davino (2003) identified a number of best practices and principles derived from, and applicable to, a wide variety of prevention and intervention programs, ranging from anti-smoking and other health-oriented educational campaigns to road safety: 1. Developing comprehensive, coordinated, multi-component programs comprised of components that increase awareness but also promote developing specific skills such as resistance skills, problem solving and negotiation, assertiveness, and communication skills. 2. Targeting enablers (individuals, settings, culture) that have an impact on risky behaviour, including parents, peers, schools, school and community norms, social and business practices, etc. 3. Focusing on helping to build positive relationships with protective influencers (parents, police, selected peers, etc.) 4. Utilizing varied educational strategies, particularly interactive, hands-on experiences rather than relying on knowledge and information strategies. 5. Involving the target audience as much as possible, as directly as possible. Having target audiences contribute to the planning, design, execution, and evaluation of any educational programs aimed at them. 6. Maintaining sufficient program intensity. However, no clear guidelines regarding what is “sufficient” are available. More may not always be better. A general principle is that the more at-risk, or the more the behaviour is entrenched, the more intensity is required. Periodic boosters are a must. Common intensity parameters include:

• Quality and quantity of exposure • Exposure length • Number of exposures


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• Interval between exposures • Duration of total program

7. Using empirically validated theories to drive program design, including etiological theories that focus on causes of targeted behaviours (risk or protective factors), and intervention theories derived from empirically tested interventions that have been shown to bring about the desired change. The most effective education campaigns were all developed from an explicit theoretical framework (Delhomme, 1999). 8. Properly timing campaign implementations. It is critical to time program exposure to maximize impact on the developmental trajectory of the risky behaviour – if it is introduced too early, then impact is washed away; if too late, then behaviour becomes too entrenched. 9. Matching program content to the target audience’s intellectual, emotional, and social development. 10. Targeting pre-cursor behaviours rather than waiting until the problem behaviour is fully developed (e.g., pre-driving risks, violations, purchasing high performance parts). 11. Making interventions relevant to the target audience. Reflecting or addressing community norms, and cultural beliefs and practices, and addressing the fundamental needs of the target audience are all essential. Otherwise it is difficult to attract and include high-risk audiences. Delaney et al (2004) and Delhome et al (2002) identified a number of characteristics of effective campaigns:

• Persuasive messages have a greater impact than messages containing information only.

• Emotional messages are better than rational messages.

• If the base rate (for example recognition rate) of a particular target measure

is less than 40% then negative appeals are recommended, otherwise messages with positive appeals tend to perform better.

• Campaigns are more effective if they are based on prior qualitative or

quantitative research. Qualitative research appears to be more effective in guiding campaign effectiveness, particularly if the behaviour base is less than 40%.

• TV was the only medium with identifiable effects.

• Advertisements that were more strongly associated with self-reported

behaviour change and that contained more original information were able to evoke uncomfortable emotions, and were serious, relevant, and credible.


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Based on 12 international studies with 27 results, Delhomme et al (1999) found that:

• Local campaigns were more effective than provincial campaigns (10.5% vs. 7.4% reduction in crashes respectively).

• Short campaigns (30 to 100 days) and medium-term campaigns (100 to 200

days) were more effective than long-term ones (200 to more than 540 days), yielding 22% and 5% crash reductions respectively.

• Campaigns with direct personal interaction were more effective than media-

only campaigns. Interaction included conferences, meetings, local activities, pledge cards, etc.).

• Campaigns based on theoretical frameworks were more effective than ones

without such a base (17% vs 6% crash reductions), and campaigns based on an explicit strategy (selective traffic enforcement, incentive programs, etc.) were more effective than ones without such strategies (11% vs. 1% crash reductions).

Contrary to expectations, Taylor et al (2001) found that high intensity media advertising was associated with higher (not lower) speeds leading the authors to conclude that a moderate level of advertising might be optimal (about 150 TARPs). Alternatively, a Reach 3+ (proportion of target audience exposed to the message three or more times) of about 65% and an average frequency of about 6 was the most effective intensity for changing short-term speeding behaviour. Response efficacy (perceived ability to actually carry out the desired behaviour) was most highly correlated with intentions to drive more safely. Fear arousal, on the other hand, was least correlated with intentions to drive more safely. In fact, fear arousal was most highly correlated with the avoidance of such advertisements. These observations led to the conclusion that the main emphasis of messages should be to provide strategies that help drivers overcome the resistance to adopting the desired behaviour. Linderholm (2000) notes that, despite the fact that theory-driven campaigns are consistently found to be most effective, there has been a lack of theoretical basis in developing messages. In addition, a thorough analysis of target groups, and careful evaluation planning are also needed. Different methods should be used to reach different targets. A target group of “young road users” is too broad and not enough to carry out a single campaign for long-term effects. Finally Linderholm argues that a combination of education, information, communication, engineering, and enforcement is needed to succeed. DeJong and Atkin (1995) conducted a review of national television PSA campaigns for preventing alcohol-impaired driving. All were intended to reach a general audience rather than an audience at high risk for drinking and driving. They identified two dominant message formats, both reportedly having questionable effectiveness: celebrity endorsements and emotional appeals. According to these authors, celebrity endorsements are not effective because celebrities may overwhelm the message, celebrity status is transient, and because a celebrity’s reputation or actions may undermine the message. Emotional appeals invoking fear or anger often lack a call to action. Although people rate them highly in focus groups, fear appeals


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rarely succeed because they are difficult to execute properly. According to these authors, the best chance of success is moderate fear followed by concrete steps that people can take to reduce the fear. They recommend that PSAs targeting teens should be delivered by peers, should not be preachy since peers can then be interpreted as stand-ins for adults, and should emphasize social consequences rather than life-threatening consequences. According to the authors, there is also a need to be clear about the type of PSA in relation to the campaign objectives. PSAs may be focusing on general awareness in order to increase public recognition of a problem and establish it as a primary concern that can shift societal norms. PSAs can also be aimed at behaviour change in which case they must promote alternative behaviour to be successful. Finally, PSAs may be used to stimulate public action through school or community-based programs, or they might be aimed at changes in public policy. Interestingly, none of the PSAs reviewed worked to achieve specific changes in public policy since many broadcasters will not air this type of advertisement. The authors’ general recommendations include a need for government and public service organizations to work together, reinforcing an emerging shift in social norms against alcohol and driving, galvanizing public anger, stigmatizing it as a character flaw by showing the individual has choices that result in others being victimized, and focusing on the alcohol industry’s responsibility. Slater, M.D. (1999) recommends strong theory-based approaches. He also suggests that empathy-based appeals deserve closer scrutiny and wider application. Finally he advocates studying responses of different target groups to different types of advertisements. Shults et al (2001) recommended that intervention programs be implemented within a community’s social and legal context, and suggests that effective prevention requires a comprehensive systematic approach that addresses various individual and ecologic (e.g. political, social, legal, cultural) influences. Hafstad et al (1997) recommend that provocative appeals that create effective reactions and stimulate interpersonal communications should be given more attention in campaigns for adolescents. The optimal way will vary across populations. Based on evaluations of large-scale media campaigns NHTSA researchers (2004) concluded that:

• Earned and paid media can be highly effective in changing behaviour when they are used in conjunction with each other and in conjunction with enforcement.

• Earned media is not sufficiently effective by itself to reach high-risk groups;

however, paid media is very important in an effective media program.

• Key messages should focus on the enforcement aspect of the campaigns and include visuals of enforcement.

• Careful timing is required for enforcement program to be maximally effective.

• Intensity of both media and enforcement is critical to success.


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• Repetition is critical to success.

Tay et al (2000) concluded that fear appeals are only effective with certain groups and not the entire population. Based on his evaluations of New Zealand media campaigns, Tay (2002) reported that high threat messages are more effective than low threat for people who do not feel particularly vulnerable to the threat, and strong fear appeals are more convincing than weak fear appeals when the communication is of low relevance to the actions of the audience. According to Tay, high fear arousal is more persuasive for people already engaged in safety measures prior to their exposure to a safety campaign while low fear appeals are more persuasive to the unconverted or target audience. Tay suggested that to make fear-based safety campaigns more successful, the level of fear should be reduced and the audience should be given effective and realistic coping strategies to address the risks associated with drunk-driving. Also, if the fear arousal is high and efficacy of the message is low, then the audience will attempt to reduce the level of fear instead of attempting to reduce the threat presented in the message. Further, the fear reduction strategy may include discounting or rejecting the message. Thornton et al (2004) found that high threat/high efficacy advertisements were more likely to reduce drivers' relative speed than high threat/low efficacy advertisements. The authors suggest road authorities consider including more efficacy components in threat appeal advertisements. Coulter et al (1995) investigated the impact of guilt in advertising and concluded that moderate guilt appeals may be most effective in finding a balance between gaining attention and eliciting an acceptable level of felt guilt. High guilt appeals generated significantly more ill feelings than either moderate or low guilt appeals, and moderate guilt appeals generated significantly more ill feelings than the low guilt level. Moderate and low-level guilt appeals may be effective in communicating with audiences, but blatant attempts to manipulate feelings of guilt arouse anger. Yalsh (1991) found that music enhanced memory for advertising slogans when the slogans were incorporated into the advertisement in the form of a jingle or song. Slogan information presented with music appears easier to retrieve than similar information presented without music. However, not all jingle advertisements resulted in better memory than non-jingle advertisements. The findings show that jingles are most useful when individuals are presented with few cues to aid retrieval or have minimal exposures to the advertising. However, music should not be avoided in high-exposure campaigns even though the research findings imply they are more useful in low-exposure advertisements. Music may be worthwhile in delaying the wear out of a high-exposure advertisement. Smith (2000) discussed the basic principles of data-driven design of publicity campaigns. He stated that:

• Unless the target audience and the behaviour are known, it is impossible to develop an effective campaign strategy.

• It is often more effective to target the people who influence the road user in

question.


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• The message must be clear, unambiguous and directional. Avoid general messages.

• Media selection depends on the target audience.

• Timing should be considered regarding length of campaign and time of year.

Campaigns should not run too long or their impact will be lost.

• Pre-campaign research is essential.

• One-off campaigns do not result in lasting behavioural changes.

• Use appropriate means of evaluating the publicity campaign and where possible use multiple measures.

• It is better not to use fear, shock, horror, or threat tactics. At best, they

should be used carefully.

• Advertising by itself will not result in desired changes, but should be included as part of a wider campaign involving enforcement, legislation, and engineering.

• The behavioural change that is desired should be realistic.

According to Tay (2005), speeding is fundamentally a different behaviour from drunk driving that may require a different combination of enforcement, publicity, and public education campaigns, especially regarding solutions targeting young male drivers. Anti-drunk driving campaigns can effectively employ a combination of fear-based advertising and coping strategies, resulting in a high level of perceived self-efficacy on the part of the viewers to carry out coping strategies. This does not appear to work with the anti-speeding advertisements. Among the reasons given for this are that speeding is a more transient behaviour associated with lower self-efficacy because of unsuitable coping strategies. Drivers speed for personal and social reasons, especially young males and other high sensation seeking individuals. Based on a systematic review of various media campaigns from Australia and New Zealand, Tay (2005) concluded that decisions regarding message content are generally based on the opinions expressed by experts or focus groups rather than evidence of effectiveness in changing behaviour. Tay believes this should change in that advertising messages should be based on theory and empirical evidence. Tay also noted that the most important aspect in determining positive behaviour change is response efficacy (perceived ability to carry out the behaviour). Therefore, more emphasis should be placed on providing suitable coping strategies to address the threats portrayed in advertisements instead of relying on their emotional appeal. Lewis et al (2003) suggest that measuring respondents’ perceptions of self-other influence may provide a better understanding of the relevance of advertisements for specific target audiences. For example, drivers may reject a message for themselves because they feel that it may be more relevant to others they know. Identifying such “others”, and finding out if they are being persuaded would be helpful in evaluating the effectiveness of advertisement messages.


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A study by Walton & McKeown (2001) illustrates an innovative approach to measuring message impact in a way that minimizes many of the shortcomings of self-reported attitude shifts. The study found that anti-speeding messages were more likely to be accepted by those who believe they drive faster than average and rejected by those who believe they drive slower than the average driver, where the perception of average is biased toward higher than actual speeds. In addition to a new measurement approach, this study also implies that to be effective, advertisement campaigns should address these distorted perceptions of “average” speeds. Furthermore, advertisements depicting examples of extreme driving behaviour such as excessive speeding may actually reinforce the misconception that the norm is higher than it really is. While TV is regarded as the most effective media choice, radio is also used frequently in many campaigns. The following findings were obtained concerning radio advertising (The RAEL1 Research Compendium 2002):

• Radio advertisements do result in the recall of advertisements, copy points, and brand names.

• The effectiveness of Radio advertisements differs significantly from advertisement to advertisement, suggesting a wide variation in the quality of Radio advertisements.

o The best Radio advertisements appear to be as potent as the average TV advertisement.

• The effectiveness of Radio advertisements (as measured by recall) is highest when the advertisement:

o is longer o contains early and frequent brand mentions o has with relatively few different ideas within the advertisement o is aired in a shorter pod or at the beginning of a pod2

• The effect of humour in Radio advertisements varies by product. • Radio advertisements can, and often do, cause images to appear in the

listener’s mind. • Radio advertisements are capable of achieving significant recall even when

listeners are distracted. • Radio’s impact on recall is about 80% as potent at TV’s - for a single

exposure. o Thus, when costs are contrasted with impact, Radio is more effective

than TV, and Radio can increase the impact of a campaign when added to TV.

o In one recent UK study, moving 10% of a TV budget into Radio raised recall by 15%.

• At the same GRP (measure exposure) levels (and less cost), Radio can affect sales and recall as much as TV.

1 The Radio Advertising Effectiveness Laboratory (RAEL) was created in 2001 to research the effectiveness of Radio Advertising. Established as an independent organization with funding from Radio industry companies, RAEL works closely with advertisers, agencies, and Radio broadcasters to further the industry’s understanding of how Radio advertising works and to measure its effectiveness. 2 Pod is a TV term that refers to a grouping to commercials and non-program material in (usually) more than one advertiser’s commercials air. In Radio, a pod is more frequently referred to as a commercial cluster, commercial break, or stop set.


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More generally, there is growing consensus to go beyond education as information dissemination. To that end, some authors advocate tactics based on marketing principles, particularly social marketing. But while commercial marketing and advertising channel existing motivations into switching to different brands (secondary demand), social marketing must create the motivation in the first place (primary demand). What is perhaps not fully appreciated in the road safety community is that it is “difficult to sell brotherhood like soap” (Weibe, 1951). Despite these challenges, marketing tactics are seen as potentially potent tools for behaviour change. This is because they are focussed on offering benefits that people want for desired behaviour, reducing perceived barriers, and motivating people to participate in program activities. Marketing tactics are used to invite and offer something in exchange for the desired behaviour. A marketing perspective recognizes the need for tangible and temporally close payback in exchange for such behaviour, and is more focused on self-interest and choice. Marketing also recognizes that behaviour change is more likely if the required change is small, the perceived benefit is more immediate and direct, and the emphasis is on personal rather than societal benefits. Finally, marketing directly addresses competition to behaviour change such as free choice, apathy, and inertia, and the benefits of taking risks.

6. How is the impact of educational tactics, particularly media advertising, generally evaluated?

Since general road safety evaluation methodologies are covered in detail elsewhere (e.g., Ferrence & Weicker, 2003), they are not discussed in this report. The purpose of this section is to highlight evaluation issues and measures that are relevant in assessing the impact of road safety education, and particularly advertising. In the road safety community, it is well recognized that demonstrating the effects of mass media advertising is very difficult (Woolley, 2001). Empirical studies that might be able to provide the necessary evidence are generally very expensive, logistically challenging, or unethical. For these reasons, there is a dearth of controlled evaluation studies that randomly assign drivers to treatment and control groups, studies that look at long-term outcome over decades, if not years, and studies that properly control for a plethora of confounding factors that potentially impact the target measures that are not under the control of the intervention programs. For some of these reasons, Delhomme et al (1999) defined program effectiveness not as a short-term change attributable to a single initiative, but as the cumulative effect of repetitive campaigns that may not be observable on separate campaigns or separate campaign components. Effect was defined as a detectable change in a specific target variable, ideally crashes related to the target behaviour. In their international review of 256 programs, Delhomme et al (1999) reported that 76% of the program evaluations relied on self-reports, 52% measured overt behaviour, 25% used crash data, and 16% included traffic offence statistics. The most common covariates, or factors that might influence crash rates independent of media campaigns, were found to be weather, average wages, gas prices, unemployment rates, and police enforcement. Most evaluations used a simple post-


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test-only design, while only the remaining 23% used a control group. Interrupted time series analysis, general linear models, and regression techniques are the most common methods for establishing an association between media campaigns and outcome measures while controlling for other confounding factors. Evaluations of advertising campaigns rely heavily on exposure measures. Collecting these data is essential in any short-term or long-term program evaluation, particularly if return on investment questions need to be addressed, because the exposure measures generally have tangible costs associated with them. Common campaign exposure measures typically include one or more related variables:

• Gross Rating Points (GRPs) is the sum of all exposures to a message for a given time period or message schedule.

• Target Audience Rating Points (TARPs) represent reaching a percentage of the

available target audience through the chosen media channel. One TARP represents a reach of one per cent of the audience. TARPs are accumulated over several advertisement exposures, resulting in multiple exposures of the audience, and as such they typically exceed 100. TARPs are generally obtained from meters linked to media devices of volunteer samples.

• Adstock is a measure of impact of an advertisement over time. The common

practice is to assume a half-life of 5 weeks where the advertisement effectiveness is reduced by one half every five weeks.

• Exposure Frequency is the number of times an individual is exposed to an

advertisement.

• Reach is the proportion of the target audience exposed to an advertisement at least once in the campaign.

• Reach 3+ is the proportion of the target audience exposed to an

advertisement at least three times in the campaign. Program impact is typically assessed using a wide range of variables along the cause-effect chain:

• The degree of aided and unaided recall of messages (message awareness). Delaney at al (2004) reported increased impact sensitivity with an advertisement awareness model that uses a lower bound (base level) in addition to rate of decay of awareness over time measured by the half-life (typically assumed to be about 5 weeks).

• Change in knowledge about traffic laws, driving risks, or preventive

behaviours.

• Changes in attitudes toward desirable or undesirable behaviours including risky driving behaviours, and safety practices, attitudes toward programs and organizations promoting safety practices, attitudes toward laws targeting risky behaviours, and attitudes toward enforcement such as tolerance of active enforcement.


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• Changes in the perceived probability of apprehension, and changes in perceived behaviour norms.

• Change in self-reported behaviours, including driving speed, DWI

occurrences, and seatbelt wearing frequency.

• Change in observed behaviours, including driving speeds such as free speeds or free speeds at different speed percentiles, DWI rate, and observed seatbelt wearing rates.

• Changes in the frequency of crashes associated with targeted driving

behaviours such as speed-related or alcohol-related crashes.

• Changes in the severity of crashes associated with targeted driving behaviours.

In addition to the above measures, the review of best practices in evaluating injury prevention programs identified several other recommendations, based primarily on guidelines from the National Centre for Injury Prevention and Control (e.g., Doll et al 2003). 1. The design of an evaluation needs to be determined before the intervention program starts. Special attention must be given to determining the unit of analysis for the evaluation (i.e., individual drivers, schools, entire communities, etc.). 2. Program stakeholders need to be engaged in the evaluation. This includes field staff, target audiences, and primary users of the program such as teachers or community leaders. Experience has shown that stakeholder involvement enhances maintenance of program activities, and program promotion. 3. Evaluations of prevention programs need to be based on a clear “logic model” that specifies the relationship between risk factors, protective factors, intervention components, and the desired outcome. 4. To be evaluated properly, programs must follow a standard implementation. As Doll et al (2005) advise, “Staff should not be encouraged to make up their own implementation”. The main reason for this is that standardization enables the application of an evaluation methodology known as non-equivalent dependent-variable design. This design is a credible alternative to the gold standard known as the randomized controlled trial design which is not easily applicable to media or education prevention programs. This alternate approach involves predictive modeling of program impact based on a specific intervention theory coupled with the program’s logic model. 5. The guidelines clearly indicate that it is quite acceptable, and in fact it is common practice in effectiveness research, to evaluate multi-component programs as a “package”, without the need to isolate the impact of individual components such as community education, mass media, and enforcement. 6. It is also recommended that multiple outcome measures are conducted, before, during, and after program implementation. Increasing the number of observations provides more precise modeling of confounding environmental and policy changes


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related to the program, assessing intermediate effects of the intervention, and tracking the sustainability of the impact after the program ends.

7. What are the current viewpoints and practices concerning the ROI of educational programs in other jurisdictions?

Delhomme et al (1999) reported that only 6% of the 256 campaign evaluations included in their review contained some cost-benefit information. Campaign costs for some programs and benefits for others were reported, but virtually no reliable cost-benefit analyses associated with a specific program were reported. The literature provides no guidelines concerning advertising costs. The advertising portions of the full campaign budgets are rarely reported and those that are vary widely. The Land Transport Safety Authority in New Zealand devoted about 16% of the overall campaign costs to advertisement production. Donovan et al (1999) attempted to relate production costs to self-reported behaviour change intentions following exposure to a variety of advertisements ranging from $50,000 to almost $300,000. They found no clear relationship between production costs and advertisement impact. Some high cost advertisements were less effective than low cost ones and visa versa. These results are consistent with Tay’s (2005) observation that big production budgets do not necessarily translate to more persuasive advertisements. Cameron et al (1992) conducted an economic analysis to determine the point of diminishing returns of Australian television advertising. They included fixed costs for the advertisement campaign (developing the advertisements) and variable costs (media buys at different TARP levels). Benefits were based on reduction of casualty crashes which was valued in terms of lower injury compensation payments. The researchers determined that an investment of 540 TARPs for speed and 800 TARPs for alcohol advertisements was “economically justified”. Elder et al (2004) reported cost-benefit analyses for two DWI campaigns. An Australian DWI campaign ran for 23 months at a cost of $403,174 per month including advertisement development, media buys, and concept research. The estimated savings were reportedly $8,324,532 per month based on medical costs, productivity losses, pain & suffering, and property damage savings. A US six month campaign had a total cost of $776,720 including planning and evaluation research, message production, and media scheduling. The estimated savings were $5,107,704 based on calculations incorporating insurance claims, funeral costs, legal costs, court costs, additional medical costs, property damage costs, and employers’ losses. Tay (2005) cautions, however, that the results are only applicable to high quality, high-intensity mass media campaigns. Using New Zealand data for program, travel time delay, and crash costs (including value of work and quality of life lost), Miller et al (2004) calculated a benefit/cost for compulsory breath testing enforcement alone of 14:1 and of enforcement plus education of 19:1.


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Delaney et al (2004) drew attention to several issues related to the ROI of media campaigns. The base level of a measure influences the impact of a campaign. The higher the base rate, the lower the impact being measured. One reason is that when the target audience is small, the potential impact is limited. One way to enhance the sensitivity of evaluations in these situations is to focus the measurement very specifically on the target audience. Given the relatively high cost of TV advertising, the ROI of using TV may be questioned. However, as Delaney et al point out, TV is generally considered to be the most effective media channel for road safety campaigns. In addition, the more effective campaigns last at least one year, and provide a minimum of 3 exposures for each target. As such, the costs can be substantial, but apparently worthwhile. It should also be noted that some road safety experts feel that mass media has more influence on changing social policies than changing individual behaviour. Therefore, in ROI, measures need to be expanded to include the level of public support for changes in social policy (e.g., Elder et al, 2004). Finally, many risk prevention programs have unintended but positive outcomes that should be included in the overall ROI assessment. For example, Williams et al (1996) found that increased seat belt enforcement resulted in increased detection and apprehension for various other offences and crimes.


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Appendix

Lessons Learned From Anti-Smoking Campaigns Levy, DT & Friend K (2000) reviewed the effects of mass media policies in Anti-Smoking Campaigns. Some of the implications that are relevant to road safety are summarized below. Mass media campaigns may be viewed as part of a comprehensive tobacco control policy and their effects may depend on the other policies that are in place or being simultaneously implemented. The primary outcome goal is percent reduction in smoking, via increased cessation or reduced smoking initiation, or reduced average quantity smoked per smoker. Intermediate outcome goals include the extent to which campaigns increase positive smoking-related attitudes, beliefs, knowledge, and awareness. Campaigns differ depending on target audience: adult campaigns focus on cessation; youth campaigns focus on initiation of smoking. A campaign may need to be of a sufficient duration if it is to affect social norms, and these effects may be expected to build over time as norms change. Longer rather than shorter campaigns may be needed. Messages with high complexity need more frequent exposure and longer duration; messages with high novelty or high familiarity need less exposure. Effect of a media campaign may depend on the level of advertising by the tobacco industry, and the industry may step up their advertising in reaction to an effective anti-smoking campaign. Other forms of social information, especially media publicity (e.g., about clean indoor air laws), increase the effectiveness of messages and reduce the level of information needed to overcome any threshold effects, especially in attempting to shape social norms – hiring public relations personnel to get news coverage may be included in expenditures. Linking media messages with specific health care programs may improve likelihood of success [e.g., link drunk driving with AA]. Youth-oriented campaigns must be maintained over time so that messages have time to impact adult smoking, rather than just delaying when the youth starts smoking. Linking media campaigns with other programs (e.g., school education) may improve their effectiveness, but if other programs, laws, or interventions are already well established, the media campaign will be less effective. Well-designed campaigns with high levels of exposure, and those linked to other policies are more effective.


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It is difficult to distinguish the causal role of media campaigns along with other programs on tobacco consumption – there is a need to try and separate out effects of media from concurrent policy changes etc., but this is difficult to do. Information on what type of anti-smoking campaign is most effective is inconclusive – suggest using marketing research techniques to study this: controlled studies, focus groups Some things are currently not measured e.g., campaign’s impact on altering an adult’s willingness to supply a minor with cigarettes – not addressing such effects overlooks outcomes that point to that campaign’s success Longitudinal data are needed to measure long-term outcomes. Effects may decay without additional enforcement. Finally, there is a need to develop campaigns consistent with a broader package of tobacco control policies.


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33

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34

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35

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APPENDIX 10 E PROGRAMS/TACTICS DISCONTINUED OR

TRANSITIONED AS PART OF THE 2007/2008 ROAD SAFETY

STRATEGIC REVIEW


Insurance Corporation of British Columbia 10E-1 December 1, 2011

Programs/Tactics Discontinued or Transitioned as Part of the 2007/2008 Road Safety Strategic Review

The result of the 2007/2008 Road Safety Strategic Review was a streamlined portfolio of

programs. Funding was discontinued for eight existing education and awareness programs

and three education and awareness tactics. Two other programs (Child Passenger Safety

and Youth Education & Awareness) were modified into tactics that support the objectives of

the established road safety programs. One of the programs (Distracted Driving) for which

funding was discontinued in 2008 has since been re-introduced owing to legislative changes.

The following table provides more information on programs and tactics that were

discontinued or transitioned:

Program Direction and Rationale

Aging Drivers Direction: DISCONTINUED • If supported by crash data, aging drivers can be a target

audience in one of the road safety priority programs. Rationale: • Not a significant risk at present. • Difficult to discern specific driving behaviours that are “high-

risk”. • Other agencies are on lead to address this issue.

Animal Collisions

Direction: DISCONTINUED • Interventions focus on road improvement initiatives that meet

investment criteria. Rationale: • Awareness initiatives are not the most effective way to address

the problem. • More effective to use engineering countermeasures from the

Road Improvement Program, assuming projects meet defined investment criteria.

Bad Weather Direction: DISCONTINUED • Messaging incorporated into speed and intersection campaigns

as appropriate. Rationale: • Results in better alignment of the issue within the new program

structure. Child Passenger Safety

Direction: TRANSITIONED • Incorporated into Occupant Restraint program as Child

Passenger Safety tactic. Rationale: • The beneficial effects on knowledge and attitudes in the young

child age group (under 12) and their parents, are an important first step to behaviour change and provide foundational education to develop safe attitudes among children as passengers and road users.




Cycling Direction: DISCONTINUED • Internet information directs people to other resources. Rationale: • Relatively low-risk to customers (as measured by incidents and

claims costs). • This issue indirectly addressed by programs targeting

intersection safety and road improvement projects that target pedestrian and cycling crossings.

Distractions1 Direction: DISCONTINUED in 2008, but reintroduced in 2010 • No discretionary work. • Passively monitor trends. Rationale: • Government agencies taking policy lead. • No enforcement capability. • No ability to effect change in near future.

Fatigue Direction: DISCONTINUED • Web information directs people to other resources. Rationale: • Difficult to quantify the effects of fatigue-related crashes. • Difficult to influence or enforce this behaviour. • Changing driver behaviours to reduce fatigue-related crashes is

extremely difficult. Motorcycles Direction: DISCONTINUED

• Message incorporated into overall speed and intersection programs as appropriate.

Rationale: • Stand alone tactics not required as this issue is integrated with

speed and intersection programs. • Government agencies on lead for this issue.

Pedestrians Direction: DISCONTINUED • Target audience addressed under intersection and speeding as

appropriate. Rationale: • Relatively low-risk (as measured by incidents and claims costs). • Most pedestrian incidents happen at intersections, and

effectively incorporated into intersection campaign without separate stand alone tactics.

Youth Education and Awareness

Direction: TRANSITIONED • Youth audience incorporated into speeding program. Rationale: • Other programs (e.g., Graduated Licensing Program) having

significant impact on this audience. • Young males aged 19 to 25 continue to represent the highest

risk of crashes and looked at in specific programs (e.g., speeding, impaired driving).

1 Due to legislative changes prohibiting the operation of hand held personal electronic devices effective January 1, 2010, this program has been added to the Drivers portfolio.




• Educating youth on the risks and consequences of driving behaviours before they obtain driver licenses is an important precursor to developing safe driving behaviours.

Zero Crash Month

Direction: DISCONTINUED Rationale: • Tactic consumes large investments and time, and it is difficult to

evaluate its effectiveness. Mission Possible @ Work

Direction: DISCONTINUED Rationale: • Little interest in tactic among target audience. • Unable to evaluate the effectiveness of this tactic in its current

form. Safer Cities Direction: DISCONTINUED

Rationale: • Unable to evaluate effectiveness.


CHAPTER 11

GENERAL APPENDICES



Table of Contents Appendix 11 A – Basic Insurance Information Sharing ..................................... 11-A

Appendix 11 B – Service Plan 2011 - 2013 ........................................................ 11-B

Appendix 11 C – 2010 ICBC Annual Report ....................................................... 11-C


APPENDIX 11 A

BASIC INSURANCE INFORMATION SHARING EXHIBITS

ICBC Basic Insurance Information Sharing The following exhibits provide aggregated Basic insurance data for premiums, sales volume and loss experience. The data is aggregated by the major lines of business of third party Basic, no-fault accident benefits and underinsured motorist protection coverages. The exhibits provide the data in various views as noted below:

Exhibit I, Major Lines of Business Experience - In this exhibit the data is presented in the form of major use categories: private passenger, commercial, all-terrain vehicles, and private passenger motorcycles.

Exhibit II, Classification – The data is sorted into a more detailed perspective of type of use rather than the major groupings above.

Exhibit III, Territorial – This exhibit provides data based on a territorial view. Exhibit IV, Distribution of Accident Year Paid by Policy Year Paid – This is provided for both Bodily Injury claims and Property Damage claims. Exhibit V, Major Lines of Business by Territory – This exhibit splits the territorial exhibits into the major lines of business and meets the requirements outlined in paragraph 3.4 of the May 2004 Negotiated Settlement Agreement.

Appendix A, attached, provides a glossary of terms used in these exhibits. These exhibits are subject to the limitations inherent in ICBC’s data. For example, this level of detail is not available for all Basic insurance premiums and claims costs, therefore the revenues and costs outlined in these exhibits do not correlate precisely to the figures published in ICBC’s annual report. Appendix B provides a reconciliation of the aggregated data included in the exhibits to premiums and claims data published in annual Basic Insurance financial statements. These exhibits exclude premiums for manually processed policies (i.e., those policies that are not processed through ICBC’s Autoplan Data Capture system including garage and fleet reporting policies), driver penalty points1

, and premiums for certain territories and rate classes as this data is not available on a basis consistent with the form outlined in these exhibits. Claims and Adjustment Expenses Incurred included in these exhibits are based on claim file estimates of the likely cost of any claims that have been reported as at December 31, 2010. These exhibits exclude claims for manually processed policies, out of province policies, and temporary operating permits as data at the level of detail outlined in these exhibits is not available for these claims.

The actuarial exhibits that meet the requirements outlined in paragraph 3.3 of the May 2004 Negotiated Settlement Agreement are located within exhibit set C of Chapter 3. 1 Driver penalty points refers to driver penalty point premium, multiple-crash premium, and driver risk premium in both the schedules and Appendix B.

Appendix A

Glossary The order of the defined terms is as they appear in most exhibits. Number of Written Vehicles: These are annualized measures of business sales volumes. The number of written vehicles is annualized by determining the net policy terms portion of a 12 month period, e.g. a 6 month policy is 0.5 written vehicles. Number of Earned Vehicles: These are annualized measures of risk exposure. Policies are annualized by determining which portions of the policy occur in a given year. For a 12 month policy written July 1, 0.5 vehicles are earned in the first year and 0.5 are earned after January 1 of the next year. The difference between written and earned is the difference between sales activity and performance of the contract (which could include no activity if there are no claims). When written is greater than earned, the company is growing. Written Premiums: This is the same concept as Number of Written Vehicles, but counts net dollars of premiums written. Earned Premiums: This is the same concept as Number of Earned Vehicles, but counts net dollars of premiums earned. Number of Claims: The number of claims reported by coverage. Claims and Adjustment Expenses Incurred: This is the claims file estimate of the likely costs of any claims that have been recorded. Claims Frequency per 100 Earned Vehicles: This represents the rate of claims. It is the ratio of Number of Claims to Number of Earned Vehicles. Average Cost Per Claim: This measures the severity of claims being made. It is the ratio of Claims and Adjustment Expenses Incurred to Number of Claims. Average Earned Premium: This is the average amount available to pay claims in this year and for this coverage. It is the ratio of earned premiums to earned vehicles. Claim Cost per Earned Vehicle: This is the amount of money required for each earned vehicle, just to pay for claims. It is the ratio of Claims and Adjustment Expenses Incurred to Number of Earned Vehicles. Recorded Loss Ratio: This is the portion of every premium dollar that has been used to pay for claims. It is calculated as the ratio of Claims and Adjustment Expenses Incurred to Earned Premiums.

APPENDIX B

APPENDIX B

PREMIUMS WRITTEN2006 2007 2008 2009 2010

EXHIBITS TOTAL 1,778,537,293 1,893,298,735 1,933,168,706 1,945,290,544 1,959,638,770

OTHER BASIC INSURANCETEMPORARY OPERATING PERMITS AND OUT OF PROVINCE POLICIES 55,436,083 56,421,838 55,113,728 53,514,854 54,738,874 MANUAL POLICIES (including garage and fleet reporting policies) 43,898,512 45,981,465 45,350,381 56,407,296 36,046,597 SHORT TERM SURCHARGES & CANCELLATION FEES 12,438,841 13,482,932 13,988,598 13,887,333 13,815,796 DRIVER'S PENALTY POINTS 17,465,610 17,363,112 15,952,506 17,270,865 21,696,687 CREDIT CARD FEES (10,610,824) (12,402,157) (13,538,887) (14,513,029) (14,441,432) UNPROCESSED TRANSACTIONS AND TIMING DIFFERENCES (480,773) (424,382) (820,005) (598,776) (1,008,681) OTHER BASIC INSURANCE 118,147,449 120,422,808 116,046,321 125,968,543 110,847,841

118,147,449 120,422,808 116,046,321 125,968,543 110,847,841 1,896,684,742 2,013,721,543 2,049,215,027 2,071,259,087 2,070,486,611

- - -

PREMIUMS EARNED2006 2007 2008 2009 2010

EXHIBITS TOTAL 1,702,120,301 1,840,982,002 1,929,990,858 1,934,535,473 1,956,814,653

OTHER BASIC INSURANCETEMPORARY OPERATING PERMITS AND OUT OF PROVINCE POLICIES 52,836,315 56,052,508 55,962,748 54,559,813 54,057,768 MANUAL POLICIES (including garage and fleet reporting policies) 42,809,644 43,189,955 45,194,363 57,266,526 38,523,168 SHORT TERM SURCHARGES & CANCELLATION FEES 12,393,838 13,496,011 14,007,907 13,886,941 13,815,796 DRIVER'S PENALTY POINTS 16,546,412 17,496,150 16,592,092 16,465,277 19,328,924 CREDIT CARD FEES (10,572,434) (12,361,696) (13,557,574) (14,512,619) (14,441,432) UNPROCESSED TRANSACTIONS AND TIMING DIFFERENCES 8,343,113 (1,776,519) (555,288) (946,858) (1,527,122) OTHER BASIC INSURANCE 122,356,886 116,096,409 117,644,247 126,719,081 109,757,101

1,824,477,188 1,957,078,411 2,047,635,104 2,061,254,554 2,066,571,754 - - -

CLAIMS AND ADJUSTMENT EXPENSES INCURRED2006 2007 2008 2009 2010

EXHIBITS TOTAL 1,491,763,898 1,498,151,219 1,393,865,151 1,195,737,020 901,115,163

OTHER BASIC INSURANCETEMPORARY OPERATING PERMITS AND OUT OF PROVINCE POLICIES 55,724,794 57,356,022 54,367,737 40,230,716 29,593,614 MANUAL POLICIES (including garage and fleet reporting policies) 37,265,650 36,406,644 36,850,217 26,890,246 21,211,747 DISCOUNTING (40,785,000) (50,239,000) (26,712,000) (22,444,020) (14,112,048) INCURRED BUT NOT REPORTED CLAIM AND CLAIMS DEVELOPMENT 812,102,680 881,387,484 817,330,933 870,494,918 851,268,232 INCREASE IN RECORDED TO DECEMBER 2010 AND UNRECONCILED DIFFERENCES (702,522,691) (716,843,131) (591,035,568) (394,802,006) (3,311,966) OTHER BASIC INSURANCE 161,785,432 208,068,018 290,801,319 520,369,854 884,649,580

1,653,549,330 1,706,219,237 1,684,666,470 1,716,106,874 1,785,764,742 1,653,549,330 1,706,219,237 1,684,666,470 1,716,106,874 1,785,764,742

BASIC INSURANCE TOTAL

BASIC INSURANCE - YEAR END FINANCIAL STATEMENTS



These exhibits are produced from a management information system in ICBC's data warehouse created to provide drilldowns not readily available in the accounting and actuarial systems of record. Minor discrepancies exist primarily due to timing differences and methods of consolidation; historically the discrepancy has been less than one percent. The management information system has been selected as the source of these exhibits since the systems of record do not contain the classification of vehicle use required.

2BI - 1

DATA AS OF DECEMBER 31, 2010

COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS

CLAIMS AND ADJUSTMENT

EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 2,390,856 2,364,295 1,354,049,233 1,294,369,414 213,178 1,187,516,499 9.02 5,571 547 502 92%2007 2,455,256 2,423,435 1,438,489,917 1,398,851,379 221,444 1,191,601,104 9.14 5,381 577 492 85%2008 2,488,920 2,483,244 1,494,364,593 1,475,149,287 216,609 1,092,943,910 8.72 5,046 594 440 74%2009 2,523,695 2,502,044 1,517,583,067 1,506,808,180 214,854 954,202,293 8.59 4,441 602 381 63%2010 2,562,451 2,543,918 1,527,377,137 1,524,666,035 197,276 725,171,594 7.75 3,676 599 285 48%TOTAL 12,421,178 12,316,936 7,331,863,947 7,199,844,297 1,063,361 5,151,435,401 8.63 4,844 585 418 72%

THIRD PARTY TOTAL

2006 2,390,856 2,364,295 213,178 1,433,359,255 9.02 6,724 606 2007 2,455,256 2,423,435 221,444 1,399,749,453 9.14 6,321 578 2008 2,488,920 2,483,244 216,609 1,276,975,440 8.72 5,895 514 2009 2,523,695 2,502,044 214,854 1,076,154,463 8.59 5,009 430 2010 2,562,451 2,543,918 197,276 771,856,925 7.75 3,913 303 TOTAL 12,421,178 12,316,936 1,063,361 5,958,095,536 8.63 5,603 484

ACCIDENT BENEFITS

2006 2,390,856 2,364,295 166,179,529 159,896,397 53,202 104,326,251 2.25 1,961 68 44 65%2007 2,455,256 2,423,435 176,123,448 171,513,381 53,473 104,632,615 2.21 1,957 71 43 61%2008 2,488,920 2,483,244 149,695,347 167,617,164 51,140 101,929,016 2.06 1,993 67 41 61%2009 2,523,695 2,502,044 137,707,588 138,941,686 49,753 89,559,966 1.99 1,800 56 36 64%2010 2,562,451 2,543,918 138,632,428 138,368,298 49,742 68,261,610 1.96 1,372 54 27 49%TOTAL 12,421,178 12,316,936 768,338,340 776,336,925 257,310 468,709,459 2.09 1,822 63 38 60%

UNDERINSURED MOTORIST

2006 2,390,856 2,364,294 50,767,498 48,490,292 178 28,351,578 0.01 159,279 21 12 58%2007 2,455,256 2,423,435 53,328,477 52,273,838 138 21,315,520 0.01 154,460 22 9 41%2008 2,488,920 2,483,244 54,230,389 54,128,397 102 22,399,257 0.00 219,601 22 9 41%2009 2,523,695 2,502,044 54,841,380 54,441,074 71 18,923,379 0.00 266,526 22 8 35%2010 2,562,451 2,543,918 55,484,837 55,243,492 36 7,971,171 0.00 221,421 22 3 14%TOTAL 12,421,178 12,316,935 268,652,581 264,577,093 525 98,960,904 0.00 188,497 21 8 37%

EXHIBIT I - MAJOR LINES OF BUSINESS EXPERIENCE

PRIVATE PASSENGER AUTOMOBILE

PROVINCE OF BRITISH COLUMBIA

2BI - 2


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 509,257 497,760 164,135,413 157,160,514 24,280 150,040,996 4.88 6,180 316 301 95%2007 535,963 523,107 178,576,002 172,198,657 25,587 146,641,175 4.89 5,731 329 280 85%2008 546,903 545,076 187,028,281 184,099,851 25,036 144,566,800 4.59 5,774 338 265 79%2009 552,745 547,552 188,313,211 187,118,692 21,934 107,286,010 4.01 4,891 342 196 57%2010 565,741 561,697 189,860,754 190,450,673 19,599 80,123,160 3.49 4,088 339 143 42%TOTAL 2,710,608 2,675,192 907,913,661 891,028,387 116,436 628,658,140 4.35 5,399 333 235 71%

THIRD PARTY TOTAL

2006 509,257 497,760 24,280 161,788,662 4.88 6,663 325 2007 535,963 523,107 25,587 162,223,939 4.89 6,340 310 2008 546,903 545,076 25,036 152,151,701 4.59 6,077 279 2009 552,745 547,552 21,934 113,347,315 4.01 5,168 207 2010 565,741 561,697 19,599 83,431,864 3.49 4,257 149 TOTAL 2,710,608 2,675,192 116,436 672,943,480 4.35 5,780 252

ACCIDENT BENEFITS

2006 509,257 497,760 12,337,276 11,844,022 2,715 4,287,917 0.55 1,579 24 9 36%2007 535,963 523,107 13,253,405 12,841,700 2,829 5,280,039 0.54 1,866 25 10 41%2008 546,903 545,076 11,380,937 12,653,563 2,764 4,760,784 0.51 1,722 23 9 38%2009 552,745 547,552 10,300,370 10,397,792 2,562 5,100,606 0.47 1,991 19 9 49%2010 565,741 561,697 10,390,283 10,418,881 2,482 2,471,605 0.44 996 19 4 24%TOTAL 2,710,608 2,675,192 57,662,271 58,155,958 13,352 21,900,951 0.50 1,640 22 8 38%


2006 498,944 487,478 4,445,433 4,305,855 4 1,804,898 0.00 451,225 9 4 42%2007 525,120 512,472 4,685,794 4,584,284 12 3,161,075 0.00 263,423 9 6 69%2008 535,822 533,991 4,715,487 4,739,894 2 105,003 0.00 52,502 9 0 2%2009 541,008 536,193 4,645,881 4,654,587 5 1,550,633 0.00 310,127 9 3 33%2010 554,349 550,162 4,679,502 4,679,612 - - - N/A 9 - 0%TOTAL 2,655,245 2,620,296 23,172,097 22,964,232 23 6,621,610 0.00 287,896 9 3 29%


COMMERCIAL


2BI - 3


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 2,742 2,682 102,678 98,628 8 20,344 0.30 2,543 37 8 21%2007 3,125 2,944 130,603 119,148 17 336,080 0.58 19,769 40 114 282%2008 3,305 3,405 150,144 156,854 16 213,920 0.47 13,370 46 63 136%2009 3,507 3,386 155,199 154,636 20 28,863 0.59 1,443 46 9 19%2010 3,926 3,791 157,299 155,059 10 20,249 0.26 2,025 41 5 13%TOTAL 16,605 16,208 695,923 684,325 71 619,457 0.44 8,725 42 38 91%

THIRD PARTY TOTAL

2006 2,742 2,682 8 20,344 0.30 2,543 8 2007 3,125 2,944 17 1,795,533 0.58 105,620 610 2008 3,305 3,405 16 448,889 0.47 28,056 132 2009 3,507 3,386 20 28,863 0.59 1,443 9 2010 3,926 3,791 10 20,249 0.26 2,025 5 TOTAL 16,605 16,208 71 2,313,879 0.44 32,590 143

ACCIDENT BENEFITS

2006 2,742 2,682 83,086 79,836 - - - N/A 30 - 0%2007 3,125 2,944 104,972 96,236 3 239,157 0.10 79,719 33 81 249%2008 3,305 3,405 103,233 116,352 1 89,912 0.03 89,912 34 26 77%2009 3,507 3,386 92,650 93,057 - - - N/A 27 - 0%2010 3,926 3,791 93,040 91,912 - - - N/A 24 - 0%TOTAL 16,605 16,208 476,981 477,394 4 329,069 0.02 82,267 29 20 69%


2006 2,742 2,682 24,162 23,035 - - - N/A 9 - 0%2007 3,125 2,944 30,458 28,020 - - - N/A 10 - 0%2008 3,305 3,405 32,788 35,450 - - - N/A 10 - 0%2009 3,507 3,386 32,704 32,638 - - - N/A 10 - 0%2010 3,926 3,791 33,246 33,009 - - - N/A 9 - 0%TOTAL 16,605 16,208 153,358 152,151 - - - N/A 9 - 0%


ALL TERRAIN


2BI - 4


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 43,905 43,292 17,136,081 16,768,343 1,350 7,075,560 3.12 5,241 387 163 42%2007 46,098 46,101 18,569,261 18,499,718 1,281 9,707,186 2.78 7,578 401 211 52%2008 51,812 50,998 21,410,489 21,121,555 1,415 10,747,756 2.77 7,596 414 211 51%2009 52,650 53,172 22,435,114 22,580,651 1,476 6,865,582 2.78 4,651 425 129 30%2010 54,745 54,339 23,388,969 23,230,901 1,323 5,516,900 2.43 4,170 428 102 24%TOTAL 249,210 247,902 102,939,914 102,201,168 6,845 39,912,985 2.76 5,831 412 161 39%

THIRD PARTY TOTAL

2006 43,905 43,292 1,350 8,531,553 3.12 6,320 197 2007 46,098 46,101 1,281 12,712,398 2.78 9,924 276 2008 51,812 50,998 1,415 14,294,342 2.77 10,102 280 2009 52,650 53,172 1,476 8,191,095 2.78 5,550 154 2010 54,745 54,339 1,323 5,957,180 2.43 4,503 110 TOTAL 249,210 247,902 6,845 49,686,567 2.76 7,259 200

ACCIDENT BENEFITS

2006 43,905 43,292 8,331,448 8,161,813 1,174 7,869,990 2.71 6,704 189 182 96%2007 46,098 46,101 8,987,848 8,959,469 1,112 10,527,934 2.41 9,468 194 228 118%2008 51,812 50,998 8,889,925 9,025,304 1,275 12,808,945 2.50 10,046 177 251 142%2009 52,650 53,172 8,000,127 8,116,286 1,249 9,659,619 2.35 7,734 153 182 119%2010 54,745 54,339 8,316,855 8,260,562 1,135 8,807,272 2.09 7,760 152 162 107%TOTAL 249,210 247,902 42,526,203 42,523,433 5,945 49,673,761 2.40 8,356 172 200 117%


2006 43,905 43,292 945,456 922,152 6 469,864 0.01 78,311 21 11 51%2007 46,098 46,101 1,018,550 1,016,172 20 4,709,334 0.04 235,467 22 102 463%2008 51,812 50,998 1,167,093 1,147,186 14 3,299,847 0.03 235,703 22 65 288%2009 52,650 53,172 1,183,253 1,196,195 10 2,560,068 0.02 256,007 22 48 214%2010 54,745 54,339 1,224,420 1,216,218 7 2,771,601 0.01 395,943 22 51 228%TOTAL 249,210 247,902 5,538,772 5,497,923 57 13,810,713 0.02 242,293 22 56 251%


MOTORCYCLES


2BII - 1


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 979,712 969,129 489,356,512 467,736,231 78,217 426,473,415 8.07 5,452 483 440 91%2007 1,005,513 992,014 520,069,076 505,483,729 81,371 429,224,239 8.20 5,275 510 433 85%2008 1,030,933 1,021,727 549,918,812 537,095,331 80,553 400,241,377 7.88 4,969 526 392 75%2009 1,066,555 1,048,608 573,230,135 563,195,855 82,381 362,778,356 7.86 4,404 537 346 64%2010 1,099,033 1,084,154 587,228,281 581,645,418 77,652 287,917,197 7.16 3,708 536 266 50%TOTAL 5,181,745 5,115,631 2,719,802,816 2,655,156,565 400,174 1,906,634,584 7.82 4,765 519 373 72%

THIRD PARTY TOTAL

2006 979,712 969,129 78,217 508,335,006 8.07 6,499 525 2007 1,005,513 992,014 81,371 498,166,985 8.20 6,122 502 2008 1,030,933 1,021,727 80,553 461,147,540 7.88 5,725 451 2009 1,066,555 1,048,608 82,381 413,766,802 7.86 5,023 395 2010 1,099,033 1,084,154 77,652 311,765,113 7.16 4,015 288 TOTAL 5,181,745 5,115,631 400,174 2,193,181,447 7.82 5,481 429

ACCIDENT BENEFITS

2006 979,712 969,129 60,880,367 58,691,657 17,262 38,520,308 1.78 2,232 61 40 66%2007 1,005,513 992,014 64,555,542 62,796,722 17,244 32,928,109 1.74 1,910 63 33 52%2008 1,030,933 1,021,727 55,810,336 61,714,522 16,562 33,314,269 1.62 2,011 60 33 54%2009 1,066,555 1,048,608 52,596,495 52,524,527 16,747 34,790,327 1.60 2,077 50 33 66%2010 1,099,033 1,084,154 53,819,587 53,324,339 16,977 26,179,098 1.57 1,542 49 24 49%TOTAL 5,181,745 5,115,631 287,662,327 289,051,767 84,792 165,732,110 1.66 1,955 57 32 57%


2006 979,712 969,128 19,476,206 18,713,779 70 9,308,859 0.01 132,984 19 10 50%2007 1,005,513 992,014 20,489,700 20,026,539 46 8,393,864 0.00 182,475 20 8 42%2008 1,030,933 1,021,727 21,141,291 20,943,488 38 9,408,293 0.00 247,587 20 9 45%2009 1,066,555 1,048,608 21,857,370 21,499,461 31 9,535,093 0.00 307,584 21 9 44%2010 1,099,033 1,084,154 22,439,766 22,211,832 19 3,079,100 0.00 162,058 20 3 14%TOTAL 5,181,745 5,115,631 105,404,333 103,395,100 204 39,725,209 0.00 194,731 20 8 38%

EXHIBIT II - CLASSIFICATION

CLASS 01 - PLEASURE USE


2BII - 2


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 632,488 636,162 373,117,611 364,099,080 56,936 315,764,319 8.95 5,546 572 496 87%2007 648,673 638,019 396,849,722 383,390,262 57,357 303,324,640 8.99 5,288 601 475 79%2008 681,704 667,644 428,451,945 415,507,236 58,908 290,098,904 8.82 4,925 622 435 70%2009 709,906 696,346 450,001,999 440,197,067 61,502 271,437,734 8.83 4,413 632 390 62%2010 723,937 717,066 457,960,887 454,820,560 57,933 208,388,444 8.08 3,597 634 291 46%TOTAL 3,396,707 3,355,238 2,106,382,164 2,058,014,205 292,636 1,389,014,042 8.72 4,747 613 414 67%

THIRD PARTY TOTAL

2006 632,488 636,162 56,936 394,243,087 8.95 6,924 620 2007 648,673 638,019 57,357 358,248,136 8.99 6,246 562 2008 681,704 667,644 58,908 347,583,281 8.82 5,900 521 2009 709,906 696,346 61,502 309,476,459 8.83 5,032 444 2010 723,937 717,066 57,933 222,553,518 8.08 3,842 310 TOTAL 3,396,707 3,355,238 292,636 1,632,104,481 8.72 5,577 486

ACCIDENT BENEFITS

2006 632,488 636,162 46,459,497 45,522,713 15,109 28,633,941 2.38 1,895 72 45 63%2007 648,673 638,019 49,320,047 47,737,857 14,852 32,692,654 2.33 2,201 75 51 68%2008 681,704 667,644 43,319,346 47,782,713 14,817 32,014,059 2.22 2,161 72 48 67%2009 709,906 696,346 41,236,810 41,019,245 14,966 27,135,493 2.15 1,813 59 39 66%2010 723,937 717,066 41,923,208 41,645,216 15,334 19,780,906 2.14 1,290 58 28 47%TOTAL 3,396,707 3,355,238 222,258,908 223,707,743 75,078 140,257,052 2.24 1,868 67 42 63%


2006 632,488 636,162 14,323,374 13,864,046 54 11,191,666 0.01 207,253 22 18 81%2007 648,673 638,019 15,039,228 14,689,162 43 5,585,201 0.01 129,888 23 9 38%2008 681,704 667,644 15,894,901 15,548,062 31 5,939,302 0.00 191,590 23 9 38%2009 709,906 696,346 16,544,523 16,233,798 20 6,376,903 0.00 318,845 23 9 39%2010 723,937 717,066 16,842,489 16,712,852 10 2,608,449 0.00 260,845 23 4 16%TOTAL 3,396,707 3,355,238 78,644,515 77,047,920 158 31,701,521 0.00 200,643 23 9 41%


CLASS 02 - COMMUTE < 15 KM


2BII - 3


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 430,276 416,993 296,858,854 277,687,729 47,026 280,915,628 11.28 5,974 666 674 101%2007 441,163 438,676 314,039,674 308,182,277 50,135 295,012,752 11.43 5,884 703 673 96%2008 417,054 432,409 304,026,126 311,497,328 45,641 249,763,746 10.56 5,472 720 578 80%2009 391,777 401,210 285,033,145 293,126,261 40,405 194,853,884 10.07 4,823 731 486 66%2010 385,047 387,189 276,427,331 280,157,418 34,611 138,079,324 8.94 3,989 724 357 49%TOTAL 2,065,317 2,076,476 1,476,385,130 1,470,651,013 217,818 1,158,625,334 10.49 5,319 708 558 79%

THIRD PARTY TOTAL

2006 430,276 416,993 47,026 333,132,331 11.28 7,084 799 2007 441,163 438,676 50,135 357,760,348 11.43 7,136 816 2008 417,054 432,409 45,641 283,378,510 10.56 6,209 655 2009 391,777 401,210 40,405 216,677,940 10.07 5,363 540 2010 385,047 387,189 34,611 144,909,436 8.94 4,187 374 TOTAL 2,065,317 2,076,476 217,818 1,335,858,564 10.49 6,133 643

ACCIDENT BENEFITS

2006 430,276 416,993 35,197,769 33,101,650 13,904 25,766,349 3.33 1,853 79 62 78%2007 441,163 438,676 37,108,796 36,493,034 14,507 29,378,225 3.31 2,025 83 67 81%2008 417,054 432,409 29,515,654 34,349,203 13,026 25,598,920 3.01 1,965 79 59 75%2009 391,777 401,210 25,067,389 26,199,125 11,594 18,917,083 2.89 1,632 65 47 72%2010 385,047 387,189 24,358,938 24,674,770 11,086 14,892,766 2.86 1,343 64 38 60%TOTAL 2,065,317 2,076,476 151,248,546 154,817,781 64,117 114,553,343 3.09 1,787 75 55 74%


2006 430,276 416,993 9,761,141 9,101,136 34 3,494,516 0.01 102,780 22 8 38%2007 441,163 438,676 10,200,566 10,102,166 30 5,574,373 0.01 185,812 23 13 55%2008 417,054 432,409 9,606,786 9,991,446 27 5,576,193 0.01 206,526 23 13 56%2009 391,777 401,210 8,962,842 9,204,488 12 1,179,675 0.00 98,306 23 3 13%2010 385,047 387,189 8,768,860 8,844,209 4 1,445,091 0.00 361,273 23 4 16%TOTAL 2,065,317 2,076,476 47,300,195 47,243,445 107 17,269,848 0.01 161,400 23 8 37%


CLASS 03 - COMMUTE >= 15 KM


2BII - 4


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 309,654 304,104 185,608,027 176,000,607 30,085 161,261,722 9.89 5,360 579 530 92%2007 320,043 315,452 198,034,130 192,441,565 31,659 160,277,769 10.04 5,063 610 508 83%2008 319,350 321,562 202,800,492 201,704,171 30,690 149,500,837 9.54 4,871 627 465 74%2009 313,277 314,642 199,863,225 200,949,070 29,714 121,518,042 9.44 4,090 639 386 60%2010 310,914 312,236 196,154,168 198,418,175 26,243 88,270,155 8.40 3,364 635 283 44%TOTAL 1,573,238 1,567,996 982,460,042 969,513,589 148,391 680,828,525 9.46 4,588 618 434 70%

THIRD PARTY TOTAL

2006 309,654 304,104 30,085 194,547,417 9.89 6,467 640 2007 320,043 315,452 31,659 181,518,381 10.04 5,734 575 2008 319,350 321,562 30,690 179,211,007 9.54 5,839 557 2009 313,277 314,642 29,714 131,805,532 9.44 4,436 419 2010 310,914 312,236 26,243 90,112,384 8.40 3,434 289 TOTAL 1,573,238 1,567,996 148,391 777,194,721 9.46 5,237 496

ACCIDENT BENEFITS

2006 309,654 304,104 22,375,191 21,351,049 6,831 11,091,238 2.25 1,624 70 36 52%2007 320,043 315,452 23,808,414 23,178,693 6,777 9,402,690 2.15 1,387 73 30 41%2008 319,350 321,562 19,983,722 22,592,141 6,668 10,723,798 2.07 1,608 70 33 47%2009 313,277 314,642 17,801,963 18,197,287 6,352 8,376,092 2.02 1,319 58 27 46%2010 310,914 312,236 17,499,859 17,694,053 6,267 7,160,511 2.01 1,143 57 23 40%TOTAL 1,573,238 1,567,996 101,469,149 103,013,222 32,895 46,754,329 2.10 1,421 66 30 45%


2006 309,654 304,104 6,470,938 6,107,518 16 2,550,572 0.01 159,411 20 8 42%2007 320,043 315,452 6,822,360 6,695,171 17 1,607,082 0.01 94,534 21 5 24%2008 319,350 321,562 6,804,666 6,862,299 6 1,475,469 0.00 245,911 21 5 22%2009 313,277 314,642 6,651,517 6,695,080 7 1,826,708 0.00 260,958 21 6 27%2010 310,914 312,236 6,583,859 6,627,218 2 818,530 0.00 409,265 21 3 12%TOTAL 1,573,238 1,567,996 33,333,340 32,987,286 48 8,278,362 0.00 172,466 21 5 25%


CLASS 04 - BUSINESS USE


2BII - 5


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 4,702 4,853 4,661,597 4,664,830 1,186 5,564,235 24.44 4,692 961 1,147 119%2007 4,880 4,788 5,153,211 4,931,785 1,280 4,372,891 26.73 3,416 1,030 913 89%2008 4,329 4,622 4,805,835 4,977,180 1,117 3,781,902 24.16 3,386 1,077 818 76%2009 3,266 3,756 3,518,806 4,198,895 773 2,079,071 20.58 2,690 1,118 554 50%2010 3,268 3,410 3,071,430 3,344,700 564 1,211,526 16.54 2,148 981 355 36%TOTAL 20,445 21,430 21,210,879 22,117,390 4,920 17,009,626 22.96 3,457 1,032 794 77%

THIRD PARTY TOTAL

2006 4,702 4,853 1,186 6,528,851 24.44 5,505 1,345 2007 4,880 4,788 1,280 5,911,244 26.73 4,618 1,235 2008 4,329 4,622 1,117 4,560,970 24.16 4,083 987 2009 3,266 3,756 773 4,046,765 20.58 5,235 1,077 2010 3,268 3,410 564 1,211,526 16.54 2,148 355 TOTAL 20,445 21,430 4,920 22,259,357 22.96 4,524 1,039

ACCIDENT BENEFITS

2006 4,702 4,853 318,919 319,670 99 842,844 2.04 8,514 66 174 264%2007 4,880 4,788 346,969 334,081 75 223,171 1.57 2,976 70 47 67%2008 4,329 4,622 269,091 310,188 61 49,035 1.32 804 67 11 16%2009 3,266 3,756 184,169 215,955 56 39,709 1.49 709 57 11 18%2010 3,268 3,410 166,653 178,545 42 23,898 1.23 569 52 7 13%TOTAL 20,445 21,430 1,285,801 1,358,440 333 1,178,656 1.55 3,540 63 55 87%


2006 4,702 4,853 83,127 83,977 1 1,804,898 0.02 1,804,898 17 372 2149%2007 4,880 4,788 90,280 87,420 - - - N/A 18 - 0%2008 4,329 4,622 80,854 85,560 1 15,003 0.02 15,003 19 3 18%2009 3,266 3,756 59,966 70,170 - - - N/A 19 - 0%2010 3,268 3,410 59,530 61,968 - - - N/A 18 - 0%TOTAL 20,445 21,430 373,757 389,096 2 1,819,902 0.01 909,951 18 85 468%


CLASS 05 - U-DRIVE VEHICLES


2BII - 6


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 106 106 58,731 53,880 6 15,067 5.63 2,511 506 141 28%2007 111 108 62,500 59,434 5 5,624 4.65 1,125 553 52 9%2008 109 110 61,291 62,900 6 25,921 5.44 4,320 570 235 41%2009 105 110 58,970 62,862 6 80,019 5.46 13,337 572 729 127%2010 103 104 58,620 59,206 1 - 0.96 - 568 - 0%TOTAL 533 538 300,112 298,282 24 126,631 4.46 5,276 554 235 42%

THIRD PARTY TOTAL

2006 106 106 6 15,067 5.63 2,511 141 2007 111 108 5 5,624 4.65 1,125 52 2008 109 110 6 25,921 5.44 4,320 235 2009 105 110 6 80,019 5.46 13,337 729 2010 103 104 1 - 0.96 - - TOTAL 533 538 24 126,631 4.46 5,276 235

ACCIDENT BENEFITS

2006 106 106 6,054 5,700 2 637 1.88 319 54 6 11%2007 111 108 6,435 6,155 1 639 0.93 639 57 6 10%2008 109 110 5,108 6,082 2 32 1.81 16 55 0 1%2009 105 110 4,543 4,926 2 4,179 1.82 2,090 45 38 85%2010 103 104 4,482 4,548 - - - N/A 44 - 0%TOTAL 533 538 26,622 27,410 7 5,487 1.30 784 51 10 20%


2006 106 106 2,042 1,949 - - - N/A 18 - 0%2007 111 108 2,131 2,060 - - - N/A 19 - 0%2008 109 110 2,109 2,151 - - - N/A 19 - 0%2009 105 110 1,986 2,129 - - - N/A 19 - 0%2010 103 104 1,958 1,999 - - - N/A 19 - 0%TOTAL 533 538 10,226 10,286 - - - N/A 19 - 0%


CLASS 06 - HEARSE


2BII - 7


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 17,944 18,439 6,649,699 6,627,395 922 6,329,952 5.00 6,865 359 343 96%2007 17,046 17,411 6,499,841 6,562,161 810 4,848,655 4.65 5,986 377 278 74%2008 16,098 16,600 6,424,845 6,472,810 776 4,620,700 4.67 5,955 390 278 71%2009 15,550 15,763 6,310,403 6,389,455 714 3,707,164 4.53 5,192 405 235 58%2010 14,932 15,221 6,020,878 6,171,759 677 3,027,982 4.45 4,473 405 199 49%TOTAL 81,569 83,433 31,905,666 32,223,579 3,899 22,534,453 4.67 5,780 386 270 70%

THIRD PARTY TOTAL

2006 17,944 18,439 922 7,632,907 5.00 8,279 414 2007 17,046 17,411 810 5,040,209 4.65 6,222 289 2008 16,098 16,600 776 5,271,079 4.67 6,793 318 2009 15,550 15,763 714 3,707,164 4.53 5,192 235 2010 14,932 15,221 677 4,075,443 4.45 6,020 268 TOTAL 81,569 83,433 3,899 25,726,803 4.67 6,598 308

ACCIDENT BENEFITS

2006 17,944 18,439 816,986 817,904 104 131,433 0.56 1,264 44 7 16%2007 17,046 17,411 798,308 806,861 121 285,757 0.69 2,362 46 16 35%2008 16,098 16,600 652,795 738,177 84 236,801 0.51 2,819 44 14 32%2009 15,550 15,763 573,820 591,286 102 266,642 0.65 2,614 38 17 45%2010 14,932 15,221 548,135 561,336 71 192,210 0.47 2,707 37 13 34%TOTAL 81,569 83,433 3,390,044 3,515,564 482 1,112,844 0.58 2,309 42 13 32%


2006 17,944 18,439 394,411 397,653 - - - N/A 22 - 0%2007 17,046 17,411 379,276 386,551 3 809,121 0.02 269,707 22 46 209%2008 16,098 16,600 358,794 369,481 - - - N/A 22 - 0%2009 15,550 15,763 345,798 350,972 1 442,000 0.01 442,000 22 28 126%2010 14,932 15,221 331,265 338,488 - - - N/A 22 - 0%TOTAL 81,569 83,433 1,809,544 1,843,145 4 1,251,121 0.00 312,780 22 15 68%


CLASS 07 - FARMS AND FISHERMEN < 5000 KG


2BII - 8


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 4,500 4,494 1,484,864 1,442,431 166 1,288,508 3.69 7,762 321 287 89%2007 4,562 4,532 1,547,186 1,519,752 189 2,941,029 4.17 15,561 335 649 194%2008 4,577 4,584 1,613,051 1,592,087 135 1,852,511 2.95 13,722 347 404 116%2009 4,648 4,604 1,654,645 1,635,940 162 1,562,768 3.52 9,647 355 339 96%2010 4,774 4,710 1,696,752 1,683,685 131 409,744 2.78 3,128 357 87 24%TOTAL 23,062 22,924 7,996,498 7,873,895 783 8,054,559 3.42 10,287 343 351 102%

THIRD PARTY TOTAL

2006 4,500 4,494 166 1,288,508 3.69 7,762 287 2007 4,562 4,532 189 3,485,902 4.17 18,444 769 2008 4,577 4,584 135 1,852,511 2.95 13,722 404 2009 4,648 4,604 162 1,562,768 3.52 9,647 339 2010 4,774 4,710 131 409,744 2.78 3,128 87 TOTAL 23,062 22,924 783 8,599,433 3.42 10,983 375

ACCIDENT BENEFITS

2006 4,500 4,494 114,958 112,215 5 765 0.11 153 25 0 1%2007 4,562 4,532 119,864 117,703 7 2,692 0.15 385 26 1 2%2008 4,577 4,584 104,818 114,504 7 4,504 0.15 643 25 1 4%2009 4,648 4,604 95,296 96,027 10 145,738 0.22 14,574 21 32 152%2010 4,774 4,710 97,618 96,789 2 240 0.04 120 21 0 0%TOTAL 23,062 22,924 532,554 537,237 31 153,940 0.14 4,966 23 7 29%


2006 4,500 4,494 96,118 94,135 - - - N/A 21 - 0%2007 4,562 4,532 98,317 97,425 - - - N/A 21 - 0%2008 4,577 4,584 98,599 98,902 - - - N/A 22 - 0%2009 4,648 4,604 100,143 99,218 1 577,034 0.02 577,034 22 125 582%2010 4,774 4,710 102,076 101,132 - - - N/A 21 - 0%TOTAL 23,062 22,924 495,253 490,813 1 577,034 0.00 577,034 21 25 118%


CLASS 08 - FARMS AND FISHERMEN >= 5000 KG


2BII - 9


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 6,232 6,089 552,362 528,080 186 274,930 3.05 1,478 87 45 52%2007 6,389 6,442 584,901 583,516 152 547,717 2.36 3,603 91 85 94%2008 7,838 7,409 767,628 711,468 198 276,791 2.67 1,398 96 37 39%2009 7,606 7,803 758,843 777,434 178 327,539 2.28 1,840 100 42 42%2010 7,721 7,704 767,620 767,194 195 385,578 2.53 1,977 100 50 50%TOTAL 35,786 35,448 3,431,354 3,367,692 909 1,812,555 2.56 1,994 95 51 54%

THIRD PARTY TOTAL

2006 6,232 6,089 186 274,930 3.05 1,478 45 2007 6,389 6,442 152 547,717 2.36 3,603 85 2008 7,838 7,409 198 276,791 2.67 1,398 37 2009 7,606 7,803 178 327,539 2.28 1,840 42 2010 7,721 7,704 195 385,578 2.53 1,977 50 TOTAL 35,786 35,448 909 1,812,555 2.56 1,994 51

ACCIDENT BENEFITS

2006 6,232 6,089 261,311 250,771 115 285,193 1.89 2,480 41 47 114%2007 6,389 6,442 277,519 276,709 93 367,559 1.44 3,952 43 57 133%2008 7,838 7,409 295,682 296,429 137 318,506 1.85 2,325 40 43 107%2009 7,606 7,803 266,774 275,757 126 458,269 1.61 3,637 35 59 166%2010 7,721 7,704 270,913 270,626 126 447,423 1.64 3,551 35 58 165%TOTAL 35,786 35,448 1,372,199 1,370,292 597 1,876,950 1.68 3,144 39 53 137%


2006 6,232 6,089 150,471 145,201 - - - N/A 24 - 0%2007 6,389 6,442 159,741 159,400 1 330,000 0.02 330,000 25 51 207%2008 7,838 7,409 198,324 187,352 - - - N/A 25 - 0%2009 7,606 7,803 192,169 197,213 - - - N/A 25 - 0%2010 7,721 7,704 194,677 194,653 - - - N/A 25 - 0%TOTAL 35,786 35,448 895,382 883,819 1 330,000 0.00 330,000 25 9 37%


CLASS 09 - MOPED


2BII - 10


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 37,673 37,203 16,583,719 16,240,263 1,164 6,800,630 3.13 5,842 437 183 42%2007 39,709 39,659 17,984,360 17,916,202 1,129 9,159,470 2.85 8,113 452 231 51%2008 43,974 43,589 20,642,861 20,410,087 1,217 10,470,966 2.79 8,604 468 240 51%2009 45,044 45,369 21,676,271 21,803,217 1,298 6,538,043 2.86 5,037 481 144 30%2010 47,023 46,635 22,621,349 22,463,707 1,128 5,131,322 2.42 4,549 482 110 23%TOTAL 213,424 212,454 99,508,560 98,833,476 5,936 38,100,429 2.79 6,419 465 179 39%

THIRD PARTY TOTAL

2006 37,673 37,203 1,164 8,256,622 3.13 7,093 222 2007 39,709 39,659 1,129 12,164,682 2.85 10,775 307 2008 43,974 43,589 1,217 14,017,551 2.79 11,518 322 2009 45,044 45,369 1,298 7,863,555 2.86 6,058 173 2010 47,023 46,635 1,128 5,571,601 2.42 4,939 119 TOTAL 213,424 212,454 5,936 47,874,012 2.79 8,065 225

ACCIDENT BENEFITS

2006 37,673 37,203 8,070,137 7,911,042 1,059 7,584,797 2.85 7,162 213 204 96%2007 39,709 39,659 8,710,329 8,682,760 1,019 10,160,375 2.57 9,971 219 256 117%2008 43,974 43,589 8,594,243 8,728,875 1,138 12,490,439 2.61 10,976 200 287 143%2009 45,044 45,369 7,733,353 7,840,529 1,123 9,201,350 2.48 8,194 173 203 117%2010 47,023 46,635 8,045,942 7,989,936 1,009 8,359,849 2.16 8,285 171 179 105%TOTAL 213,424 212,454 41,154,004 41,153,141 5,348 47,796,811 2.52 8,937 194 225 116%


2006 37,673 37,203 794,985 776,951 6 469,864 0.02 78,311 21 13 60%2007 39,709 39,659 858,809 856,771 19 4,379,334 0.05 230,491 22 110 511%2008 43,974 43,589 968,769 959,834 14 3,299,847 0.03 235,703 22 76 344%2009 45,044 45,369 991,084 998,982 10 2,560,068 0.02 256,007 22 56 256%2010 47,023 46,635 1,029,743 1,021,565 7 2,771,601 0.02 395,943 22 59 271%TOTAL 213,424 212,454 4,643,390 4,614,104 56 13,480,713 0.03 240,727 22 63 292%


CLASS 10 - OTHER MOTORCYLE


2BII - 11


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 24,793 24,679 8,110,133 7,922,352 837 2,649,779 3.39 3,166 321 107 33%2007 24,864 24,806 8,390,467 8,299,380 842 3,472,311 3.39 4,124 335 140 42%2008 23,585 24,168 7,942,719 8,170,271 740 2,963,385 3.06 4,005 338 123 36%2009 24,308 24,046 8,110,527 8,044,842 741 3,050,393 3.08 4,117 335 127 38%2010 24,693 24,698 8,194,711 8,226,398 708 2,185,160 2.87 3,086 333 88 27%TOTAL 122,242 122,399 40,748,557 40,663,243 3,868 14,321,028 3.16 3,702 332 117 35%

THIRD PARTY TOTAL

2006 24,793 24,679 837 2,649,779 3.39 3,166 107 2007 24,864 24,806 842 3,766,209 3.39 4,473 152 2008 23,585 24,168 740 5,279,442 3.06 7,134 218 2009 24,308 24,046 741 3,863,845 3.08 5,214 161 2010 24,693 24,698 708 2,185,160 2.87 3,086 88 TOTAL 122,242 122,399 3,868 17,744,435 3.16 4,587 145

ACCIDENT BENEFITS

2006 24,793 24,679 1,076,744 1,051,446 75 228,021 0.30 3,040 43 9 22%2007 24,864 24,806 1,112,734 1,102,075 71 192,109 0.29 2,706 44 8 17%2008 23,585 24,168 862,938 962,331 44 170,876 0.18 3,884 40 7 18%2009 24,308 24,046 797,903 799,691 61 143,897 0.25 2,359 33 6 18%2010 24,693 24,698 806,877 810,080 46 134,372 0.19 2,921 33 5 17%TOTAL 122,242 122,399 4,657,196 4,725,623 297 869,275 0.24 2,927 39 7 18%


2006 24,793 24,679 463,337 453,394 2 951,500 0.01 475,750 18 39 210%2007 24,864 24,806 477,902 473,984 2 155,000 0.01 77,500 19 6 33%2008 23,585 24,168 457,443 468,706 - - - N/A 19 - 0%2009 24,308 24,046 469,746 465,500 1 5,000 0.00 5,000 19 0 1%2010 24,693 24,698 477,123 478,382 1 20,000 0.00 20,000 19 1 4%TOTAL 122,242 122,398 2,345,551 2,339,965 6 1,131,500 0.00 188,583 19 9 48%


CLASS 11 - PLEASURE USE - MOTORHOME


2BII - 12


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 2,742 2,682 102,678 98,628 8 20,344 0.30 2,543 37 8 21%2007 3,125 2,944 130,603 119,148 17 336,080 0.58 19,769 40 114 282%2008 3,305 3,405 150,144 156,854 16 213,920 0.47 13,370 46 63 136%2009 3,507 3,386 155,199 154,636 20 28,863 0.59 1,443 46 9 19%2010 3,926 3,791 157,299 155,059 10 20,249 0.26 2,025 41 5 13%TOTAL 16,605 16,208 695,923 684,325 71 619,457 0.44 8,725 42 38 91%

THIRD PARTY TOTAL

2006 2,742 2,682 8 20,344 0.30 2,543 8 2007 3,125 2,944 17 1,795,533 0.58 105,620 610 2008 3,305 3,405 16 448,889 0.47 28,056 132 2009 3,507 3,386 20 28,863 0.59 1,443 9 2010 3,926 3,791 10 20,249 0.26 2,025 5 TOTAL 16,605 16,208 71 2,313,879 0.44 32,590 143

ACCIDENT BENEFITS

2006 2,742 2,682 83,086 79,836 - - - N/A 30 - 0%2007 3,125 2,944 104,972 96,236 3 239,157 0.10 79,719 33 81 249%2008 3,305 3,405 103,233 116,352 1 89,912 0.03 89,912 34 26 77%2009 3,507 3,386 92,650 93,057 - - - N/A 27 - 0%2010 3,926 3,791 93,040 91,912 - - - N/A 24 - 0%TOTAL 16,605 16,208 476,981 477,394 4 329,069 0.02 82,267 29 20 69%




CLASS 12 - GOLF CART,SNOWMOBILE,ATV


2BII - 13


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 79,877 77,968 46,742,207 44,299,174 7,651 50,360,031 9.81 6,582 568 646 114%2007 84,338 82,189 51,565,543 49,320,100 8,188 50,361,006 9.96 6,151 600 613 102%2008 86,764 86,131 56,108,729 54,191,165 8,454 43,935,934 9.82 5,197 629 510 81%2009 86,566 86,369 57,798,713 57,034,989 7,779 40,114,794 9.01 5,157 660 464 70%2010 88,092 87,428 59,561,889 59,027,703 7,184 30,369,346 8.22 4,227 675 347 51%TOTAL 425,638 420,086 271,777,081 263,873,132 39,256 215,141,111 9.34 5,480 628 512 82%

THIRD PARTY TOTAL

2006 79,877 77,968 7,651 55,747,308 9.81 7,286 715 2007 84,338 82,189 8,188 59,285,348 9.96 7,241 721 2008 86,764 86,131 8,454 46,307,845 9.82 5,478 538 2009 86,566 86,369 7,779 43,527,169 9.01 5,595 504 2010 88,092 87,428 7,184 30,508,355 8.22 4,247 349 TOTAL 425,638 420,086 39,256 235,376,025 9.34 5,996 560

ACCIDENT BENEFITS

2006 79,877 77,968 4,098,562 3,905,799 920 1,562,270 1.18 1,698 50 20 40%2007 84,338 82,189 4,489,306 4,310,029 960 2,413,983 1.17 2,515 52 29 56%2008 86,764 86,131 3,976,198 4,357,877 1,014 1,416,761 1.18 1,397 51 16 33%2009 86,566 86,369 3,667,441 3,686,820 944 1,903,307 1.09 2,016 43 22 52%2010 88,092 87,428 3,758,883 3,734,447 943 714,224 1.08 757 43 8 19%TOTAL 425,638 420,086 19,990,390 19,994,972 4,781 8,010,545 1.14 1,675 48 19 40%


2006 79,877 77,968 1,712,795 1,640,284 1 - 0.00 - 21 - 0%2007 84,338 82,189 1,840,089 1,785,220 4 673,989 0.00 168,497 22 8 38%2008 86,764 86,131 1,889,507 1,882,069 1 90,000 0.00 90,000 22 1 5%2009 86,566 86,369 1,877,775 1,875,445 2 422,137 0.00 211,069 22 5 23%2010 88,092 87,428 1,894,981 1,891,082 - - - N/A 22 - 0%TOTAL 425,638 420,086 9,215,147 9,074,101 8 1,186,126 0.00 148,266 22 3 13%


CLASS 13 - ARTISANS


2BII - 14


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 14,504 14,527 14,521,720 14,215,176 2,825 11,872,713 19.45 4,203 979 817 84%2007 14,471 14,420 14,962,674 14,695,800 2,882 12,847,951 19.99 4,458 1,019 891 87%2008 14,126 14,396 15,259,087 15,182,058 2,768 14,436,758 19.23 5,216 1,055 1,003 95%2009 13,618 13,798 14,949,263 15,151,223 2,303 9,629,943 16.69 4,181 1,098 698 64%2010 13,427 13,475 14,523,143 14,711,200 1,961 6,720,270 14.55 3,427 1,092 499 46%TOTAL 70,145 70,615 74,215,887 73,955,457 12,739 55,507,634 18.04 4,357 1,047 786 75%

THIRD PARTY TOTAL

2006 14,504 14,527 2,825 11,896,347 19.45 4,211 819 2007 14,471 14,420 2,882 13,662,170 19.99 4,741 947 2008 14,126 14,396 2,768 14,572,702 19.23 5,265 1,012 2009 13,618 13,798 2,303 10,024,183 16.69 4,353 727 2010 13,427 13,475 1,961 8,043,813 14.55 4,102 597 TOTAL 70,145 70,615 12,739 58,199,216 18.04 4,569 824

ACCIDENT BENEFITS

2006 14,504 14,527 1,083,328 1,063,737 440 339,127 3.03 771 73 23 32%2007 14,471 14,420 1,117,992 1,096,831 437 651,011 3.03 1,490 76 45 59%2008 14,126 14,396 925,600 1,054,779 388 343,693 2.70 886 73 24 33%2009 13,618 13,798 823,975 847,421 361 764,247 2.62 2,117 61 55 90%2010 13,427 13,475 804,304 812,807 342 319,019 2.54 933 60 24 39%TOTAL 70,145 70,615 4,755,199 4,875,575 1,968 2,417,097 2.79 1,228 69 34 50%


2006 14,504 14,527 325,786 321,386 - - - N/A 22 - 0%2007 14,471 14,420 330,561 327,643 1 346,000 0.01 346,000 23 24 106%2008 14,126 14,396 321,247 328,834 - - - N/A 23 - 0%2009 13,618 13,798 309,071 313,827 - - - N/A 23 - 0%2010 13,427 13,475 302,906 305,078 - - - N/A 23 - 0%TOTAL 70,145 70,615 1,589,571 1,596,766 1 346,000 0.00 346,000 23 5 22%


CLASS 14 - DELIVERY < 5000 KG


2BII - 15


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 4,940 4,898 2,002,869 1,948,160 284 1,164,885 5.80 4,102 398 238 60%2007 5,025 4,985 2,121,166 2,081,091 274 893,012 5.50 3,259 418 179 43%2008 5,064 5,069 2,196,014 2,186,549 298 1,084,933 5.88 3,641 431 214 50%2009 5,059 5,056 2,203,570 2,198,047 288 901,532 5.70 3,130 435 178 41%2010 4,979 5,022 2,190,768 2,208,853 250 543,073 4.98 2,172 440 108 25%TOTAL 25,066 25,029 10,714,387 10,622,699 1,394 4,587,436 5.57 3,291 424 183 43%

THIRD PARTY TOTAL

2006 4,940 4,898 284 1,164,885 5.80 4,102 238 2007 5,025 4,985 274 893,012 5.50 3,259 179 2008 5,064 5,069 298 1,084,933 5.88 3,641 214 2009 5,059 5,056 288 901,532 5.70 3,130 178 2010 4,979 5,022 250 543,073 4.98 2,172 108 TOTAL 25,066 25,029 1,394 4,587,436 5.57 3,291 183

ACCIDENT BENEFITS

2006 4,940 4,898 191,796 186,777 24 4,947 0.49 206 38 1 3%2007 5,025 4,985 202,512 198,940 38 13,816 0.76 364 40 3 7%2008 5,064 5,069 180,505 196,278 31 31,826 0.61 1,027 39 6 16%2009 5,059 5,056 155,800 157,810 34 28,525 0.67 839 31 6 18%2010 4,979 5,022 153,871 155,313 19 8,283 0.38 436 31 2 5%TOTAL 25,066 25,029 884,484 895,120 146 87,396 0.58 599 36 3 10%




CLASS 15 - MUNICIPAL GOVERNMENT VEHICLES


2BII - 16


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 3,964 3,834 1,568,810 1,479,991 121 552,071 3.16 4,563 386 144 37%2007 3,608 3,826 1,496,502 1,552,217 139 678,222 3.63 4,879 406 177 44%2008 3,350 3,560 1,416,791 1,482,079 121 931,672 3.40 7,700 416 262 63%2009 2,942 3,092 1,260,050 1,318,340 87 497,455 2.81 5,718 426 161 38%2010 3,241 3,150 1,381,985 1,343,900 84 392,845 2.67 4,677 427 125 29%TOTAL 17,107 17,462 7,124,138 7,176,526 552 3,052,264 3.16 5,529 411 175 43%

THIRD PARTY TOTAL

2006 3,964 3,834 121 1,324,172 3.16 10,944 345 2007 3,608 3,826 139 1,966,294 3.63 14,146 514 2008 3,350 3,560 121 960,027 3.40 7,934 270 2009 2,942 3,092 87 784,451 2.81 9,017 254 2010 3,241 3,150 84 392,845 2.67 4,677 125 TOTAL 17,107 17,462 552 5,427,789 3.16 9,833 311

ACCIDENT BENEFITS

2006 3,964 3,834 174,127 165,805 9 2,447 0.23 272 43 1 1%2007 3,608 3,826 163,376 170,601 12 103,178 0.31 8,598 45 27 60%2008 3,350 3,560 125,073 149,459 11 56,503 0.31 5,137 42 16 38%2009 2,942 3,092 100,006 106,079 10 10,856 0.32 1,086 34 4 10%2010 3,241 3,150 107,932 106,052 7 4,597 0.22 657 34 1 4%TOTAL 17,107 17,462 670,514 697,997 49 177,579 0.28 3,624 40 10 25%




CLASS 16 - LOGGING OR SILVICULTURE


2BII - 17


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 3,493 3,473 1,639,714 1,599,140 456 1,838,244 13.13 4,031 460 529 115%2007 3,517 3,520 1,732,960 1,712,961 392 1,898,795 11.14 4,844 487 539 111%2008 3,616 3,620 1,864,927 1,847,751 374 808,470 10.33 2,162 510 223 44%2009 3,652 3,642 1,922,498 1,907,563 376 1,218,101 10.32 3,240 524 334 64%2010 3,681 3,685 1,996,486 1,988,674 307 786,016 8.33 2,560 540 213 40%TOTAL 17,959 17,940 9,156,585 9,056,090 1,905 6,549,624 10.62 3,438 505 365 72%

THIRD PARTY TOTAL

2006 3,493 3,473 456 1,838,244 13.13 4,031 529 2007 3,517 3,520 392 2,135,155 11.14 5,447 607 2008 3,616 3,620 374 808,470 10.33 2,162 223 2009 3,652 3,642 376 1,218,101 10.32 3,240 334 2010 3,681 3,685 307 786,016 8.33 2,560 213 TOTAL 17,959 17,940 1,905 6,785,984 10.62 3,562 378

ACCIDENT BENEFITS

2006 3,493 3,473 155,917 152,892 28 4,604 0.81 164 44 1 3%2007 3,517 3,520 164,120 162,381 40 38,808 1.14 970 46 11 24%2008 3,616 3,620 159,326 167,810 19 6,781 0.52 357 46 2 4%2009 3,652 3,642 136,058 138,238 22 9,779 0.60 445 38 3 7%2010 3,681 3,685 141,501 140,920 14 59,314 0.38 4,237 38 16 42%TOTAL 17,959 17,940 756,922 762,240 123 119,287 0.69 970 42 7 16%


2006 3,493 3,473 60,117 59,002 1 - 0.03 - 17 - 0%2007 3,517 3,520 62,726 62,230 1 5,868 0.03 5,868 18 2 9%2008 3,616 3,620 65,019 65,260 - - - N/A 18 - 0%2009 3,652 3,642 65,564 65,324 - - - N/A 18 - 0%2010 3,681 3,685 66,192 66,327 - - - N/A 18 - 0%TOTAL 17,959 17,940 319,618 318,142 2 5,868 0.01 2,934 18 0 2%


CLASS 17 - EMERGENCY VEHICLES < 5000 KG


2BII - 18


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 319 320 25,586 25,143 4 28,812 1.25 7,203 79 90 115%2007 308 313 27,603 26,694 - - - N/A 85 - 0%2008 301 307 29,045 29,104 2 1,779 0.65 890 95 6 6%2009 279 285 26,998 27,705 7 17,608 2.46 2,515 97 62 64%2010 258 264 24,888 25,321 6 9,497 2.27 1,583 96 36 38%TOTAL 1,464 1,489 134,120 133,967 19 57,695 1.28 3,037 90 39 43%

THIRD PARTY TOTAL

2006 319 320 4 28,812 1.25 7,203 90 2007 308 313 - - - N/A - 2008 301 307 2 1,779 0.65 890 6 2009 279 285 7 17,608 2.46 2,515 62 2010 258 264 6 9,497 2.27 1,583 36 TOTAL 1,464 1,489 19 57,695 1.28 3,037 39

ACCIDENT BENEFITS

2006 319 320 3,466 3,385 1 - 0.31 - 11 - 0%2007 308 313 3,517 3,475 - - - N/A 11 - 0%2008 301 307 3,107 3,439 - - - N/A 11 - 0%2009 279 285 2,499 2,622 1 - 0.35 - 9 - 0%2010 258 264 2,329 2,357 - - - N/A 9 - 0%TOTAL 1,464 1,489 14,918 15,278 2 - 0.13 - 10 - 0%


2006 319 320 5,831 5,722 - - - N/A 18 - 0%2007 308 313 5,820 5,801 - - - N/A 19 - 0%2008 301 307 5,813 5,965 - - - N/A 19 - 0%2009 279 285 5,322 5,472 - - - N/A 19 - 0%2010 258 264 4,895 4,980 - - - N/A 19 - 0%TOTAL 1,464 1,489 27,681 27,939 - - - N/A 19 - 0%


CLASS 18 - FARM TRACTOR


2BII - 19


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 1,485 1,475 2,113,062 2,010,787 466 3,053,320 31.59 6,552 1,363 2,070 152%2007 1,520 1,507 2,695,729 2,429,514 403 2,364,895 26.75 5,868 1,613 1,570 97%2008 1,569 1,552 2,774,435 2,745,092 376 2,732,291 24.22 7,267 1,769 1,760 100%2009 1,555 1,546 2,786,112 2,775,731 339 2,429,014 21.93 7,165 1,795 1,571 88%2010 1,580 1,549 2,770,158 2,733,184 273 1,102,570 17.62 4,039 1,764 712 40%TOTAL 7,709 7,629 13,139,496 12,694,309 1,857 11,682,090 24.34 6,291 1,664 1,531 92%

THIRD PARTY TOTAL

2006 1,485 1,475 466 4,915,723 31.59 10,549 3,333 2007 1,520 1,507 403 2,990,038 26.75 7,419 1,985 2008 1,569 1,552 376 2,732,291 24.22 7,267 1,760 2009 1,555 1,546 339 2,429,014 21.93 7,165 1,571 2010 1,580 1,549 273 1,102,570 17.62 4,039 712 TOTAL 7,709 7,629 1,857 14,169,636 24.34 7,630 1,857

ACCIDENT BENEFITS

2006 1,485 1,475 94,118 90,618 36 97,963 2.44 2,721 61 66 108%2007 1,520 1,507 102,216 98,458 29 24,399 1.92 841 65 16 25%2008 1,569 1,552 86,802 97,578 29 83,872 1.87 2,892 63 54 86%2009 1,555 1,546 79,442 80,191 13 57,991 0.84 4,461 52 38 72%2010 1,580 1,549 79,531 78,266 25 13,849 1.61 554 51 9 18%TOTAL 7,709 7,629 442,109 445,112 132 278,074 1.73 2,107 58 36 62%




CLASS 19 - WRECKER


2BII - 20


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 13,608 13,376 16,314,032 15,737,251 2,086 16,303,115 15.60 7,815 1,177 1,219 104%2007 13,780 13,692 17,233,271 16,821,289 2,171 16,583,711 15.86 7,639 1,229 1,211 99%2008 13,253 13,531 17,222,369 17,319,298 2,080 18,281,961 15.37 8,789 1,280 1,351 106%2009 12,863 12,751 17,176,183 16,813,607 1,936 10,813,337 15.18 5,585 1,319 848 64%2010 13,499 13,378 18,271,101 18,091,996 1,622 7,110,489 12.12 4,384 1,352 532 39%TOTAL 67,003 66,728 86,216,956 84,783,441 9,895 69,092,613 14.83 6,983 1,271 1,035 81%

THIRD PARTY TOTAL

2006 13,608 13,376 2,086 16,326,654 15.60 7,827 1,221 2007 13,780 13,692 2,171 16,583,711 15.86 7,639 1,211 2008 13,253 13,531 2,080 20,899,825 15.37 10,048 1,545 2009 12,863 12,751 1,936 10,813,337 15.18 5,585 848 2010 13,499 13,378 1,622 7,110,489 12.12 4,384 532 TOTAL 67,003 66,728 9,895 71,734,016 14.83 7,250 1,075

ACCIDENT BENEFITS

2006 13,608 13,376 1,080,587 1,047,375 79 17,697 0.59 224 78 1 2%2007 13,780 13,692 1,118,813 1,101,713 76 93,791 0.56 1,234 80 7 9%2008 13,253 13,531 904,167 1,012,002 65 197,641 0.48 3,041 75 15 20%2009 12,863 12,751 795,195 789,701 50 77,744 0.39 1,555 62 6 10%2010 13,499 13,378 856,835 845,643 49 17,639 0.37 360 63 1 2%TOTAL 67,003 66,728 4,755,597 4,796,435 319 404,512 0.48 1,268 72 6 8%


2006 13,608 13,376 274,353 265,560 - - - N/A 20 - 0%2007 13,780 13,692 285,137 280,864 - - - N/A 21 - 0%2008 13,253 13,531 275,493 280,855 - - - N/A 21 - 0%2009 12,863 12,751 268,668 265,637 - - - N/A 21 - 0%2010 13,499 13,378 280,326 278,910 - - - N/A 21 - 0%TOTAL 67,003 66,728 1,383,977 1,371,826 - - - N/A 21 - 0%


CLASS 20 - WOODCHIP,LOGGING AND DUMP TRUCKS > 5000 KG


2BII - 21


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 13,155 12,801 3,943,853 3,701,906 634 4,934,264 4.95 7,783 289 385 133%2007 14,181 13,696 4,520,007 4,303,702 685 3,794,958 5.00 5,540 314 277 88%2008 14,734 14,534 4,823,426 4,760,529 653 3,375,461 4.49 5,169 328 232 71%2009 14,491 14,503 4,614,771 4,634,704 490 2,192,119 3.38 4,474 320 151 47%2010 14,797 14,599 4,711,675 4,681,541 458 1,943,791 3.14 4,244 321 133 42%TOTAL 71,358 70,133 22,613,732 22,082,383 2,920 16,240,592 4.16 5,562 315 232 74%

THIRD PARTY TOTAL

2006 13,155 12,801 634 5,260,883 4.95 8,298 411 2007 14,181 13,696 685 4,111,448 5.00 6,002 300 2008 14,734 14,534 653 3,375,461 4.49 5,169 232 2009 14,491 14,503 490 2,192,119 3.38 4,474 151 2010 14,797 14,599 458 1,943,791 3.14 4,244 133 TOTAL 71,358 70,133 2,920 16,883,702 4.16 5,782 241

ACCIDENT BENEFITS

2006 13,155 12,801 325,225 307,447 18 99,889 0.14 5,549 24 8 32%2007 14,181 13,696 355,463 343,439 13 21,789 0.09 1,676 25 2 6%2008 14,734 14,534 320,455 351,114 16 2,871 0.11 179 24 0 1%2009 14,491 14,503 275,434 280,602 9 32,476 0.06 3,608 19 2 12%2010 14,797 14,599 279,649 277,876 9 22,490 0.06 2,499 19 2 8%TOTAL 71,358 70,133 1,556,226 1,560,479 65 179,514 0.09 2,762 22 3 12%




CLASS 21 - CEMENT DELIVERY,GARBAGE TRUCKS,DELIVERY OF SOLID WASTE AND HOUSEHOLD GOODS


2BII - 22


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 865 836 1,044,607 960,614 107 398,340 12.80 3,723 1,149 476 41%2007 963 921 1,164,865 1,111,162 98 386,069 10.64 3,939 1,206 419 35%2008 975 970 1,207,368 1,194,628 97 669,962 10.00 6,907 1,232 691 56%2009 944 954 1,193,115 1,190,304 84 435,488 8.81 5,184 1,248 457 37%2010 992 973 1,281,420 1,248,386 82 432,389 8.43 5,273 1,283 444 35%TOTAL 4,738 4,654 5,891,375 5,705,095 468 2,322,249 10.06 4,962 1,226 499 41%

THIRD PARTY TOTAL

2006 865 836 107 398,340 12.80 3,723 476 2007 963 921 98 386,069 10.64 3,939 419 2008 975 970 97 669,962 10.00 6,907 691 2009 944 954 84 435,488 8.81 5,184 457 2010 992 973 82 432,389 8.43 5,273 444 TOTAL 4,738 4,654 468 2,322,249 10.06 4,962 499

ACCIDENT BENEFITS

2006 865 836 38,720 36,161 5 148 0.60 30 43 0 0%2007 963 921 43,590 41,369 4 320 0.43 80 45 0 1%2008 975 970 36,657 41,105 4 530 0.41 133 42 1 1%2009 944 954 32,571 33,125 4 17,620 0.42 4,405 35 18 53%2010 992 973 34,818 34,031 6 605 0.62 101 35 1 2%TOTAL 4,738 4,654 186,356 185,790 23 19,224 0.49 836 40 4 10%




CLASS 22 - DELIVERY,CONSTRUCTION MATERIAL > 5000 KG


2BII - 23


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 19,023 18,536 33,532,034 31,614,008 4,075 25,782,823 21.98 6,327 1,706 1,391 82%2007 20,068 19,716 36,732,967 35,571,876 4,572 27,096,747 23.19 5,927 1,804 1,374 76%2008 20,128 20,250 37,065,446 37,282,211 4,139 25,868,522 20.44 6,250 1,841 1,277 69%2009 19,833 19,854 36,477,705 36,587,643 3,329 15,752,147 16.77 4,732 1,843 793 43%2010 20,162 20,053 36,308,329 36,631,600 2,960 13,720,101 14.76 4,635 1,827 684 37%TOTAL 99,213 98,408 180,116,481 177,687,338 19,075 108,220,340 19.38 5,673 1,806 1,100 61%

THIRD PARTY TOTAL

2006 19,023 18,536 4,075 26,134,129 21.98 6,413 1,410 2007 20,068 19,716 4,572 28,200,102 23.19 6,168 1,430 2008 20,128 20,250 4,139 26,869,901 20.44 6,492 1,327 2009 19,833 19,854 3,329 15,752,147 16.77 4,732 793 2010 20,162 20,053 2,960 13,720,101 14.76 4,635 684 TOTAL 99,213 98,408 19,075 110,676,379 19.38 5,802 1,125

ACCIDENT BENEFITS

2006 19,023 18,536 1,303,773 1,234,095 131 287,958 0.71 2,198 67 16 23%2007 20,068 19,716 1,423,719 1,377,925 147 478,438 0.75 3,255 70 24 35%2008 20,128 20,250 1,172,664 1,341,388 141 341,208 0.70 2,420 66 17 25%2009 19,833 19,854 1,045,831 1,064,608 121 136,830 0.61 1,131 54 7 13%2010 20,162 20,053 1,044,846 1,052,964 98 37,477 0.49 382 53 2 4%TOTAL 99,213 98,408 5,990,833 6,070,981 638 1,281,911 0.65 2,009 62 13 21%


2006 19,023 18,536 415,799 397,453 - - - N/A 21 - 0%2007 20,068 19,716 448,764 436,461 2 526,097 0.01 263,049 22 27 121%2008 20,128 20,250 446,332 453,026 - - - N/A 22 - 0%2009 19,833 19,854 437,109 438,624 - - - N/A 22 - 0%2010 20,162 20,053 434,645 438,056 - - - N/A 22 - 0%TOTAL 99,213 98,408 2,182,649 2,163,619 2 526,097 0.00 263,049 22 5 24%


CLASS 23 - DELIVERY,OTHER > 5000 KG


2BII - 24


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 316,460 307,609 8,538,082 8,053,068 462 874,404 0.15 1,893 26 3 11%2007 336,742 326,914 9,651,112 9,136,788 504 646,419 0.15 1,283 28 2 7%2008 346,828 344,212 10,236,611 10,056,188 452 322,212 0.13 713 29 1 3%2009 355,639 350,172 10,612,586 10,342,699 442 337,843 0.13 764 30 1 3%2010 366,566 363,202 11,181,094 11,024,325 416 291,071 0.11 700 30 1 3%TOTAL 1,722,235 1,692,108 50,219,485 48,613,067 2,276 2,471,948 0.13 1,086 29 1 5%

THIRD PARTY TOTAL

2006 316,460 307,609 462 874,404 0.15 1,893 3 2007 336,742 326,914 504 646,419 0.15 1,283 2 2008 346,828 344,212 452 322,212 0.13 713 1 2009 355,639 350,172 442 337,843 0.13 764 1 2010 366,566 363,202 416 291,071 0.11 700 1 TOTAL 1,722,235 1,692,108 2,276 2,471,948 0.13 1,086 1

ACCIDENT BENEFITS

2006 316,460 307,609 1,087,978 994,693 15 36,192 0.00 2,413 3 0 4%2007 336,742 326,914 1,196,323 1,149,715 16 4,711 0.00 294 4 0 0%2008 346,828 344,212 974,622 1,108,880 15 181,962 0.00 12,131 3 1 16%2009 355,639 350,172 896,735 900,599 11 3,359 0.00 305 3 0 0%2010 366,566 363,202 927,372 918,595 14 88,173 0.00 6,298 3 0 10%TOTAL 1,722,235 1,692,108 5,083,030 5,072,482 71 314,398 0.00 4,428 3 0 6%


2006 316,460 307,542 618,017 601,452 - - - N/A 2 - 0%2007 336,742 326,849 656,751 638,133 1 800,000 0.00 800,000 2 2 125%2008 346,828 344,154 676,406 671,822 - - - N/A 2 - 0%2009 355,639 350,111 695,490 685,408 1 109,462 0.00 109,462 2 0 16%2010 366,566 363,139 715,897 709,777 - - - N/A 2 - 0%TOTAL 1,722,235 1,691,795 3,362,561 3,306,592 2 909,462 0.00 454,731 2 1 28%


CLASS 24 - TRAILERS


2BII - 25


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 1,499 1,459 2,598,275 2,479,084 525 2,369,915 36.00 4,514 1,700 1,625 96%2007 1,726 1,613 3,098,376 2,866,139 577 1,499,051 35.78 2,598 1,777 930 52%2008 1,827 1,805 3,373,030 3,293,303 680 5,617,346 37.68 8,261 1,825 3,113 171%2009 2,574 2,271 4,907,299 4,291,167 785 2,656,687 34.57 3,384 1,890 1,170 62%2010 2,376 2,366 4,803,452 4,822,099 661 2,405,693 27.93 3,639 2,038 1,017 50%TOTAL 10,002 9,513 18,780,432 17,751,792 3,228 14,548,692 33.93 4,507 1,866 1,529 82%

THIRD PARTY TOTAL

2006 1,499 1,459 525 2,369,915 36.00 4,514 1,625 2007 1,726 1,613 577 1,499,051 35.78 2,598 930 2008 1,827 1,805 680 5,617,346 37.68 8,261 3,113 2009 2,574 2,271 785 2,656,687 34.57 3,384 1,170 2010 2,376 2,366 661 2,405,693 27.93 3,639 1,017 TOTAL 10,002 9,513 3,228 14,548,692 33.93 4,507 1,529

ACCIDENT BENEFITS

2006 1,499 1,459 218,616 208,845 104 75,843 7.13 729 143 52 36%2007 1,726 1,613 261,014 241,400 131 124,352 8.12 949 150 77 52%2008 1,827 1,805 238,204 255,079 131 302,477 7.26 2,309 141 168 119%2009 2,574 2,271 297,636 266,892 150 185,725 6.61 1,238 118 82 70%2010 2,376 2,366 296,016 296,396 144 181,480 6.08 1,260 125 77 61%TOTAL 10,002 9,513 1,311,486 1,268,612 660 869,877 6.94 1,318 133 91 69%


2006 - - - - - - N/A N/A N/A N/A N/A2007 - 0 - 1 - - - N/A 8 - 0%2008 - 0 - 20 - - - N/A 431 - 0%2009 - - - - - - N/A N/A N/A N/A N/A2010 - - - - - - N/A N/A N/A N/A N/ATOTAL - 0 - 21 - - - N/A 118 - 0%


CLASS 25 - BUSES < 160 KM


2BII - 26


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 253 244 482,660 458,988 32 51,074 13.13 1,596 1,883 210 11%2007 314 298 595,775 570,621 78 301,410 26.14 3,864 1,912 1,010 53%2008 319 318 597,895 598,709 59 410,354 18.55 6,955 1,882 1,290 69%2009 280 282 515,131 523,201 36 95,314 12.78 2,648 1,857 338 18%2010 299 292 554,510 551,904 30 40,869 10.26 1,362 1,887 140 7%TOTAL 1,465 1,434 2,745,971 2,703,423 235 899,021 16.38 3,826 1,885 627 33%

THIRD PARTY TOTAL

2006 253 244 32 51,074 13.13 1,596 210 2007 314 298 78 301,410 26.14 3,864 1,010 2008 319 318 59 410,354 18.55 6,955 1,290 2009 280 282 36 95,314 12.78 2,648 338 2010 299 292 30 40,869 10.26 1,362 140 TOTAL 1,465 1,434 235 899,021 16.38 3,826 627

ACCIDENT BENEFITS

2006 253 244 39,971 38,079 5 251 2.05 50 156 1 1%2007 314 298 49,583 47,377 11 10,938 3.69 994 159 37 23%2008 319 318 40,781 45,395 7 3,283 2.20 469 143 10 7%2009 280 282 32,065 32,855 3 228 1.06 76 117 1 1%2010 299 292 34,111 34,046 3 3,768 1.03 1,256 116 13 11%TOTAL 1,465 1,434 196,511 197,752 29 18,466 2.02 637 138 13 9%


2006 - - - - - - N/A N/A N/A N/A N/A2007 - - - - - - N/A N/A N/A N/A N/A2008 - - - - - - N/A N/A N/A N/A N/A2009 - - - - - - N/A N/A N/A N/A N/A2010 - - - - - - N/A N/A N/A N/A N/ATOTAL - - - - - - N/A N/A N/A N/A N/A


CLASS 26 - BUSES 161 KM - 550 KM


2BII - 27


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 49 44 101,561 89,424 2 11,477 4.59 5,738 2,054 264 13%2007 49 48 119,901 109,825 1 10,273 2.09 10,273 2,292 214 9%2008 49 54 114,379 130,236 12 35,983 22.33 2,999 2,424 670 28%2009 52 52 128,944 123,604 1 62,071 1.91 62,071 2,356 1,183 50%2010 52 52 158,187 152,206 7 41,745 13.37 5,964 2,906 797 27%TOTAL 251 250 622,972 605,296 23 161,549 9.20 7,024 2,421 646 27%

THIRD PARTY TOTAL

2006 49 44 2 11,477 4.59 5,738 264 2007 49 48 1 10,273 2.09 10,273 214 2008 49 54 12 35,983 22.33 2,999 670 2009 52 52 1 62,071 1.91 62,071 1,183 2010 52 52 7 41,745 13.37 5,964 797 TOTAL 251 250 23 161,549 9.20 7,024 646

ACCIDENT BENEFITS

2006 49 44 8,669 7,608 - - - N/A 175 - 0%2007 49 48 9,594 9,046 - - - N/A 189 - 0%2008 49 54 7,809 9,707 1 - 1.86 - 181 - 0%2009 52 52 7,909 7,779 - - - N/A 148 - 0%2010 52 52 9,604 9,270 2 300 3.82 150 177 6 3%TOTAL 251 250 43,585 43,410 3 300 1.20 100 174 1 1%


2006 - - - - - - N/A N/A N/A N/A N/A2007 - 0 - - - - - N/A - - N/A2008 - - - - - - N/A N/A N/A N/A N/A2009 - - - - - - N/A N/A N/A N/A N/A2010 - - - - - - N/A N/A N/A N/A N/ATOTAL - 0 - - - - - N/A - - N/A


CLASS 27 - BUSES > 550 KM


2BII - 28


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 5,838 5,832 4,297,759 4,193,734 596 3,665,381 10.22 6,150 719 628 87%2007 5,999 5,904 4,642,054 4,482,871 614 3,334,562 10.40 5,431 759 565 74%2008 5,927 5,971 4,770,866 4,735,758 625 2,980,628 10.47 4,769 793 499 63%2009 5,759 5,674 4,526,758 4,486,918 470 2,364,016 8.28 5,030 791 417 53%2010 5,624 5,695 4,490,449 4,534,951 428 1,427,956 7.52 3,336 796 251 31%TOTAL 29,147 29,076 22,727,886 22,434,232 2,733 13,772,543 9.40 5,039 772 474 61%

THIRD PARTY TOTAL

2006 5,838 5,832 596 4,398,596 10.22 7,380 754 2007 5,999 5,904 614 3,334,562 10.40 5,431 565 2008 5,927 5,971 625 2,980,628 10.47 4,769 499 2009 5,759 5,674 470 2,364,016 8.28 5,030 417 2010 5,624 5,695 428 1,427,956 7.52 3,336 251 TOTAL 29,147 29,076 2,733 14,505,758 9.40 5,308 499

ACCIDENT BENEFITS

2006 5,838 5,832 333,319 325,946 61 38,565 1.05 632 56 7 12%2007 5,999 5,904 359,803 347,151 54 42,022 0.91 778 59 7 12%2008 5,927 5,971 301,321 337,780 68 86,560 1.14 1,273 57 14 26%2009 5,759 5,674 261,462 263,320 44 45,012 0.78 1,023 46 8 17%2010 5,624 5,695 259,975 262,257 50 25,202 0.88 504 46 4 10%TOTAL 29,147 29,076 1,515,880 1,536,454 277 237,361 0.95 857 53 8 15%


2006 - - - - 1 - N/A - N/A N/A N/A2007 - 0 - 16 - - - N/A 1,951 - 0%2008 - - - - - - N/A N/A N/A N/A N/A2009 - - - - - - N/A N/A N/A N/A N/A2010 - - - - - - N/A N/A N/A N/A N/ATOTAL - 0 - 16 1 - 12,195.12 - 1,951 - 0%


CLASS 28 - BUSES,SCHOOL,PRIVATE AND RELIGIOUS


2BII - 29


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 2,674 2,637 11,813,691 11,506,329 1,674 13,582,366 63.48 8,114 4,364 5,151 118%2007 2,755 2,708 12,952,759 12,332,874 1,725 11,775,897 63.69 6,827 4,554 4,348 95%2008 2,960 2,879 15,062,841 13,960,217 1,812 12,791,502 62.93 7,059 4,849 4,443 92%2009 3,071 3,019 15,670,691 15,424,094 1,527 10,339,518 50.57 6,771 5,109 3,424 67%2010 3,039 3,067 14,803,540 15,413,482 1,497 8,136,188 48.81 5,435 5,025 2,653 53%TOTAL 14,499 14,311 70,303,522 68,636,997 8,235 56,625,470 57.54 6,876 4,796 3,957 82%

THIRD PARTY TOTAL

2006 2,674 2,637 1,674 13,582,366 63.48 8,114 5,151 2007 2,755 2,708 1,725 11,775,897 63.69 6,827 4,348 2008 2,960 2,879 1,812 12,791,502 62.93 7,059 4,443 2009 3,071 3,019 1,527 10,339,518 50.57 6,771 3,424 2010 3,039 3,067 1,497 8,934,878 48.81 5,969 2,913 TOTAL 14,499 14,311 8,235 57,424,161 57.54 6,973 4,013

ACCIDENT BENEFITS

2006 2,674 2,637 842,187 819,270 629 744,338 23.85 1,183 311 282 91%2007 2,755 2,708 920,888 877,048 657 746,225 24.26 1,136 324 276 85%2008 2,960 2,879 895,834 954,940 670 1,414,444 23.27 2,111 332 491 148%2009 3,071 3,019 832,483 830,935 615 1,370,640 20.37 2,229 275 454 165%2010 3,039 3,067 781,818 816,422 642 758,836 20.93 1,182 266 247 93%TOTAL 14,499 14,311 4,273,210 4,298,616 3,213 5,034,483 22.45 1,567 300 352 117%


2006 - - - - - - N/A N/A N/A N/A N/A2007 - - - - - - N/A N/A N/A N/A N/A2008 - - - - - - N/A N/A N/A N/A N/A2009 - 0 - 21 - - - N/A 2,561 - 0%2010 - 0 - - - - - N/A - - N/ATOTAL - 0 - 21 - - - N/A 365 - 0%


CLASS 29 - TAXIS AND LIMOS


2BII - 30


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 13,933 13,228 998,096 923,415 77 451,636 0.58 5,865 70 34 49%2007 15,001 14,468 1,106,848 1,054,166 80 289,394 0.55 3,617 73 20 27%2008 16,294 15,734 1,224,499 1,174,950 77 375,661 0.49 4,879 75 24 32%2009 17,873 17,191 1,344,036 1,295,085 111 563,884 0.65 5,080 75 33 44%2010 18,828 18,575 1,411,759 1,398,066 129 331,315 0.69 2,568 75 18 24%TOTAL 81,928 79,196 6,085,238 5,845,682 474 2,011,889 0.60 4,244 74 25 34%

THIRD PARTY TOTAL

2006 13,933 13,228 77 451,636 0.58 5,865 34 2007 15,001 14,468 80 289,394 0.55 3,617 20 2008 16,294 15,734 77 375,661 0.49 4,879 24 2009 17,873 17,191 111 563,884 0.65 5,080 33 2010 18,828 18,575 129 331,315 0.69 2,568 18 TOTAL 81,928 79,196 474 2,011,889 0.60 4,244 25

ACCIDENT BENEFITS

2006 13,933 13,228 189,961 177,882 21 86,395 0.16 4,114 13 7 49%2007 15,001 14,468 217,915 204,999 22 38,827 0.15 1,765 14 3 19%2008 16,294 15,734 203,351 216,255 23 107,094 0.15 4,656 14 7 50%2009 17,873 17,191 207,028 201,811 33 197,074 0.19 5,972 12 11 98%2010 18,828 18,575 223,959 219,840 32 113,958 0.17 3,561 12 6 52%TOTAL 81,928 79,196 1,042,214 1,020,789 131 543,349 0.17 4,148 13 7 53%


2006 13,933 13,228 272,502 250,419 2 854,464 0.02 427,232 19 65 341%2007 15,001 14,468 298,721 286,816 - - - N/A 20 - 0%2008 16,294 15,734 325,302 314,396 - - - N/A 20 - 0%2009 17,873 17,191 355,382 342,748 - - - N/A 20 - 0%2010 18,828 18,575 372,740 368,998 - - - N/A 20 - 0%TOTAL 81,928 79,196 1,624,647 1,563,378 2 854,464 0.00 427,232 20 11 55%


CLASS 30 - COLLECTOR VEHICLES


2BIII - 1


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 1,201,659 1,187,536 819,408,725 783,340,684 139,529 759,268,261 11.75 5,442 660 639 97%2007 1,231,575 1,216,724 870,806,359 846,804,549 145,028 770,319,403 11.92 5,312 696 633 91%2008 1,246,165 1,244,880 910,921,783 895,200,513 140,428 704,515,284 11.28 5,017 719 566 79%2009 1,268,919 1,253,602 931,277,759 922,075,908 137,969 612,403,363 11.01 4,439 736 489 66%2010 1,288,761 1,279,662 934,729,105 934,499,144 125,410 461,223,616 9.80 3,678 730 360 49%TOTAL 6,237,078 6,182,405 4,467,143,731 4,381,920,798 688,364 3,307,729,927 11.13 4,805 709 535 75%

THIRD PARTY TOTAL

2006 1,201,659 1,187,536 139,529 875,777,624 11.75 6,277 737 2007 1,231,575 1,216,724 145,028 874,431,390 11.92 6,029 719 2008 1,246,165 1,244,880 140,428 788,327,715 11.28 5,614 633 2009 1,268,919 1,253,602 137,969 671,395,559 11.01 4,866 536 2010 1,288,761 1,279,662 125,410 478,254,891 9.80 3,814 374 TOTAL 6,237,078 6,182,405 688,364 3,688,187,178 11.13 5,358 597

ACCIDENT BENEFITS

2006 1,201,659 1,187,536 90,796,974 87,423,341 33,288 57,170,286 2.80 1,717 74 48 65%2007 1,231,575 1,216,724 95,828,516 93,542,777 33,222 60,824,293 2.73 1,831 77 50 65%2008 1,246,165 1,244,880 82,231,612 91,656,476 31,478 56,174,926 2.53 1,785 74 45 61%2009 1,268,919 1,253,602 76,176,044 76,656,999 30,837 51,509,815 2.46 1,670 61 41 67%2010 1,288,761 1,279,662 76,547,381 76,472,672 30,956 37,061,512 2.42 1,197 60 29 48%TOTAL 6,237,078 6,182,405 421,580,527 425,752,267 159,781 262,740,832 2.58 1,644 69 42 62%


2006 1,197,461 1,183,402 24,523,969 23,418,120 84 9,395,573 0.01 111,852 20 8 40%2007 1,227,088 1,212,379 25,685,038 25,214,389 75 10,783,021 0.01 143,774 21 9 43%2008 1,241,424 1,240,237 26,078,827 26,049,738 53 9,802,845 0.00 184,959 21 8 38%2009 1,263,731 1,248,771 26,431,968 26,204,811 39 7,819,873 0.00 200,510 21 6 30%2010 1,283,887 1,274,691 26,629,963 26,543,061 15 3,241,524 0.00 216,102 21 3 12%TOTAL 6,213,591 6,159,480 129,349,765 127,430,119 266 41,042,837 0.00 154,296 21 7 32%

EXHIBIT III - TERRITORIAL

TERRITORY 01 - LOWER MAINLAND


2BIII - 2


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 61,701 60,581 34,910,462 33,159,792 5,446 38,192,457 8.99 7,013 547 630 115%2007 65,002 63,118 37,124,858 36,041,299 5,755 34,237,159 9.12 5,949 571 542 95%2008 70,372 68,614 40,841,978 39,136,221 5,631 30,839,123 8.21 5,477 570 449 79%2009 69,683 70,637 42,260,045 41,821,707 5,663 31,156,204 8.02 5,502 592 441 74%2010 67,859 67,781 43,438,796 42,981,721 5,023 22,703,566 7.41 4,520 634 335 53%TOTAL 334,617 330,731 198,576,139 193,140,740 27,518 157,128,509 8.32 5,710 584 475 81%

THIRD PARTY TOTAL

2006 61,701 60,581 5,446 46,191,155 8.99 8,482 762 2007 65,002 63,118 5,755 39,174,763 9.12 6,807 621 2008 70,372 68,614 5,631 34,677,135 8.21 6,158 505 2009 69,683 70,637 5,663 32,998,861 8.02 5,827 467 2010 67,859 67,781 5,023 26,871,212 7.41 5,350 396 TOTAL 334,617 330,731 27,518 179,913,126 8.32 6,538 544

ACCIDENT BENEFITS

2006 61,701 60,581 4,720,725 4,517,054 1,657 3,472,664 2.74 2,096 75 57 77%2007 65,002 63,118 5,004,734 4,869,384 1,715 3,353,331 2.72 1,955 77 53 69%2008 70,372 68,614 4,525,067 4,892,705 1,655 4,019,235 2.41 2,429 71 59 82%2009 69,683 70,637 4,260,303 4,274,133 1,649 2,798,663 2.33 1,697 61 40 65%2010 67,859 67,781 4,385,589 4,337,325 1,513 2,559,404 2.23 1,692 64 38 59%TOTAL 334,617 330,731 22,896,418 22,890,601 8,189 16,203,296 2.48 1,979 69 49 71%


2006 61,585 60,471 1,190,222 1,130,093 5 495,549 0.01 99,110 19 8 44%2007 64,883 62,999 1,246,063 1,222,680 4 1,377,846 0.01 344,461 19 22 113%2008 70,236 68,487 1,284,793 1,276,221 3 472,043 0.00 157,348 19 7 37%2009 69,568 70,511 1,301,798 1,292,067 - - - N/A 18 - 0%2010 67,726 67,658 1,325,777 1,315,069 - - - N/A 19 - 0%TOTAL 333,998 330,125 6,348,653 6,236,131 12 2,345,438 0.00 195,453 19 7 38%


TERRITORY 02 - MAPLE RIDGE/PITT MEADOWS


2BIII - 3


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 21,173 20,946 12,433,233 11,904,734 1,677 11,317,702 8.01 6,749 568 540 95%2007 22,188 21,617 13,685,839 12,996,517 1,700 8,682,605 7.86 5,107 601 402 67%2008 23,023 22,739 15,056,834 14,653,768 1,753 9,794,457 7.71 5,587 644 431 67%2009 23,894 23,616 15,657,614 15,367,215 1,637 6,007,607 6.93 3,670 651 254 39%2010 24,105 23,897 16,348,198 16,074,808 1,479 4,389,686 6.19 2,968 673 184 27%TOTAL 114,384 112,814 73,181,718 70,997,042 8,246 40,192,057 7.31 4,874 629 356 57%

THIRD PARTY TOTAL

2006 21,173 20,946 1,677 13,600,504 8.01 8,110 649 2007 22,188 21,617 1,700 10,479,934 7.86 6,165 485 2008 23,023 22,739 1,753 10,520,474 7.71 6,001 463 2009 23,894 23,616 1,637 6,007,607 6.93 3,670 254 2010 24,105 23,897 1,479 4,389,686 6.19 2,968 184 TOTAL 114,384 112,814 8,246 44,998,205 7.31 5,457 399

ACCIDENT BENEFITS

2006 21,173 20,946 1,690,787 1,633,335 288 706,339 1.37 2,453 78 34 43%2007 22,188 21,617 1,848,213 1,768,660 296 663,823 1.37 2,243 82 31 38%2008 23,023 22,739 1,617,090 1,787,117 243 684,210 1.07 2,816 79 30 38%2009 23,894 23,616 1,509,953 1,515,867 198 262,216 0.84 1,324 64 11 17%2010 24,105 23,897 1,559,390 1,539,865 188 186,185 0.79 990 64 8 12%TOTAL 114,384 112,814 8,225,433 8,244,845 1,213 2,502,772 1.08 2,063 73 22 30%


2006 21,011 20,784 423,351 405,728 - - - N/A 20 - 0%2007 22,014 21,460 454,308 440,300 1 - 0.00 - 21 - 0%2008 22,811 22,534 472,785 467,176 - - - N/A 21 - 0%2009 23,647 23,377 479,687 477,338 - - - N/A 20 - 0%2010 23,870 23,654 491,735 486,248 - - - N/A 21 - 0%TOTAL 113,354 111,810 2,321,866 2,276,791 1 - 0.00 - 20 - 0%


TERRITORY 03 - SQUAMISH WHISTLER AREA


2BIII - 4


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 11,278 11,189 4,803,256 4,651,416 664 4,508,994 5.93 6,791 416 403 97%2007 11,426 11,383 5,015,746 4,934,753 628 5,451,866 5.52 8,681 434 479 110%2008 11,562 11,558 5,191,538 5,136,948 676 3,938,776 5.85 5,827 444 341 77%2009 12,271 11,869 5,388,589 5,311,902 625 3,292,565 5.27 5,268 448 277 62%2010 11,726 11,992 5,325,868 5,362,285 487 2,209,601 4.06 4,537 447 184 41%TOTAL 58,263 57,990 25,724,997 25,397,304 3,080 19,401,802 5.31 6,299 438 335 76%

THIRD PARTY TOTAL

2006 11,278 11,189 664 4,783,478 5.93 7,204 428 2007 11,426 11,383 628 6,172,242 5.52 9,828 542 2008 11,562 11,558 676 4,857,023 5.85 7,185 420 2009 12,271 11,869 625 4,601,997 5.27 7,363 388 2010 11,726 11,992 487 2,209,601 4.06 4,537 184 TOTAL 58,263 57,990 3,080 22,624,341 5.31 7,346 390

ACCIDENT BENEFITS

2006 11,278 11,189 630,215 612,546 145 618,303 1.30 4,264 55 55 101%2007 11,426 11,383 660,228 649,791 135 591,960 1.19 4,385 57 52 91%2008 11,562 11,558 566,110 625,087 139 865,684 1.20 6,228 54 75 138%2009 12,271 11,869 530,951 531,441 129 765,808 1.09 5,936 45 65 144%2010 11,726 11,992 524,992 527,739 109 150,489 0.91 1,381 44 13 29%TOTAL 58,263 57,990 2,912,496 2,946,604 657 2,992,244 1.13 4,554 51 52 102%


2006 11,226 11,138 208,238 201,599 2 259,892 0.02 129,946 18 23 129%2007 11,377 11,335 215,044 213,067 1 - 0.01 - 19 - 0%2008 11,515 11,507 217,806 218,197 1 2,050,000 0.01 2,050,000 19 178 940%2009 12,219 11,818 221,937 219,983 1 220,000 0.01 220,000 19 19 100%2010 11,676 11,942 217,870 219,411 - - - N/A 18 - 0%TOTAL 58,013 57,739 1,080,895 1,072,257 5 2,529,892 0.01 505,978 19 44 236%


TERRITORY 04 - PEMBERTON AREA/HOPE AREA


2BIII - 5


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 193,749 190,617 103,010,952 98,507,553 15,093 95,686,089 7.92 6,340 517 502 97%2007 201,648 198,194 110,915,802 107,338,435 15,741 104,214,768 7.94 6,621 542 526 97%2008 206,305 205,080 119,456,905 115,851,362 15,565 94,823,477 7.59 6,092 565 462 82%2009 207,589 206,493 121,322,991 120,794,687 15,320 78,714,643 7.42 5,138 585 381 65%2010 210,335 208,999 122,994,048 122,434,275 14,135 65,688,583 6.76 4,647 586 314 54%TOTAL 1,019,626 1,009,383 577,700,698 564,926,312 75,854 439,127,559 7.51 5,789 560 435 78%

THIRD PARTY TOTAL

2006 193,749 190,617 15,093 108,985,318 7.92 7,221 572 2007 201,648 198,194 15,741 117,196,153 7.94 7,445 591 2008 206,305 205,080 15,565 113,748,424 7.59 7,308 555 2009 207,589 206,493 15,320 88,519,001 7.42 5,778 429 2010 210,335 208,999 14,135 68,649,846 6.76 4,857 328 TOTAL 1,019,626 1,009,383 75,854 497,098,742 7.51 6,553 492

ACCIDENT BENEFITS

2006 193,749 190,617 13,175,289 12,672,743 4,251 9,809,086 2.23 2,307 66 51 77%2007 201,648 198,194 14,107,176 13,702,797 4,331 9,324,968 2.19 2,153 69 47 68%2008 206,305 205,080 12,526,227 13,656,219 4,343 11,017,379 2.12 2,537 67 54 81%2009 207,589 206,493 11,593,747 11,708,024 4,208 8,487,695 2.04 2,017 57 41 72%2010 210,335 208,999 11,764,074 11,702,026 4,246 6,700,878 2.03 1,578 56 32 57%TOTAL 1,019,626 1,009,383 63,166,513 63,441,808 21,379 45,340,007 2.12 2,121 63 45 71%


2006 193,123 189,982 3,643,013 3,481,239 13 3,674,292 0.01 282,638 18 19 106%2007 200,974 197,533 3,845,442 3,764,584 22 5,111,925 0.01 232,360 19 26 136%2008 205,649 204,416 3,937,839 3,923,389 14 2,302,825 0.01 164,488 19 11 59%2009 206,893 205,808 3,949,538 3,936,050 9 2,944,370 0.00 327,152 19 14 75%2010 209,649 208,304 4,010,974 3,985,155 7 1,504,000 0.00 214,857 19 7 38%TOTAL 1,016,288 1,006,043 19,386,806 19,090,416 65 15,537,413 0.01 239,037 19 15 81%


TERRITORY 05 - FRASER VALLEY


2BIII - 6


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 432,904 425,211 171,175,886 162,970,857 23,419 149,670,550 5.51 6,391 383 352 92%2007 452,354 443,701 184,253,339 178,473,590 25,023 142,711,246 5.64 5,703 402 322 80%2008 461,167 459,944 190,814,495 189,426,249 25,454 141,240,479 5.53 5,549 412 307 75%2009 466,963 463,323 192,726,275 191,800,880 24,478 117,204,281 5.28 4,788 414 253 61%2010 477,211 473,977 194,720,780 194,596,466 22,151 85,605,544 4.67 3,865 411 181 44%TOTAL 2,290,600 2,266,155 933,690,775 917,268,042 120,525 636,432,100 5.32 5,280 405 281 69%

THIRD PARTY TOTAL

2006 432,904 425,211 23,419 183,251,788 5.51 7,825 431 2007 452,354 443,701 25,023 176,158,684 5.64 7,040 397 2008 461,167 459,944 25,454 171,776,254 5.53 6,748 373 2009 466,963 463,323 24,478 136,391,935 5.28 5,572 294 2010 477,211 473,977 22,151 94,553,796 4.67 4,269 199 TOTAL 2,290,600 2,266,155 120,525 762,132,457 5.32 6,323 336

ACCIDENT BENEFITS

2006 432,904 425,211 23,015,205 22,043,682 5,739 13,969,492 1.35 2,434 52 33 63%2007 452,354 443,701 24,787,605 24,082,935 5,766 14,107,901 1.30 2,447 54 32 59%2008 461,167 459,944 21,339,497 23,702,938 6,022 15,767,562 1.31 2,618 52 34 67%2009 466,963 463,323 19,425,246 19,620,705 5,524 13,607,214 1.19 2,463 42 29 69%2010 477,211 473,977 19,691,458 19,664,012 5,680 10,905,737 1.20 1,920 41 23 55%TOTAL 2,290,600 2,266,155 108,259,011 109,114,272 28,731 68,357,906 1.27 2,379 48 30 63%


2006 431,580 423,880 7,744,803 7,392,484 14 2,096,390 0.00 149,742 17 5 28%2007 450,986 442,330 8,242,501 8,042,836 24 4,097,401 0.01 170,725 18 9 51%2008 459,768 458,516 8,437,481 8,423,011 14 5,093,273 0.00 363,805 18 11 60%2009 465,499 461,843 8,494,876 8,453,505 12 2,642,205 0.00 220,184 18 6 31%2010 475,719 472,478 8,599,579 8,580,629 6 1,712,312 0.00 285,385 18 4 20%TOTAL 2,283,552 2,259,047 41,519,240 40,892,465 70 15,641,581 0.00 223,451 18 7 38%


TERRITORY 06 - THOMPSON OKANAGAN AREA


2BIII - 7


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 134,711 132,850 47,970,591 46,023,275 4,925 32,214,297 3.71 6,541 346 242 70%2007 140,166 137,489 51,445,309 49,862,853 4,882 27,552,368 3.55 5,644 363 200 55%2008 143,946 142,767 52,136,741 52,311,305 5,081 26,279,280 3.56 5,172 366 184 50%2009 145,944 144,782 51,318,539 51,582,834 4,866 21,078,872 3.36 4,332 356 146 41%2010 149,127 148,225 50,678,565 51,061,665 4,375 16,172,747 2.95 3,697 344 109 32%TOTAL 713,894 706,113 253,549,745 250,841,932 24,129 123,297,564 3.42 5,110 355 175 49%

THIRD PARTY TOTAL

2006 134,711 132,850 4,925 49,591,261 3.71 10,069 373 2007 140,166 137,489 4,882 39,007,270 3.55 7,990 284 2008 143,946 142,767 5,081 36,385,689 3.56 7,161 255 2009 145,944 144,782 4,866 27,036,934 3.36 5,556 187 2010 149,127 148,225 4,375 18,512,340 2.95 4,231 125 TOTAL 713,894 706,113 24,129 170,533,493 3.42 7,068 242

ACCIDENT BENEFITS

2006 134,711 132,850 6,361,228 6,133,388 1,078 3,853,907 0.81 3,575 46 29 63%2007 140,166 137,489 6,807,286 6,621,137 997 4,165,857 0.73 4,178 48 30 63%2008 143,946 142,767 5,693,950 6,393,914 978 4,334,697 0.69 4,432 45 30 68%2009 145,944 144,782 5,085,946 5,176,172 916 3,677,298 0.63 4,015 36 25 71%2010 149,127 148,225 5,048,721 5,081,075 895 2,362,860 0.60 2,640 34 16 47%TOTAL 713,894 706,113 28,997,131 29,405,686 4,864 18,394,620 0.69 3,782 42 26 63%


2006 134,167 132,305 2,351,975 2,257,459 7 1,862,938 0.01 266,134 17 14 83%2007 139,605 136,941 2,488,844 2,432,036 4 5,222 0.00 1,305 18 0 0%2008 143,366 142,196 2,561,043 2,543,844 6 789,668 0.00 131,611 18 6 31%2009 145,399 144,224 2,579,104 2,566,362 7 1,402,500 0.00 200,357 18 10 55%2010 148,580 147,672 2,615,835 2,610,110 2 1,177,000 0.00 588,500 18 8 45%TOTAL 711,117 703,339 12,596,801 12,409,810 26 5,237,327 0.00 201,436 18 7 42%


TERRITORY 07 - KOOTENAYS


2BIII - 8


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 44,411 43,893 18,044,428 17,395,229 1,652 10,884,727 3.76 6,589 396 248 63%2007 46,292 45,288 19,174,323 18,601,579 1,748 11,288,040 3.86 6,458 411 249 61%2008 46,170 46,403 18,953,331 19,206,312 1,754 9,406,758 3.78 5,363 414 203 49%2009 46,108 45,971 18,637,670 18,649,384 1,612 6,943,999 3.51 4,308 406 151 37%2010 47,036 46,828 18,937,593 18,932,577 1,458 6,335,697 3.11 4,345 404 135 33%TOTAL 230,016 228,383 93,747,345 92,785,080 8,224 44,859,220 3.60 5,455 406 196 48%

THIRD PARTY TOTAL

2006 44,411 43,893 1,652 17,012,262 3.76 10,298 388 2007 46,292 45,288 1,748 17,968,646 3.86 10,280 397 2008 46,170 46,403 1,754 11,932,901 3.78 6,803 257 2009 46,108 45,971 1,612 8,706,734 3.51 5,401 189 2010 47,036 46,828 1,458 7,205,555 3.11 4,942 154 TOTAL 230,016 228,383 8,224 62,826,098 3.60 7,639 275

ACCIDENT BENEFITS

2006 44,411 43,893 2,433,332 2,357,400 389 979,141 0.89 2,517 54 22 42%2007 46,292 45,288 2,585,500 2,513,591 416 1,964,292 0.92 4,722 56 43 78%2008 46,170 46,403 2,106,009 2,391,980 363 1,381,688 0.78 3,806 52 30 58%2009 46,108 45,971 1,871,663 1,901,529 399 814,602 0.87 2,042 41 18 43%2010 47,036 46,828 1,905,906 1,904,292 301 988,459 0.64 3,284 41 21 52%TOTAL 230,016 228,383 10,902,410 11,068,793 1,868 6,128,182 0.82 3,281 48 27 55%


2006 44,241 43,715 721,676 695,122 7 1,770,035 0.02 252,862 16 40 255%2007 46,114 45,108 761,485 743,552 1 1,700 0.00 1,700 16 0 0%2008 46,002 46,225 759,271 765,886 2 515,000 0.00 257,500 17 11 67%2009 45,922 45,810 750,916 751,818 2 977,034 0.00 488,517 16 21 130%2010 46,869 46,661 764,558 762,319 1 305,500 0.00 305,500 16 7 40%TOTAL 229,148 227,519 3,757,906 3,718,698 13 3,569,269 0.01 274,559 16 16 96%


TERRITORY 08 - CARIBOO AREA


2BIII - 9


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 124,651 123,520 46,863,386 45,104,693 6,415 30,195,703 5.19 4,707 365 244 67%2007 127,192 125,944 49,166,765 48,166,686 6,590 27,442,236 5.23 4,164 382 218 57%2008 126,936 127,634 49,354,495 49,662,098 6,337 25,128,958 4.96 3,965 389 197 51%2009 126,251 126,467 48,492,095 48,898,759 6,223 22,085,827 4.92 3,549 387 175 45%2010 129,127 128,129 48,319,917 48,416,680 5,296 20,176,107 4.13 3,810 378 157 42%TOTAL 634,157 631,695 242,196,658 240,248,916 30,861 125,028,831 4.89 4,051 380 198 52%

THIRD PARTY TOTAL

2006 124,651 123,520 6,415 36,933,270 5.19 5,757 299 2007 127,192 125,944 6,590 33,611,380 5.23 5,100 267 2008 126,936 127,634 6,337 28,777,228 4.96 4,541 225 2009 126,251 126,467 6,223 28,418,369 4.92 4,567 225 2010 129,127 128,129 5,296 22,034,647 4.13 4,161 172 TOTAL 634,157 631,695 30,861 149,774,894 4.89 4,853 237

ACCIDENT BENEFITS

2006 124,651 123,520 6,236,971 6,028,765 1,430 2,752,953 1.16 1,925 49 22 46%2007 127,192 125,944 6,546,081 6,420,300 1,458 2,239,719 1.16 1,536 51 18 35%2008 126,936 127,634 5,431,880 6,108,136 1,250 3,288,961 0.98 2,631 48 26 54%2009 126,251 126,467 4,857,991 4,962,912 1,257 2,336,988 0.99 1,859 39 18 47%2010 129,127 128,129 4,849,798 4,859,224 1,180 2,238,161 0.92 1,897 38 17 46%TOTAL 634,157 631,695 27,922,721 28,379,338 6,575 12,856,782 1.04 1,955 45 20 45%


2006 124,209 123,075 2,179,465 2,094,886 10 1,949,849 0.01 194,985 17 16 93%2007 126,758 125,509 2,260,188 2,232,115 4 720,908 0.00 180,227 18 6 32%2008 126,495 127,192 2,252,426 2,272,569 3 1,238,494 0.00 412,831 18 10 54%2009 125,811 126,031 2,228,999 2,236,255 2 2,161,000 0.00 1,080,500 18 17 97%2010 128,697 127,697 2,263,611 2,252,680 2 112,046 0.00 56,023 18 1 5%TOTAL 631,970 629,503 11,184,689 11,088,505 21 6,182,298 0.00 294,395 18 10 56%


TERRITORY 09 - PRINCE GEORGE AREA


2BIII - 10


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 42,640 42,352 15,044,747 14,467,604 1,692 8,011,386 4.00 4,735 342 189 55%2007 44,303 43,457 16,179,112 15,657,107 1,784 8,163,320 4.11 4,576 360 188 52%2008 45,106 45,029 16,214,064 16,366,157 1,758 7,858,440 3.90 4,470 363 175 48%2009 45,415 45,323 15,958,011 16,109,763 1,794 6,656,492 3.96 3,710 355 147 41%2010 46,041 45,834 15,592,088 15,760,994 1,589 4,846,438 3.47 3,050 344 106 31%TOTAL 223,505 221,995 78,988,022 78,361,625 8,617 35,536,076 3.88 4,124 353 160 45%

THIRD PARTY TOTAL

2006 42,640 42,352 1,692 13,041,056 4.00 7,707 308 2007 44,303 43,457 1,784 9,903,605 4.11 5,551 228 2008 45,106 45,029 1,758 10,065,376 3.90 5,725 224 2009 45,415 45,323 1,794 7,318,617 3.96 4,079 161 2010 46,041 45,834 1,589 5,162,476 3.47 3,249 113 TOTAL 223,505 221,995 8,617 45,491,130 3.88 5,279 205

ACCIDENT BENEFITS

2006 42,640 42,352 2,227,714 2,158,368 316 823,887 0.75 2,607 51 19 38%2007 44,303 43,457 2,400,865 2,322,864 375 674,081 0.86 1,798 53 16 29%2008 45,106 45,029 1,987,661 2,251,291 336 759,381 0.75 2,260 50 17 34%2009 45,415 45,323 1,770,830 1,812,475 328 536,600 0.72 1,636 40 12 30%2010 46,041 45,834 1,736,219 1,752,662 324 762,869 0.71 2,355 38 17 44%TOTAL 223,505 221,995 10,123,289 10,297,659 1,679 3,556,818 0.76 2,118 46 16 35%


2006 42,319 42,040 741,913 714,694 - - - N/A 17 - 0%2007 43,977 43,140 787,612 768,359 4 74,944 0.01 18,736 18 2 10%2008 44,827 44,716 803,522 802,003 1 - 0.00 - 18 - 0%2009 45,102 45,010 803,728 803,886 1 197,851 0.00 197,851 18 4 25%2010 45,736 45,527 807,757 807,508 1 413,873 0.00 413,873 18 9 51%TOTAL 221,960 220,434 3,944,532 3,896,449 7 686,668 0.00 98,095 18 3 18%


TERRITORY 10 - NORTHERN COAST


2BIII - 11


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 64,637 63,143 23,628,301 22,452,925 2,848 16,720,918 4.51 5,871 356 265 74%2007 66,159 65,695 24,606,979 24,296,656 2,773 12,965,695 4.22 4,676 370 197 53%2008 67,529 67,031 25,477,651 25,163,910 2,537 15,908,666 3.78 6,271 375 237 63%2009 67,006 67,175 25,028,874 25,212,112 2,349 8,985,931 3.50 3,825 375 134 36%2010 70,155 68,845 25,899,364 25,591,069 2,123 8,307,567 3.08 3,913 372 121 32%TOTAL 335,486 331,888 124,641,169 122,716,672 12,630 62,888,778 3.81 4,979 370 189 51%

THIRD PARTY TOTAL

2006 64,637 63,143 2,848 24,179,722 4.51 8,490 383 2007 66,159 65,695 2,773 14,917,136 4.22 5,379 227 2008 67,529 67,031 2,537 19,729,391 3.78 7,777 294 2009 67,006 67,175 2,349 10,525,384 3.50 4,481 157 2010 70,155 68,845 2,123 10,029,598 3.08 4,724 146 TOTAL 335,486 331,888 12,630 79,381,230 3.81 6,285 239

ACCIDENT BENEFITS

2006 64,637 63,143 3,125,749 2,987,033 453 1,886,699 0.72 4,165 47 30 63%2007 66,159 65,695 3,252,068 3,215,580 378 728,916 0.58 1,928 49 11 23%2008 67,529 67,031 2,777,464 3,064,714 350 1,271,403 0.52 3,633 46 19 41%2009 67,006 67,175 2,489,113 2,541,960 339 1,619,924 0.50 4,779 38 24 64%2010 70,155 68,845 2,555,278 2,531,061 314 839,336 0.46 2,673 37 12 33%TOTAL 335,486 331,888 14,199,672 14,340,347 1,834 6,346,279 0.55 3,460 43 19 44%


2006 64,374 62,878 1,084,187 1,039,586 5 2,661,363 0.01 532,273 17 42 256%2007 65,898 65,434 1,127,104 1,110,334 2 748 0.00 374 17 0 0%2008 67,228 66,747 1,154,724 1,147,395 3 350,000 0.00 116,667 17 5 31%2009 66,675 66,858 1,133,756 1,140,808 - - - N/A 17 - 0%2010 69,810 68,514 1,175,540 1,161,540 1 30,915 0.00 30,915 17 0 3%TOTAL 333,985 330,430 5,675,311 5,599,662 11 3,043,026 0.00 276,639 17 9 54%


TERRITORY 11 - PEACE RIVER AREA


2BIII - 12


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 276,286 273,720 105,261,883 101,153,769 17,669 87,790,769 6.46 4,969 370 321 87%2007 283,102 279,715 111,479,176 108,634,372 18,257 90,065,826 6.53 4,933 388 322 83%2008 287,451 286,772 115,128,672 114,188,034 18,420 81,505,091 6.42 4,425 398 284 71%2009 293,078 290,153 117,435,812 116,386,659 18,403 70,261,664 6.34 3,818 401 242 60%2010 298,260 295,786 118,980,217 118,448,079 18,286 53,208,597 6.18 2,910 400 180 45%TOTAL 1,438,177 1,426,146 568,285,760 558,810,912 91,035 382,831,946 6.38 4,205 392 268 69%

THIRD PARTY TOTAL

2006 276,286 273,720 17,669 104,251,915 6.46 5,900 381 2007 283,102 279,715 18,257 108,947,841 6.53 5,967 389 2008 287,451 286,772 18,420 95,600,993 6.42 5,190 333 2009 293,078 290,153 18,403 77,352,884 6.34 4,203 267 2010 298,260 295,786 18,286 55,909,389 6.18 3,057 189 TOTAL 1,438,177 1,426,146 91,035 442,063,022 6.38 4,856 310

ACCIDENT BENEFITS

2006 276,286 273,720 14,027,293 13,551,784 3,934 8,766,361 1.44 2,228 50 32 65%2007 283,102 279,715 14,864,601 14,497,792 4,102 10,113,020 1.47 2,465 52 36 70%2008 287,451 286,772 12,676,170 14,160,021 3,987 7,805,273 1.39 1,958 49 27 55%2009 293,078 290,153 11,649,685 11,744,008 3,833 6,611,243 1.32 1,725 40 23 56%2010 298,260 295,786 11,808,983 11,761,654 3,743 6,711,788 1.27 1,793 40 23 57%TOTAL 1,438,177 1,426,146 65,026,732 65,715,259 19,599 40,007,685 1.37 2,041 46 28 61%


2006 275,308 272,733 5,348,302 5,136,324 18 1,722,820 0.01 95,712 19 6 34%2007 282,088 278,700 5,594,451 5,496,811 7 1,966,060 0.00 280,866 20 7 36%2008 286,434 285,739 5,707,905 5,693,136 4 618,862 0.00 154,716 20 2 11%2009 292,018 289,113 5,807,662 5,755,963 6 1,490,000 0.00 248,333 20 5 26%2010 297,222 294,731 5,884,624 5,853,672 4 811,601 0.00 202,900 20 3 14%TOTAL 1,433,070 1,421,016 28,342,944 27,935,905 39 6,609,343 0.00 169,470 20 5 24%


TERRITORY 12 - SOUTHERN VANCOUVER ISLAND AND ALL OTHER ISLANDS OFF THE WEST COAST


2BIII - 13


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 294,866 290,984 115,681,569 110,828,788 15,850 87,988,816 5.45 5,551 381 302 79%2007 305,379 300,289 123,615,610 120,075,338 16,433 91,484,083 5.47 5,567 400 305 76%2008 311,547 310,328 124,784,356 125,619,886 15,707 85,792,926 5.06 5,462 405 276 68%2009 316,563 313,620 124,712,377 124,273,592 15,585 73,703,352 4.97 4,729 396 235 59%2010 323,444 320,469 126,265,771 125,867,633 14,696 54,217,028 4.59 3,689 393 169 43%TOTAL 1,551,799 1,535,690 615,059,683 606,665,237 78,271 393,186,205 5.10 5,023 395 256 65%

THIRD PARTY TOTAL

2006 294,866 290,984 15,850 108,612,901 5.45 6,853 373 2007 305,379 300,289 16,433 112,262,233 5.47 6,832 374 2008 311,547 310,328 15,707 105,020,709 5.06 6,686 338 2009 316,563 313,620 15,585 87,225,517 4.97 5,597 278 2010 323,444 320,469 14,696 61,700,646 4.59 4,198 193 TOTAL 1,551,799 1,535,690 78,271 474,822,006 5.10 6,066 309

ACCIDENT BENEFITS

2006 294,866 290,984 15,949,473 15,414,185 3,641 10,167,483 1.25 2,792 53 35 66%2007 305,379 300,289 17,066,240 16,567,090 3,735 10,684,509 1.24 2,861 55 36 64%2008 311,547 310,328 14,314,649 16,163,795 3,575 10,765,133 1.15 3,011 52 35 67%2009 316,563 313,620 12,856,154 13,036,911 3,523 9,527,223 1.12 2,704 42 30 73%2010 323,444 320,469 12,995,323 12,957,847 3,535 7,390,724 1.10 2,091 40 23 57%TOTAL 1,551,799 1,535,690 73,181,839 74,139,827 18,009 48,535,072 1.17 2,695 48 32 65%


2006 293,978 290,083 5,291,797 5,075,877 22 4,733,923 0.01 215,178 17 16 93%2007 304,409 299,327 5,588,058 5,468,839 17 5,042,535 0.01 296,620 18 17 92%2008 310,643 309,401 5,712,805 5,695,909 12 2,271,095 0.00 189,258 18 7 40%2009 315,667 312,700 5,773,984 5,734,604 6 3,065,248 0.00 510,875 18 10 53%2010 322,554 319,564 5,876,593 5,841,898 4 1,434,000 0.00 358,500 18 4 25%TOTAL 1,547,250 1,531,074 28,243,237 27,817,127 61 16,546,801 0.00 271,259 18 11 59%


TERRITORY 13 - MIDDLE VANCOUVER ISLAND/SUNSHINE COAST AREA


2BIII - 14


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

EARNED INCURRED

LOSS RATIO

THIRD PARTY BASIC

2006 42,093 41,486 17,185,986 16,435,580 1,937 12,202,730 4.67 6,300 396 294 74%2007 43,656 42,972 18,296,566 17,785,167 1,987 13,706,932 4.62 6,898 414 319 77%2008 43,661 43,944 18,620,664 18,604,784 1,975 11,440,673 4.49 5,793 423 260 61%2009 42,912 43,125 18,269,940 18,376,759 1,760 9,887,950 4.08 5,618 426 229 54%2010 43,676 43,322 18,553,849 18,475,273 1,700 5,747,126 3.92 3,381 426 133 31%TOTAL 215,997 214,848 90,927,005 89,677,564 9,359 52,985,411 4.36 5,661 417 247 59%

THIRD PARTY TOTAL

2006 42,093 41,486 1,937 17,487,560 4.67 9,028 422 2007 43,656 42,972 1,987 16,250,047 4.62 8,178 378 2008 43,661 43,944 1,975 12,451,061 4.49 6,304 283 2009 42,912 43,125 1,760 11,222,337 4.08 6,376 260 2010 43,676 43,322 1,700 5,782,536 3.92 3,401 133 TOTAL 215,997 214,848 9,359 63,193,540 4.36 6,752 294

ACCIDENT BENEFITS

2006 42,093 41,486 2,540,384 2,448,444 482 1,507,556 1.16 3,128 59 36 62%2007 43,656 42,972 2,710,560 2,636,088 491 1,243,074 1.14 2,532 61 29 47%2008 43,661 43,944 2,276,056 2,557,989 461 1,453,126 1.05 3,152 58 33 57%2009 42,912 43,125 2,023,109 2,065,685 424 1,764,901 0.98 4,163 48 41 85%2010 43,676 43,322 2,059,494 2,048,199 375 682,087 0.87 1,819 47 16 33%TOTAL 215,997 214,848 11,609,603 11,756,405 2,233 6,650,744 1.04 2,978 55 31 57%


2006 41,866 41,260 729,638 698,125 1 3,716 0.00 3,716 17 0 1%2007 43,427 42,757 767,141 752,411 4 3,620 0.01 905 18 0 0%2008 43,460 43,726 764,530 772,454 2 300,000 0.00 150,000 18 7 39%2009 42,711 42,922 745,265 751,042 1 114,000 0.00 114,000 17 3 15%2010 43,477 43,117 757,589 753,032 - - - N/A 17 - 0%TOTAL 214,942 213,782 3,764,163 3,727,065 8 421,335 0.00 52,667 17 2 11%


TERRITORY 14 - NORTHERN VANCOUVER ISLAND


2BIV - 1

EXHIBIT IV - DISTRIBUTION OF THE ACCIDENT YEAR PAID BY POLICY YEAR PAID


Basic BI & PD Net Paid

Accident Year Prior Year Current Year No Policy/Error Basic BI Total Prior Year Current Year No Policy/Error Basic PD Total Grand Total1993 196,836,858 503,000,526 12,372,378 712,209,763 55,259,043 136,703,596 1,310,754 193,273,393 905,483,1561994 227,265,833 541,671,637 11,470,419 780,407,889 64,430,148 147,487,874 895,704 212,813,725 993,221,6141995 236,135,793 571,920,112 11,498,815 819,554,720 70,647,528 164,571,693 1,007,623 236,226,845 1,055,781,5641996 308,295,211 518,538,299 9,952,771 836,786,281 97,497,587 164,414,967 1,223,109 263,135,662 1,099,921,9441997 307,527,134 490,628,946 10,688,408 808,844,488 105,928,752 158,267,162 1,204,669 265,400,583 1,074,245,0701998 305,640,240 499,971,959 9,125,475 814,737,674 101,209,278 147,889,007 925,881 250,024,166 1,064,761,8401999 318,412,002 489,263,219 7,321,882 814,997,102 102,297,282 148,695,437 1,087,226 252,079,946 1,067,077,0482000 330,382,742 486,978,327 7,328,845 824,689,914 104,504,041 157,164,737 1,157,116 262,825,894 1,087,515,8082001 325,325,409 498,576,662 8,989,370 832,891,441 118,029,374 174,623,456 1,003,604 293,656,434 1,126,547,8752002 343,365,387 509,001,942 8,537,585 860,904,913 127,389,640 171,936,471 908,524 300,234,634 1,161,139,5472003 366,614,800 543,285,792 10,965,645 920,866,237 121,770,304 180,796,699 439,896 303,006,899 1,223,873,1362004 375,952,672 571,606,416 7,570,243 955,129,331 132,205,810 183,519,274 451,456 316,176,539 1,271,305,8702005 381,582,456 574,289,047 6,910,675 962,782,178 134,454,333 192,728,232 455,621 327,638,186 1,290,420,3642006 363,303,649 502,313,770 9,778,313 875,395,733 140,797,930 204,954,922 469,737 346,222,589 1,221,618,3212007 294,869,938 398,448,316 7,858,482 701,176,736 149,841,103 218,741,482 606,594 369,189,179 1,070,365,9142008 192,736,708 236,496,318 3,435,718 432,668,744 150,520,618 218,062,443 1,321,962 369,905,023 802,573,7672009 101,088,709 120,913,921 1,273,206 223,275,836 144,714,774 201,624,098 399,047 346,737,919 570,013,7552010 45,882,255 35,912,860 555,584 82,350,699 130,210,472 129,653,037 146,271 260,009,779 342,360,478

Total 5,021,217,796 8,092,818,069 145,633,813 13,259,669,678 2,051,708,015 3,101,834,586 15,014,794 5,168,557,395 18,428,227,073

Notes: Assignment of BI payments to Basic is based on the latest Basic/Optional split algorithm, which includes the correct allocation of Additional Payment amounts.Basic PD payments are shown after the transfer of certain Hit and Run costs to optional Collision coverage.


Basic BI Net Paid with ALAE Basic PD Net Paid with ALAE

2BV - 1


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 1,042,674 1,032,007 719,565,128 688,143,403 123,704 668,767,458 11.99 5,406 667 648 97%2007 1,066,759 1,054,288 761,488,743 741,345,590 128,138 675,063,864 12.15 5,268 703 640 91%2008 1,079,714 1,077,699 795,032,353 781,863,527 123,909 614,079,174 11.50 4,956 725 570 79%2009 1,099,159 1,087,163 812,925,456 804,881,428 123,507 541,756,742 11.36 4,386 740 498 67%2010 1,111,258 1,104,326 816,218,935 815,293,103 112,380 408,626,700 10.18 3,636 738 370 50%TOTAL 5,399,563 5,355,483 3,905,230,615 3,831,527,051 611,638 2,908,293,938 11.42 4,755 715 543 76%

THIRD PARTY TOTAL

2006 1,042,674 1,032,007 123,704 780,104,389 11.99 6,306 756 2007 1,066,759 1,054,288 128,138 769,724,661 12.15 6,007 730 2008 1,079,714 1,077,699 123,909 690,346,319 11.50 5,571 641 2009 1,099,159 1,087,163 123,507 595,295,700 11.36 4,820 548 2010 1,111,258 1,104,326 112,380 424,148,486 10.18 3,774 384 TOTAL 5,399,563 5,355,483 611,638 3,259,619,555 11.42 5,329 609

ACCIDENT BENEFITS

2006 1,042,674 1,032,007 81,904,754 78,863,403 31,049 51,233,390 3.01 1,650 76 50 65%2007 1,066,759 1,054,288 86,290,231 84,216,912 30,963 53,638,692 2.94 1,732 80 51 64%2008 1,079,714 1,077,699 73,525,780 82,347,835 29,304 48,809,460 2.72 1,666 76 45 59%2009 1,099,159 1,087,163 68,211,893 68,642,054 28,697 45,888,739 2.64 1,599 63 42 67%2010 1,111,258 1,104,326 68,464,269 68,387,977 28,892 32,887,721 2.62 1,138 62 30 48%TOTAL 5,399,563 5,355,483 378,396,927 382,458,180 148,905 232,458,003 2.78 1,561 71 43 61%


2006 1,042,674 1,032,007 22,614,875 21,584,537 79 9,362,573 0.01 118,514 21 9 43%2007 1,066,759 1,054,288 23,643,184 23,218,317 61 8,131,056 0.01 133,296 22 8 35%2008 1,079,714 1,077,699 23,967,993 23,943,355 45 8,894,575 0.00 197,657 22 8 37%2009 1,099,159 1,087,163 24,320,769 24,092,546 35 7,030,168 0.00 200,862 22 6 29%2010 1,111,258 1,104,326 24,486,465 24,405,664 15 3,241,524 0.00 216,102 22 3 13%TOTAL 5,399,563 5,355,482 119,033,286 117,244,420 235 36,659,896 0.00 156,000 22 7 31%

EXHIBIT V - EXPERIENCE BY MAJOR LINE OF BUSINESS AND TERRITORY

PRIVATE PASSENGER AUTOMOBILETERRITORY 01 - LOWER MAINLAND


2BV - 2


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 51,266 50,477 32,294,056 30,697,991 5,100 35,292,621 10.10 6,920 608 699 115%2007 52,501 51,811 34,175,432 33,257,001 5,337 31,565,641 10.30 5,914 642 609 95%2008 53,806 53,446 37,442,330 35,882,771 5,209 29,046,394 9.75 5,576 671 543 81%2009 54,737 54,150 39,043,926 38,412,264 5,281 27,695,596 9.75 5,244 709 511 72%2010 56,126 55,537 40,440,012 39,954,655 4,711 21,653,133 8.48 4,596 719 390 54%TOTAL 268,437 265,421 183,395,756 178,204,682 25,638 145,253,387 9.66 5,666 671 547 82%

THIRD PARTY TOTAL

2006 51,266 50,477 5,100 41,386,634 10.10 8,115 820 2007 52,501 51,811 5,337 36,140,376 10.30 6,772 698 2008 53,806 53,446 5,209 32,884,407 9.75 6,313 615 2009 54,737 54,150 5,281 29,343,011 9.75 5,556 542 2010 56,126 55,537 4,711 25,820,780 8.48 5,481 465 TOTAL 268,437 265,421 25,638 165,575,208 9.66 6,458 624

ACCIDENT BENEFITS

2006 51,266 50,477 4,255,473 4,070,892 1,575 2,880,029 3.12 1,829 81 57 71%2007 52,501 51,811 4,499,291 4,379,606 1,649 2,703,194 3.18 1,639 85 52 62%2008 53,806 53,446 4,041,057 4,387,256 1,564 3,637,673 2.93 2,326 82 68 83%2009 54,737 54,150 3,838,252 3,830,982 1,560 2,242,947 2.88 1,438 71 41 59%2010 56,126 55,537 3,981,392 3,931,010 1,432 2,186,441 2.58 1,527 71 39 56%TOTAL 268,437 265,421 20,615,465 20,599,746 7,780 13,650,283 2.93 1,755 78 51 66%


2006 51,266 50,477 1,099,140 1,042,621 4 58,685 0.01 14,671 21 1 6%2007 52,501 51,811 1,148,438 1,127,705 3 1,272,000 0.01 424,000 22 25 113%2008 53,806 53,446 1,178,779 1,172,184 3 472,043 0.01 157,348 22 9 40%2009 54,737 54,150 1,196,432 1,184,967 - - - N/A 22 - 0%2010 56,126 55,537 1,223,598 1,213,230 - - - N/A 22 - 0%TOTAL 268,437 265,421 5,846,387 5,740,707 10 1,802,728 0.00 180,273 22 7 31%


PRIVATE PASSENGER AUTOMOBILETERRITORY 02 - MAPLE RIDGE/PITT MEADOWS


2BV - 3


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 17,165 17,004 10,806,518 10,336,363 1,489 9,572,633 8.76 6,429 608 563 93%2007 17,807 17,485 11,671,218 11,257,630 1,482 8,090,576 8.48 5,459 644 463 72%2008 18,238 18,072 12,245,999 12,015,891 1,475 6,365,394 8.16 4,316 665 352 53%2009 18,346 18,331 12,338,569 12,350,371 1,391 5,055,102 7.59 3,634 674 276 41%2010 18,874 18,601 12,622,756 12,492,840 1,201 3,436,340 6.46 2,861 672 185 28%TOTAL 90,430 89,493 59,685,060 58,453,096 7,038 32,520,045 7.86 4,621 653 363 56%

THIRD PARTY TOTAL

2006 17,165 17,004 1,489 11,855,434 8.76 7,962 697 2007 17,807 17,485 1,482 9,887,905 8.48 6,672 566 2008 18,238 18,072 1,475 6,503,720 8.16 4,409 360 2009 18,346 18,331 1,391 5,055,102 7.59 3,634 276 2010 18,874 18,601 1,201 3,436,340 6.46 2,861 185 TOTAL 90,430 89,493 7,038 36,738,502 7.86 5,220 411

ACCIDENT BENEFITS

2006 17,165 17,004 1,478,939 1,425,708 263 657,782 1.55 2,501 84 39 46%2007 17,807 17,485 1,602,583 1,542,806 275 593,144 1.57 2,157 88 34 38%2008 18,238 18,072 1,367,302 1,525,417 214 418,827 1.18 1,957 84 23 27%2009 18,346 18,331 1,252,584 1,272,200 176 214,815 0.96 1,221 69 12 17%2010 18,874 18,601 1,280,375 1,267,096 174 175,140 0.94 1,007 68 9 14%TOTAL 90,430 89,493 6,981,783 7,033,228 1,102 2,059,707 1.23 1,869 79 23 29%


2006 17,165 17,004 378,053 361,328 - - - N/A 21 - 0%2007 17,807 17,485 403,628 392,708 1 - 0.01 - 22 - 0%2008 18,238 18,072 415,519 411,596 - - - N/A 23 - 0%2009 18,346 18,331 416,061 416,992 - - - N/A 23 - 0%2010 18,874 18,601 426,247 421,292 - - - N/A 23 - 0%TOTAL 90,430 89,493 2,039,508 2,003,916 1 - 0.00 - 22 - 0%


PRIVATE PASSENGER AUTOMOBILETERRITORY 03 - SQUAMISH WHISTLER AREA


2BV - 4


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 8,856 8,824 4,335,919 4,199,385 617 4,013,076 6.99 6,504 476 455 96%2007 8,905 8,866 4,508,960 4,428,227 567 4,755,642 6.40 8,387 499 536 107%2008 8,961 8,992 4,690,792 4,637,709 615 3,505,587 6.84 5,700 516 390 76%2009 9,139 9,044 4,832,923 4,774,808 579 2,863,466 6.40 4,946 528 317 60%2010 9,094 9,094 4,784,884 4,813,918 446 2,052,436 4.90 4,602 529 226 43%TOTAL 44,955 44,821 23,153,478 22,854,047 2,824 17,190,207 6.30 6,087 510 384 75%

THIRD PARTY TOTAL

2006 8,856 8,824 617 4,287,560 6.99 6,949 486 2007 8,905 8,866 567 5,476,019 6.40 9,658 618 2008 8,961 8,992 615 4,423,834 6.84 7,193 492 2009 9,139 9,044 579 4,172,898 6.40 7,207 461 2010 9,094 9,094 446 2,052,436 4.90 4,602 226 TOTAL 44,955 44,821 2,824 20,412,746 6.30 7,228 455

ACCIDENT BENEFITS

2006 8,856 8,824 563,120 546,808 138 615,729 1.56 4,462 62 70 113%2007 8,905 8,866 585,814 575,216 131 585,799 1.48 4,472 65 66 102%2008 8,961 8,992 502,251 556,024 132 716,169 1.47 5,426 62 80 129%2009 9,139 9,044 471,208 471,856 122 626,884 1.35 5,138 52 69 133%2010 9,094 9,094 467,875 470,146 102 102,691 1.12 1,007 52 11 22%TOTAL 44,955 44,821 2,590,268 2,620,050 625 2,647,272 1.39 4,236 58 59 101%


2006 8,856 8,824 186,489 180,085 2 259,892 0.02 129,946 20 29 144%2007 8,905 8,866 191,767 189,719 1 - 0.01 - 21 - 0%2008 8,961 8,992 193,998 194,466 1 2,050,000 0.01 2,050,000 22 228 1054%2009 9,139 9,044 197,660 195,949 - - - N/A 22 - 0%2010 9,094 9,094 194,775 196,041 - - - N/A 22 - 0%TOTAL 44,955 44,821 964,689 956,262 4 2,309,892 0.01 577,473 21 52 242%


PRIVATE PASSENGER AUTOMOBILETERRITORY 04 - PEMBERTON AREA/HOPE AREA


SBV - 5


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 153,913 151,780 93,053,550 88,830,039 13,794 87,585,145 9.09 6,350 585 577 99%2007 158,928 156,625 99,700,825 96,675,396 14,389 93,096,548 9.19 6,470 617 594 96%2008 161,947 161,247 107,550,211 103,940,729 14,209 86,418,341 8.81 6,082 645 536 83%2009 163,593 162,427 109,873,144 109,194,576 14,035 71,951,687 8.64 5,127 672 443 66%2010 166,953 165,260 111,575,393 110,899,427 13,090 59,185,619 7.92 4,521 671 358 53%TOTAL 805,334 797,340 521,753,123 509,540,168 69,517 398,237,339 8.72 5,729 639 499 78%

THIRD PARTY TOTAL

2006 153,913 151,780 13,794 100,353,729 9.09 7,275 661 2007 158,928 156,625 14,389 104,535,650 9.19 7,265 667 2008 161,947 161,247 14,209 104,269,830 8.81 7,338 647 2009 163,593 162,427 14,035 81,323,478 8.64 5,794 501 2010 166,953 165,260 13,090 62,146,882 7.92 4,748 376 TOTAL 805,334 797,340 69,517 452,629,568 8.72 6,511 568

ACCIDENT BENEFITS

2006 153,913 151,780 11,805,469 11,335,516 4,031 8,655,569 2.66 2,147 75 57 76%2007 158,928 156,625 12,602,506 12,236,581 4,070 8,501,399 2.60 2,089 78 54 69%2008 161,947 161,247 11,150,769 12,190,640 4,053 9,876,872 2.51 2,437 76 61 81%2009 163,593 162,427 10,372,783 10,458,547 3,972 7,302,882 2.45 1,839 64 45 70%2010 166,953 165,260 10,532,623 10,467,764 4,038 6,013,571 2.44 1,489 63 36 57%TOTAL 805,334 797,340 56,464,150 56,689,048 20,164 40,350,292 2.53 2,001 71 51 71%


2006 153,913 151,780 3,288,590 3,134,623 11 1,869,394 0.01 169,945 21 12 60%2007 158,928 156,625 3,469,539 3,396,538 18 3,836,511 0.01 213,140 22 24 113%2008 161,947 161,247 3,548,603 3,533,766 13 1,686,825 0.01 129,756 22 10 48%2009 163,593 162,427 3,568,677 3,551,265 6 2,392,908 0.00 398,818 22 15 67%2010 166,953 165,260 3,630,167 3,602,665 5 1,479,000 0.00 295,800 22 9 41%TOTAL 805,334 797,340 17,505,576 17,218,857 53 11,264,638 0.01 212,540 22 14 65%


PRIVATE PASSENGER AUTOMOBILETERRITORY 05 - FRASER VALLEY


2BV - 6


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 331,199 326,148 152,367,771 144,908,448 21,056 132,508,690 6.46 6,293 444 406 91%2007 343,644 337,785 163,955,365 158,674,133 22,651 128,079,320 6.71 5,654 470 379 81%2008 349,200 348,302 169,374,211 168,093,095 23,033 124,575,084 6.61 5,409 483 358 74%2009 353,419 350,898 171,026,606 170,161,484 22,275 107,195,446 6.35 4,812 485 305 63%2010 358,969 356,954 172,312,268 172,221,372 20,336 77,235,139 5.70 3,798 482 216 45%TOTAL 1,736,432 1,720,087 829,036,221 814,058,533 109,351 569,593,679 6.36 5,209 473 331 70%

THIRD PARTY TOTAL

2006 331,199 326,148 21,056 164,887,448 6.46 7,831 506 2007 343,644 337,785 22,651 160,356,143 6.71 7,079 475 2008 349,200 348,302 23,033 154,799,430 6.61 6,721 444 2009 353,419 350,898 22,275 126,047,754 6.35 5,659 359 2010 358,969 356,954 20,336 84,243,895 5.70 4,143 236 TOTAL 1,736,432 1,720,087 109,351 690,334,670 6.36 6,313 401

ACCIDENT BENEFITS

2006 331,199 326,148 20,295,943 19,408,274 5,306 12,638,906 1.63 2,382 60 39 65%2007 343,644 337,785 21,782,391 21,128,059 5,344 12,910,544 1.58 2,416 63 38 61%2008 349,200 348,302 18,480,402 20,669,111 5,519 12,511,687 1.58 2,267 59 36 61%2009 353,419 350,898 16,904,089 17,073,219 5,065 11,319,206 1.44 2,235 49 32 66%2010 358,969 356,954 17,071,499 17,048,994 5,260 8,529,540 1.47 1,622 48 24 50%TOTAL 1,736,432 1,720,087 94,534,324 95,327,657 26,494 57,909,882 1.54 2,186 55 34 61%


2006 331,199 326,148 6,870,775 6,542,469 14 2,096,390 0.00 149,742 20 6 32%2007 343,644 337,785 7,312,622 7,129,600 19 2,497,956 0.01 131,471 21 7 35%2008 349,200 348,302 7,473,979 7,452,388 10 3,931,556 0.00 393,156 21 11 53%2009 353,419 350,898 7,551,738 7,504,411 8 2,394,705 0.00 299,338 21 7 32%2010 358,969 356,954 7,644,921 7,624,066 5 962,312 0.00 192,462 21 3 13%TOTAL 1,736,432 1,720,087 36,854,035 36,252,934 56 11,882,919 0.00 212,195 21 7 33%


PRIVATE PASSENGER AUTOMOBILETERRITORY 06 - THOMPSON OKANAGAN AREA


2BV - 7


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 100,142 99,126 42,884,293 41,117,388 4,470 28,213,798 4.51 6,312 415 285 69%2007 103,472 101,838 45,950,105 44,510,285 4,430 23,267,663 4.35 5,252 437 228 52%2008 105,717 105,005 46,333,701 46,586,386 4,588 23,174,407 4.37 5,051 444 221 50%2009 106,813 106,102 45,608,559 45,856,100 4,435 19,377,837 4.18 4,369 432 183 42%2010 108,879 108,208 44,865,943 45,232,303 4,005 14,901,997 3.70 3,721 418 138 33%TOTAL 525,023 520,279 225,642,601 223,302,461 21,928 108,935,702 4.21 4,968 429 209 49%

THIRD PARTY TOTAL

2006 100,142 99,126 4,470 44,774,004 4.51 10,017 452 2007 103,472 101,838 4,430 32,087,321 4.35 7,243 315 2008 105,717 105,005 4,588 33,200,382 4.37 7,236 316 2009 106,813 106,102 4,435 25,335,899 4.18 5,713 239 2010 108,879 108,208 4,005 17,241,590 3.70 4,305 159 TOTAL 525,023 520,279 21,928 152,639,196 4.21 6,961 293

ACCIDENT BENEFITS

2006 100,142 99,126 5,535,771 5,334,278 1,008 3,481,261 1.02 3,454 54 35 65%2007 103,472 101,838 5,908,157 5,735,817 925 3,137,561 0.91 3,392 56 31 55%2008 105,717 105,005 4,882,471 5,532,032 898 3,735,811 0.86 4,160 53 36 68%2009 106,813 106,102 4,346,494 4,432,501 846 2,921,078 0.80 3,453 42 28 66%2010 108,879 108,208 4,298,569 4,328,060 833 1,901,105 0.77 2,282 40 18 44%TOTAL 525,023 520,279 24,971,462 25,362,688 4,510 15,176,817 0.87 3,365 49 29 60%


2006 100,142 99,126 2,067,317 1,981,034 7 1,862,938 0.01 266,134 20 19 94%2007 103,472 101,837 2,187,783 2,136,664 3 5,222 0.00 1,741 21 0 0%2008 105,717 105,005 2,249,034 2,232,407 6 789,668 0.01 131,611 21 8 35%2009 106,813 106,102 2,265,757 2,254,260 7 1,402,500 0.01 200,357 21 13 62%2010 108,879 108,208 2,301,550 2,294,941 1 602,000 0.00 602,000 21 6 26%TOTAL 525,023 520,278 11,071,441 10,899,307 24 4,662,327 0.00 194,264 21 9 43%


PRIVATE PASSENGER AUTOMOBILETERRITORY 07 - KOOTENAYS


2BV - 8


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 29,530 29,286 15,006,631 14,430,155 1,442 9,604,853 4.92 6,661 493 328 67%2007 30,565 30,038 16,073,885 15,564,290 1,526 9,998,083 5.08 6,552 518 333 64%2008 30,484 30,694 15,949,364 16,182,294 1,560 8,024,876 5.08 5,144 527 261 50%2009 30,297 30,317 15,620,963 15,697,223 1,426 5,764,665 4.70 4,043 518 190 37%2010 30,938 30,740 15,849,514 15,832,124 1,286 4,984,538 4.18 3,876 515 162 31%TOTAL 151,814 151,075 78,500,357 77,706,086 7,240 38,377,015 4.79 5,301 514 254 49%

THIRD PARTY TOTAL

2006 29,530 29,286 1,442 15,067,982 4.92 10,449 515 2007 30,565 30,038 1,526 15,390,617 5.08 10,086 512 2008 30,484 30,694 1,560 10,551,019 5.08 6,763 344 2009 30,297 30,317 1,426 7,527,400 4.70 5,279 248 2010 30,938 30,740 1,286 5,854,396 4.18 4,552 190 TOTAL 151,814 151,075 7,240 54,391,415 4.79 7,513 360

ACCIDENT BENEFITS

2006 29,530 29,286 2,046,471 1,975,820 358 949,558 1.22 2,652 67 32 48%2007 30,565 30,038 2,187,348 2,121,829 387 1,751,509 1.29 4,526 71 58 83%2008 30,484 30,694 1,781,431 2,032,428 340 1,365,398 1.11 4,016 66 44 67%2009 30,297 30,317 1,578,461 1,609,983 368 688,915 1.21 1,872 53 23 43%2010 30,938 30,740 1,603,158 1,601,147 278 855,893 0.90 3,079 52 28 53%TOTAL 151,814 151,075 9,196,869 9,341,206 1,731 5,611,273 1.15 3,242 62 37 60%


2006 29,530 29,286 606,037 581,499 7 1,770,035 0.02 252,862 20 60 304%2007 30,565 30,038 641,795 626,376 1 1,700 0.00 1,700 21 0 0%2008 30,484 30,694 641,545 646,855 2 515,000 0.01 257,500 21 17 80%2009 30,297 30,317 633,786 635,589 1 400,000 0.00 400,000 21 13 63%2010 30,938 30,740 644,503 642,772 1 305,500 0.00 305,500 21 10 48%TOTAL 151,814 151,075 3,167,666 3,133,091 12 2,992,235 0.01 249,353 21 20 96%


PRIVATE PASSENGER AUTOMOBILETERRITORY 08 - CARIBOO AREA


2BV - 9


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 90,810 90,106 40,037,359 38,427,168 5,733 26,450,138 6.36 4,614 426 294 69%2007 92,416 91,694 42,123,445 41,201,866 5,942 23,807,289 6.48 4,007 449 260 58%2008 92,041 92,602 42,622,764 42,678,883 5,747 21,337,107 6.21 3,713 461 230 50%2009 91,643 91,675 42,038,265 42,345,919 5,722 19,986,710 6.24 3,493 462 218 47%2010 93,144 92,497 41,718,868 41,853,216 4,885 18,636,371 5.28 3,815 452 201 45%TOTAL 460,054 458,575 208,540,701 206,507,051 28,029 110,217,614 6.11 3,932 450 240 53%

THIRD PARTY TOTAL

2006 90,810 90,106 5,733 32,832,919 6.36 5,727 364 2007 92,416 91,694 5,942 29,409,665 6.48 4,949 321 2008 92,041 92,602 5,747 24,957,021 6.21 4,343 270 2009 91,643 91,675 5,722 25,768,455 6.24 4,503 281 2010 93,144 92,497 4,885 20,494,911 5.28 4,195 222 TOTAL 460,054 458,575 28,029 133,462,972 6.11 4,762 291

ACCIDENT BENEFITS

2006 90,810 90,106 5,416,772 5,225,241 1,322 2,475,970 1.47 1,873 58 27 47%2007 92,416 91,694 5,693,684 5,574,291 1,357 1,954,841 1.48 1,441 61 21 35%2008 92,041 92,602 4,710,871 5,313,720 1,159 2,960,184 1.25 2,554 57 32 56%2009 91,643 91,675 4,216,606 4,310,046 1,172 2,128,518 1.28 1,816 47 23 49%2010 93,144 92,497 4,184,577 4,195,907 1,113 2,003,573 1.20 1,800 45 22 48%TOTAL 460,054 458,575 24,222,510 24,619,204 6,123 11,523,086 1.34 1,882 54 25 47%


2006 90,810 90,106 1,914,933 1,835,946 9 1,949,849 0.01 216,650 20 22 106%2007 92,416 91,694 1,988,729 1,962,421 4 720,908 0.00 180,227 21 8 37%2008 92,041 92,602 1,986,591 2,000,001 3 1,238,494 0.00 412,831 22 13 62%2009 91,643 91,675 1,971,624 1,974,828 2 2,161,000 0.00 1,080,500 22 24 109%2010 93,144 92,497 2,000,940 1,991,373 2 112,046 0.00 56,023 22 1 6%TOTAL 460,054 458,575 9,862,817 9,764,570 20 6,182,298 0.00 309,115 21 13 63%


PRIVATE PASSENGER AUTOMOBILETERRITORY 09 - PRINCE GEORGE AREA


2BV - 10


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 31,917 31,789 13,182,885 12,679,082 1,531 6,323,598 4.82 4,130 399 199 50%2007 33,017 32,471 14,148,851 13,681,924 1,605 7,099,928 4.94 4,424 421 219 52%2008 33,553 33,445 14,222,369 14,329,127 1,603 7,206,002 4.79 4,495 428 215 50%2009 33,538 33,554 13,903,491 14,071,144 1,636 6,198,776 4.88 3,789 419 185 44%2010 33,775 33,680 13,425,262 13,613,791 1,447 4,506,098 4.30 3,114 404 134 33%TOTAL 165,800 164,939 68,882,858 68,375,068 7,822 31,334,401 4.74 4,006 415 190 46%

THIRD PARTY TOTAL

2006 31,917 31,789 1,531 10,620,053 4.82 6,937 334 2007 33,017 32,471 1,605 8,840,212 4.94 5,508 272 2008 33,553 33,445 1,603 9,412,937 4.79 5,872 281 2009 33,538 33,554 1,636 6,860,902 4.88 4,194 204 2010 33,775 33,680 1,447 4,822,137 4.30 3,333 143 TOTAL 165,800 164,939 7,822 40,556,240 4.74 5,185 246

ACCIDENT BENEFITS

2006 31,917 31,789 1,977,003 1,916,355 293 783,583 0.92 2,674 60 25 41%2007 33,017 32,471 2,126,150 2,054,575 351 576,308 1.08 1,642 63 18 28%2008 33,553 33,445 1,751,187 1,989,918 310 699,337 0.93 2,256 59 21 35%2009 33,538 33,554 1,551,433 1,591,718 301 510,207 0.90 1,695 47 15 32%2010 33,775 33,680 1,509,138 1,526,442 300 719,806 0.89 2,399 45 21 47%TOTAL 165,800 164,939 8,914,911 9,079,007 1,555 3,289,240 0.94 2,115 55 20 36%


2006 31,917 31,789 661,581 636,149 - - - N/A 20 - 0%2007 33,017 32,471 701,291 683,931 3 29,944 0.01 9,981 21 1 4%2008 33,553 33,445 715,478 713,212 1 - 0.00 - 21 - 0%2009 33,538 33,554 714,507 715,155 1 197,851 0.00 197,851 21 6 28%2010 33,775 33,680 717,008 717,046 1 413,873 0.00 413,873 21 12 58%TOTAL 165,800 164,939 3,509,865 3,465,493 6 641,668 0.00 106,945 21 4 19%


PRIVATE PASSENGER AUTOMOBILETERRITORY 10 - NORTHERN COAST


2BV - 11


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 41,650 40,772 18,585,662 17,567,050 2,440 12,962,309 5.98 5,312 431 318 74%2007 42,214 42,096 19,443,144 19,139,152 2,397 10,997,928 5.69 4,588 455 261 57%2008 42,898 42,620 20,119,481 19,844,931 2,204 12,392,293 5.17 5,623 466 291 62%2009 42,453 42,600 19,753,296 19,935,027 2,081 8,054,629 4.89 3,871 468 189 40%2010 44,207 43,437 20,265,321 20,056,073 1,885 7,354,132 4.34 3,901 462 169 37%TOTAL 213,422 211,526 98,166,904 96,542,233 11,007 51,761,292 5.20 4,703 456 245 54%

THIRD PARTY TOTAL

2006 41,650 40,772 2,440 20,421,113 5.98 8,369 501 2007 42,214 42,096 2,397 12,949,368 5.69 5,402 308 2008 42,898 42,620 2,204 16,213,018 5.17 7,356 380 2009 42,453 42,600 2,081 9,594,082 4.89 4,610 225 2010 44,207 43,437 1,885 9,076,163 4.34 4,815 209 TOTAL 213,422 211,526 11,007 68,253,744 5.20 6,201 323

ACCIDENT BENEFITS

2006 41,650 40,772 2,563,005 2,439,311 418 1,723,397 1.03 4,123 60 42 71%2007 42,214 42,096 2,668,680 2,634,484 342 615,024 0.81 1,798 63 15 23%2008 42,898 42,620 2,268,274 2,509,460 317 1,050,489 0.74 3,314 59 25 42%2009 42,453 42,600 2,033,464 2,079,693 314 814,946 0.74 2,595 49 19 39%2010 44,207 43,437 2,073,814 2,056,103 283 761,778 0.65 2,692 47 18 37%TOTAL 213,422 211,526 11,607,237 11,719,051 1,674 4,965,634 0.79 2,966 55 23 42%


2006 41,650 40,772 875,811 836,680 5 2,661,363 0.01 532,273 21 65 318%2007 42,214 42,096 912,042 897,390 2 748 0.00 374 21 0 0%2008 42,898 42,620 934,059 927,037 3 350,000 0.01 116,667 22 8 38%2009 42,453 42,600 920,185 925,096 - - - N/A 22 - 0%2010 44,207 43,437 952,309 940,834 1 30,915 0.00 30,915 22 1 3%TOTAL 213,422 211,526 4,594,406 4,527,038 11 3,043,026 0.01 276,639 21 14 67%


PRIVATE PASSENGER AUTOMOBILETERRITORY 11 - PEACE RIVER AREA


2BV - 12


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 229,679 227,715 93,340,481 89,586,236 15,672 76,775,612 6.88 4,899 393 337 86%2007 234,336 231,931 98,473,870 96,095,769 16,220 80,899,452 6.99 4,988 414 349 84%2008 237,073 236,743 100,855,457 100,439,610 16,366 71,262,563 6.91 4,354 424 301 71%2009 241,555 239,096 102,719,276 101,719,776 16,500 62,909,474 6.90 3,813 425 263 62%2010 245,108 243,297 103,852,491 103,456,141 16,426 46,978,894 6.75 2,860 425 193 45%TOTAL 1,187,751 1,178,782 499,241,575 491,297,532 81,184 338,825,994 6.89 4,174 417 287 69%

THIRD PARTY TOTAL

2006 229,679 227,715 15,672 92,211,259 6.88 5,884 405 2007 234,336 231,931 16,220 98,229,151 6.99 6,056 424 2008 237,073 236,743 16,366 84,622,553 6.91 5,171 357 2009 241,555 239,096 16,500 69,815,194 6.90 4,231 292 2010 245,108 243,297 16,426 49,379,685 6.75 3,006 203 TOTAL 1,187,751 1,178,782 81,184 394,257,842 6.89 4,856 334

ACCIDENT BENEFITS

2006 229,679 227,715 12,236,949 11,820,046 3,600 7,742,675 1.58 2,151 52 34 66%2007 234,336 231,931 12,926,879 12,605,836 3,726 7,783,304 1.61 2,089 54 34 62%2008 237,073 236,743 10,888,553 12,271,266 3,595 6,109,255 1.52 1,699 52 26 50%2009 241,555 239,096 10,018,893 10,082,820 3,475 5,236,301 1.45 1,507 42 22 52%2010 245,108 243,297 10,117,807 10,088,614 3,389 5,195,347 1.39 1,533 41 21 51%TOTAL 1,187,751 1,178,782 56,189,081 56,868,582 17,785 32,066,881 1.51 1,803 48 27 56%


2006 229,679 227,715 4,821,692 4,621,486 18 1,722,820 0.01 95,712 20 8 37%2007 234,336 231,931 5,034,093 4,948,196 6 1,910,060 0.00 318,343 21 8 39%2008 237,073 236,743 5,116,615 5,109,065 2 - 0.00 - 22 - 0%2009 241,555 239,096 5,213,109 5,160,375 5 640,000 0.00 128,000 22 3 12%2010 245,108 243,297 5,278,758 5,251,287 2 515,000 0.00 257,500 22 2 10%TOTAL 1,187,751 1,178,782 25,464,267 25,090,409 33 4,787,880 0.00 145,087 21 4 19%


PRIVATE PASSENGER AUTOMOBILETERRITORY 12 - SOUTHERN VANCOUVER ISLAND AND ALL OTHER ISLANDS OFF THE WEST COAST


2BV - 13


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 231,529 229,102 103,720,905 99,270,507 14,380 78,635,872 6.28 5,468 433 343 79%2007 239,125 235,454 110,879,785 107,604,592 14,944 83,099,815 6.35 5,561 457 353 77%2008 243,468 242,476 111,501,979 112,361,181 14,290 75,552,908 5.89 5,287 463 312 67%2009 247,367 245,090 111,550,120 111,060,986 14,356 66,209,211 5.86 4,612 453 270 60%2010 252,811 250,312 112,827,618 112,428,735 13,590 50,252,184 5.43 3,698 449 201 45%TOTAL 1,214,300 1,202,434 550,480,407 542,726,001 71,560 353,749,991 5.95 4,943 451 294 65%

THIRD PARTY TOTAL

2006 231,529 229,102 14,380 98,461,205 6.28 6,847 430 2007 239,125 235,454 14,944 102,399,894 6.35 6,852 435 2008 243,468 242,476 14,290 93,776,803 5.89 6,562 387 2009 247,367 245,090 14,356 79,497,246 5.86 5,538 324 2010 252,811 250,312 13,590 57,735,802 5.43 4,248 231 TOTAL 1,214,300 1,202,434 71,560 431,870,951 5.95 6,035 359

ACCIDENT BENEFITS

2006 231,529 229,102 13,905,685 13,425,859 3,390 9,112,687 1.48 2,688 59 40 68%2007 239,125 235,454 14,904,438 14,432,275 3,489 8,738,590 1.48 2,505 61 37 61%2008 243,468 242,476 12,363,337 14,068,371 3,310 8,673,964 1.37 2,621 58 36 62%2009 247,367 245,090 11,126,075 11,273,580 3,285 7,955,732 1.34 2,422 46 32 71%2010 252,811 250,312 11,230,503 11,194,275 3,298 6,309,886 1.32 1,913 45 25 56%TOTAL 1,214,300 1,202,434 63,530,038 64,394,360 16,772 40,790,859 1.39 2,432 54 34 63%


2006 231,529 229,102 4,747,515 4,546,616 21 4,733,923 0.01 225,425 20 21 104%2007 239,125 235,454 5,023,510 4,908,844 13 2,907,492 0.01 223,653 21 12 59%2008 243,468 242,476 5,134,741 5,114,664 11 2,171,095 0.00 197,372 21 9 42%2009 247,367 245,090 5,205,635 5,163,735 5 2,190,248 0.00 438,050 21 9 42%2010 252,811 250,312 5,305,697 5,269,433 3 309,000 0.00 103,000 21 1 6%TOTAL 1,214,300 1,202,434 25,417,098 25,003,292 53 12,311,758 0.00 232,297 21 10 49%


PRIVATE PASSENGER AUTOMOBILETERRITORY 13 - MIDDLE VANCOUVER ISLAND/SUNSHINE COAST AREA


2BV - 14


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 30,524 30,158 14,868,075 14,176,200 1,750 10,810,697 5.80 6,178 470 358 76%2007 31,567 31,053 15,896,289 15,415,526 1,816 11,779,355 5.85 6,486 496 379 76%2008 31,820 31,901 16,423,582 16,293,153 1,801 10,003,780 5.65 5,555 511 314 61%2009 31,636 31,597 16,348,473 16,347,073 1,630 9,182,953 5.16 5,634 517 291 56%2010 32,315 31,973 16,617,872 16,518,337 1,588 5,368,012 4.97 3,380 517 168 32%TOTAL 157,862 156,682 80,154,291 78,750,289 8,585 47,144,797 5.48 5,492 503 301 60%

THIRD PARTY TOTAL

2006 30,524 30,158 1,750 16,095,527 5.80 9,197 534 2007 31,567 31,053 1,816 14,322,470 5.85 7,887 461 2008 31,820 31,901 1,801 11,014,168 5.65 6,116 345 2009 31,636 31,597 1,630 10,517,340 5.16 6,452 333 2010 32,315 31,973 1,588 5,403,422 4.97 3,403 169 TOTAL 157,862 156,682 8,585 57,352,927 5.48 6,681 366

ACCIDENT BENEFITS

2006 30,524 30,158 2,194,175 2,108,885 451 1,375,714 1.50 3,050 70 46 65%2007 31,567 31,053 2,345,296 2,275,095 464 1,142,706 1.49 2,463 73 37 50%2008 31,820 31,901 1,981,662 2,223,685 425 1,363,892 1.33 3,209 70 43 61%2009 31,636 31,597 1,785,353 1,812,488 400 1,708,798 1.27 4,272 57 54 94%2010 32,315 31,973 1,816,829 1,804,763 350 619,119 1.09 1,769 56 19 34%TOTAL 157,862 156,682 10,123,315 10,224,916 2,090 6,210,229 1.33 2,971 65 40 61%


2006 30,524 30,158 634,690 605,218 1 3,716 0.00 3,716 20 0 1%2007 31,567 31,053 670,056 655,429 3 1,923 0.01 641 21 0 0%2008 31,820 31,901 673,455 677,401 2 300,000 0.01 150,000 21 9 44%2009 31,636 31,597 665,440 665,904 1 114,000 0.00 114,000 21 4 17%2010 32,315 31,973 677,899 672,847 - - - N/A 21 - 0%TOTAL 157,862 156,682 3,321,540 3,276,798 7 419,639 0.00 59,948 21 3 13%


PRIVATE PASSENGER AUTOMOBILETERRITORY 14 - NORTHERN VANCOUVER ISLAND


2BV - 15


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 142,024 138,872 93,565,836 89,086,029 15,086 86,836,929 10.86 5,756 641 625 97%2007 147,431 145,012 102,757,903 98,886,632 16,204 90,530,931 11.17 5,587 682 624 92%2008 147,455 148,415 108,497,203 106,053,378 15,797 85,747,094 10.64 5,428 715 578 81%2009 150,197 146,793 110,546,014 109,358,303 13,708 67,021,490 9.34 4,889 745 457 61%2010 157,075 155,140 110,422,647 111,177,892 12,342 49,902,451 7.96 4,043 717 322 45%TOTAL 744,181 734,232 525,789,603 514,562,234 73,137 380,038,894 9.96 5,196 701 518 74%

THIRD PARTY TOTAL

2006 142,024 138,872 15,086 91,697,233 10.86 6,078 660 2007 147,431 145,012 16,204 99,925,649 11.17 6,167 689 2008 147,455 148,415 15,797 90,407,682 10.64 5,723 609 2009 150,197 146,793 13,708 71,982,491 9.34 5,251 490 2010 157,075 155,140 12,342 51,411,661 7.96 4,166 331 TOTAL 744,181 734,232 73,137 405,424,715 9.96 5,543 552

ACCIDENT BENEFITS

2006 142,024 138,872 5,465,349 5,221,280 1,659 2,320,777 1.19 1,399 38 17 44%2007 147,431 145,012 5,965,561 5,746,392 1,733 3,256,687 1.20 1,879 40 22 57%2008 147,455 148,415 5,262,161 5,788,424 1,627 2,562,613 1.10 1,575 39 17 44%2009 150,197 146,793 4,829,922 4,836,791 1,567 2,164,035 1.07 1,381 33 15 45%2010 157,075 155,140 4,839,218 4,866,306 1,566 1,383,886 1.01 884 31 9 28%TOTAL 744,181 734,232 26,362,211 26,459,194 8,152 11,687,998 1.11 1,434 36 16 44%


2006 137,826 134,738 1,547,454 1,483,525 3 - 0.00 - 11 - 0%2007 142,944 140,667 1,662,877 1,616,802 5 1,481,965 0.00 296,393 11 11 92%2008 142,715 143,772 1,689,609 1,691,222 2 105,003 0.00 52,502 12 1 6%2009 145,009 141,962 1,679,830 1,677,410 2 422,137 0.00 211,069 12 3 25%2010 152,201 150,169 1,695,757 1,694,087 - - - N/A 11 - 0%TOTAL 720,694 711,307 8,275,527 8,163,046 12 2,009,105 0.00 167,425 11 3 25%


COMMERCIALTERRITORY 01 - LOWER MAINLAND


2BV - 16


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 9,267 8,943 2,071,050 1,927,434 312 2,468,150 3.49 7,911 216 276 128%2007 11,276 10,095 2,367,468 2,210,574 400 2,551,318 3.96 6,378 219 253 115%2008 15,234 13,847 2,736,522 2,598,501 387 1,389,163 2.79 3,590 188 100 53%2009 13,633 15,140 2,530,100 2,705,703 331 3,314,847 2.19 10,015 179 219 123%2010 10,438 10,955 2,325,055 2,350,440 264 892,933 2.41 3,382 215 82 38%TOTAL 59,848 58,979 12,030,195 11,792,652 1,694 10,616,412 2.87 6,267 200 180 90%

THIRD PARTY TOTAL

2006 9,267 8,943 312 4,143,081 3.49 13,279 463 2007 11,276 10,095 400 2,914,188 3.96 7,285 289 2008 15,234 13,847 387 1,389,163 2.79 3,590 100 2009 13,633 15,140 331 3,510,089 2.19 10,604 232 2010 10,438 10,955 264 892,933 2.41 3,382 82 TOTAL 59,848 58,979 1,694 12,849,453 2.87 7,585 218

ACCIDENT BENEFITS

2006 9,267 8,943 220,843 205,994 44 60,890 0.49 1,384 23 7 30%2007 11,276 10,095 244,754 232,738 47 212,977 0.47 4,531 23 21 92%2008 15,234 13,847 229,060 246,111 51 44,819 0.37 879 18 3 18%2009 13,633 15,140 196,236 209,074 45 287,425 0.30 6,387 14 19 137%2010 10,438 10,955 181,930 183,600 42 36,292 0.38 864 17 3 20%TOTAL 59,848 58,979 1,072,823 1,077,518 229 642,402 0.39 2,805 18 11 60%




COMMERCIALTERRITORY 02 - MAPLE RIDGE/PITT MEADOWS


2BV - 17


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 3,564 3,493 1,463,620 1,405,754 180 1,743,072 5.15 9,684 402 499 124%2007 3,903 3,664 1,838,286 1,564,666 210 578,328 5.73 2,754 427 158 37%2008 4,293 4,174 2,629,006 2,452,039 265 3,299,071 6.35 12,449 587 790 135%2009 5,007 4,747 3,112,169 2,812,272 242 938,440 5.10 3,878 592 198 33%2010 4,669 4,739 3,509,774 3,367,690 272 952,012 5.74 3,500 711 201 28%TOTAL 21,435 20,817 12,552,855 11,602,421 1,169 7,510,923 5.62 6,425 557 361 65%

THIRD PARTY TOTAL

2006 3,564 3,493 180 1,743,072 5.15 9,684 499 2007 3,903 3,664 210 578,328 5.73 2,754 158 2008 4,293 4,174 265 3,886,762 6.35 14,667 931 2009 5,007 4,747 242 938,440 5.10 3,878 198 2010 4,669 4,739 272 952,012 5.74 3,500 201 TOTAL 21,435 20,817 1,169 8,098,615 5.62 6,928 389

ACCIDENT BENEFITS

2006 3,564 3,493 134,792 130,849 19 15,781 0.54 831 37 5 12%2007 3,903 3,664 162,219 143,380 17 62,182 0.46 3,658 39 17 43%2008 4,293 4,174 176,681 185,105 20 39,224 0.48 1,961 44 9 21%2009 5,007 4,747 184,378 171,222 19 41,574 0.40 2,188 36 9 24%2010 4,669 4,739 203,538 197,758 10 10,189 0.21 1,019 42 2 5%TOTAL 21,435 20,817 861,608 828,313 85 168,952 0.41 1,988 40 8 20%




COMMERCIALTERRITORY 03 - SQUAMISH WHISTLER AREA


2BV - 18


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 2,296 2,239 423,033 408,668 46 494,474 2.05 10,749 183 221 121%2007 2,378 2,372 452,826 452,527 60 615,666 2.53 10,261 191 260 136%2008 2,442 2,405 441,203 439,171 58 433,189 2.41 7,469 183 180 99%2009 2,974 2,664 492,521 473,010 42 186,893 1.58 4,450 178 70 40%2010 2,474 2,745 476,978 486,010 37 156,737 1.35 4,236 177 57 32%TOTAL 12,564 12,426 2,286,561 2,259,386 243 1,886,959 1.96 7,765 182 152 84%

THIRD PARTY TOTAL

2006 2,296 2,239 46 494,474 2.05 10,749 221 2007 2,378 2,372 60 615,666 2.53 10,261 260 2008 2,442 2,405 58 433,189 2.41 7,469 180 2009 2,974 2,664 42 186,893 1.58 4,450 70 2010 2,474 2,745 37 156,737 1.35 4,236 57 TOTAL 12,564 12,426 243 1,886,959 1.96 7,765 152

ACCIDENT BENEFITS

2006 2,296 2,239 46,020 45,124 7 2,574 0.31 368 20 1 6%2007 2,378 2,372 49,012 49,067 1 - 0.04 - 21 - 0%2008 2,442 2,405 40,137 44,701 4 74,457 0.17 18,614 19 31 167%2009 2,974 2,664 37,896 37,367 4 5,394 0.15 1,348 14 2 14%2010 2,474 2,745 35,262 36,265 3 5,619 0.11 1,873 13 2 15%TOTAL 12,564 12,426 208,327 212,523 19 88,043 0.15 4,634 17 7 41%




COMMERCIALTERRITORY 04 - PEMBERTON AREA/HOPE AREA


2BV - 19


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 36,815 35,860 8,601,810 8,353,050 1,225 7,592,784 3.42 6,198 233 212 91%2007 39,458 38,338 9,708,216 9,170,625 1,286 10,647,202 3.35 8,279 239 278 116%2008 40,747 40,275 10,197,548 10,222,540 1,290 7,900,502 3.20 6,124 254 196 77%2009 40,329 40,329 9,652,193 9,780,738 1,181 6,444,907 2.93 5,457 243 160 66%2010 39,632 40,017 9,570,133 9,701,319 967 5,805,696 2.42 6,004 242 145 60%TOTAL 196,981 194,820 47,729,900 47,228,272 5,949 38,391,091 3.05 6,453 242 197 81%

THIRD PARTY TOTAL

2006 36,815 35,860 1,225 8,123,429 3.42 6,631 227 2007 39,458 38,338 1,286 11,997,428 3.35 9,329 313 2008 40,747 40,275 1,290 8,733,080 3.20 6,770 217 2009 40,329 40,329 1,181 6,877,473 2.93 5,823 171 2010 39,632 40,017 967 5,805,696 2.42 6,004 145 TOTAL 196,981 194,820 5,949 41,537,106 3.05 6,982 213

ACCIDENT BENEFITS

2006 36,815 35,860 787,281 767,354 157 571,085 0.44 3,637 21 16 74%2007 39,458 38,338 857,027 825,014 188 206,373 0.49 1,098 22 5 25%2008 40,747 40,275 745,821 826,511 209 264,455 0.52 1,265 21 7 32%2009 40,329 40,329 648,576 665,121 158 476,433 0.39 3,015 16 12 72%2010 39,632 40,017 645,763 652,574 142 138,343 0.35 974 16 3 21%TOTAL 196,981 194,820 3,684,468 3,736,573 854 1,656,689 0.44 1,940 19 9 44%


2006 36,189 35,225 291,180 284,887 1 1,804,898 0.00 1,804,898 8 51 634%2007 38,785 37,677 305,261 298,336 3 1,275,414 0.01 425,138 8 34 428%2008 40,091 39,612 309,820 311,502 - - - N/A 8 - 0%2009 39,632 39,645 300,719 302,737 2 551,462 0.01 275,731 8 14 182%2010 38,946 39,321 299,369 301,493 - - - N/A 8 - 0%TOTAL 193,643 191,480 1,506,349 1,498,956 6 3,631,774 0.00 605,296 8 19 242%


COMMERCIALTERRITORY 05 - FRASER VALLEY


2BV - 20


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 94,765 92,187 16,143,117 15,428,296 2,206 15,977,362 2.39 7,243 167 173 104%2007 100,873 98,157 17,203,079 16,723,878 2,230 12,651,496 2.27 5,673 170 129 76%2008 102,718 102,424 17,642,005 17,554,745 2,228 15,039,463 2.18 6,750 171 147 86%2009 104,303 103,167 17,776,018 17,708,771 2,011 8,889,348 1.95 4,420 172 86 50%2010 108,357 107,229 18,249,257 18,239,454 1,662 7,485,896 1.55 4,504 170 70 41%TOTAL 511,016 503,165 87,013,476 85,655,144 10,337 60,043,565 2.05 5,809 170 119 70%

THIRD PARTY TOTAL

2006 94,765 92,187 2,206 16,837,494 2.39 7,633 183 2007 100,873 98,157 2,230 13,343,959 2.27 5,984 136 2008 102,718 102,424 2,228 15,117,147 2.18 6,785 148 2009 104,303 103,167 2,011 8,889,348 1.95 4,420 86 2010 108,357 107,229 1,662 9,285,391 1.55 5,587 87 TOTAL 511,016 503,165 10,337 63,473,337 2.05 6,140 126

ACCIDENT BENEFITS

2006 94,765 92,187 1,488,252 1,417,982 280 466,925 0.30 1,668 15 5 33%2007 100,873 98,157 1,577,397 1,536,922 285 372,923 0.29 1,309 16 4 24%2008 102,718 102,424 1,316,251 1,482,544 290 539,234 0.28 1,859 14 5 36%2009 104,303 103,167 1,192,776 1,209,855 256 364,190 0.25 1,423 12 4 30%2010 108,357 107,229 1,215,626 1,219,005 244 426,849 0.23 1,749 11 4 35%TOTAL 511,016 503,165 6,790,302 6,866,308 1,355 2,170,121 0.27 1,602 14 4 32%




COMMERCIALTERRITORY 06 - THOMPSON OKANAGAN AREA


2BV - 21


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 32,515 31,698 4,368,987 4,192,749 425 3,968,557 1.34 9,338 132 125 95%2007 34,452 33,391 4,676,914 4,531,161 419 3,190,255 1.25 7,614 136 96 70%2008 35,660 35,226 4,848,838 4,777,956 473 3,074,480 1.34 6,500 136 87 64%2009 36,402 35,978 4,676,769 4,700,580 400 1,665,518 1.11 4,164 131 46 35%2010 37,398 37,186 4,738,580 4,756,971 347 1,118,361 0.93 3,223 128 30 24%TOTAL 176,428 173,478 23,310,088 22,959,417 2,064 13,017,171 1.19 6,307 132 75 57%

THIRD PARTY TOTAL

2006 32,515 31,698 425 4,785,315 1.34 11,260 151 2007 34,452 33,391 419 3,471,473 1.25 8,285 104 2008 35,660 35,226 473 3,154,915 1.34 6,670 90 2009 36,402 35,978 400 1,665,518 1.11 4,164 46 2010 37,398 37,186 347 1,118,361 0.93 3,223 30 TOTAL 176,428 173,478 2,064 14,195,581 1.19 6,878 82

ACCIDENT BENEFITS

2006 32,515 31,698 497,153 472,858 36 44,654 0.11 1,240 15 1 9%2007 34,452 33,391 526,003 510,542 33 21,643 0.10 656 15 1 4%2008 35,660 35,226 440,476 492,043 53 77,116 0.15 1,455 14 2 16%2009 36,402 35,978 389,386 395,443 30 94,565 0.08 3,152 11 3 24%2010 37,398 37,186 389,537 392,707 28 16,167 0.08 577 11 0 4%TOTAL 176,428 173,478 2,242,555 2,263,593 180 254,145 0.10 1,412 13 1 11%


2006 31,971 31,153 243,690 235,875 - - - N/A 8 - 0%2007 33,891 32,843 254,958 248,888 1 - 0.00 - 8 - 0%2008 35,080 34,655 258,142 257,939 - - - N/A 7 - 0%2009 35,857 35,421 255,182 254,481 - - - N/A 7 - 0%2010 36,851 36,633 255,889 256,727 - - - N/A 7 - 0%TOTAL 173,651 170,704 1,267,861 1,253,910 1 - 0.00 - 7 - 0%


COMMERCIALTERRITORY 07 - KOOTENAYS


2BV - 22


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 14,424 14,152 2,857,523 2,785,700 204 1,262,838 1.44 6,190 197 89 45%2007 15,252 14,773 2,905,649 2,844,008 215 1,286,725 1.46 5,985 193 87 45%2008 15,169 15,178 2,779,333 2,797,647 187 1,343,535 1.23 7,185 184 89 48%2009 15,278 15,130 2,780,846 2,718,720 181 1,174,313 1.20 6,488 180 78 43%2010 15,521 15,521 2,831,360 2,846,972 166 1,297,754 1.07 7,818 183 84 46%TOTAL 75,643 74,754 14,154,711 13,993,047 953 6,365,166 1.27 6,679 187 85 45%

THIRD PARTY TOTAL

2006 14,424 14,152 204 1,927,244 1.44 9,447 136 2007 15,252 14,773 215 2,574,798 1.46 11,976 174 2008 15,169 15,178 187 1,343,535 1.23 7,185 89 2009 15,278 15,130 181 1,174,313 1.20 6,488 78 2010 15,521 15,521 166 1,297,754 1.07 7,818 84 TOTAL 75,643 74,754 953 8,317,644 1.27 8,728 111

ACCIDENT BENEFITS

2006 14,424 14,152 311,554 306,350 24 13,945 0.17 581 22 1 5%2007 15,252 14,773 316,640 310,933 19 86,048 0.13 4,529 21 6 28%2008 15,169 15,178 245,584 279,208 18 9,667 0.12 537 18 1 3%2009 15,278 15,130 220,865 219,748 24 99,516 0.16 4,146 15 7 45%2010 15,521 15,521 224,249 225,607 15 7,546 0.10 503 15 0 3%TOTAL 75,643 74,754 1,318,892 1,341,846 100 216,722 0.13 2,167 18 3 16%


2006 14,254 13,973 107,084 105,073 - - - N/A 8 - 0%2007 15,074 14,593 110,585 108,134 - - - N/A 7 - 0%2008 15,001 15,001 107,327 108,491 - - - N/A 7 - 0%2009 15,092 14,969 106,484 105,666 1 577,034 0.01 577,034 7 39 546%2010 15,354 15,354 108,579 108,250 - - - N/A 7 - 0%TOTAL 74,775 73,890 540,059 535,613 1 577,034 0.00 577,034 7 8 108%


COMMERCIALTERRITORY 08 - CARIBOO AREA


2BV - 23


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 32,617 32,189 6,344,667 6,196,220 654 3,512,141 2.03 5,370 192 109 57%2007 33,485 32,963 6,517,931 6,441,070 628 3,485,907 1.91 5,551 195 106 54%2008 33,405 33,545 6,098,862 6,351,905 567 3,388,813 1.69 5,977 189 101 53%2009 33,031 33,218 5,779,751 5,877,438 476 1,859,964 1.43 3,907 177 56 32%2010 34,271 33,927 5,871,068 5,835,268 389 1,490,482 1.15 3,832 172 44 26%TOTAL 166,808 165,842 30,612,279 30,701,901 2,714 13,737,307 1.64 5,062 185 83 45%

THIRD PARTY TOTAL

2006 32,617 32,189 654 3,866,927 2.03 5,913 120 2007 33,485 32,963 628 4,052,675 1.91 6,453 123 2008 33,405 33,545 567 3,417,169 1.69 6,027 102 2009 33,031 33,218 476 2,146,960 1.43 4,510 65 2010 34,271 33,927 389 1,490,482 1.15 3,832 44 TOTAL 166,808 165,842 2,714 14,974,212 1.64 5,517 90

ACCIDENT BENEFITS

2006 32,617 32,189 582,201 565,450 82 144,349 0.25 1,760 18 4 26%2007 33,485 32,963 594,724 589,006 81 239,798 0.25 2,960 18 7 41%2008 33,405 33,545 455,919 528,810 69 276,839 0.21 4,012 16 8 52%2009 33,031 33,218 397,116 407,967 64 24,741 0.19 387 12 1 6%2010 34,271 33,927 401,755 400,364 42 58,144 0.12 1,384 12 2 15%TOTAL 166,808 165,842 2,431,715 2,491,597 338 743,872 0.20 2,201 15 4 30%




COMMERCIALTERRITORY 09 - PRINCE GEORGE AREA


2BV - 24


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 10,268 10,110 1,711,811 1,638,927 154 1,657,788 1.52 10,765 162 164 101%2007 10,794 10,495 1,861,103 1,807,612 170 789,536 1.62 4,644 172 75 44%2008 10,952 10,995 1,782,660 1,830,022 147 641,254 1.34 4,362 166 58 35%2009 11,239 11,126 1,827,164 1,810,650 149 447,928 1.34 3,006 163 40 25%2010 11,619 11,505 1,937,184 1,915,926 137 328,731 1.19 2,399 167 29 17%TOTAL 54,871 54,231 9,119,922 9,003,137 757 3,865,236 1.40 5,106 166 71 43%

THIRD PARTY TOTAL

2006 10,268 10,110 154 2,391,003 1.52 15,526 237 2007 10,794 10,495 170 789,536 1.62 4,644 75 2008 10,952 10,995 147 641,254 1.34 4,362 58 2009 11,239 11,126 149 447,928 1.34 3,006 40 2010 11,619 11,505 137 328,731 1.19 2,399 29 TOTAL 54,871 54,231 757 4,598,451 1.40 6,075 85

ACCIDENT BENEFITS

2006 10,268 10,110 186,531 177,929 15 18,110 0.15 1,207 18 2 10%2007 10,794 10,495 202,099 196,402 16 978 0.15 61 19 0 0%2008 10,952 10,995 158,269 183,034 19 42,050 0.17 2,213 17 4 23%2009 11,239 11,126 147,057 148,067 15 3,034 0.13 202 13 0 2%2010 11,619 11,505 154,031 152,620 13 5,250 0.11 404 13 0 3%TOTAL 54,871 54,231 847,987 858,052 78 69,422 0.14 890 16 1 8%




COMMERCIALTERRITORY 10 - NORTHERN COAST


2BV - 25


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 22,400 21,786 4,799,864 4,645,181 403 3,709,946 1.85 9,206 213 170 80%2007 23,328 22,985 4,905,966 4,899,104 372 1,964,498 1.62 5,281 213 85 40%2008 23,883 23,670 5,048,011 5,011,608 324 3,480,139 1.37 10,741 212 147 69%2009 23,796 23,816 4,951,110 4,951,886 263 929,411 1.10 3,534 208 39 19%2010 25,147 24,607 5,297,176 5,196,205 235 867,130 0.96 3,690 211 35 17%TOTAL 118,553 116,864 25,002,127 24,703,983 1,597 10,951,124 1.37 6,857 211 94 44%

THIRD PARTY TOTAL

2006 22,400 21,786 403 3,709,946 1.85 9,206 170 2007 23,328 22,985 372 1,964,498 1.62 5,281 85 2008 23,883 23,670 324 3,480,139 1.37 10,741 147 2009 23,796 23,816 263 929,411 1.10 3,534 39 2010 25,147 24,607 235 867,130 0.96 3,690 35 TOTAL 118,553 116,864 1,597 10,951,124 1.37 6,857 94

ACCIDENT BENEFITS

2006 22,400 21,786 456,002 441,801 27 161,326 0.12 5,975 20 7 37%2007 23,328 22,985 469,626 467,214 23 8,137 0.10 354 20 0 2%2008 23,883 23,670 392,278 438,818 24 95,752 0.10 3,990 19 4 22%2009 23,796 23,816 349,438 355,366 18 589,846 0.08 32,769 15 25 166%2010 25,147 24,607 371,395 364,374 19 9,510 0.08 501 15 0 3%TOTAL 118,553 116,864 2,038,739 2,067,573 111 864,571 0.09 7,789 18 7 42%




COMMERCIALTERRITORY 11 - PEACE RIVER AREA


2BV - 26


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 39,478 39,027 9,765,964 9,487,968 1,834 10,805,000 4.70 5,891 243 277 114%2007 41,289 40,392 10,675,560 10,239,045 1,850 8,629,878 4.58 4,665 253 214 84%2008 42,076 41,956 11,626,277 11,190,641 1,849 9,539,155 4.41 5,159 267 227 85%2009 43,160 42,572 11,992,229 11,899,235 1,719 7,071,762 4.04 4,114 280 166 59%2010 44,449 43,890 12,260,018 12,165,905 1,659 5,662,890 3.78 3,413 277 129 47%TOTAL 210,451 207,838 56,320,048 54,982,794 8,911 41,708,685 4.29 4,681 265 201 76%

THIRD PARTY TOTAL

2006 39,478 39,027 1,834 11,830,498 4.70 6,451 303 2007 41,289 40,392 1,850 8,798,237 4.58 4,756 218 2008 42,076 41,956 1,849 10,040,098 4.41 5,430 239 2009 43,160 42,572 1,719 7,257,262 4.04 4,222 170 2010 44,449 43,890 1,659 5,662,890 3.78 3,413 129 TOTAL 210,451 207,838 8,911 43,588,985 4.29 4,892 210

ACCIDENT BENEFITS

2006 39,478 39,027 825,649 796,551 188 224,007 0.48 1,192 20 6 28%2007 41,289 40,392 894,932 862,991 215 298,737 0.53 1,389 21 7 35%2008 42,076 41,956 782,925 860,410 209 421,333 0.50 2,016 21 10 49%2009 43,160 42,572 728,167 734,425 211 558,392 0.50 2,646 17 13 76%2010 44,449 43,890 743,102 738,368 207 182,350 0.47 881 17 4 25%TOTAL 210,451 207,838 3,974,775 3,992,745 1,030 1,684,819 0.50 1,636 19 8 42%


2006 38,500 38,041 375,660 369,882 - - - N/A 10 - 0%2007 40,276 39,377 397,903 388,250 1 56,000 0.00 56,000 10 1 14%2008 41,059 40,923 407,203 405,821 - - - N/A 10 - 0%2009 42,099 41,532 409,802 407,672 - - - N/A 10 - 0%2010 43,411 42,835 414,121 412,640 - - - N/A 10 - 0%TOTAL 205,345 202,708 2,004,689 1,984,266 1 56,000 0.00 56,000 10 0 3%


COMMERCIALTERRITORY 12 - SOUTHERN VANCOUVER ISLAND AND ALL OTHER ISLANDS OFF THE WEST COAST


2BV - 27


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 57,903 56,528 9,926,095 9,571,734 1,371 8,622,225 2.43 6,289 169 153 90%2007 60,681 59,252 10,569,724 10,314,962 1,376 7,795,549 2.32 5,665 174 132 76%2008 61,799 61,695 10,802,475 10,804,853 1,301 8,004,420 2.11 6,153 175 130 74%2009 62,868 62,109 10,576,340 10,599,224 1,110 6,706,138 1.79 6,042 171 108 63%2010 64,134 63,674 10,754,219 10,769,064 1,018 3,790,874 1.60 3,724 169 60 35%TOTAL 307,384 303,259 52,628,853 52,059,837 6,176 34,919,207 2.04 5,654 172 115 67%

THIRD PARTY TOTAL

2006 57,903 56,528 1,371 8,849,217 2.43 6,455 157 2007 60,681 59,252 1,376 9,273,620 2.32 6,740 157 2008 61,799 61,695 1,301 8,821,047 2.11 6,780 143 2009 62,868 62,109 1,110 6,706,138 1.79 6,042 108 2010 64,134 63,674 1,018 3,790,874 1.60 3,724 60 TOTAL 307,384 303,259 6,176 37,440,897 2.04 6,062 123

ACCIDENT BENEFITS

2006 57,903 56,528 1,091,432 1,057,398 158 239,405 0.28 1,515 19 4 23%2007 60,681 59,252 1,147,149 1,125,640 150 462,110 0.25 3,081 19 8 41%2008 61,799 61,695 955,961 1,080,489 152 301,617 0.25 1,984 18 5 28%2009 62,868 62,109 840,890 856,916 136 386,662 0.22 2,843 14 6 45%2010 64,134 63,674 847,455 850,085 140 178,645 0.22 1,276 13 3 21%TOTAL 307,384 303,259 4,882,887 4,970,527 736 1,568,439 0.24 2,131 16 5 32%


2006 57,014 55,627 433,676 421,280 - - - N/A 8 - 0%2007 59,711 58,289 447,054 442,518 1 346,000 0.00 346,000 8 6 78%2008 60,895 60,769 444,124 449,600 - - - N/A 7 - 0%2009 61,972 61,189 433,881 434,280 - - - N/A 7 - 0%2010 63,243 62,769 434,270 435,690 - - - N/A 7 - 0%TOTAL 302,835 298,643 2,193,005 2,183,368 1 346,000 0.00 346,000 7 1 16%


COMMERCIALTERRITORY 13 - MIDDLE VANCOUVER ISLAND/SUNSHINE COAST AREA


2BV - 28


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 10,921 10,676 2,092,036 2,032,805 180 1,389,731 1.69 7,721 190 130 68%2007 11,362 11,216 2,135,377 2,112,794 167 1,923,884 1.49 11,520 188 172 91%2008 11,071 11,270 1,898,338 2,014,845 163 1,286,521 1.45 7,893 179 114 64%2009 10,528 10,764 1,619,987 1,722,161 121 635,052 1.12 5,248 160 59 37%2010 10,558 10,562 1,617,305 1,641,557 104 371,213 0.98 3,569 155 35 23%TOTAL 54,441 54,488 9,363,043 9,524,162 735 5,606,400 1.35 7,628 175 103 59%

THIRD PARTY TOTAL

2006 10,921 10,676 180 1,389,731 1.69 7,721 130 2007 11,362 11,216 167 1,923,884 1.49 11,520 172 2008 11,071 11,270 163 1,286,521 1.45 7,893 114 2009 10,528 10,764 121 635,052 1.12 5,248 59 2010 10,558 10,562 104 371,213 0.98 3,569 35 TOTAL 54,441 54,488 735 5,606,400 1.35 7,628 103

ACCIDENT BENEFITS

2006 10,921 10,676 244,217 237,101 19 4,089 0.18 215 22 0 2%2007 11,362 11,216 246,262 245,458 21 51,446 0.19 2,450 22 5 21%2008 11,071 11,270 179,414 217,355 19 11,609 0.17 611 19 1 5%2009 10,528 10,764 137,667 150,432 15 4,797 0.14 320 14 0 3%2010 10,558 10,562 137,422 139,250 11 12,814 0.10 1,165 13 1 9%TOTAL 54,441 54,488 944,982 989,596 85 84,755 0.16 997 18 2 9%


2006 10,695 10,451 81,695 79,641 - - - N/A 8 - 0%2007 11,134 11,001 81,917 82,293 1 1,696 0.01 1,696 7 0 2%2008 10,871 11,052 74,517 78,517 - - - N/A 7 - 0%2009 10,327 10,562 63,934 68,802 - - - N/A 7 - 0%2010 10,359 10,357 62,816 63,596 - - - N/A 6 - 0%TOTAL 53,386 53,422 364,879 372,850 1 1,696 0.00 1,696 7 0 0%


COMMERCIALTERRITORY 14 - NORTHERN VANCOUVER ISLAND


2BV - 29


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 16,213 15,904 6,249,231 6,082,604 738 3,661,915 4.64 4,962 382 230 60%2007 16,560 16,630 6,525,432 6,540,114 678 4,666,675 4.08 6,883 393 281 71%2008 18,194 17,906 7,359,957 7,247,503 715 4,683,063 3.99 6,550 405 262 65%2009 18,651 18,795 7,769,589 7,800,870 748 3,619,881 3.98 4,839 415 193 46%2010 19,409 19,230 8,048,834 7,992,147 682 2,688,888 3.55 3,943 416 140 34%TOTAL 89,027 88,464 35,953,043 35,663,237 3,561 19,320,423 4.03 5,426 403 218 54%

THIRD PARTY TOTAL

2006 16,213 15,904 738 3,974,043 4.64 5,385 250 2007 16,560 16,630 678 4,723,146 4.08 6,966 284 2008 18,194 17,906 715 7,567,760 3.99 10,584 423 2009 18,651 18,795 748 4,112,118 3.98 5,497 219 2010 19,409 19,230 682 2,689,168 3.55 3,943 140 TOTAL 89,027 88,464 3,561 23,066,236 4.03 6,477 261

ACCIDENT BENEFITS

2006 16,213 15,904 3,403,126 3,314,821 580 3,616,119 3.65 6,235 208 227 109%2007 16,560 16,630 3,544,233 3,552,799 525 3,928,914 3.16 7,484 214 236 111%2008 18,194 17,906 3,420,656 3,492,075 547 4,802,852 3.05 8,780 195 268 138%2009 18,651 18,795 3,111,637 3,156,192 573 3,457,042 3.05 6,033 168 184 110%2010 19,409 19,230 3,220,224 3,196,361 498 2,789,905 2.59 5,602 166 145 87%TOTAL 89,027 88,464 16,699,876 16,712,249 2,723 18,594,832 3.08 6,829 189 210 111%


2006 16,213 15,904 355,405 343,809 2 33,000 0.01 16,500 22 2 10%2007 16,560 16,630 371,525 372,269 9 1,170,000 0.05 130,000 22 70 314%2008 18,194 17,906 414,611 407,481 6 803,267 0.03 133,878 23 45 197%2009 18,651 18,795 424,208 427,906 2 367,568 0.01 183,784 23 20 86%2010 19,409 19,230 440,403 436,475 - - - N/A 23 - 0%TOTAL 89,027 88,464 2,006,152 1,987,941 19 2,373,835 0.02 124,939 22 27 119%


MOTORCYCLETERRITORY 01 - LOWER MAINLAND


2BV - 30


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 1,163 1,158 545,302 534,332 34 431,686 2.94 12,697 461 373 81%2007 1,218 1,206 581,884 573,656 18 120,199 1.49 6,678 476 100 21%2008 1,324 1,316 663,036 654,881 35 403,565 2.66 11,530 498 307 62%2009 1,304 1,340 685,835 703,600 51 145,761 3.81 2,858 525 109 21%2010 1,275 1,277 673,375 676,420 48 157,499 3.76 3,281 530 123 23%TOTAL 6,284 6,297 3,149,432 3,142,889 186 1,258,710 2.95 6,767 499 200 40%

THIRD PARTY TOTAL

2006 1,163 1,158 34 661,441 2.94 19,454 571 2007 1,218 1,206 18 120,199 1.49 6,678 100 2008 1,324 1,316 35 403,565 2.66 11,530 307 2009 1,304 1,340 51 145,761 3.81 2,858 109 2010 1,275 1,277 48 157,499 3.76 3,281 123 TOTAL 6,284 6,297 186 1,488,464 2.95 8,002 236

ACCIDENT BENEFITS

2006 1,163 1,158 244,366 240,140 38 531,745 3.28 13,993 207 459 221%2007 1,218 1,206 260,633 256,988 19 437,160 1.58 23,008 213 363 170%2008 1,324 1,316 254,899 259,291 40 336,744 3.04 8,419 197 256 130%2009 1,304 1,340 225,710 233,996 44 268,291 3.28 6,098 175 200 115%2010 1,275 1,277 222,068 222,600 39 336,671 3.05 8,633 174 264 151%TOTAL 6,284 6,297 1,207,676 1,213,015 180 1,910,611 2.86 10,615 193 303 158%


2006 1,163 1,158 24,614 24,250 1 436,864 0.09 436,864 21 377 1802%2007 1,218 1,206 26,461 26,112 1 105,846 0.08 105,846 22 88 405%2008 1,324 1,316 29,314 29,044 - - - N/A 22 - 0%2009 1,304 1,340 28,747 29,650 - - - N/A 22 - 0%2010 1,275 1,277 28,064 28,109 - - - N/A 22 - 0%TOTAL 6,284 6,297 137,200 137,165 2 542,710 0.03 271,355 22 86 396%


MOTORCYCLETERRITORY 02 - MAPLE RIDGE/PITT MEADOWS


2BV - 31


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 372 374 159,057 158,610 8 1,997 2.14 250 425 5 1%2007 397 392 171,792 169,743 7 13,701 1.79 1,957 434 35 8%2008 412 414 176,896 180,998 12 127,822 2.90 10,652 437 309 71%2009 453 452 200,411 198,378 3 14,065 0.66 4,688 439 31 7%2010 473 468 210,791 209,203 6 1,334 1.28 222 447 3 1%TOTAL 2,107 2,100 918,947 916,932 36 158,918 1.71 4,414 437 76 17%

THIRD PARTY TOTAL

2006 372 374 8 1,997 2.14 250 5 2007 397 392 7 13,701 1.79 1,957 35 2008 412 414 12 127,822 2.90 10,652 309 2009 453 452 3 14,065 0.66 4,688 31 2010 473 468 6 1,334 1.28 222 3 TOTAL 2,107 2,100 36 158,918 1.71 4,414 76

ACCIDENT BENEFITS

2006 372 374 73,757 73,504 6 32,776 1.61 5,463 197 88 45%2007 397 392 79,533 78,658 4 8,496 1.02 2,124 201 22 11%2008 412 414 69,322 72,642 9 226,159 2.17 25,129 175 546 311%2009 453 452 69,083 68,699 3 5,826 0.66 1,942 152 13 8%2010 473 468 72,469 71,879 4 856 0.85 214 154 2 1%TOTAL 2,107 2,100 364,164 365,383 26 274,113 1.24 10,543 174 131 75%




MOTORCYCLETERRITORY 03 - SQUAMISH WHISTLER AREA


2BV - 32


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 123 119 44,280 43,241 1 1,445 0.84 1,445 362 12 3%2007 139 141 53,923 53,971 1 80,558 0.71 80,558 384 573 149%2008 156 157 59,516 60,033 3 - 1.91 - 382 - 0%2009 155 159 63,115 64,054 4 242,206 2.52 60,551 404 1,527 378%2010 153 148 63,956 62,313 4 428 2.70 107 421 3 1%TOTAL 726 724 284,790 283,612 13 324,636 1.80 24,972 392 448 114%

THIRD PARTY TOTAL

2006 123 119 1 1,445 0.84 1,445 12 2007 139 141 1 80,558 0.71 80,558 573 2008 156 157 3 - 1.91 - - 2009 155 159 4 242,206 2.52 60,551 1,527 2010 153 148 4 428 2.70 107 3 TOTAL 726 724 13 324,636 1.80 24,972 448

ACCIDENT BENEFITS

2006 123 119 21,054 20,510 - - - N/A 172 - 0%2007 139 141 25,368 25,481 3 6,161 2.13 2,054 181 44 24%2008 156 157 23,700 24,333 3 75,058 1.91 25,019 155 478 308%2009 155 159 21,829 22,199 3 133,530 1.89 44,510 140 842 602%2010 153 148 21,826 21,303 4 42,179 2.70 10,545 144 285 198%TOTAL 726 724 113,777 113,827 13 256,928 1.80 19,764 157 355 226%


2006 123 119 2,564 2,482 - - - N/A 21 - 0%2007 139 141 2,942 3,008 - - - N/A 21 - 0%2008 156 157 3,422 3,393 - - - N/A 22 - 0%2009 155 159 3,380 3,470 1 220,000 0.63 220,000 22 1,387 6341%2010 153 148 3,372 3,262 - - - N/A 22 - 0%TOTAL 726 724 15,680 15,614 1 220,000 0.14 220,000 22 304 1409%


MOTORCYCLETERRITORY 04 - PEMBERTON AREA/HOPE AREA


2BV - 33


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 2,994 2,951 1,354,435 1,323,360 74 508,160 2.51 6,867 449 172 38%2007 3,232 3,202 1,505,589 1,491,239 65 470,365 2.03 7,236 466 147 32%2008 3,575 3,524 1,708,025 1,687,014 66 504,634 1.87 7,646 479 143 30%2009 3,620 3,693 1,796,314 1,818,115 101 312,072 2.73 3,090 492 84 17%2010 3,690 3,666 1,846,798 1,831,864 78 697,269 2.13 8,939 500 190 38%TOTAL 17,111 17,036 8,211,161 8,151,591 384 2,492,500 2.25 6,491 478 146 31%

THIRD PARTY TOTAL

2006 2,994 2,951 74 508,160 2.51 6,867 172 2007 3,232 3,202 65 662,424 2.03 10,191 207 2008 3,575 3,524 66 745,514 1.87 11,296 212 2009 3,620 3,693 101 312,072 2.73 3,090 84 2010 3,690 3,666 78 697,269 2.13 8,939 190 TOTAL 17,111 17,036 384 2,925,439 2.25 7,618 172

ACCIDENT BENEFITS

2006 2,994 2,951 581,547 568,930 63 582,432 2.14 9,245 193 197 102%2007 3,232 3,202 646,650 640,204 73 617,197 2.28 8,455 200 193 96%2008 3,575 3,524 628,742 638,172 81 876,053 2.30 10,815 181 249 137%2009 3,620 3,693 571,575 583,578 78 708,380 2.11 9,082 158 192 121%2010 3,690 3,666 584,660 580,686 66 548,964 1.80 8,318 158 150 95%TOTAL 17,111 17,036 3,013,174 3,011,570 361 3,333,026 2.12 9,233 177 196 111%


2006 2,994 2,951 63,018 61,513 1 - 0.03 - 21 - 0%2007 3,232 3,202 70,419 69,485 1 - 0.03 - 22 - 0%2008 3,575 3,524 79,232 77,932 1 616,000 0.03 616,000 22 175 790%2009 3,620 3,693 79,945 81,859 1 - 0.03 - 22 - 0%2010 3,690 3,666 81,210 80,773 2 25,000 0.05 12,500 22 7 31%TOTAL 17,111 17,036 373,824 371,561 6 641,000 0.04 106,833 22 38 173%


MOTORCYCLETERRITORY 05 - FRASER VALLEY


2BV - 34


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 6,329 6,273 2,640,093 2,609,820 152 1,177,796 2.42 7,749 416 188 45%2007 7,085 7,086 3,060,826 3,046,876 141 1,980,430 1.99 14,046 430 279 65%2008 8,407 8,346 3,750,621 3,728,878 191 1,625,183 2.29 8,509 447 195 44%2009 8,393 8,447 3,884,106 3,889,938 191 1,108,523 2.26 5,804 460 131 28%2010 8,841 8,784 4,110,860 4,088,524 150 871,934 1.71 5,813 465 99 21%TOTAL 39,056 38,936 17,446,506 17,364,035 825 6,763,866 2.12 8,199 446 174 39%

THIRD PARTY TOTAL

2006 6,329 6,273 152 1,520,146 2.42 10,001 242 2007 7,085 7,086 141 2,458,583 1.99 17,437 347 2008 8,407 8,346 191 1,858,928 2.29 9,733 223 2009 8,393 8,447 191 1,443,869 2.26 7,560 171 2010 8,841 8,784 150 1,011,934 1.71 6,746 115 TOTAL 39,056 38,936 825 8,293,461 2.12 10,053 213

ACCIDENT BENEFITS

2006 6,329 6,273 1,212,372 1,199,177 153 863,661 2.44 5,645 191 138 72%2007 7,085 7,086 1,402,536 1,396,588 137 824,434 1.93 6,018 197 116 59%2008 8,407 8,346 1,512,282 1,518,259 213 2,716,641 2.55 12,754 182 326 179%2009 8,393 8,447 1,306,850 1,315,472 203 1,923,819 2.40 9,477 156 228 146%2010 8,841 8,784 1,377,654 1,370,105 176 1,949,347 2.00 11,076 156 222 142%TOTAL 39,056 38,936 6,811,694 6,799,601 882 8,277,903 2.27 9,385 175 213 122%


2006 6,329 6,273 133,967 132,262 - - - N/A 21 - 0%2007 7,085 7,086 153,866 153,746 5 1,599,445 0.07 319,889 22 226 1040%2008 8,407 8,346 188,492 187,027 4 1,161,717 0.05 290,429 22 139 621%2009 8,393 8,447 187,908 189,005 4 247,500 0.05 61,875 22 29 131%2010 8,841 8,784 195,763 194,820 1 750,000 0.01 750,000 22 85 385%TOTAL 39,056 38,936 859,996 856,860 14 3,758,662 0.04 268,476 22 97 439%


MOTORCYCLETERRITORY 06 - THOMPSON OKANAGAN AREA


2BV - 35


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 1,837 1,824 709,059 705,356 30 31,942 1.64 1,065 387 18 5%2007 2,010 2,022 808,767 811,424 30 820,288 1.48 27,343 401 406 101%2008 2,246 2,236 938,301 931,913 20 30,392 0.89 1,520 417 14 3%2009 2,358 2,342 1,009,181 1,003,059 31 35,517 1.32 1,146 428 15 4%2010 2,450 2,444 1,054,614 1,052,581 23 152,389 0.94 6,626 431 62 14%TOTAL 10,901 10,868 4,519,922 4,504,333 134 1,070,529 1.23 7,989 414 99 24%

THIRD PARTY TOTAL

2006 1,837 1,824 30 31,942 1.64 1,065 18 2007 2,010 2,022 30 1,714,861 1.48 57,162 848 2008 2,246 2,236 20 30,392 0.89 1,520 14 2009 2,358 2,342 31 35,517 1.32 1,146 15 2010 2,450 2,444 23 152,389 0.94 6,626 62 TOTAL 10,901 10,868 134 1,965,101 1.23 14,665 181

ACCIDENT BENEFITS

2006 1,837 1,824 321,236 319,601 34 327,992 1.86 9,647 175 180 103%2007 2,010 2,022 365,108 366,300 38 767,528 1.88 20,198 181 380 210%2008 2,246 2,236 359,367 358,594 27 521,770 1.21 19,325 160 233 146%2009 2,358 2,342 334,857 333,525 40 661,656 1.71 16,541 142 283 198%2010 2,450 2,444 348,333 347,768 34 445,587 1.39 13,106 142 182 128%TOTAL 10,901 10,868 1,728,901 1,725,788 173 2,724,533 1.59 15,749 159 251 158%


2006 1,837 1,824 38,963 38,622 - - - N/A 21 - 0%2007 2,010 2,022 43,845 44,083 - - - N/A 22 - 0%2008 2,246 2,236 50,146 49,946 - - - N/A 22 - 0%2009 2,358 2,342 52,527 52,152 - - - N/A 22 - 0%2010 2,450 2,444 53,929 53,878 1 575,000 0.04 575,000 22 235 1067%TOTAL 10,901 10,868 239,410 238,681 1 575,000 0.01 575,000 22 53 241%


MOTORCYCLETERRITORY 07 - KOOTENAYS


2BV - 36


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 401 398 179,505 177,956 6 17,036 1.51 2,839 447 43 10%2007 415 413 193,421 191,982 7 3,231 1.70 462 465 8 2%2008 471 477 223,924 225,507 7 38,347 1.47 5,478 473 80 17%2009 486 481 235,207 232,740 5 5,021 1.04 1,004 484 10 2%2010 526 518 256,056 252,854 6 53,404 1.16 8,901 488 103 21%TOTAL 2,300 2,287 1,088,113 1,081,039 31 117,039 1.36 3,775 473 51 11%

THIRD PARTY TOTAL

2006 401 398 6 17,036 1.51 2,839 43 2007 415 413 7 3,231 1.70 462 8 2008 471 477 7 38,347 1.47 5,478 80 2009 486 481 5 5,021 1.04 1,004 10 2010 526 518 6 53,404 1.16 8,901 103 TOTAL 2,300 2,287 31 117,039 1.36 3,775 51

ACCIDENT BENEFITS

2006 401 398 74,670 74,036 7 15,637 1.76 2,234 186 39 21%2007 415 413 80,343 79,741 10 126,735 2.42 12,674 193 307 159%2008 471 477 78,487 79,627 5 6,623 1.05 1,325 167 14 8%2009 486 481 71,928 71,340 7 26,171 1.46 3,739 148 54 37%2010 526 518 78,086 77,150 8 125,020 1.54 15,627 149 241 162%TOTAL 2,300 2,287 383,514 381,895 37 300,187 1.62 8,113 167 131 79%




MOTORCYCLETERRITORY 08 - CARIBOO AREA


2BV - 37


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 1,139 1,142 479,810 480,009 26 221,740 2.28 8,528 420 194 46%2007 1,204 1,203 523,474 522,210 20 149,040 1.66 7,452 434 124 29%2008 1,404 1,399 631,094 629,377 23 403,038 1.64 17,523 450 288 64%2009 1,477 1,477 671,714 673,355 23 239,154 1.56 10,398 456 162 36%2010 1,591 1,589 727,570 725,745 22 49,254 1.38 2,239 457 31 7%TOTAL 6,816 6,811 3,033,662 3,030,696 114 1,062,225 1.67 9,318 445 156 35%

THIRD PARTY TOTAL

2006 1,139 1,142 26 221,740 2.28 8,528 194 2007 1,204 1,203 20 149,040 1.66 7,452 124 2008 1,404 1,399 23 403,038 1.64 17,523 288 2009 1,477 1,477 23 502,954 1.56 21,868 341 2010 1,591 1,589 22 49,254 1.38 2,239 31 TOTAL 6,816 6,811 114 1,326,026 1.67 11,632 195

ACCIDENT BENEFITS

2006 1,139 1,142 236,762 237,018 26 132,634 2.28 5,101 207 116 56%2007 1,204 1,203 256,180 255,790 20 45,080 1.66 2,254 213 37 18%2008 1,404 1,399 264,109 264,188 22 51,938 1.57 2,361 189 37 20%2009 1,477 1,477 243,011 243,804 21 183,729 1.42 8,749 165 124 75%2010 1,591 1,589 262,122 261,608 25 176,444 1.57 7,058 165 111 67%TOTAL 6,816 6,811 1,262,184 1,262,408 114 589,824 1.67 5,174 185 87 47%


2006 1,139 1,142 23,904 23,939 1 - 0.09 - 21 - 0%2007 1,204 1,203 25,849 25,846 - - - N/A 21 - 0%2008 1,404 1,399 31,131 31,043 - - - N/A 22 - 0%2009 1,477 1,477 32,623 32,616 - - - N/A 22 - 0%2010 1,591 1,589 34,876 34,850 - - - N/A 22 - 0%TOTAL 6,816 6,811 148,383 148,294 1 - 0.01 - 22 - 0%


MOTORCYCLETERRITORY 09 - PRINCE GEORGE AREA


2BV - 38


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 424 425 149,721 149,337 7 30,001 1.65 4,286 351 71 20%2007 459 457 168,778 167,232 8 272,231 1.75 34,029 366 596 163%2008 567 556 208,770 206,671 8 11,185 1.44 1,398 371 20 5%2009 602 607 227,053 227,672 8 8,061 1.32 1,008 375 13 4%2010 604 608 229,227 230,895 5 11,608 0.82 2,322 380 19 5%TOTAL 2,656 2,654 983,549 981,808 36 333,086 1.36 9,252 370 125 34%

THIRD PARTY TOTAL

2006 424 425 7 30,001 1.65 4,286 71 2007 459 457 8 272,231 1.75 34,029 596 2008 567 556 8 11,185 1.44 1,398 20 2009 602 607 8 8,061 1.32 1,008 13 2010 604 608 5 11,608 0.82 2,322 19 TOTAL 2,656 2,654 36 333,086 1.36 9,252 125

ACCIDENT BENEFITS

2006 424 425 63,866 63,833 8 22,195 1.88 2,774 150 52 35%2007 459 457 72,249 71,568 8 96,795 1.75 12,099 157 212 135%2008 567 556 77,979 78,017 7 17,993 1.26 2,570 140 32 23%2009 602 607 72,120 72,463 12 23,359 1.98 1,947 119 38 32%2010 604 608 72,756 73,323 11 37,813 1.81 3,438 121 62 52%TOTAL 2,656 2,654 358,970 359,203 46 198,156 1.73 4,308 135 75 55%


2006 424 425 8,918 8,949 - - - N/A 21 - 0%2007 459 457 9,901 9,822 1 45,000 0.22 45,000 21 98 458%2008 567 556 12,593 12,354 - - - N/A 22 - 0%2009 602 607 13,336 13,448 - - - N/A 22 - 0%2010 604 608 13,486 13,570 - - - N/A 22 - 0%TOTAL 2,656 2,654 58,234 58,143 1 45,000 0.04 45,000 22 17 77%


MOTORCYCLETERRITORY 10 - NORTHERN COAST


2BV - 39


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 537 532 241,671 239,573 5 48,664 0.94 9,733 450 91 20%2007 547 551 255,568 256,511 4 3,269 0.73 817 466 6 1%2008 631 628 303,860 301,517 9 36,234 1.43 4,026 480 58 12%2009 661 661 320,487 320,808 4 - 0.61 - 485 - 0%2010 694 698 332,829 335,040 3 86,305 0.43 28,768 480 124 26%TOTAL 3,070 3,070 1,454,415 1,453,450 25 174,471 0.81 6,979 473 57 12%

THIRD PARTY TOTAL

2006 537 532 5 48,664 0.94 9,733 91 2007 547 551 4 3,269 0.73 817 6 2008 631 628 9 36,234 1.43 4,026 58 2009 661 661 4 - 0.61 - - 2010 694 698 3 86,305 0.43 28,768 124 TOTAL 3,070 3,070 25 174,471 0.81 6,979 57

ACCIDENT BENEFITS

2006 537 532 105,773 104,930 8 1,976 1.50 247 197 4 2%2007 547 551 111,767 112,236 13 105,756 2.36 8,135 204 192 94%2008 631 628 111,754 111,395 9 125,163 1.43 13,907 177 199 112%2009 661 661 103,645 103,994 7 215,132 1.06 30,733 157 325 207%2010 694 698 107,429 108,125 12 68,048 1.72 5,671 155 98 63%TOTAL 3,070 3,070 540,368 540,680 49 516,074 1.60 10,532 176 168 95%




MOTORCYCLETERRITORY 11 - PEACE RIVER AREA


2BV - 40


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 6,720 6,592 2,139,873 2,066,208 163 210,158 2.47 1,289 313 32 10%2007 7,009 6,964 2,311,983 2,282,902 185 534,789 2.66 2,891 328 77 23%2008 7,904 7,607 2,632,809 2,539,800 201 499,918 2.64 2,487 334 66 20%2009 7,942 8,071 2,709,279 2,752,993 179 277,373 2.22 1,550 341 34 10%2010 8,266 8,173 2,852,654 2,810,862 200 564,716 2.45 2,824 344 69 20%TOTAL 37,840 37,406 12,646,598 12,452,765 928 2,086,954 2.48 2,249 333 56 17%

THIRD PARTY TOTAL

2006 6,720 6,592 163 210,158 2.47 1,289 32 2007 7,009 6,964 185 1,918,745 2.66 10,372 276 2008 7,904 7,607 201 499,918 2.64 2,487 66 2009 7,942 8,071 179 277,373 2.22 1,550 34 2010 8,266 8,173 200 864,716 2.45 4,324 106 TOTAL 37,840 37,406 928 3,770,910 2.48 4,063 101

ACCIDENT BENEFITS

2006 6,720 6,592 953,166 925,289 146 799,679 2.21 5,477 140 121 86%2007 7,009 6,964 1,029,618 1,016,675 160 2,030,948 2.30 12,693 146 292 200%2008 7,904 7,607 996,066 1,015,728 182 1,184,773 2.39 6,510 134 156 117%2009 7,942 8,071 894,370 918,598 147 816,550 1.82 5,555 114 101 89%2010 8,266 8,173 940,006 926,452 147 1,334,091 1.80 9,075 113 163 144%TOTAL 37,840 37,406 4,813,226 4,802,743 782 6,166,041 2.09 7,885 128 165 128%


2006 6,720 6,592 146,701 141,295 - - - N/A 21 - 0%2007 7,009 6,964 157,642 155,843 - - - N/A 22 - 0%2008 7,904 7,607 180,577 173,446 2 618,862 0.03 309,431 23 81 357%2009 7,942 8,071 181,046 184,349 1 850,000 0.01 850,000 23 105 461%2010 8,266 8,173 187,979 185,950 2 296,601 0.02 148,300 23 36 160%TOTAL 37,840 37,406 853,945 840,883 5 1,765,463 0.01 353,093 22 47 210%


MOTORCYCLETERRITORY 12 - SOUTHERN VANCOUVER ISLAND AND ALL OTHER ISLANDS OFF THE WEST COAST


2BV - 41


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 5,023 4,964 2,018,389 1,971,581 99 730,718 1.99 7,381 397 147 37%2007 5,117 5,150 2,143,233 2,135,276 113 588,718 2.19 5,210 415 114 28%2008 5,767 5,677 2,455,161 2,430,916 114 2,234,005 2.01 19,597 428 394 92%2009 5,822 5,903 2,561,566 2,587,757 119 788,003 2.02 6,622 438 133 30%2010 5,991 5,971 2,662,962 2,647,306 88 173,970 1.47 1,977 443 29 7%TOTAL 27,720 27,665 11,841,311 11,772,836 533 4,515,415 1.93 8,472 426 163 38%

THIRD PARTY TOTAL

2006 5,023 4,964 99 1,302,478 1.99 13,156 262 2007 5,117 5,150 113 588,718 2.19 5,210 114 2008 5,767 5,677 114 2,421,267 2.01 21,239 426 2009 5,822 5,903 119 1,022,132 2.02 8,589 173 2010 5,991 5,971 88 173,970 1.47 1,977 29 TOTAL 27,720 27,665 533 5,508,566 1.93 10,335 199

ACCIDENT BENEFITS

2006 5,023 4,964 937,962 917,771 93 815,391 1.87 8,768 185 164 89%2007 5,117 5,150 994,899 991,143 96 1,483,809 1.86 15,456 192 288 150%2008 5,767 5,677 977,747 996,224 113 1,789,552 1.99 15,837 175 315 180%2009 5,822 5,903 873,569 889,803 102 1,184,829 1.73 11,616 151 201 133%2010 5,991 5,971 904,132 899,165 97 902,194 1.62 9,301 151 151 100%TOTAL 27,720 27,665 4,688,309 4,694,107 501 6,175,774 1.81 12,327 170 223 132%


2006 5,023 4,964 106,178 103,958 1 - 0.02 - 21 - 0%2007 5,117 5,150 111,308 111,766 3 1,789,043 0.06 596,348 22 347 1601%2008 5,767 5,677 127,811 125,696 1 100,000 0.02 100,000 22 18 80%2009 5,822 5,903 128,539 130,428 1 875,000 0.02 875,000 22 148 671%2010 5,991 5,971 131,631 131,270 1 1,125,000 0.02 1,125,000 22 188 857%TOTAL 27,720 27,665 605,467 603,118 7 3,889,043 0.03 555,578 22 141 645%


MOTORCYCLETERRITORY 13 - MIDDLE VANCOUVER ISLAND/SUNSHINE COAST AREA


2BV - 42


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 632 636 225,655 226,355 7 2,303 1.10 329 356 4 1%2007 706 685 264,591 256,580 4 3,692 0.58 923 375 5 1%2008 751 754 298,519 296,548 11 150,372 1.46 13,670 393 200 51%2009 727 745 301,257 307,313 9 69,946 1.21 7,772 413 94 23%2010 780 766 318,443 315,148 8 7,902 1.05 988 412 10 3%TOTAL 3,596 3,585 1,408,465 1,401,944 39 234,214 1.09 6,005 391 65 17%

THIRD PARTY TOTAL

2006 632 636 7 2,303 1.10 329 4 2007 706 685 4 3,692 0.58 923 5 2008 751 754 11 150,372 1.46 13,670 200 2009 727 745 9 69,946 1.21 7,772 94 2010 780 766 8 7,902 1.05 988 10 TOTAL 3,596 3,585 39 234,214 1.09 6,005 65

ACCIDENT BENEFITS

2006 632 636 101,791 102,252 12 127,752 1.89 10,646 161 201 125%2007 706 685 118,731 115,297 6 48,922 0.88 8,154 168 71 42%2008 751 754 114,815 116,756 17 77,625 2.26 4,566 155 103 66%2009 727 745 99,943 102,624 9 51,306 1.21 5,701 138 69 50%2010 780 766 105,090 104,035 14 50,153 1.83 3,582 136 66 48%TOTAL 3,596 3,585 540,370 540,965 58 355,759 1.62 6,134 151 99 66%




MOTORCYCLETERRITORY 14 - NORTHERN VANCOUVER ISLAND


2BV - 43


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 749 753 28,530 28,649 1 1,959 0.13 1,959 38 3 7%2007 825 795 34,281 32,213 8 57,934 1.01 7,242 41 73 180%2008 802 860 32,270 36,106 7 5,953 0.81 850 42 7 16%2009 913 851 36,700 35,306 6 5,250 0.71 875 41 6 15%2010 1,018 967 38,689 36,001 6 5,576 0.62 929 37 6 15%TOTAL 4,307 4,226 170,470 168,275 28 76,672 0.66 2,738 40 18 46%

THIRD PARTY TOTAL

2006 749 753 1 1,959 0.13 1,959 3 2007 825 795 8 57,934 1.01 7,242 73 2008 802 860 7 5,953 0.81 850 7 2009 913 851 6 5,250 0.71 875 6 2010 1,018 967 6 5,576 0.62 929 6 TOTAL 4,307 4,226 28 76,672 0.66 2,738 18

ACCIDENT BENEFITS

2006 749 753 23,745 23,838 - - - N/A 32 - 0%2007 825 795 28,491 26,674 1 - 0.13 - 34 - 0%2008 802 860 23,015 28,142 - - - N/A 33 - 0%2009 913 851 22,592 21,962 - - - N/A 26 - 0%2010 1,018 967 23,670 22,028 - - - N/A 23 - 0%TOTAL 4,307 4,226 121,513 122,644 1 - 0.02 - 29 - 0%


2006 749 753 6,235 6,248 - - - N/A 8 - 0%2007 825 795 7,452 7,001 - - - N/A 9 - 0%2008 802 860 6,614 7,680 - - - N/A 9 - 0%2009 913 851 7,161 6,949 - - - N/A 8 - 0%2010 1,018 967 7,338 6,835 - - - N/A 7 - 0%TOTAL 4,307 4,226 34,800 34,712 - - - N/A 8 - 0%


ALL TERRAINTERRITORY 01 - LOWER MAINLAND


2BV - 44


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 5 3 54 35 - - - N/A 10 - 0%2007 6 6 74 68 - - - N/A 11 - 0%2008 7 6 90 68 - - - N/A 12 - 0%2009 9 7 184 141 - - - N/A 20 - 0%2010 20 12 354 205 - - - N/A 17 - 0%TOTAL 48 34 756 518 - - - N/A 15 - 0%

THIRD PARTY TOTAL

2006 5 3 - - - N/A - 2007 6 6 - - - N/A - 2008 7 6 - - - N/A - 2009 9 7 - - - N/A - 2010 20 12 - - - N/A - TOTAL 48 34 - - - N/A -

ACCIDENT BENEFITS





ALL TERRAINTERRITORY 02 - MAPLE RIDGE/PITT MEADOWS


2BV - 45


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 72 76 4,038 4,007 - - - N/A 53 - 0%2007 82 76 4,543 4,478 1 - 1.31 - 59 - 0%2008 80 79 4,933 4,839 1 2,170 1.26 2,170 61 27 45%2009 88 85 6,465 6,194 1 - 1.18 - 73 - 0%2010 89 89 4,877 5,075 - - - N/A 57 - 0%TOTAL 412 405 24,856 24,593 3 2,170 0.74 723 61 5 9%

THIRD PARTY TOTAL

2006 72 76 - - - N/A - 2007 82 76 1 - 1.31 - - 2008 80 79 1 2,170 1.26 2,170 27 2009 88 85 1 - 1.18 - - 2010 89 89 - - - N/A - TOTAL 412 405 3 2,170 0.74 723 5

ACCIDENT BENEFITS

2006 72 76 3,299 3,273 - - - N/A 43 - 0%2007 82 76 3,878 3,816 - - - N/A 50 - 0%2008 80 79 3,785 3,952 - - - N/A 50 - 0%2009 88 85 3,908 3,747 - - - N/A 44 - 0%2010 89 89 3,008 3,133 - - - N/A 35 - 0%TOTAL 412 405 17,878 17,921 - - - N/A 44 - 0%


2006 72 76 900 877 - - - N/A 12 - 0%2007 82 76 915 922 - - - N/A 12 - 0%2008 80 79 994 993 - - - N/A 13 - 0%2009 88 85 1,162 1,133 - - - N/A 13 - 0%2010 89 89 920 938 - - - N/A 11 - 0%TOTAL 412 405 4,891 4,863 - - - N/A 12 - 0%


ALL TERRAINTERRITORY 03 - SQUAMISH WHISTLER AREA


2BV - 46


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC


THIRD PARTY TOTAL


ACCIDENT BENEFITS





ALL TERRAINTERRITORY 04 - PEMBERTON AREA/HOPE AREA


2BV - 47


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 27 26 1,157 1,103 - - - N/A 43 - 0%2007 29 29 1,172 1,176 1 652 3.47 652 41 23 55%2008 35 32 1,121 1,078 - - - N/A 33 - 0%2009 48 44 1,340 1,258 3 5,978 6.87 1,993 29 137 475%2010 60 56 1,724 1,665 - - - N/A 30 - 0%TOTAL 200 187 6,514 6,280 4 6,629 2.14 1,657 34 36 106%

THIRD PARTY TOTAL

2006 27 26 - - - N/A - 2007 29 29 1 652 3.47 652 23 2008 35 32 - - - N/A - 2009 48 44 3 5,978 6.87 1,993 137 2010 60 56 - - - N/A - TOTAL 200 187 4 6,629 2.14 1,657 36

ACCIDENT BENEFITS

2006 27 26 992 943 - - - N/A 36 - 0%2007 29 29 993 998 - - - N/A 35 - 0%2008 35 32 895 896 - - - N/A 28 - 0%2009 48 44 813 778 - - - N/A 18 - 0%2010 60 56 1,028 1,002 - - - N/A 18 - 0%TOTAL 200 187 4,721 4,616 - - - N/A 25 - 0%


2006 27 26 225 215 - - - N/A 8 - 0%2007 29 29 223 225 - - - N/A 8 - 0%2008 35 32 184 189 - - - N/A 6 - 0%2009 48 44 197 189 - - - N/A 4 - 0%2010 60 56 228 224 - - - N/A 4 - 0%TOTAL 200 187 1,057 1,042 - - - N/A 6 - 0%


ALL TERRAINTERRITORY 05 - FRASER VALLEY


2BV - 48


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 610 603 24,905 24,293 5 6,701 0.83 1,340 40 11 28%2007 752 672 34,069 28,704 1 - 0.15 - 43 - 0%2008 842 872 47,658 49,530 2 749 0.23 375 57 1 2%2009 847 810 39,545 40,687 1 10,963 0.12 10,963 50 14 27%2010 1,044 1,010 48,395 47,116 3 12,576 0.30 4,192 47 12 27%TOTAL 4,095 3,967 194,572 190,330 12 30,989 0.30 2,582 48 8 16%

THIRD PARTY TOTAL

2006 610 603 5 6,701 0.83 1,340 11 2007 752 672 1 - 0.15 - - 2008 842 872 2 749 0.23 375 1 2009 847 810 1 10,963 0.12 10,963 14 2010 1,044 1,010 3 12,576 0.30 4,192 12 TOTAL 4,095 3,967 12 30,989 0.30 2,582 8

ACCIDENT BENEFITS

2006 610 603 18,638 18,249 - - - N/A 30 - 0%2007 752 672 25,281 21,366 - - - N/A 32 - 0%2008 842 872 30,562 33,024 - - - N/A 38 - 0%2009 847 810 21,531 22,160 - - - N/A 27 - 0%2010 1,044 1,010 26,679 25,907 - - - N/A 26 - 0%TOTAL 4,095 3,967 122,691 120,706 - - - N/A 30 - 0%


2006 610 603 5,602 5,520 - - - N/A 9 - 0%2007 752 672 7,857 6,571 - - - N/A 10 - 0%2008 842 872 10,578 11,212 - - - N/A 13 - 0%2009 847 810 8,085 8,338 - - - N/A 10 - 0%2010 1,044 1,010 10,616 10,278 - - - N/A 10 - 0%TOTAL 4,095 3,967 42,738 41,919 - - - N/A 11 - 0%


ALL TERRAINTERRITORY 06 - THOMPSON OKANAGAN AREA


2BV - 49


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 216 203 8,252 7,782 - - - N/A 38 - 0%2007 231 239 9,523 9,984 3 274,162 1.26 91,387 42 1,149 2746%2008 323 300 15,901 15,050 - - - N/A 50 - 0%2009 372 359 24,030 23,096 - - - N/A 64 - 0%2010 399 387 19,428 19,810 - - - N/A 51 - 0%TOTAL 1,542 1,488 77,134 75,722 3 274,162 0.20 91,387 51 184 362%

THIRD PARTY TOTAL

2006 216 203 - - - N/A - 2007 231 239 3 1,733,615 1.26 577,872 7,266 2008 323 300 - - - N/A - 2009 372 359 - - - N/A - 2010 399 387 - - - N/A - TOTAL 1,542 1,488 3 1,733,615 0.20 577,872 1,165

ACCIDENT BENEFITS

2006 216 203 7,068 6,651 - - - N/A 33 - 0%2007 231 239 8,018 8,478 1 239,125 0.42 239,125 36 1,002 2821%2008 323 300 11,636 11,245 - - - N/A 37 - 0%2009 372 359 15,209 14,703 - - - N/A 41 - 0%2010 399 387 12,282 12,540 - - - N/A 32 - 0%TOTAL 1,542 1,488 54,213 53,617 1 239,125 0.07 239,125 36 161 446%




ALL TERRAINTERRITORY 07 - KOOTENAYS


2BV - 50


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 55 58 769 1,418 - - - N/A 25 - 0%2007 61 64 1,368 1,299 - - - N/A 20 - 0%2008 45 53 710 864 - - - N/A 16 - 0%2009 46 43 654 700 - - - N/A 16 - 0%2010 51 49 663 627 - - - N/A 13 - 0%TOTAL 258 267 4,164 4,908 - - - N/A 18 - 0%

THIRD PARTY TOTAL


ACCIDENT BENEFITS

2006 55 58 637 1,194 - - - N/A 21 - 0%2007 61 64 1,169 1,088 - - - N/A 17 - 0%2008 45 53 507 716 - - - N/A 14 - 0%2009 46 43 409 458 - - - N/A 11 - 0%2010 51 49 413 388 - - - N/A 8 - 0%TOTAL 258 267 3,135 3,845 - - - N/A 14 - 0%




ALL TERRAINTERRITORY 08 - CARIBOO AREA


2BV - 51


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 86 83 1,550 1,297 2 11,684 2.42 5,842 16 142 901%2007 87 84 1,915 1,540 - - - N/A 18 - 0%2008 86 88 1,775 1,933 - - - N/A 22 - 0%2009 100 98 2,365 2,047 2 - 2.04 - 21 - 0%2010 120 115 2,411 2,452 - - - N/A 21 - 0%TOTAL 479 467 10,016 9,268 4 11,684 0.86 2,921 20 25 126%

THIRD PARTY TOTAL

2006 86 83 2 11,684 2.42 5,842 142 2007 87 84 - - - N/A - 2008 86 88 - - - N/A - 2009 100 98 2 - 2.04 - - 2010 120 115 - - - N/A - TOTAL 479 467 4 11,684 0.86 2,921 25

ACCIDENT BENEFITS

2006 86 83 1,236 1,056 - - - N/A 13 - 0%2007 87 84 1,493 1,213 - - - N/A 14 - 0%2008 86 88 981 1,417 - - - N/A 16 - 0%2009 100 98 1,258 1,096 - - - N/A 11 - 0%2010 120 115 1,344 1,345 - - - N/A 12 - 0%TOTAL 479 467 6,312 6,128 - - - N/A 13 - 0%




ALL TERRAINTERRITORY 09 - PRINCE GEORGE AREA


2BV - 52


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 31 29 330 257 - - - N/A 9 - 0%2007 33 34 380 339 1 1,625 2.92 1,625 10 47 480%2008 33 33 265 338 - - - N/A 10 - 0%2009 37 36 303 297 1 1,727 2.76 1,727 8 48 581%2010 43 40 415 381 - - - N/A 9 - 0%TOTAL 178 172 1,693 1,612 2 3,352 1.16 1,676 9 19 208%

THIRD PARTY TOTAL

2006 31 29 - - - N/A - 2007 33 34 1 1,625 2.92 1,625 47 2008 33 33 - - - N/A - 2009 37 36 1 1,727 2.76 1,727 48 2010 43 40 - - - N/A - TOTAL 178 172 2 3,352 1.16 1,676 19

ACCIDENT BENEFITS





ALL TERRAINTERRITORY 10 - NORTHERN COAST


2BV - 53


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 51 51 1,104 1,121 - - - N/A 22 - 0%2007 70 62 2,301 1,889 - - - N/A 30 - 0%2008 117 114 6,299 5,855 - - - N/A 51 - 0%2009 96 98 3,981 4,390 1 1,890 1.02 1,890 45 19 43%2010 107 103 4,038 3,752 - - - N/A 36 - 0%TOTAL 441 429 17,723 17,006 1 1,890 0.23 1,890 40 4 11%

THIRD PARTY TOTAL

2006 51 51 - - - N/A - 2007 70 62 - - - N/A - 2008 117 114 - - - N/A - 2009 96 98 1 1,890 1.02 1,890 19 2010 107 103 - - - N/A - TOTAL 441 429 1 1,890 0.23 1,890 4

ACCIDENT BENEFITS

2006 51 51 969 991 - - - N/A 19 - 0%2007 70 62 1,995 1,646 - - - N/A 26 - 0%2008 117 114 5,158 5,040 - - - N/A 44 - 0%2009 96 98 2,566 2,908 - - - N/A 30 - 0%2010 107 103 2,640 2,459 - - - N/A 24 - 0%TOTAL 441 429 13,328 13,043 - - - N/A 30 - 0%




ALL TERRAINTERRITORY 11 - PEACE RIVER AREA


2BV - 54


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 409 386 15,565 13,357 - - - N/A 35 - 0%2007 467 429 17,763 16,656 2 1,707 0.47 854 39 4 10%2008 400 466 14,129 17,984 4 203,455 0.86 50,864 39 436 1131%2009 421 415 15,028 14,654 5 3,055 1.20 611 35 7 21%2010 437 425 15,054 15,171 1 2,097 0.24 2,097 36 5 14%TOTAL 2,134 2,121 77,539 77,821 12 210,315 0.57 17,526 37 99 270%

THIRD PARTY TOTAL

2006 409 386 - - - N/A - 2007 467 429 2 1,707 0.47 854 4 2008 400 466 4 438,424 0.86 109,606 940 2009 421 415 5 3,055 1.20 611 7 2010 437 425 1 2,097 0.24 2,097 5 TOTAL 2,134 2,121 12 445,284 0.57 37,107 210

ACCIDENT BENEFITS

2006 409 386 11,529 9,898 - - - N/A 26 - 0%2007 467 429 13,172 12,290 1 31 0.23 31 29 0 0%2008 400 466 8,626 12,617 1 89,912 0.21 89,912 27 193 713%2009 421 415 8,255 8,165 - - - N/A 20 - 0%2010 437 425 8,068 8,220 - - - N/A 19 - 0%TOTAL 2,134 2,121 49,650 51,190 2 89,943 0.09 44,972 24 42 176%




ALL TERRAINTERRITORY 12 - SOUTHERN VANCOUVER ISLAND AND ALL OTHER ISLANDS OFF THE WEST COAST


2BV - 55


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC

2006 411 391 16,180 14,966 - - - N/A 38 - 0%2007 456 433 22,868 20,508 - - - N/A 47 - 0%2008 512 479 24,741 22,936 2 1,593 0.42 796 48 3 7%2009 507 518 24,351 25,625 - - - N/A 49 - 0%2010 508 511 20,972 22,528 - - - N/A 44 - 0%TOTAL 2,394 2,332 109,112 106,563 2 1,593 0.09 796 46 1 1%

THIRD PARTY TOTAL

2006 411 391 - - - N/A - 2007 456 433 - - - N/A - 2008 512 479 2 1,593 0.42 796 3 2009 507 518 - - - N/A - 2010 508 511 - - - N/A - TOTAL 2,394 2,332 2 1,593 0.09 796 1

ACCIDENT BENEFITS





ALL TERRAINTERRITORY 13 - MIDDLE VANCOUVER ISLAND/SUNSHINE COAST AREA


2BV - 56


COVERAGE AND YEAR

NUMBER OF WRITTEN

VEHICLES

NUMBER OF EARNED

VEHICLES WRITTEN

PREMIUMS EARNED

PREMIUMS NUMBER

OF CLAIMS


EXPENSES INCURRED

CLAIM FREQUENCY

PER 100 EARNED

VEHICLES

AVERAGE COST PER

CLAIM

AVERAGE EARNED

PREMIUM

CLAIM COST

PER EARNED VEHICLE

RECORDED LOSS

RATIO

THIRD PARTY BASIC


THIRD PARTY TOTAL


ACCIDENT BENEFITS





ALL TERRAINTERRITORY 14 - NORTHERN VANCOUVER ISLAND



APPENDIX 11 B

SERVICE PLAN 2011 - 2013

Service Plan2011 – 2013

Insurance Corporation of British Columbia

February 2011

Insurance Corporation of British ColumbiaLibrary and Archives Canada Cataloguing in Publication Data

Insurance Corporation of British Columbia.

Service plan. — 2002/2004-Annual.

Also available on the Internet.Continues: Insurance Corporation of British Columbia. Performance plan.1. Insurance Corporation of British Columbia – Planning - Periodicals. I. Title. II. Title: Insurance Corporation of British Columbia ... service plan.

III. Title: ICBC service plan.

HG9970.A68C36 368.’092’068409711’05 2005-960261-9Service Plan 2011–2013

iService Plan 2011 – 2013

Introduction ............................................................................................................................. 1

Letter from the Chair of the Board .......................................................................................... 2

Overview of ICBC .................................................................................................................... 4

ICBC Points of Service ............................................................................................................ 6

Operating Structure ................................................................................................................. 6

Governance ............................................................................................................................. 7

Strategic Context ................................................................................................................... 9

Corporate Strategy ................................................................................................................ 14

Strategy Summary ................................................................................................................. 23

Alignment with Shareholder’s Letter of Expectations ........................................................... 24

Summary Financial Outlook .................................................................................................. 26

Table of Contents

1Service Plan 2011 – 2013

Introduction

PurposeThe Insurance Corporation of British Columbia’s (ICBC) 2011 – 2013 Service Plan presents an overview of our three-year plan to fulfi ll responsibilities for providing vehicle insurance, driver licensing, and vehicle licensing and registration services. In this Service Plan, we set out our performance accountability to the public by describing:

Where we envision ourselves in three years;•

The goals and objectives we need to achieve to • realize this vision; and

How we defi ne and measure progress on achieving • these goals and objectives.

In 2012, we will publish our 2011 Annual Report detailing our progress in achieving the goals set out in this Service Plan. The Service Plan and Annual Report are companion documents and central to the broader accountability framework for Crown corporations. In developing the Service Plan, we have relied on guidance from various sources, including the following:

The Shareholder’s Letter of Expectations between • ICBC and government, which can be found on www.icbc.com.

The provincial government’s • Crown Corporation Service Plan Guidelines, September 2010, which can be found on www.gov.bc.ca.

The Legislative Assembly of BC’s Select Standing • Committee on Crown Corporations (SSCCC) in A Guide to Operations, April 2003, which can be found on www.leg.bc.ca.

Balancing Accountability and Commercial SensitivityWe are committed to providing customers and the public with information needed to understand our plans and to evaluate our performance against those plans. This is fundamental to the governance of any Crown corporation.

We compete with other insurance companies in the sale of optional vehicle insurance products in BC. Due to commercial concerns, this Service Plan does not provide specifi c competitive information pertaining to our Optional insurance business.

2 Service Plan 2011 – 2013

Letter from the Chair of the Board

The Honourable Rich ColemanMinister of Public Safety and Solicitor GeneralGovernment of British Columbia

Dear Minister,

On behalf of ICBC’s Board of Directors and employees, I am pleased to present our 2011 – 2013 Service Plan.

We continue to be guided by our vision to be BC’s preferred auto insurer, providing protection and peace of mind. While there are no major changes to our strategic direction since the last Service Plan, we are continuing to provide greater focus to our corporate goals and objectives and better alignment of strategic activities to support achievement of our corporate strategy.

Over the next three years, ICBC will be focusing on business renewal efforts through the Transformation Program. It is a suite of projects that will help the company achieve our corporate strategy by making things simpler for both customers and employees, by putting the right systems and business processes in place to support new ways of doing things. Our new systems, changes to processes and workforce culture will help us better meet our customers’ needs and better maintain the support of our business partners. We are making these much-needed changes to ensure ICBC can continue to deliver solid results into the future, meet the demands of customers, and improve the employee experience.

Our corporate goal is focused on our customers: to improve our customers’ experiences and perceptions of us. In order to achieve this, we use the following objectives to guide us: improving customer perception, improving employee engagement, and maintaining fi nancial stability. This Service Plan outlines how we will achieve these goals and measure our success.

Improving our customers’ perceptions of us is a key strategic focus. We want to make things more hassle-free and transparent for our customers, which includes things like improved claims handling, more choice in how they deal with ICBC, and less paperwork. Achieving our vision of being BC’s preferred auto insurer will depend on our people being engaged, inspired, and confi dent in their roles and in the company. We will focus on developing workforce capability, capacity, and implementation readiness to realize the benefi ts of the new business systems and processes. Our strong fi nancial performance over the last several years has allowed us to provide greater value to our customers by keeping rates low and stable. In 2010, Basic rates were decreased by 2.4%. Optional insurance rates were, on average, reduced by three per cent in 2010, for a total decrease of approximately 20% since 2005. To maintain fi nancial stability we will continue to have a conservative investment philosophy and manage operating costs prudently. The most signifi cant cost pressure to our business is bodily injury claims costs. We will work to manage this pressure by streamlining claims handling and cost controls and investing in road safety enhancements.

We will also continue to partner with law enforcement and other stakeholders on awareness campaigns around road safety issues, community volunteer programs, and work with local municipalities on road improvement projects. Ongoing community programs include the United Way fundraising campaign and Giving Back to Communities, which is based on volunteering or team fundraising activities with registered charities.

The insurance industry is affected by external factors, risks, and regulatory trends which impact insurers’ profi tability and rate stability. During 2009, increasing claims costs and the impacts of an unstable global economy challenged the Canadian property and casualty (P&C) industry. During the fi rst half of 2010, however, industry results were mixed. Despite the continued uncertainty in fi nancial markets and instability in the Canadian P&C market, ICBC’s position is sound and we continue to fare well relative to the industry. We have a conservative investment philosophy and are managing our insurance operations prudently, which allows us to keep rates low and stable over the long term for our customers.

Looking forward, our outlook remains optimistic. We will strengthen our relationships with customers and our partners. We continue to make much-needed investments in our aging customer service systems, and through underwriting and pricing improvements we continue to move towards driver-based pricing where premium rates will be more refl ective of driver risk. Our current fi nancial position is strong.


Letter from the Chair of the Board

ICBC’s 2011 – 2013 Service Plan was prepared under the direction of the Board of Directors in accordance with the Budget Transparency and Accountability Act and the BC Reporting Principles. The plan is consistent with government’s strategic priorities and fi scal plan. The Board is accountable for the contents of the plan, including what has been included in the plan and how it has been reported.

All signifi cant assumptions, policy decisions, events, and identifi ed risks, as of January 20, 2011 have been considered in preparing the plan. The performance measures presented are consistent with ICBC’s mandate and goals, and focus on aspects critical to the organization’s performance. The targets in this plan have been determined based on an assessment of ICBC’s operating environment, forecast conditions, risk assessment, and past performance.

Nancy McKinstryChair, Board of Directors


Overview of ICBC

VisionICBC will be BC’s preferred auto insurer, providing protection and peace of mind.

MissionWe deliver quality auto insurance products and services at competitive prices through a knowledgeable team committed to our customers.

Values

IntegrityOur business is based on trust. We are honest, ethical, • straightforward, and fair.

Dedication to CustomersWe exist to serve our customers. We listen actively • and are responsive to their needs.

AccountabilityWe hold ourselves and each other accountable for • our actions and the success of our business.

CaringWe care about our customers’ well-being and ensure • they feel supported by treating them with dignity and respect.

We care about each other’s well-being and create an • environment that promotes personal growth.

We care about our communities by supporting • road safety programs and being environmentally responsible.

Insurance ServicesICBC is a provincial Crown corporation established in 1973 to provide vehicle insurance to British Columbia’s motorists. We are the sole provider of universal compulsory coverage (Basic insurance) in the province, and our Basic rates and service are regulated by the British Columbia Utilities Commission (BCUC). We also sell Optional auto insurance products in the competitive marketplace.

Under Basic insurance, private passenger and commercial vehicle owners are provided with $200,000 in third party liability protection, $150,000 in no-fault accident benefi ts, and $1 million of underinsured motorist protection. Buses, taxis, limousines, and extra-provincial trucking and transport vehicles have higher mandatory levels. Under Optional insurance, the coverages that we offer include, but are not limited to, extended third party liability, collision, comprehensive, coverage for new vehicles, and vehicle storage. For a complete list of our Optional insurance products, please visit www.icbc.com.

Auto insurance in BC is based on a full tort system, which means that an injured party is entitled to take legal action against the at-fault party for damages. In addition, the insured injured party has access to accident benefi ts, including up to $150,000 in medical and rehabilitation expenses and up to $300 per week for wage loss, through ICBC Basic insurance, regardless of fault. Our coverage level for medical and rehabilitation expenses is the highest in Canada when compared to any other province with a tort-based system.

In contrast, in some other provinces in Canada auto insurance is based on some variant of no-fault or mixed no-fault and tort systems. This means compensation can be based on predetermined benefi t schedules, threshold schemes, and/or caps or deductibles on pain and suffering awards, and there may be limited or no ability to sue for additional damages.

ICBC operates as an integrated company that provides signifi cant benefi ts to customers in terms of costs and convenience. With annual earned premiums of approximately $3.7 billion,1 approximately $13 billion in assets, and approximately 5,200 full-time equivalent (FTE) employees, we are one of the largest property and casualty insurers in Canada. For more information on our products and the auto insurance system in British Columbia, please visit www.icbc.com.

1 Please refer to the Summary Financial Outlook table on page 26.


Overview of ICBC

Loss Management ProgramsICBC invests in road safety initiatives and fraud prevention that provide a direct benefi t to customers through reduced claims costs. This ultimately assists in keeping premiums low and stable. We work with a network of partners across the province to deliver these programs, including the Ministry of Public Safety and Solicitor General, the enforcement community, the Ministry of Attorney General, the Ministry of Transportation and Infrastructure, municipalities, community groups, and volunteers. For more information, please visit www.icbc.com under Road Safety.

Non-Insurance ServicesIn addition to the Basic insurance and Optional insurance lines of business, we provide driver licensing services, vehicle licensing and registration services, and fines collection on behalf of the provincial government. We refer to the provision of these services as our non-insurance line of business. These non-insurance services are outlined in the Service Agreement between ICBC and the Province, and their costs are funded through Basic insurance premiums.

There have not been any signifi cant shifts from our last Service Plan (ICBC Service Plan 2010 – 2012) in relation to our provision of insurance and non-insurance services, and in the delivery of loss management programs.

Key Business Partners and StakeholdersICBC delivers its services in partnership with:

Independent insurance brokers who provide auto • insurance products and services to the public and are guided by the agreement with ICBC’s broker partners;

A broad base of suppliers in the automotive industry, • guided by performance-based agreements, and liaison groups such as the Automotive Retailers Association (ARA);

The medical community to assist injured customers • in getting well;

Government agents and appointed agents that • provide driver and vehicle licensing services in a number of communities where there are no ICBC offi ces;

The Offi ce of the Superintendent of Motor Vehicles • and Police Services within the Ministry of Public Safety and Solicitor General, with whom we work together in a number of areas, including driver licensing and road safety;

Road authorities, e.g., the Ministry of Transportation • and Infrastructure, and municipalities to share costs of road improvements that decrease the frequency and severity of crashes;

Police and enforcement agencies to enhance road • safety; and

A host of diverse community organizations, including • business improvement associations and auto crime groups, which support the delivery of our safety and auto crime programs.

For more information, please visit the Business Partners page on www.icbc.com.


Operating Structure

ICBC operates using an integrated business model. Although the majority of premium revenues and costs are specifi cally identifi able as Basic or Optional, certain costs are not tracked separately. For those revenues and costs that are not specifi cally identifi ed as Basic or Optional, a pro-rata method of allocation is used to allocate the revenues and costs between the two lines of business. This method allocates revenues and costs to each line of business based on the drivers of those revenues and costs, the degree of causality, and any directives from our independent regulator, the BCUC, which are applied on a prospective basis. More on the role of BCUC can be found in the next section, Governance.

A breakdown of actual revenues and allocated costs can be found in the Notes to Consolidated Financial Statements section in our Annual Report, which can be found at www.icbc.com. Information on the allocation methodology can be found in BCUC’s decisions on our submissions, which can be viewed at www.bcuc.com.

We continue to operate our business through an integrated business model, which provides economies of scale, and in turn, benefi ts the customer in terms of lower rates.

There have not been any signifi cant shifts or changes in our business areas, program delivery or internal operating environment from the previous year.

ICBC offers insurance products to more than three million policyholders through a province-wide network of approximately 900 independent brokers, government agents, and appointed agents. Our claims-handling services process almost one million claims per year through our 24-hour, 7-days-a-week, 365 days a year claims contact centre, our province-wide network of 38 claims servicing locations, and the various Express Glass and Repair facilities across the province. Information about the claims process can be found through www.icbc.com.

We also provide driver licensing services through 120 offi ces, including driver licensing centres, government agents, and appointed agents throughout the province.

We deliver our products and services in partnership with businesses and organizations in communities throughout British Columbia, including insurance brokers, auto repair facilities, and health service providers. Our partners are involved in different aspects of the insurance and claims processes such as the sale of our insurance product, repairs to damaged vehicles, provision of rehabilitation services, as well as management of road safety and loss management programs in conjunction with law enforcement agencies.

For further information on our points of service in British Columbia, please visit www.icbc.com.

ICBC Points of Service


Governance

ICBC’s governance is defi ned through legislation applicable to all Crown corporations, and legislation specifi c to the company itself. ICBC’s corporate governance is further defi ned by the Shareholder’s Letter of Expectations between the minister responsible for ICBC as a representative of the Government of British Columbia, and the chair of ICBC’s Board of Directors as a representative of ICBC. The Honourable Rich Coleman, Minister of Public Safety and Solicitor General, is the minister responsible for ICBC.

Legislative FrameworkAs a Crown corporation, ICBC is subject to the Budget Transparency and Accountability Act (BTAA), the Financial Information Act, the Financial Administration Act, and the Freedom of Information and Protection of Privacy Act. Under these provincial laws, we are accountable for making public our strategic plan (i.e., Service Plan) and performance against the plan (i.e., Annual Report). In addition, we are required to provide fi nancial and other information in accordance with the requirements of applicable legislation. In terms of providing Basic and Optional insurance and non-insurance services on behalf of government, ICBC must adhere to a number of acts, including:

Insurance (Vehicle) Act•

Insurance Corporation Act•

Motor Vehicle Act•

Commercial Transport Act•

Motor Vehicle (All Terrain) Act•

Insurance Premium Tax Act•

Consumption Tax Rebate and Transition Act•

Social Services Tax Act •

Offence Act •

ICBC as a Regulated Crown EntityThe BCUC, as the independent regulator for ICBC, approves Basic insurance rates and ensures that our provision of service for our Basic product is adequate, effi cient, and reasonable. As we are the sole provider of Basic insurance, this regulatory environment is important for BC, providing customers with an independent and transparent review of our Basic insurance rates and an opportunity to be heard and involved in the review.

The BCUC’s initial phase of regulation included fi nancial allocation between Basic and Optional insurance lines of business, revenue requirements for Basic insurance, and Basic rate design. These elements have now been reviewed. We continue to work with the BCUC to achieve effective and effi cient regulation that contributes to an open and transparent regulatory process for the setting of Basic insurance rates that meet customer expectation in this regard. More information on BCUC is available on its website, www.bcuc.com. ICBC’s current regulatory proceedings can be found on www.icbc.com under About ICBC.

Shareholder’s Letter of ExpectationsThe Shareholder’s Letter of Expectations between the Government of British Columbia and the Corporation is an agreement on their respective roles and responsibilities, and on the corporate mandate including high-level strategic priorities, public policy issues, and performance expectations. It is reviewed and updated annually. For specifi c information, please refer to the section on Alignment with Shareholder’s Letter of Expectations in this Service Plan.


Governance

Board Governance Structure

Mandate: To foster the Corporation’s short and long term success consistent with the Board’s responsibilities to the people of British Columbia as represented by the Government of British Columbia.

Chair: Nancy McKinstryVice-Chair: Neil de GelderMembers: Catherine Boivie, Carol Brown, Paul Haggis, T. Michael Porter, Jatinder Rai, Stacy Shields, Todd G. Stone

Board of Directors

Mandate: The primary role of the Executive Team is to lead the management of ICBC’s business and affairs, and to lead the implementation of the plans and policies approved by the Board of Directors (the “Board”) of ICBC.

President & CEO: Jon SchubertMembers: Mark Blucher, Senior Vice-President, Insurance;Cindy Brown, Vice-President, Communications;Ward Chapin, Chief Information Offi cer;Sheila Eddin, Vice-President, Business Transformation;Fred Hess, Vice-President, Driver Licensing;Craig Horton, Senior Vice-President, Claims;Len Posyniak, Vice-President, Human Resources;Geri Prior, Chief Financial Offi cer;Jeff Schulz, Vice-President, Strategic Marketing;Donnie Wing, Senior Vice-President, Corporate Affairs;Betty Weigel, Corporate Secretary.

Executive Team

Governance CommitteePurpose: To provide a focus on governance for ICBC and its subsidiaries that will enhance ICBC’s performance.

Chair: Neil de GelderMembers: Carol Brown, Jatinder Rai

Audit CommitteePurpose: To assist the Board in fulfi lling its oversight responsibilities by reviewing: (i) fi nancial information; (ii) systems of internal controls and risk management; and (iii) all audit processes.

Chair: T. Michael PorterMembers: Paul Haggis, Jatinder Rai

Investment CommitteePurpose: To recommend and review investment policy for both ICBC and any pension fund of which ICBC is an administrator.

Chair: Paul HaggisMembers: Nancy McKinstry, Neil de Gelder

Human Resources and Compensation Committee

Purpose: To assist the Board in fulfi lling its obligations relating to human resource and compensation policies.

Chair: Nancy McKinstryMembers: Carol Brown, Jatinder Rai, Stacy Shields

Transformation Program CommitteePurpose: To assist the Board in overseeing the management of ICBC’s business renewal efforts (“Transformation Program”).

Chair: Neil de GelderMembers: T. Michael Porter, Stacy Shields

ICBC Board GovernanceThe Board of Directors guides ICBC in fulfi lling its mandate and sets our corporate direction. The Board and management approve our vision, mission, and values that guide us. The Board sets goals for our performance and these goals and associated objectives are the basis upon which accountability and performance are evaluated. Performance against these goals and objectives is reviewed and reported regularly.

The governance processes and guidelines outlining how the Board will carry out its duties of stewardship and accountability are set out in the Board Governance Manual, which is

updated annually by the Board’s Governance Committee. ICBC’s Board complies with the Board Resourcing and Development Offi ce Guidelines and has adopted the guiding principles included in the provincial government’s Governance Framework for Crown Corporations: Best Practices Governance and Disclosure Guidelines (www.fi n.gov.bc.ca/brdo/governance/corporateguidelines.pdf). For more detail on these governance principles, please refer to the Annual Report.

Further information on Board policies and members is available on our website, www.icbc.com under About ICBC.


Strategic Context

Industry and Competitive ContextThe insurance industry is affected by external factors, risks, and regulatory trends which impact profi tability and rate stability. The following section provides an overview of recent events that may pose risks to the insurance industry and consumers.

Profitability of Canadian Property and Casualty Insurance IndustryThe Canadian property and casualty (P&C) market continued to weaken in 2009 following a year of instability in 2008. Increasing claims costs and the impacts of an unstable global economy challenged the industry; however, net income for P&C insurers in 2009 still improved by 35% to $2.2 billion over 2008.2 Return on equity for the industry also improved slightly to 6.54%.3

The economic downturn had created signifi cant instability in the fi nancial markets, which in turn impacted insurers’ capital levels built from previous years. Deteriorating performance was further exacerbated by low investment returns, which decreased investment income and created a stronger reliance on underwriting income. In 2009, the industry experienced an overall decline in underwriting results pushed by deteriorating loss ratios in many lines of insurance, particularly the automobile line in Ontario. During the fi rst half of 2010, the industry results were mixed. While Ontario auto insurers continued to be challenged with increasing claims costs, overall, the rest of the industry saw some improvement.

Despite the continued volatility in fi nancial markets and instability in the Canadian P&C market, ICBC’s position is sound and we continue to fare well relative to the industry. Our strategy to reduce the growth of bodily injury claims, which includes streamlined claims handling and cost controls, and road safety enhancements, have contributed to our sound position. We have a conservative investment philosophy and are managing our insurance operations prudently, which allows us to keep rates low and stable over the long term for our customers.

Automobile Insurance Automobile insurance is the largest class of insurance in the Canadian P&C industry, accounting for nearly half of direct premiums written within the industry.4 The automobile insurance product offered in each province differs. Where BC is a tort system, some other provinces in Canada have an automobile insurance product that is based on some variant of no-fault or mixed no-fault and tort systems. No-fault systems are characterized by compensation that is based on predetermined benefi t schedules regardless of who is at fault and there may be little or no ability to sue for further damages.

The auto insurance line in Canada has been negatively affected by increased loss ratios, especially for personal accident benefi ts, which deteriorated to 137.2%5 in 2009 compared to 115.2% in 2008.6 The auto insurance market has continued to show instability and deterioration.

Further impacts on the industry’s operating environment in 2010 will be affected by two signifi cant rulings and decisions in Ontario and Alberta.7

Ontario is the largest auto insurance market in Canada, and is based on a threshold no-fault system. It continued to face instability in 2009 as insurers writing auto lost an estimated $907 million.8 In 2010, the growth in claims costs continued to exceed premium growth.9 Some companies are turning to rate increases in order to improve their results.10 To help stabilize rates and ensure affordability, the Ontario government introduced a package of automobile insurance regulatory reforms that took effect on September 1, 2010. The reforms focus on protecting consumers, increasing consumer choice, streamlining the auto insurance system, and reducing transaction costs. Under the reforms, consumers have standard medical and rehabilitation coverage of $50,000 for non-catastrophic injuries with the option to increase the limit to $100,000. The measures also place a $3,500 cap on soft-tissue injuries and stipulate a $30,000 deductible on pain and suffering.11 It will take some time to see whether the reforms provide relief in 2011.12

2 MSA/Baron Outlook Report Q4 2009, p. 4 3 MSA/Baron Outlook Report Q4 2009, p. 4 4 Canadian Underwriter 2010 Statistical Issue, p. 20 5 MSA/Baron Outlook Report Q4 2009, p. 6 6 MSA/Baron Outlook Report Q4 2009, p. 6 7 Canadian Underwriter 2010 Statistical Issue, p. 20 8 Canadian Underwriter 2010 Statistical Issue, p. 22 9 Canadian Underwriter 2010 Statistical Issue, p. 2010 MSA/Baron Outlook Report Q2 2010, p. 311 http://www.fsco.gov.on.ca/english/insurance/auto/reform/consumer.asp12 MSA/Baron Outlook Report Q2 2010, p. 3


Strategic Context

The Alberta auto insurance market, the second largest auto insurance market for private insurers, had been facing signifi cant challenges with the striking down of the cap on compensation for minor injuries in February 2008.13 The cap was challenged on the grounds of being unconstitutional and as the court ruling was being appealed in the province’s Court of Appeal, it caused signifi cant uncertainty around how insurers should be pricing mandatory auto insurance. In December 2009, the Supreme Court of Canada upheld Alberta’s cap on minor auto injuries, effectively closing the door for any further appeals.14 Alberta insurers are now taking rate decreases due to the staying of the cap on minor injuries.

Insurers in the Ontario and Alberta markets are expected to focus on improving their results, especially in Ontario where performance has been greatly challenged, and the impacts of the regulatory reforms are not expected to be realized immediately. The recent updates relating to Ontario and Alberta are not expected to have an impact on auto insurance in BC, and therefore neither on ICBC or its policyholders.

Regulatory TrendsIn addition to the changes to minor injury regulation in Alberta and regulatory reform in Ontario mentioned above, the insurance industry is also experiencing the following regulatory trends:

The review of the • Bank Act, which is due for completion in April 2012, is now underway. There likely will not be any major reforms coming out of this review, according to the federal government, as extensive changes in the regulatory framework have already been made as a result of the recent fi nancial crisis. The existing position holds that banks cannot market or retail insurance from their bank branches. In October 2009, the Canadian government also announced its intention to introduce legislation that would prohibit banks from selling and marketing insurance products and services through their banking websites.

Proposed legislation that would allow credit unions • to operate like banks, including doing business in multiple provinces, could be restrictive to their current ability to sell insurance. Under the proposed new legislation, credit unions would also be subject to the same restrictions as other banks under the Bank Act with respect to distributing insurance from their branches and websites.

•

13 MSA/Baron Outlook Report Q4 2007, p. 714 Canadian Underwriter 2010 Statistical Issue, p. 20


Strategic Context

Key Strategic Issues

Meeting Increasing Customer Expectations

Customers have increasing expectations around price, choice, convenience, and service. In addition, they want to be able to access services in a variety of ways, including face-to-face, via telephone or the Internet. Our business processes and systems are aging and require much-needed upgrades and renewal in order to adapt to changing business and customer needs and expectations. The relationship between price and value is by far the greatest infl uencer of customer purchasing behaviour. Continuing to provide value to all of our customers as their expectations increase will be an ongoing challenge, particularly in the face of claims cost pressures. As such, we will have to balance competing priorities so that we are able to allocate our fi nite resources between our various initiatives while continuing to run our operations with expected levels of customer service. A collaborative process with our stakeholders will help us to manage these various priorities.

Competition in the Optional Insurance Market

Based on premiums written, the BC Optional automobile insurance market has experienced growth over the past fi ve years. There are over 30 private insurers, many of which are large multi-national insurers that sell some level of BC Optional auto insurance.15 There are about fi ve of the total private insurers that are considered to be our main competitors in the BC Optional auto insurance market. Although insurers may be adversely impacted by lower investment returns and the issues in the Alberta and Ontario auto insurance markets, we expect that the Optional market will continue to be robust and competitive in BC.

High-Risk Drivers

High-risk drivers are a serious concern as they cause a disproportionate number of crashes and these crashes are very costly, which in turn affect all of our customers’ insurance premiums. There were more than 100 traffi c fatalities and 3,000 injuries caused by impaired driving in 2008, and approximately 180 fatalities and 10,300 injuries caused by other high-risk driving behaviours such as excessive speed, failing to yield, and ignoring traffi c control. We will be taking steps to increase personal accountability for high-risk driving through underwriting enhancements, which include higher premiums for higher risk drivers to help keep rates low and stable for safer drivers.

Automobile-Related Crime

Insurance costs for all British Columbians are impacted by

automobile-related crime. This continues to be an area of focus for us and auto theft rates have declined by 61% between 2003 and 2009. The improving trends may be attributed to the positive results of the Bait Car Program, newer vehicles having built-in immobilizers, growing public education and awareness over the use of vehicle anti-theft technology, as well as strong partnerships with the police and community stakeholders on automobile-related crime prevention.

Evolving Business Environment

In an evolving business environment, it is important for us to continue innovating to better serve customers through examining and reinvesting in our people, business processes, and technology. Some of the challenges we face include an aging workforce and legacy Information Technology (IT) systems that are not easily adaptable.

Economic Environment

The current economy is seeing some improvement since the downturn, yet some challenges still remain in the economic environment. Interest rate, concentration, and credit risks are challenges in the current environment that we need to continue to monitor as we manage our investment portfolio and operational expenditures.

Key Strategic Risks

ICBC’s Corporate Risk Management Framework is approved by the Board of Directors and defi nes the approach used to assess and manage corporate risk. Consistent with good governance practices and insurance sector practices, ICBC manages risk from an organization-wide perspective.

The Corporate Risk Framework considers both external and internal environments and the risks and challenges associated with each. The framework is used by ICBC executives and Board of Directors to discuss and monitor strategic risks and mitigation strategies. Managing corporate risk is an ongoing process as strategic risks evolve and new risks may also emerge over time. The framework uses ongoing monitoring and reviewing of the external environment and our corporate strategy, which allows us to actively manage corporate risk. As new risks are identifi ed or if existing risks change, they may be reduced or eliminated through mitigation strategies or changes in the risk profi le.

The key strategic risks and mitigation strategies identifi ed on the following pages are considered and incorporated into our corporate strategy, as outlined in this Service Plan, and into detailed operational plans.

Key Strategic Issues and Risks Looking ahead to 2011 – 2013, we have identifi ed a number of issues and risks that could impact our future performance.

15 Canadian Underwriter 2010 Statistical Issue, p. 50 and p. 52 (2009 Year-End Data)


Strategic Context

Description of Risks: Mitigation Strategies:

Objective: Improve Customer Perception

Reputation• The risk that ICBC’s reputation, or trust in ICBC, is negatively impacted due to perceived or real breaches in its ability, or the ability of third parties with which ICBC is associated, to conduct business securely, ethically and responsibly, and be customer-focused.

ICBC’s risk management framework explicitly considers • the impact on ICBC’s reputation associated with business practices and decisions. We have ongoing brand-related work and proactive • communications which aim to build customer trust and confi dence in ICBC and awareness of ICBC’s community involvement.

Business Partner and Stakeholder Management• The risk that business partners/ stakeholders who infl uence customers do not support the current business model and strategy.

We will seek input from stakeholders so that changes to • enhance customers’ experiences and perceptions of price/value are supported by partners and stakeholders.

Privacy• The risk that customers’ and employees’ trust in ICBC will be diminished due to breaches by ICBC or business partners in safeguarding their personal information.

ICBC has data security measures in place, including • Information Systems Security Policies governing the access and use of corporate data.ICBC’s Code of Ethics refl ects its focus on protecting access • to information. The company continues to undertake signifi cant awareness campaigns internally and with our business partners on the importance of understanding our obligation to ensure privacy of customers’ personal information. An annual review of ICBC’s code of ethics, which includes privacy and access obligations, is required for all employees and contractors.Privacy considerations have been embedded within • the governance and approval processes for all projects, including our Business Renewal project, so that privacy is considered early in and throughout the project life cycle.

Objective: Improve Employee Experience

Workforce Planning• The risk that ICBC cannot deliver its core business or change initiatives due to alignment, capability, capacity, and readiness of its leaders and employees.

As we are undergoing business renewal efforts over the • next 3–5 years, we are also actively managing workforce capacity to support delivery of our core business and change initiatives. Our business renewal efforts will improve our business • processes so that it is easier for our employees to continue to meet customers’ needs. We will continue to focus on recruitment, compensation, • training, and leadership development to attract, develop, and retain talent for the future.We will continue to refi ne our performance management • program so that each of our employees is aligned to the successful achievement of our objectives.

Objective: Maintain Financial Stability

Bodily Injury Claims Costs• The risk that insurance rates increase due to bodily injury claims cost increases arising from internal or external factors:

Internal factors: claims handling;• External factors: increased claims fraud, severity, • frequency and/or litigation.

Strategies to address crashes and claims costs are a priority • for ICBC and include improvements to claims handling processes, public awareness campaigns on high-risk driving, the transition to risk-based pricing and other road safety activities. ICBC completed a comprehensive review of its • claims handling practices to identify opportunities for improvement from both a customer and an employee perspective. In response, we are renewing our aging technology and updating our business processes in order to be more customer-focused and provide better tools for our employees. These changes are expected to improve the effi ciency and cost-effectiveness of our claims handling processes, contributing to ICBC’s fi nancial stability.


Strategic Context

Description of Risks: Mitigation Strategies:

Financial Markets• The risk that investments are insuffi cient to deliver on the insurance promise and/or unable to contribute to lower rates due to adverse changes in capital markets.

ICBC’s investment policy addresses ICBC’s risk tolerance • and investment goals, and specifi es a long-term investment asset mix and fi xed income duration consistent with these objectives. The policy is based on prudence and regulatory requirements, and provides guidelines for balancing the levels of risk and return in ICBC’s investment portfolio. ICBC follows a long-term strategy and diversifi es its • investment holdings to manage investment return fl uctuations.ICBC’s corporate credit policy manages credit risk from an • enterprise-wide perspective.

Other Signifi cant Corporate Risks

Business Renewal• The risk that ICBC does not fully achieve the intended outcomes of the Transformation Program currently underway.

ICBC has developed a comprehensive governance model, • to provide oversight to the Transformation Program. The model includes establishing a Transformation Program Committee of the Board of Directors, appointing a third party independent risk advisor to the Board, and internal reviews to monitor that the program continues to meet its stated objectives.

Technology• The risk that the business cannot achieve its objectives — whether they are operational or change objectives — due to any of the major technology or solutions not being available or becoming unsuitable, requiring additional time/cost/risk to change them.

We are developing long-term technology requirements to • meet our future business needs. We will use proven methods, tools, and experienced • technology partners to deliver technology solutions within the expected timeframe (e.g., principle of buying rather than custom building solutions to speed deployments with ‘out of the box’ functionality).

Access to Systems• The risk that system-dependent operations could be intentionally or accidentally compromised due to:

unauthorized access to ICBC’s systems/data obtained; • and/orauthorized access to information systems/data used • inappropriately.

An enterprise-wide Information Technology Security • Program is in place, as well as the ICBC Code of Ethics governing access and use of corporate data.Security requirements are considered in the acquisition and • implementation of any new software packages.

Business Interruption• The risk that operations cannot be maintained or essential products and services cannot be provided due to business interruption arising from physical and/or technical events.

ICBC’s business interruption risk is managed through three • related programs: Emergency Response Program (safe building evacuations, search and rescue, etc.), Business Continuity planning (continued essential customer services during interruption) and IT Disaster Recovery planning (ICBC’s Data Centre).Management is currently reviewing the design of ICBC’s • Emergency Response Program to ensure that the scale of the program is appropriate to the plausible risks ICBC might encounter.ICBC conducts an annual test of both the business • continuity plans and the IT Disaster Recovery Program with improvements made by management to ensure a successful recovery program.ICBC has entered into an agreement with other BC • government entities and Crown corporations to purchase data center services from a third party. The shared data centre solution will provide a secure and stable environment for ICBC’s information systems.

Catastrophic Loss• The risk that ICBC‘s capital strength is eroded in the event of a major disaster.

In the event of losses resulting from catastrophes such • as an earthquake, ICBC has fi nancial protection through a reinsurance program that is reviewed and renewed annually. Losses experienced in excess of a specifi ed amount will be covered by the reinsurance policy up to the policy limits. In addition to protection against individual catastrophic • events, the reinsurance program protects ICBC against abnormally large losses by limiting the amount for which it is liable in any single event and in any given year.


Corporate Strategy

ICBC’s current corporate strategy continues to be endorsed as the long-term strategy to guide the company. Our corporate vision, goal, objectives, and strategies have not signifi cantly changed from the previous year.

ICBC’s corporate vision is to be BC’s preferred auto insurer, providing protection and peace of mind. With this vision, we remain focused on building trust with our customers by delivering improved customer experience and offering products and services that are of good value. We will improve business processes and effi ciencies to deliver better customer experience, and also work toward providing customers with pricing that is more refl ective of driver risk. Improving customer experience will also need the support of our employees. We will, therefore, continue to focus on enhancing the experience of our employees, by providing them with the tools and education to help them be successful, develop leadership capability, and build workforce readiness for change. We have had healthy fi nancial results and as a result, have been able to protect our customers and provide greater value by keeping rates low and stable for the policyholders of British Columbia. We will continue to maintain fi nancial stability by having a conservative investment philosophy and manage operating costs prudently.

Increasing customer expectations on products, service and price, and our aging technology systems are key issues in our current business environment. Through the Transformation Program, we will address these issues by renewing our business processes and systems through multiple projects that will collectively play a key role to support ICBC in achieving its corporate strategy. We will involve customers and business partners in our renewal effort to ensure any changes we make help us meet our goal of exceeding customer expectations. As we are continually presented with risks and opportunities in our business environment, we will remain diligent in allocating fi nite resources and implementing our corporate strategy.

We established three key strategies under our three corporate objectives. The strategies represent core areas of focus for the work that is underway to achieve our corporate goal and objectives over the next three years. Therefore, it is important to understand these strategies in the context of our overall vision, mission, goal, and objectives. For the purpose of the Service Plan, we have focused the discussion on the goal, objectives, and strategies levels.

Goal

We must improve our customers’ experiences and perceptions of us. We will do this by listening to, better meeting the needs of, and trusting our customers while maintaining low and stable auto insurance rates. To be successful, all of us must be empowered, engaged, and accountable for the actions we take to achieve this goal.

Objective Strategies

Improve Customer Perception• Understand our customers and exceed their expectations•

Improve Employee Experience• Engaged, inspired, and confi dent leaders and employees•

Maintain Financial Stability• Streamlined, effi cient, and cost-effective systems and processes•


Corporate Strategy

Performance Management SystemsICBC has a unique business model relative to other insurers in the P&C industry. Our business model is to set premiums to achieve and maintain our capital target rather than to maximize our return on capital. We operate exclusively within British Columbia under a full tort environment wherein the cost of settling a claim may be higher than in other jurisdictions that do not operate in the same system. We are mandated to provide automobile insurance to all drivers in BC. We provide auto insurance rates that are not based on age, gender or marital status. ICBC also provides a wide range of non-insurance services such as driver licensing, vehicle licensing and registration, and fi nes collection on behalf of the provincial government. Due to our unique business model, we do not set our performance targets based on industry benchmarks.

We do, however, use a “balanced scorecard” approach which embodies our corporate strategy. By using a balanced scorecard framework, we establish our strategic goals and related objectives, and our corporate performance measures are aligned with these goals and objectives. Our strategic plan and report on performance against our plan are reported externally through the Service Plan and Annual Report.

Our fi nancial performance measures are derived from actual fi nancial information and forecasted trends and assumptions. Key corporate performance metrics such as the combined ratio, loss ratio and expense ratio are benchmarked to P&C industry benchmarks and reported in the Annual Report. Non-fi nancial performance measures are generated by external sources. Independent fi rms are retained to conduct ongoing surveys of customers for the purpose of monitoring satisfaction and an annual survey for the purpose of monitoring employee engagement.

Our divisional accountabilities are aligned to support the corporate strategy and, where applicable, corporate performance measures are cascaded down to the respective divisions. Other benchmarking studies focusing on specifi c areas of operation are undertaken to support improvement in management practices internally.

Divisional performance measures and targets are established annually and divisional performance measures are included in individual performance plans as appropriate. We hold

a quarterly corporate performance update with executive and senior management, which includes an update on key fi nancial results and performance measures, a forecast of year-end results, and a review of the corporate risk profi le. Divisions also report on their performance results and highlight business issues as part of this quarterly update.

ICBC maintains and relies on risk management practices that encompass management, system and fi nancial controls designed to provide reasonable assurance that tangible and intangible assets are safeguarded and transactions are properly authorized and recorded. The controls include written policies and procedures, an organizational structure that segregates duties, and a comprehensive program of periodic risk-based audits by the internal auditors who independently review and evaluate these controls. We continually monitor these internal accounting controls, modifying and improving them as business conditions and operations change. Policies and processes that require employees to maintain the highest ethical standards have been instituted.

ICBC recognizes the inherent limitations in all risk management frameworks and believes the current framework provides an appropriate balance between costs and desired benefi ts. We believe that the systems of management controls provide reasonable assurance that the strategic business risks have been appropriately addressed. The quarterly review by management and the Board of Directors of these strategic business risks provides a regular review process to ensure mitigation strategies are in place to reduce these risks to acceptable levels.

The Audit Committee, composed of members of the Board of Directors, oversees the corporate risk management process and fi nancial reporting. The committee meets no less than quarterly with management, our internal auditors, and representatives of our external auditors, to discuss auditing, fi nancial reporting, and internal control matters. The annual fi nancial statements are audited by our independent auditors in accordance with Canadian Generally Accepted Auditing Standards. Beginning January 1, 2011, our fi nancial statements will be in accordance with International Financial Reporting Standards (IFRS) and will be audited by our independent auditors on this basis.


Corporate Strategy

Improve Customer PerceptionImproving our customers’ perceptions of us is a key strategic focus, and we will achieve this with a commitment to understand what is important to our customers and exceeding their expectations. In order to improve customers’ perceptions of us, we will continue to maintain the high levels of customer satisfaction that we have achieved in the past, work on improving our customers’ experiences, and continue to build trust with our customers.

Customers have increasing expectations around price, choice, convenience, and service. Throughout 2011 – 2013 and beyond, we will be working to improve processes and effi ciencies at each critical customer touch point to improve our customers’ perceptions of ICBC by delivering convenience and improved customer experience. This will include making processes more hassle-free and transparent for our customers. Our claims handling processes will be more effi cient on our part, require less paperwork and save time for our customers. More choice in how customers deal with ICBC will be available, including face-to-face, via telephone or the Internet and including faster access to service through our key business partners such as our network of Express Repair shops.

As a part of our long-term strategy, we are also working to provide customers with improved pricing that is more refl ective of driver risk, which supports the concept of increased driver accountability, where drivers can have a greater infl uence on their premiums by their driving behaviour on the road. Customer perception of price/value will be enhanced through improvements in our underwriting and pricing as we continue to move in the direction of driver-based pricing where premium rates are more refl ective of driver risk.

In 2011, ICBC will continue to focus on improving driver safety and well-being in BC. We are committed to helping

Strategy Performance Measures 2009 Actual

2010 Outlook

2011 Target

2012 Target

2013 Target

Understand our customers and exceed their expectations

Insurance Services Satisfaction

96% 97% 93% 93% 93%

Driver Licensing Satisfaction

93% 94% 93% 92% 92%

Claims Services Satisfaction 88% 89% 85% 85% 85%

Summary Performance Measures

make roads safer through road improvement and intersection safety cameras to infl uence driving behaviour to reduce crashes, injury and death. We will be continuing with safety initiatives such as the Driver Distractions campaign, which reminds everyone that the use of a handheld device while driving is now prohibited in BC. The Drive Smart awareness campaign serves to remind drivers of the unwritten rules of the road, to remain safe, patient, courteous and alert while driving, and how speed and rushing can affect driving abilities and decision making.

We will also focus on improving customer perception of ICBC’s positive attributes and the value it provides customers. To accomplish this we will inform and educate customers about the value of ICBC to them, through our external communication and marketing campaigns, which focus on building customer value, and also ongoing earned media including social media. On icbc.com we have also launched a new campaign which aims to inform customers about the things of which they said they wanted more information. Customers are also provided access to a fairness process within ICBC to ensure they are being treated fairly.

We will continue to work collaboratively with our partners and engage our key stakeholders to proactively manage customer relationships and reinforce our brand. Through our marketing and media programs and community involvement we will reinforce our brand by partnering with law enforcement and other stakeholders on awareness campaigns around road safety issues, community volunteer programs such as Speed Watch and Lock Out Auto Crime, and working with local municipalities on road improvement projects. Ongoing community programs include the United Way fundraising campaign and Giving Back to Communities, which is based on volunteering or team fundraising activities with registered charities.


Corporate Strategy

Performance MeasuresICBC measures customer service performance based on the percentage of satisfi ed customers for each major transaction type: insurance product purchase, driver licensing, and claims. The design of ICBC’s measures and targets refl ects the inherent differences of these three key transactions.

An independent research firm is retained to conduct ongoing surveys of customers for the purpose of monitoring transactional satisfaction.


Independent insurance brokers process over three million policies each year. The insurance services satisfaction measure represents the percentage of customers satisfi ed with a recent insurance purchase transaction and is based on surveys of approximately 4,000 customers over the course of a year. This measure is typically over 90% and indicates the positive relationship ICBC and its brokers enjoy with customers.

Based on results to date, the 2010 outlook is expected to be 97%, a one percentage point improvement from the 2009 actual results.

In the 2011 – 2013 period, we have set our target at 93%, which refl ects historical satisfaction levels. We intend to maintain a high level of customer satisfaction while preparing for the renewal of technology and the changes to business processes associated with our Transformation Program.

Driver Licensing SatisfactionEach year, ICBC conducts approximately 1.5 million transactions relating to the issuance of driver licences and driver exams. The driver licensing satisfaction measure is used to determine the percentage of customers satisfi ed with their transaction with ICBC, which includes renewing a

licence, taking a knowledge test or undergoing a road test. This measure is weighted by the number of transactions for each type of service and is drawn from a sample of over 6,000 customers surveyed throughout the year.

The 2010 outlook for ICBC’s customer satisfaction for driver licensing is 94%, an improvement of one percentage point from the 2009 actual results.

For 2011, the target has been set at 93%, which is consistent with historical norms. For 2012 and 2013, ICBC anticipates that with the implementation of new initiatives, we will need more time to explain these changes to our customers. This may have a negative impact on wait times and customer satisfaction levels may decrease during this transition period.

Claims Services Satisfaction

Almost one million claims are processed each year through ICBC’s call centre, claim centres and specialty departments such as, but not limited to, commercial claims and rehabilitation services throughout the province. The claims services satisfaction measure represents the percentage of customers satisfi ed with a recent ICBC claims transaction and is drawn from a sample of over 30,000 customers surveyed throughout the year.

Based on results to date, the 2010 outlook is expected to be 89%, a one percentage point improvement from the 2009 actual results.

For 2011 – 2013, ICBC expects that claims services satisfaction may be impacted by the implementation of a new claims management system and changes to business processes. The target of 85% has been set to refl ect historical norms.


Improve Employee ExperienceAchieving ICBC’s vision of being BC’s preferred auto insurer involves a concentrated focus on customer needs. The company’s corporate strategy includes the renewal of major business systems, processes, and tools, which in turn require the implementation of new roles and skills, organization design and working environments for employees. All of this is supported by a workplace that engages, inspires, and empowers our people, holds them accountable, and provides them with the necessary tools and support to deliver to their potential because they are confi dent in themselves, their roles, and the company.

ICBC’s objective for improved employee experience involves aligning business systems and people needs. The company will continue its efforts to align performance management, the corporate competency framework, learning and development programs, and employee engagement efforts with increased focus on improving customer perception and renewing our business. We will also focus on developing workforce capability and capacity, and establishing “organizational readiness” to ensure an effective transition towards a more customer-centric business model.

The company also continues to value diversity in its workforce and will perpetuate the policies and programs that promote it, with a focus on representing the communities and customers ICBC serves.

In 2011, ICBC will continue focusing on improving employee experience through:

Increased communication of our corporate strategy • and plans to people managers and their teams;

Improved change management to support • employees through process and system changes;

Expanded employee and manager involvement in • our business renewal efforts;

Employee recognition to reinforce the behaviours • required to achieve the corporate strategy;

Greater investment in employee wellness and • development related to the corporate strategy; and

A performance management program for all • employees that will help build and maintain a high performance culture and ensure activities support our strategy of developing engaged, inspired, and confi dent leaders and employees.

Strategy Performance Measures 2009 Actual

2010 Outlook

2011 Target

2012 Target

2013 Target

Engaged, inspired, and confi dent leaders and employees

Employee Engagement 49% 55% 55% N/A* N/A*


* Employee engagement is an annual measure. Targets are not set beyond the current year.

Corporate Strategy


Performance Measures

Employee Engagement

A successful employee engagement strategy helps create a sense of community in the company’s overall workplace environment. An engaged workforce fosters a connection between employees, the work they do and a belief that the company is successful and socially responsible, offers meaningful recognition, rewards career growth, and enables innovative thinking and input into decision making in order to deliver outstanding customer service. Employee engagement is the willingness of employees to commit and to contribute to company success, along with increasing their emotional attachment to ICBC and intention to remain with the company.

ICBC’s success in improving employee engagement scores and the overall employee experience is measured in part on an annual basis using an employee opinion survey administered by a third party. Six engagement-related questions are asked, and a score is rendered representing the percentage of respondents whose average score on those questions is 4.5 or greater on a scale of one to six.

The employee opinion survey was sent to each of the approximately 5,200 ICBC full-time equivalent (FTE) employees in the fall of 2010. The participation rate was

84%, an increase of 4 percentage points from 2009. The 2010 result, at 55%, exceeded both the annual target of 51% and the 2009 actual of 49%, indicating that our efforts to improve employee experience are having a positive impact on ICBC’s workplace environment.

Our employee engagement results have been reviewed in context with a number of other internal indicators around performance, recruitment, and retention. ICBC’s approach in the past has been to establish an annual employee engagement target and focus on incremental improvements each year. The target for this measure is set annually with a focus on internal drivers of employee engagement rather than benchmark targets against other organizations. Targets are not set beyond the current year.

In 2011, we have set our target at 55%, equal to the 2010 actual result. One of the key factors affecting our employee experience is our outdated work tools and processes. Our goal is to maintain a workforce of engaged and committed employees while we do the transformative work necessary to modernize our systems and processes. Many of these changes will not be fully implemented until 2013 and beyond.

Corporate Strategy


Corporate Strategy

Maintain Financial StabilityOur fi nancial strength over the past several years positions us to provide greater value to our customers by keeping rates low and stable. Basic insurance rates were held constant in 2009; in 2010, Basic rates were decreased by 2.4% on November 1st. Optional insurance rates were, on average, reduced by three per cent in both 2009 and 2010, for a total decrease of approximately 20% since 2005. To maintain fi nancial stability, we are committed to managing claims costs, maintaining a conservative investment philosophy, and continuing to manage operating costs prudently, which will be critical in helping keep rates low and stable for our customers.

Achieving our corporate vision will require investment in the renewal of our aging technology, systems, and processes over the coming years and as a result, our operating cost structure is expected to increase. Our strong fi nancial


position, however, allows us to make this overdue investment in business renewal, which in the long term will allow us to better serve and provide greater value to our customers. The Transformation Program is necessary to support our corporate strategy and will be critical for delivering on the objectives of improving customer perception while also increasing the effi ciency and effectiveness of our business.

The most signifi cant cost pressure to our business continues to be the cost of bodily injury claims. Bodily injury costs are a major challenge for the insurance industry as a whole, particularly due to the increases in severity trends over the past several years. Managing the growth of bodily injury claims costs remains a key strategic focus for ICBC and strategies include claims handling based on risk and increased management oversight, and road safety enhancements.

Strategy Performance Measures 2009 (1) Actual

2010 (1) Outlook

2011 (2) Target

2012 (2) Target

2013 (2) Target

Streamlined, effi cient, and cost-effective systems and processes

Minimum Capital Test (3) 240% 220%Minimum

170%Minimum

170%Minimum

170%

Combined Ratio 100.8% 105.5% 107.8% 108.2% 109.8%

Loss Ratio 81.4% 83.8% 85.3% 85.8% 86.8%

Insurance Expense Ratio 16.4% 16.9% 18.1% 18.1% 18.1%

Transformation Program Expense Ratio

n/a 0.9% 0.9% 1.1% 1.7%

Non-insurance Expense Ratio

2.9% 2.9% 3.2% 3.2% 3.2%

Expense Ratio (excluding DPAC)

19.3% 20.7% 22.2% 22.4% 23.0%

Investment Return(Market Return)

Benchmark+ 0.55%

Policy MarketBenchmark

Return


Return


Return


Return

Notes1. Financial information for 2009 Actual and 2010 Outlook was prepared based on Canadian Generally Accepted Accounting Principles (GAAP).2. Financial forecast for years 2011 to 2013 was prepared based on International Financial Reporting Standards (IFRS). 3. Minimum Capital Test (MCT) is based on the Guidelines for MCT for Federally Regulated Property and Casualty Insurance Companies, No: A, dated March

2008 issued by the Office of the Superintendent of Financial Institutions Canada. Pursuant to legislative change effective April 2010, ICBC transfers its Optional surplus capital to the Government of British Columbia on an annual basis.


Corporate Strategy

Performance Measures

Minimum Capital Test (MCT)MCT is an industry measure set by the Office of the Superintendent of Financial Institutions (OSFI) for federally regulated insurance companies across Canada. The MCT is used to determine whether a company has suffi cient capital levels to protect policyholders from fi nancial risk and provide long-term fi nancial stability.

Pursuant to legislative change effective April 2010, ICBC now transfers its excess Optional capital to the Government of British Columbia on an annual basis.

Based on results to date, the 2010 MCT outlook is forecast at 220%. The decrease in MCT from 2009 is due to the transfer of excess Optional capital to the Government of British Columbia. For 2010, the amount transferred or to be transferred is estimated to be approximately $580 million.

As a result of the legislative change and the new framework, the 2011 – 2013 MCT targets are set at minimum 170%.

Combined Ratio

The combined ratio is a key measure of overall profi tability within the insurance industry. This measure is calculated as the ratio of all costs (claims costs, claims-related costs, administrative costs, acquisition costs, and non-insurance costs) to all insurance premium dollars earned. A ratio below 100% indicates an underwriting profi t while a ratio above 100% indicates an underwriting loss. ICBC’s combined ratio is slightly higher than the industry average. This is partially due to ICBC’s mandate to deliver non-insurance services on behalf of government and these costs are refl ected in the combined ratio. Also, ICBC uses its investment income to reduce premiums for its customers rather than to generate a return for shareholders as private insurers do. As a result of lower premiums, our combined ratio is higher.

The 2010 outlook for the combined ratio is 105.5%. This is higher than the 2009 actual of 100.8% due to our investment in the Transformation Program, higher acquisition costs, and higher claims costs. In 2010, ICBC began to invest in business renewal and replacement of aging technology. The impact to the combined ratio is an increase of approximately one percentage point. Even though current year claims costs benefi tted from reduced traffi c during the Winter Olympic Games, both severity and frequency were higher than in 2009 for injury claims. Acquisition costs were also higher as per the agreement with ICBC’s broker partners.

Premiums earned reflect the flow-through of rate adjustments. Basic rates were not changed in 2009 and effective November 1, 2010, Basic rates were reduced by 2.4%. Optional rates were reduced by three per cent on average in both 2009 and 2010. Overall, the increase in premiums earned is expected to be moderate in the forecast period. Claims costs refl ect current expectations regarding

claims cost trends and operating costs will be higher due to our investment in business renewal and replacement of aging technology. For these reasons, the increase in costs is expected to outpace the increase in premiums, resulting in higher combined ratio targets for the 2011 – 2013 period.

Loss Ratio

The loss ratio is a key performance indicator within the insurance industry measuring profi tability of the insurance product — the lower the percentage, the more profi table the product. This measure is calculated as the ratio of the total of claims costs and claims-related costs, including loss management costs, to total insurance premium dollars earned.

ICBC‘s loss ratio is typically higher than the P&C industry because our premiums are set to recover costs and to achieve and maintain capital targets. ICBC uses its investment income to offset rates for its customers, thereby allowing rates to be lower than they would be if ICBC had to generate an underwriting profi t as private insurers do. As refl ected in the expense ratio, we have lower relative operating costs and can pay more of each premium dollar towards claims and related costs; this results in a higher loss ratio. In addition, ICBC is also mandated to provide Basic insurance to all drivers in BC, including the category of high-risk drivers whose claims costs are proportionately higher. This results in a higher loss ratio for ICBC relative to those insurers who may limit their exposure to such business.

The 2010 outlook of 83.8% is higher than the 2009 actual of 81.4% primarily due to higher claims costs. Claims costs were unfavourable compared to the prior year due to increased claims severity, higher frequency of reported injury claims and an unfavourable discounting adjustment as a result of lower prevailing interest rates.

The 2011 – 2013 loss ratio targets refl ect longer term claims costs trends and expected increases in claims-related costs.

Expense Ratio

The expense ratio is a standard industry measure for assessing the percentage of each premium dollar that goes to an insurer’s expenses. This measure is calculated as the ratio of non-claims costs to total insurance premium dollars earned. It includes operating costs that are not directly related to servicing claims such as general administration, commissions paid to brokers, taxes paid on premiums written, product design (underwriting), and non-insurance costs such as those associated with driver and vehicle licensing and vehicle registration. To enable comparisons with industry benchmarks, the expense ratio excludes the impact of one-time, non-recurring items.


Corporate Strategy

16 MSA Benchmark Report, Property & Casualty, Canada 2010 (Expense Ratio for Total Canadian Property Casualty Industry, including Lloyd’s but excluding ICBC and Saskatchewan Auto Fund)

17 MSA Benchmark Report, Property & Casualty, Canada 2010 (Expense Ratio for Auto Writers excluding ICBC and Saskatchewan Auto Fund)

Beginning in 2010, ICBC’s expense ratio consists of three key components: the insurance expense ratio, the Transformation Program expense ratio, and the non-insurance expense ratio. Segregating expenses in this manner allows ICBC to better manage the costs of operating its insurance and non-insurance businesses, and to refl ect the costs of technology renewal and changes to business processes associated with our Transformation Program.

The overall P&C industry expense ratio for 2009 was approximately 29.8%.16 For insurers who predominantly write auto insurance, the ratio was about 28.3%.17 ICBC’s expense ratio is lower than the industry average due to its ability to achieve economies of scale, the benefi ts of integrated operations, and lower marketing, underwriting, acquisition, and general administration costs.

The 2010 outlook expense ratio of 20.7% is higher than the 2009 actual of 19.3%. This change is mostly due to the impact of the Transformation Program, which increased the overall expense ratio by 0.9 percentage points. It is important to note that even with the additional costs associated with our business renewal efforts, ICBC’s results are still lower than other automobile insurers. We continue to operate effi ciently and manage costs effectively.

As part of its operations, ICBC incurs non-insurance expenses in providing driver licensing, vehicle licensing and registration, and fi nes collection on behalf of government. The non-insurance expense ratio represents the ratio of the operations and administration costs of ICBC’s non-insurance business to total insurance premium dollars earned. The non-insurance expense ratio outlook, at 2.9%, is consistent with historical results.

The 2011 – 2013 targets refl ect higher expense ratios mainly due to higher operating costs required for the reinvestment into our business through renewing our aging technology and enhancing the capabilities of our people. In addition, our overall expenses will be impacted by general infl ationary increases, suppliers’ increased costs, and higher acquisition costs in the future years.

Investment Return

Investment income is typically a signifi cant component of any insurer’s overall net income and plays an important part in reducing the cost of insurance. ICBC investment assets arise from funds set aside for unpaid claims, unearned premiums, and retained earnings. At the end of 2010, ICBC’s investment portfolio had a carrying value of approximately $11.5 billion. The portfolio is managed in accordance with the Statement of Investment Policy and Procedures. This policy establishes guidelines for ICBC to manage the level of risk and return in the investment portfolio. The majority of

investments are held in the form of fi xed income investments such as bonds and equities to enhance returns and provide added diversifi cation. The asset mix was developed with the Corporation’s liability profi le and cash fl ow needs in mind to cover future claims payments, whereas the investment income generated is used to reduce the premiums that would otherwise need to be collected from our policyholders.

Investment returns, which incorporate both change in market value of assets and income generated, are closely monitored. Individual asset class returns are measured relative to the performance of standard market benchmarks. As well, the return of the overall portfolio is measured against a policy benchmark, calculated as the average of individual asset class benchmark returns and weighted according to the portfolio’s strategic asset mix. Asset class benchmarks and strategic asset mix are outlined in the ICBC Statement of Investment Policy and Procedures.

Given the heavy weighting in fi xed income instruments, the ICBC investment portfolio is subject to interest rate risk. An increase in the interest rate would decrease the market value of fi xed income holdings. However, ICBC’s claim liabilities would also decrease as a result of a higher discounting rate used. To mitigate interest rate risk, the duration of ICBC bonds has been reduced and closely matches the duration of claim liabilities.

ICBC’s fi xed income portfolio is subject to credit risk. Credit risk will remain heightened as the economy struggles to recover from its recent downturn. To mitigate this risk, it is ICBC’s investment policy to hold government and investment grade bonds. ICBC also performs its own internal credit analysis.

Economic growth is expected to be modest in the upcoming year. Interest rates are expected to remain low. The volatility in the fi nancial markets will likely continue, particularly in the equity markets given the uncertainty around the strength of the economic recovery and European debt concerns. The Canadian dollar, relative to the US dollar, is expected to remain strong. ICBC is vulnerable to deterioration in equity markets and to currency fl uctuations. Nevertheless, these risks are not unique to ICBC and are proactively managed by the Investment Department.

The 2011 – 2013 investment portfolio performance targets are set at the policy market benchmark return, net of fees and operating expenses. For performance measurement purposes, ICBC does not forecast the policy market benchmark return as it is the result of market forces beyond the company’s control.

An external performance measurement service independently calculates returns at the portfolio, asset class, and investment manager levels.


Strategy Summary

Objective Strategy MeasuresOutlook (1) Target (2)

2010 2011 2012 2013

Improve Customer Perception



97% 93% 93% 93%

Driver Licensing Satisfaction

94% 93% 92% 92%

Claims Services Satisfaction

89% 85% 85% 85%

Improve Employee Experience

Engaged, inspired, and confi dent leaders and employees

Employee Engagement 55% 55% N/A (3) N/A (3)

Maintain Financial Stability

Streamlined, effi cient, and cost-effective systems and processes

Minimum Capital Test (4) 220%Minimum

170%Minimum

170%Minimum

170%

Combined Ratio

Claims & Claims-• related Expenses & Insurance Expenses

Non-insurance • Expenses

Total

102.6%

2.9%

105.5%

104.6%

3.2%

107.8%

105.0%

3.2%

108.2%

106.6%

3.2%

109.8%

Loss Ratio 83.8% 85.3% 85.8% 86.8%

Expense Ratio

Insurance Expense • Ratio

Transformation • Program Expense Ratio

Non-insurance • Expense Ratio

Total

16.9%

0.9%

2.9%

20.7%

18.1%

0.9%

3.2%

22.2%

18.1%

1.1%

3.2%

22.4%

18.1%

1.7%

3.2%

23.0%

Investment Return Policy MarketBenchmark

Return


Return


Return


Return

ICBC’s current objectives and targets on its high-level strategies are contained in the following table.

Notes1. Financial information for 2010 Outlook was prepared based on Canadian Generally Accepted Accounting Principles (GAAP).2. Financial forecast for years 2011 to 2013 was prepared based on International Financial Reporting Standards (IFRS).3. Employee engagement is an annual measure. Targets are not set beyond the current year. 4. Pursuant to legislative change effective April 2010, ICBC transfers its Optional surplus capital to the Government of British Columbia on an annual basis.


Alignment with Shareholder’s Letter of Expectations

The 2011 Shareholder’s Letter of Expectations affi rms ICBC’s mandate to provide Basic and Optional vehicle insurance to BC motorists, provide driver licensing and vehicle licensing and registration, and administer violation tickets and provide fee and fi nes collection services on behalf of the Province.

Shareholder’s Letter of Expectations ICBC Alignment

Climate ChangeContribute to the BC Provincial Government’s climate • action objectives and comply with the requirement to be carbon neutral in accordance with the Greenhouse Gas Reduction Targets Act.

ICBC established the 2007 baseline of the company’s • environmental footprint and implemented government’s SMARTTOOL to track and report on the company’s greenhouse gas emissions.ICBC has met the requirement to be carbon neutral by 2010. • ICBC continues to implement initiatives to reduce our • carbon footprint, e.g., continuing energy retrofi ts, further switch to 100% recycled offi ce paper, building the new Driver Licensing Centre to LEED Gold standards, and a 10 month internal “Curb the Carbon” campaign to encourage employees to help reduce greenhouse gas emissions.ICBC has sponsored campaigns that help drivers understand • how good driving practices can reduce fuel costs, lower carbon emissions, and improve road safety.

Capital Management FrameworksComply with revised capital management frameworks • for Basic and Optional insurance established by the Shareholder.

ICBC is complying with the revised capital management • frameworks for Basic and Optional insurance.

Transformation ProgramInvest in ICBC’s systems and processes as part of a • Transformation Program to meet increasing customer expectations, better ensure the reliability of systems and improve options for customers, and implement more streamlined processes for employees that will improve customer service.

ICBC has begun its multi-year Transformation Program, • which includes multiple projects that will collectively help ICBC improve services and options for customers and will provide employees with the tools they need to be successful and to be able to better meet customer expectations.

Road Safety LawsSupport implementation of government’s new road safety • legislation and regulations including new impaired driving and motorcycle safety laws.

ICBC works with government and stakeholders to implement • road safety initiatives and supports these initiatives through public education and awareness strategies.

In addition to outlining government’s general reporting framework and general directions, the 2011 letter also provides specifi c direction to ICBC, including the following:


Any additional direction will be incorporated throughout the year and reported in the Annual Report.

Alignment with Shareholder’s Letter of Expectations

Shareholder’s Letter of Expectations ICBC AlignmentOther Initiatives

Ensure the Shareholder is advised in advance of the • release of information requests under the Freedom of Information and Protection of Privacy Act.

ICBC works with the Government of British Columbia • through a process for Freedom of Information and Protection of Privacy Act requests that meets Government needs and does not delay response times.

Comply with the international Payment Card (PCI) Data • Security Standards.

ICBC is fully compliant with the international Payment Card • (PCI) Data Security Standards.

Continue to support government’s policy objectives with • respect to off-road vehicles, identity management, climate action, updating the Family Compensation Act, and other road safety initiatives.

ICBC is working with government to support government’s • policy objectives.

Administration of Government InitiativesWork with the Shareholder to prepare an annual plan for • all ICBC projects that support government initiatives for approval by Treasury Board.

ICBC is working with the provincial government to establish • an annual planning process for ICBC projects that are implemented in support of government initiatives.

Governance and Administrative FrameworkEnsure that corporate priorities refl ect government’s • goals.

ICBC continues to align corporate priorities with • government’s goals.

Comply with the Shareholder’s requirements for Crown • corporations, including reporting and information-sharing, Board appointment processes, Public Sector Employers Act and related requirements, rules related to lobbyists, etc.

ICBC continues to comply with the Government of • British Columbia’s guidelines and directions for Crown corporations.


Summary Financial Outlook

The fi nancial forecasts take into consideration ICBC’s plans to address the key strategic issues and risks facing the organization and changes in the external environment. Based on these plans, planning assumptions (see next page) are developed and are used to develop the fi nancial forecasts below.

The net income outlook for 2010 is expected to be $361 million, as compared to the 2009 actual of $563 million. These results refl ect higher premiums earned offset by higher claims and operating costs and lower investment income.

Throughout 2011 – 2013, ICBC will continue to plan, develop, and implement the changes needed to enhance its ability to compete while continuing to manage claims costs, control staffi ng levels, and support government-mandated priorities.

The forecast period takes into consideration the work we began this year in business renewal and replacement of aging technology. The multi-year Transformation Program will improve our customers’ experiences by better meeting their needs, enable our employees to better serve our customers by putting the right systems and processes in place, and maintain low and stable auto insurance rates.

The net income forecast for 2011 – 2013 refl ects expected growth in premiums, a return to longer term claims cost trends, and investment income based on current investment market conditions. Capital expenditures primarily comprise Transformation Program costs and the ongoing renewal of information technology and facilities. The forecast also takes into account the estimated Optional capital amounts that are to be transferred to the Government of British Columbia under the new legislative framework.

Notes1. Financial information for 2009 Actual and 2010 Outlook was prepared based on Canadian Generally Accepted Accounting Principles (GAAP).2. Financial forecast for years 2011 to 2013 was prepared based on International Financial Reporting Standards (IFRS). 3. 2011 Total equity — beginning of year includes IFRS transitional and pension and post-retirement accounting adjustments.4. Major categories of capital expenditure include: facilities (land, building, and leasehold), vehicles, furniture and equipment, IT systems (computer equipment and

software). Looking ahead, ICBC expects an increase in capital expenditure in the facilities category as the company maintains or replaces aging infrastructure, including replacement or upgrade of facilities, and in the IT systems category as critical business systems are renewed.

$ 19Nil

$ 44 Nil

$ 81Nil

$ 84Nil

$ 88Nil

Capital expenditures (4)

Long-term debt

$ MillionsPremiums earnedService feesInvestment income

Total revenueClaims incurred (including prior years’ claims adjustments)

Claims services and loss managementInsurance operations expensesTransformation programAcquisition costs (including DPAC adjustment)Non-insurance expenses

Total expensesNet income

Change in unrealized gains/losses during the yearTotal comprehensive incomeTotal equity — beginning of yearTransfer of excess Optional capital to the Government of British Columbia

Total equity — end of yearRepresented by:Retained earnings — end of yearAccumulated other comprehensive income

Total equity — end of year

2010(Outlook)

$ 3,66755

5084,2302,752

32217235

480108

3,869361

91452

3,617

(580)3,489

2,996493

$ 3,489

2011(Forecast)

$3,69249

5274,2682,816

331206

35471119

3,978290

(107)183

3,266

(185)3,264

2,978286

$ 3,264

2012(Forecast)

$ 3,77955

5304,3642,905

337206

42476121

4,087277(96)181

3,264

(225)3,220

3,030190

$ 3,220

2013(Forecast)

$ 3,87360

5534,4863,021

34021166

489124

4,251235(78)157

3,220

(225)3,152

3,040112

$ 3,152

2009(Actual)

$ 3,65059

5324,2412,650

320169

-435104

3,678563303866

2,751

-3,617

3,215402

$ 3,617

(3)

(2)(2)(2)(1)(1)


AssumptionsBased on the current activity and investment market • conditions, changes to planning assumptions pertaining to premiums and investment returns have impacted future years’ forecasts.

Prior years’ claims refl ect changes in the discounted • value of unpaid claims.

The outlook is based on the status quo business • model and the company’s expected investment in the Transformation Program.

Effective November 1, 2010, Basic insurance • rates decreased by 2.4% and Optional insurance rates, on average, decreased by 3%.

Investment income as shown includes the expected • interest, dividends, other income and realized gains/losses from the investment portfolio.

These results refl ect the overall operations of the • business including Basic and Optional insurance and non-insurance activities.

Claims incurred refl ect current claims trends, vehicle • population growth, and infl ation.

Driver Penalty Point Premiums were partially • replaced by Driver Risk Premiums in 2009. The amount of Driver Penalty Point Premiums and/or Driver Risk Premiums included in the forecast is based on current estimates.

Forecast Risks and SensitivitiesPremiums

1% fl uctuation means $37 – $39 million in net • premiums.

Claims

1% fl uctuation means $28 – $30 million in claims • costs.

1% fl uctuation in the unpaid claims balance means • $60 – $66 million in claims costs.

Investments

1% fl uctuation in return means $111 – $117 million • in investment income.

1% change in investment balance means $5 – $6 • million in investment income.

Market share

1% change in market share represents a $4 – $6 • million impact on net income.

Summary Financial Outlook

HEAD OFFICE

151 W Esplanade North Vancouver, BCV7M 3H9

604-661-28001-800-663-3051

ADDITIONAL INFORMATION

Additional information about ICBC is available at www.icbc.com

PI295C (022011)


APPENDIX 11 C

2010 ICBC ANNUAL REPORT

2010 annual report

PI186R (042011)

Printed on 20% post-consumerrecycled paper that is manufacturedwith non-polluting windpower energy

head office151 W Esplanade North Vancouver, BC V7M 3H9

604-661-2800 1-800-663-3051

Additional information about ICBC and electronic copies of this report are available at icbc.com

Follow us on Twitter: @icbc

profileThe Insurance Corporation of British Columbia (ICBC) is a provincial Crown corporation that provides universal compulsory auto insurance (Basic insurance) to drivers in British Columbia (BC), with rates regulated by the British Columbia Utilities Commission (BCUC). ICBC also sells Optional auto insurance in a competitive marketplace.

Our insurance products are available across BC through a network of independent brokers and claims services are provided at ICBC claims handling facilities located throughout the province. We also invest in road safety and loss management programs to reduce traffic-related deaths, injuries and crashes, auto crime, and fraud. In addition, we provide driver licensing, vehicle registration and licensing services, and fines collection on behalf of the provincial government at locations across the province.

visionICBC will be BC’s preferred auto insurer, providing protection and peace of mind.

missionWe deliver quality auto insurance products and services at competitive prices through a knowledgeable team committed to our customers.

valuesIn providing products and services, the following values guide our behaviour and decisions:

integrity — Our business is based on trust. We are honest, ethical, straightforward, and fair.

dedication to customers — We exist to serve our customers. We listen actively and are responsive to their needs.

accountability — We hold ourselves, and each other, accountable for our actions and the success of our business.

caring — We care about our customers’ well-being and ensure they feel supported by treating them with dignity and respect. We care about each other’s well-being and create an environment that promotes personal growth. We care about our communities by supporting road safety programs and being environmentally responsible.

1

letter of transmittal and accountability statement 3

key financial and operating comparatives 4

performance highlights 5

message from the chair and the president 6

corporate overview 9

report on performance 13

business risks and risk management 25

management’s discussion and analysis 29

management’s responsibility for financial statements 39

independent auditors’ report 40

actuary’s report 41

consolidated financial statements 42

notes to consolidated financial statements 46

corporate governance 69

ICBC board of directors and executives 72

board governance structure 75

table of contents

Working with our customers

Focus groups are a great way for us to understand how our customers feel about certain decisions. So that’s why the opinions of the participants, like Jenna Freeman, are so important to us.

“I didn’t even know that ICBC did focus groups. So I thought it was pretty cool that I was contacted and asked to voice my opinion. And I thought it was great that they actually care about their customers’ opinions and would give us all an opportunity to be a part of a decision-making process,“ says Jenna.

The focus group Jenna participated in asked questions mostly about our customers’ communications preferences. In 2010, we did over 100 focus groups with ICBC customers on a wide range of topics, from pricing to claims services to recognizing smart drivers.

We also started our online panel — Shifting Gears — which facilitates regular, two-way conversation between ICBC and thousands of BC drivers. For example, our Shifting Gears members told us what insurance-related topics they’re most interested in learning about. This information provided input into the Demystifying Insurance Campaign with Vicki Gabereau, and helped the campaign to focus on the important issues to our customers.

We do research with our customers because it is a top priority for ICBC to improve our customers’ experiences. In order to achieve this objective, we must listen to our customers, and focus groups and surveys help us gain a better understanding of what is important to our customers and how they want to be served.

Jenna Freeman, customer

3

letter of transmittal and accountability statement

Minister of Public Safety and Solicitor General Minister Responsible for the Insurance Corporation of British Columbia

Dear Minister:

The 2010 Annual Report of the Insurance Corporation of British Columbia (ICBC) was prepared under my direction in accordance with the Budget Transparency and Accountability Act and the BC Reporting Principles. I am accountable for the contents of the report, including what has been included in the report and how it has been reported.

The information presented reflects the actual performance of ICBC for the 12 months ended December 31, 2010 in relation to the 2010 Service Plan. The measures presented are consistent with ICBC’s mandate and corporate strategy, and focus on aspects critical to the organization’s performance.

As the Chair of ICBC’s Board of Directors, I am responsible for ensuring internal controls are in place to ensure information is measured and reported accurately and in a timely fashion.

All significant assumptions, policy decisions, events and identified risks, as of December 31, 2010, have been considered in preparing the report. The report contains estimates and interpretive information that represent the best judgment of management. Any changes in mandate direction, the goal, objectives, strategies, measures or targets made since the 2010 Service Plan was released and any significant limitations in the reliability of data are identified in the report.

On behalf of the Board of Directors and all ICBC employees, it is my pleasure to submit ICBC’s Annual Report for the year ended December 31, 2010.

Sincerely,

Nancy McKinstry Chair of the Board of Directors

4

five year comparison for the years ended December 31

key financial and operating comparatives

1 ( ) denotes a favourable adjustment, i.e., a reduction in expense.

2 Annualized values have been used for policies with a term of less than 12 months.

3 Average premium is based on premiums earned.

4 Claims reported represent the number of claims reported against purchased insurance coverages.

5 Loss ratio is based on current year claims and related costs and prior years’ claims adjustments as a percentage of premiums earned.

6 Insurance expense ratio is based on insurance operating costs as a percentage of premiums earned (excludes non-insurance costs, deferred premium acquisition (DPAC) costs and other unusual items).

2010 2009 2008 2007 2006

For the year ($000):Premiums earned 3,667,324 3,650,025 3,631,215 3,482,434 3,256,856

Service fees 54,628 58,807 69,174 65,949 47,154

Claims incurred during the year 2,754,077 2,648,193 2,646,191 2,646,360 2,544,396

Prior years’ claims adjustments 1 (2,039) 2,355 (136,447) (33,779) 99,043

Claims services, road safety and insurance operating costs 494,408 488,735 457,726 450,787 433,830

Transformation Program expenses 34,775 – – – –

Insurance premium taxes and commissions 446,015 432,017 429,011 407,022 379,682

Deferred premium acquisition cost adjustments 1 31,180 2,807 (16,922) (26,543) (87,511)

Non-insurance expenses 108,094 104,258 103,840 92,935 96,819

Investment income 506,051 532,477 280,449 611,600 512,349

Net income 361,493 562,944 497,439 642,318 350,100

At year end ($000):Cash and investments 11,593,565 11,129,061 10,056,546 9,641,452 8,470,584

Total assets 13,142,157 12,643,599 11,476,492 10,991,685 9,738,492

Equity:

– Retained earnings 3,000,436 3,214,655 2,651,711 2,154,272 1,507,248

– Accumulated other comprehensive income 492,865 402,160 99,671 278,975 –

Total equity 3,493,301 3,616,815 2,751,382 2,433,247 1,507,248

Autoplan policies earned 2 3,281,000 3,225,000 3,193,000 3,108,000 3,012,000

Average premium ($) 3 1,092 1,100 1,108 1,094 1,051

Claims reported during the year 4 895,000 946,000 964,000 992,000 947,000

Loss ratio (%) 5:

– Current year (%) 83.9 81.3 81.4 84.7 87.4

– Prior years’ claims adjustments (%) 1 (0.1) 0.1 (3.8) (1.0) 3.0

Loss ratio (%) 83.8 81.4 77.6 83.7 90.4

Expense ratio (%) :

– Insurance expense ratio (%) 6 16.9 16.4 15.9 16.0 15.7

– Transformation Program expense ratio (%) 0.9 – – – –

– Non-insurance expense ratio (%) 3.0 2.9 2.9 2.6 3.0

Expense ratio (%) 20.8 19.3 18.8 18.6 18.7

5

net income($ millions)

expense ratio (%)

loss ratio (%)

customersatisfaction(%)

investmentincome($ millions)

Interest, dividendsand other income

Gains (losses)

2009 2010200820072006

506512

612

280

532

2009 2010200820072006

361350

642

497

563

Non-insuranceexpense

Insuranceexpense

TP expense

2009 2010200820072006

18.7 18.8 19.320.8

18.6

InsuranceServices

DriverLicensing

ClaimsServices

2010

2009

2008

85 8893 93 9396

899497

2009 2010200820072006

90.483.7

77.681.4 83.8

performance highlights

net incomeIn 2010, ICBC recorded net income of $361 million. Net income contributes to retained earnings which helps protect policyholders against significant unexpected losses and volatile rates.

expense ratioThe expense ratio is a standard industry measure for assessing the operational efficiency of an organization. The expense ratio has increased in 2010, partially due to the Transformation Program (TP), however, it is consistently better than the industry. We continue to operate efficiently and manage costs effectively.

loss ratioThe loss ratio is a key performance indicator within the insurance industry measuring profitability of the insurance product. The 2010 loss ratio is higher than prior year due to increasing average costs and increasing frequency of injury claims.

customer satisfactionIn 2010, all of ICBC’s customer satisfaction scores increased over 2009. We continue to work on improving customers’ perceptions of us and building their trust.

investment incomeICBC’s investments generated strong investment returns with income of $506 million in 2010. Income from investments helps to reduce the amount of premiums that would otherwise have to be paid by customers.

message from the chair and the president

We started 2010 focused on our corporate strategy and its objectives of improving customer perception and employee experience while maintaining financial stability. We’re pleased to say we made significant progress on all three objectives. Our Transformation Program initiatives achieved several major milestones en route to making our systems and processes more responsive to customer needs. At the same time, our financial performance remained strong, allowing us to reduce our rates for both Basic and Optional coverage. For this, we want to thank our customers for their smart driving decisions, helping to keep crashes down.

We made considerable steps in improving the customer experience in 2010. We know that English is not the first language of all of our customers, so we launched our Claims Translation Service offering 170 languages, which is available in all ICBC claims offices and our call centre to ensure our diverse customers have a positive and comfortable claims experience. Our website now also features some basic driver licensing, insurance, and claims information in both Chinese and Punjabi. We launched a new application called Rate Quote, which allows brokers to spend more time focused on customer service. For customers shopping for a used vehicle, we launched an enhanced version of our Vehicle Claims History report that will provide even better purchase protection for our customers.

7

To be successful in improving customers’ experiences, our staff must be empowered, engaged and accountable for the actions they take. We’re pleased that our employee engagement score increased six per cent in 2010. We took steps to improve how we support and encourage each other with the new DRIVE Council — a team of employees, nominated by their peers, who will help enhance our employee recognition practices. We extended Customer Experience Learning to all front-line employees to help us become a more customer-centric company. Through Customer Experience Learning, we’re providing employees with knowledge and tools that help them deliver service in a way that meets individual customers’ needs and expectations. It was also in large part because of our employees that we were able to provide excellent customer service during the Vancouver 2010 Olympic and Paralympic Winter Games, in which ICBC was an official supporter.

Our strong financial performance over the last several years has allowed us to provide greater value to our customers by keeping rates low and stable. In 2010, Basic rates were decreased by 2.4% and Optional insurance rates were, on average, reduced by three per cent. To maintain financial stability we will continue to have a conservative investment philosophy and manage operating costs prudently. The most significant cost pressure to our business is bodily injury claims costs. We will work to manage this pressure by streamlining claims handling and investing in road safety enhancements. We are also working towards implementing improved pricing that is more reflective of driver risk, which supports the concept of increased driver accountability, where drivers can have a greater influence on their premiums by their driving behaviour on the road.

The main driver of achieving our corporate objectives is the Transformation Program, which is ultimately about building the new ICBC. Once complete, we will be more responsive to our customers and their needs. It will streamline and modernize our business processes and systems and give us customer-centric pricing, products, and services. We are focusing on four areas: our relationships with our customers, insurance pricing, claims, and technologies. By working on our relationships with our customers, we’re creating a customer-centric business model that will influence all of ICBC’s business changes going forward, including developing targeted services for customers with similar needs and behaviours. We know we need to make our insurance pricing more reflective of driver risk, which will benefit lower-risk drivers, and implement new insurance sales technology, so we’re working on a new pricing model. In addition to buying our new integrated claims system, we’ve streamlined many of our claims processes. We’re also implementing technology across the company that will be a common foundation for our business areas, plus new work tools for our employees and business partners.

Looking forward, our outlook remains optimistic. We will strengthen our relationships with customers and our partners and suppliers and will continue to invest in initiatives to improve road safety. We continue to make much-needed investments in our aging customer service systems, and through underwriting and pricing improvements, we continue to move towards driver-based pricing where premium rates will be more reflective of driver risk. As our current financial position is strong, the changes being implemented will be made with minimal impact on rates over time.

These achievements came about thanks to a lot of effort and teamwork, involving virtually every ICBC employee, our brokers, and business partners. We are grateful for their continuing efforts to make ICBC a stronger, more successful company. The coming year is sure to have its share of challenges, and we’re confident we will meet them by continuing to work together.

Nancy McKinstry Jon Schubert, CMA Chair of the Board of Directors President and Chief Executive Officer

Working with our Road Safety partners

Alex Vasiljevic knows the importance of positive partnerships. As the lead youth worker for the NASKARZ — Never Again Steal KARZ (Cars) — program, he’s worked tirelessly to ensure at-risk youth have a fighting chance.

“We’re all responsible for the development of our young people — and not just the ones who are in trouble or stealing cars. If we develop kids as a community, it will result in social inclusion and a reduction of car theft,” says Alex.

Alex’s passion led him to write ICBC in 2004, as he was concerned about the carnage in East Vancouver related to auto theft. He proposed that ICBC work with Ray-Cam Co-operative Community Centre to develop a program to divert kids in their community away from vehicle crime. It led to the creation of the NASKARZ program, where participants learn basic automotive skills and work towards re-building cars.

The program is a partnership between the Ray-Cam Centre, Vancouver Police Department, Vancouver Community College, and ICBC and is aimed at the youth of the Vancouver Downtown Eastside, Strathcona and Grandview Woodlands areas, some of whom have been involved in joy riding and auto theft.

ICBC helps build better communities by funding several programs. This includes our Road Safety Speaker program for grades 11 and 12 students, and road safety curriculum material for kindergarten to grade 10 students. We also work in partnership with the BCAA Traffic Safety Foundation to fund child passenger safety clinics and provide funding for other local partnerships like speed readerboards.

Alex Vasiljevic, chief youth worker, Ray-Cam Co-Operative Community Centre

9

corporate overview

ICBC was established as a provincial Crown corporation in 1973 and, at that time, was the sole provider of auto insurance in BC. Soon afterwards, legislation was amended to allow other insurance companies to sell Optional auto insurance products. Today, we are the sole provider of Basic (universal compulsory) auto insurance, the rates for which are regulated by the BCUC, and we sell Optional auto insurance products in a competitive marketplace.

In addition to our insurance products and services, we also provide a number of services on behalf of the provincial government, including vehicle registration and licensing, driver licensing and fines collection. We refer to these as our non-insurance services.

In providing our products and services, we operate as an integrated company for the benefit of our customers. We are one of BC’s largest corporations and one of Canada’s largest property and casualty (P&C) insurers. Our insurance products and services are available through a province-wide network of approximately 900 independent brokers, government agents and appointed agents. We process almost 900,000 claims each year through our 24-hour, seven-days-a-week telephone claims handling facility, 38 claim centres and other claims handling facilities across the province, including Express Glass and Repair facilities, and icbc.com. We also provide driver licensing services through 120 points of service, including driver licensing centres, government agents and appointed agents throughout BC. Our head office is located in North Vancouver, BC.

In delivering our products and services, we partner with businesses and organizations in communities throughout BC. Autoplan brokers are key business partners for ICBC, distributing our insurance products and providing other services such as vehicle registration and licensing. We deliver our services in partnership with a broad base of suppliers in the automotive industry and liaison groups such as the Automotive Retailers Association. Law enforcement agencies, health services providers, lawyers, and public and community organizations are among our other key partners.

insurance products and servicesSimilar to other vehicle owners across Canada, motorists in BC are required by law to purchase a minimum level of Basic auto insurance. This provides private passenger and certain commercial vehicle owners with $200,000 in third-party liability protection, $150,000 for medical and rehabilitation costs, and $1 million of underinsured motorist protection. British Columbia’s coverage is among the most comprehensive in the country. Buses, taxis, limousines, and inter-provincial trucking and transport vehicles have higher mandatory levels. In addition to providing Basic auto insurance, we also offer various Optional auto insurance coverages, including extended third-party liability, collision, comprehensive, and vehicle storage. The table on the next page illustrates the full spectrum of our Basic and Optional insurance products.

Auto insurance in BC is based on a full tort system, which means that an at-fault driver or vehicle owner may be taken to court for the full amount of damages. In addition, an injured party has access to accident benefits coverage regardless of fault. This coverage includes medical and rehabilitation expenses and up to $300 per week for wage loss. In other provinces in Canada, auto insurance may be based on tort with caps, no-fault or a mixed no-fault and tort system, which means that compensation may be based on predetermined benefit schedules regardless of fault, thresholds and/or caps or deductibles on pain and suffering awards, and little or no ability to sue for further damages. These differences and different driving conditions and traffic density make inter-provincial comparisons difficult since the products, services and cost structures of each are unique.

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insurance corporation of british columbia

We invest in road safety programs that provide a direct benefit to our customers by helping to reduce traffic-related deaths, injuries and crashes. By doing so, we help to reduce the impact of auto crashes for everyone in BC. Fewer crashes also help control claims costs, which ultimately help keep auto insurance rates low and stable. Our road safety strategy focuses on safer drivers, safer roads and safer vehicles. We make targeted investments in education and awareness campaigns to help drivers make smart driving decisions, community-based initiatives to promote safe driving, enhanced traffic police enforcement that focuses on high-risk driving behaviours and locations, and road improvements designed to make high-crash intersections and corridors safer for drivers. We also deliver loss management programs to help reduce the impacts of auto crime, including programs that target thieves and help reduce auto crime in high-risk areas, and programs to prevent and reduce the impact of fraud on our customers.

This work cannot be done alone, which is why we partner with many individuals and organizations across the province to deliver these programs, including the Ministry of Public Safety and Solicitor General, the Ministry of Transportation and Infrastructure, local governments, the law enforcement community, brokers, driver training schools, industry associations, community groups, and the many volunteers who devote their time and energy to making BC roads safer for everyone.

icbc’s basic and optional insurance products

basic coverage

The minimum insurance protection any vehicle must carry to legally operate in BC:

Third-Party Liability•

Accident Benefits•

Underinsured Motorist Protection•

Protection Against Hit-and-Run* and Uninsured •Motorists

Inverse Liability Coverage •

optional coverage

Additional protection to meet customer needs:

Vehicle

Collision•

Comprehensive•

Specified Perils•

Vehicle in Storage•

New Vehicle Replacement Plus•

Limited Depreciation Coverage•

Replacement Cost Coverage•

Collector and Vintage Vehicles•

Equipment

Motor Vehicle Equipment•

Excess Special Equipment•

Motor Home Contents•

Individual and Family

Extended Third-Party Liability•

Excess Underinsured Motorist Protection•

Income Replacement Policy Including Death •Benefits

Loss of Use•

Vehicle Travel Protection•

RoadStar/Roadside Plus•

* Hit-and-Run payments for property damage are provided if not recoverable from any other source.

112010 annual report


non-insurance servicesIn addition to our insurance products and services, we also provide a number of non-insurance services on behalf of the provincial government, which include driver licensing, vehicle registration and licensing, violation ticket administration and government fines collection.

We manage the issuance of vehicle licence plates and decals through brokers across the province who perform vehicle registration and licensing functions at the time of insurance purchase. This linkage between the requirement for vehicle registration prior to licensing and the issuing of Basic auto insurance minimizes the number of unlicensed and uninsured vehicles operating in BC.

The driver licensing services we provide include driver testing and licensing, administering the Graduated Licensing Program and regulations governing the driver training industry, and provincial violation ticket administration. We also support the Office of the Superintendent of Motor Vehicles’ programs relating to driver fitness, driver improvement, administrative driving prohibitions, and vehicle impoundment. By helping to put the right drivers on the road with the right skills, these programs and services contribute to safer roads for all British Columbians.

To find out more about all of our products and services, please visit our website at icbc.com.

Working with our body shops

Mike Srigley has seen a lot of changes in the collision repair industry in his 36 years of owning Sunshine Auto Body in Langley.

“We’re doing a lot of the estimating now directly with the customer, so they don’t have to go to a claims centre anymore. We get on with the jobs much quicker now,” he says.

Sunshine Auto Body is a part of the c.a.r. shop VALET Program, which streamlines the claims process and provides our customers with a hassle free claims experience. It provides eligible customers with more convenience when dealing with a claim, as they’re able to go directly to a c.a.r. shop VALET facility for an estimate and repairs. All c.a.r. shop VALET facilities must meet or exceed ICBC’s standards for repair equipment and business practices.

Sunshine Auto Body is just one of our 428 c.a.r. shop VALETs across the province. They’re accredited by ICBC to provide safe, high-quality repairs that are guaranteed for as long as you own the vehicle. In 2010, Sunshine Autobody was one of 17 c.a.r. shop VALET facilities in BC that received an AutocheX Premier Achiever Award, which recognizes collision repair shops across North America for achieving excellent customer satisfaction scores in the top four per cent of participating shops.

Mike Srigley, owner, Sunshine Auto Body

13

report on performance

ICBC’s corporate vision is to be BC’s preferred auto insurer, providing protection and peace of mind. With this vision, we remain focused on building trust with our customers by delivering improved customer experience and offering products and services that are good value. We are improving business processes and efficiencies to deliver improved customer experience, and also work toward providing customers with pricing that is more reflective of driver risk. Improving customer experience will also need the support of our employees. We will therefore continue to focus on improving the experience of our employees, by providing them with the tools and education to help them be successful, develop leadership capability, and build workforce readiness for change. We have had healthy financial results and as a result have been able to protect our customers and provide greater value by keeping rates low and stable for our customers. We will continue to maintain financial stability by having a conservative investment philosophy and manage operating costs prudently.

We established three key strategies under our three corporate objectives. The strategies represent core areas of focus for the work that is underway to achieve our corporate goal and objectives over the next three years. Therefore, it is important to understand these strategies in the context of our overall vision, mission, goal and objectives.

• CorporateGoal: We must improve our customers’ experiences and perceptions of us. We will do this by listening to, better meeting the needs of, and trusting our customers while maintaining low and stable auto insurance rates. To be successful, all of us must be empowered, engaged, and accountable for the actions we take to achieve this goal.

• ImproveCustomerPerceptionObjective Strategy: Understand our customers and exceed their expectations.

• ImproveEmployeeExperienceObjectiveStrategy: Engaged, inspired, and confident leaders and employees.

• MaintainFinancialStabilityObjective Strategy: Streamlined, efficient, and cost-effective systems and processes.

performance management systemsTo assess progress against our goal and objectives, we rely on a number of financial and non-financial corporate performance measures. Where possible, we use standard industry measures that enable benchmarking with other insurers. Where external sources of data are used, the most current available information is included in this report. In other cases, because of our unique business model, we develop distinct measures relevant to the area of performance. Performance against these measures is monitored throughout the year and actions are taken to address significant variances.

Our data used in the calculation of performance results are derived from the company’s financial and operating systems. Controls over our financial systems are periodically reviewed by our internal and external auditors. We recognize the inherent limitations in all control systems.

We believe that our systems provide an appropriate balance between costs and benefits desired and that the systems of internal controls provide reasonable assurance that errors or irregularities that would be material to the financial statements are prevented or detected in the normal course of business.

Independent firms are retained to conduct ongoing surveys of customers for the purpose of monitoring customer satisfaction and an annual survey for the purpose of monitoring employee engagement.

The following sections provide further information on our objectives and key strategies, as well as our 2010 performance results relative to the measures and targets outlined in ICBC’s 2010 – 2012 Service Plan. Performance targets for 2011, as outlined in our 2011 – 2013 Service Plan, are also provided.

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* Objectives, strategies and measures for 2011 and future years are reflected in ICBC’s 2011 – 2013 Service Plan.

improve customer perceptionmulti-year strategy and measures: 2010 – 2012 Service Plan*

measures

insurance services satisfaction•

driver licensing satisfaction•

claims services satisfaction•

strategy


Improving our customers’ perceptions of us is a key strategic focus and we are working towards achieving this by committing to understand what is important to our customers and exceeding their expectations.

For the second year in a row, the Claims Contact Centre was awarded the title of World Class Call Centre Certification from the Service Quality Measurement (SQM) Group. SQM surveys customers from approximately 450 leading North American companies annually. In 2010, ICBC was one of only 13 companies to receive World Class Certification. In addition, 181 ICBC employees from both claims and insurance call centres achieved World Class Certification on an individual level for their superior customer service.

Getting in a crash is stressful, especially when you’re far away from home. ICBC partnered with Kirmac Collision to pilot a service which will provide access to repair services for customers who have been involved in a crash in Washington State. When a customer with ICBC Optional insurance coverage calls Dial-a-Claim to report a claim in Washington State and their vehicle can no longer be driven or if they have concerns about driving it, we’ll now offer to connect them directly to a Kirmac Collision representative, who will assist them with any towing, repair and rental vehicle needs. Once repairs are complete, the vehicle will be delivered to the Kirmac Collision location in BC that’s closest to the customer.

To deal with some common myths about ICBC and address topics that our customers have told us they’re interested in, we started the “Demystifying Insurance” campaign. The ads feature Vicki Gabereau as “ICBC’s somewhat reluctant de-mystifier of insurance”, sharing what she’s learning about us and our products. Another campaign, which ran in the summer months, focused on observing the unwritten rules of the road. To reach our youngest audience, we launched two peer-oriented campaigns to appeal to young drivers to change risky driving habits. The 180 Short-Film Contest for 19 – 25 year olds challenged youth to make a short film with a road safety message, while the Your Ad Here contest asked those in grades 8 – 11 to design a print ad that will make their friends reconsider their risky driving habits.

As a result of customer feedback, we developed a new web application to help customers decide which identification they need to bring with them when attending our offices — for example, to renew or replace their BC Driver’s Licence. In order to gather more customer feedback, we launched Shifting Gears — an online panel that allows customers to tell us in detail how they feel about ICBC, as well as their preferences relating to our services.

In May, we opened a new driver licensing centre in Port Coquitlam, which responded to the needs of the fast-growing Tri-City area. There’s enough space at this site to offer better parking and road testing for motorcycles, buses and tractor trailers. The centre is the first ICBC-owned driver licensing office and was built to Leadership in Energy and Environmental Design (LEED) Gold standards.

We also made some changes to Fleetplan — our rating plan for fleets. We changed the eligibility criteria for fleet status and will now charge standardized Basic insurance premiums for all trailers. The changes include eliminating one of the two existing retrospective rating plan options to ensure that participants take on some of the risk associated with the program. These changes are part of ICBC’s overall goal of making rates more reflective of risk, and lay the ground work for future changes as we continue to focus on ensuring we are charging appropriate insurance premiums for all fleet customers.

As part of our continued work on the Transformation Program, we also purchased a new rating and underwriting engine — a behind-the-scenes tool enabler that will use rates, rating variables, rules and the customer’s risk profile to calculate customer premiums. This technology will be the enabler to implement our pricing work under Driver Record Model and Fleetplan with the objective of improving customer’s price/value perception.

We’ve bought a new product that will help us achieve our goal of a state-of-the-art, fully integrated claims management system that will benefit our employees, customers and partners. The product will provide us with a consolidated view of a customer’s claim, making us more efficient and productive by reducing manual processes, automating less complex work, and offering built-in prompts to support our claims handling efforts.



source: surveys conducted byindependent firm

93 96 93 9397

2010Plan

2011Target

2010 Actual

2009 Actual

2008 Actual

insurance services satisfaction (%)


85 88 85 8589

2010Plan

2011Target

2010 Actual

2009 Actual

2008 Actual

claims services satisfaction (%)

Thanks to suggestions from our Claims staff, we were able to improve our employee and customer experience while staying true to our corporate objectives. The result was nine changes that could be put in place fairly quickly with minimal resources and move us closer to our desired future state. These included the collection of customer emails as an additional means to contact customers; a more customer-friendly Hit and Run program, which gives customers more choice on where and when they begin to process their claims; and making a copy of the vehicle evaluation available to our customer after a total loss is decided. This helps demonstrate transparency in the process and customers can better understand how their settlement was determined.

performance measures, targets and results:We measure customer service performance based on the percentage of satisfied customers. A separate measure is used for each major transaction type — insurance product purchase, claims service and driver licensing.

The design of our measures and targets reflects the inherent differences of these key transactions. An independent research firm conducts ongoing customer surveys throughout the year to monitor transactional satisfaction.

We’ve also expanded the Express Repair Program in order to streamline the claims process for our customers and to provide them with a better claims experience that is hassle free and convenient. The Express Repair Program provides more convenience when dealing with a claim, as customers are able to go directly to a c.a.r. shop VALET facility for an estimate and repairs — eliminating the need to attend a claims centre first. We know that our customers’ vehicles are important to them, and getting those vehicles back on the road as quick as possible with safe, high-quality, guaranteed repairs, is a critical component in the overall customer experience.

insurance services satisfactionIndependent insurance brokers process over three million policies each year. The insurance services satisfaction measure represents the percentage of customers satisfied with a recent ICBC insurance transaction and is based on surveys of approximately 4,000 customers during the course of the year.

This measure is typically higher than 90% and reflects the positive relationship we and brokers enjoy with our customers. The 2010 results were 97%, which exceeded the plan and results from prior years. For 2011, the target has been set at historical satisfaction levels, at 93%, in order to reflect our plan of maintaining a high level of customer satisfaction while preparing for the renewal of technology and changes to the business processes.

claims services satisfactionIn 2010, almost 900,000 claims were processed through ICBC’s Dial-a-Claim centre, claims centres and specialty departments such as commercial claims and rehabilitation services. The claims services satisfaction measure represents the percentage of customers satisfied with their recent ICBC claims transaction and is drawn from a sample of over 30,000 customers surveyed throughout the year.

In 2010, claims services satisfaction was 89%, which exceeded the plan as well as prior years’ results.

For 2011, we expect that customer satisfaction may be impacted as we begin to change some business processes and replace the existing claims system. As a result, the target of 85% has been set to reflect historical norms.

16 icbc.com



9493 93 9392

2010Plan

2011Target

2010 Actual

2009 Actual

2008 Actual

driver licensing satisfaction (%)

improve employee experiencemulti-year strategy and measures: 2010 – 2012 Service Plan*

measures

employee engagement index•


strategy

Engaged, inspired and confident leaders and employees

driver licensing satisfactionWe conduct approximately 1.5 million transactions relating to the issuance of driver licences and driver exams each year. The driver licensing satisfaction measure represents the percentage of customers satisfied with a recent driver licensing transaction with us. The transaction could relate to issuing or renewing a licence, taking a knowledge test, or undergoing a road test. This measure is drawn from a sample of over 4,000 customers surveyed throughout the year and is weighted by the number of transactions for each type of service.

The 2010 results for driver licensing satisfaction, at 94%, exceeded both the plan and prior years’ results. This measure is typically at or over 90% and is indicative of our commitment to customer service. For 2011, the target has been set at 93%, which is consistent with historical norms.

We know that we need confident, inspired employees in order for us to achieve our objective. Although we’ve seen an improvement in our employee engagement score from last year and we’ve exceeded this year’s target, it’s clear we still have more work to do to ensure all employees feel connected to the business, to the day-to-day work, and most importantly, to our customers.

Our objective for improved employee experience involves aligning business systems and people needs. In 2010, we continued our efforts to align performance management, the corporate competency framework, learning and development programs and employee engagement efforts with increased focus on improving customer perception and renewing our business. We also continued to focus on developing workforce capability and capacity, and establishing “organizational readiness” to ensure an effective transition towards a more customer-centric business model.

In order to foster a culture of recognition and appreciation, we created “iCount cards,” which help employees recognize their peers, managers, and team members. Employees can use them to thank people who have helped them get their work done, or who have gone out of their way to help a customer, or anything else they want to show appreciation for. We develop and launch programs like iCount because

recognition is an important part of a healthy workplace. These formal programs set a tone as we work towards weaving a culture of recognition through every part of the company.

Because not everyone likes to be recognized for good work in the same way, we’re offering workshops for managers on how to recognize employees, and how to be sensitive to different recognition preferences. We offer these workshops by request and so far more than 100 managers have taken us up on our offer.

In 2010 we created the DRIVE (Delivering Results Innovation Values and Enthusiasm) Council, which will increase recognition of employee achievements through a forum where employees and senior leaders share ideas about continuously improving our recognition practices. The council includes employees from various divisions, levels, and geographical locations. Hosted by our President and CEO, Jon Schubert, the group is working towards finding new ways to recognize employees, including establishing categories for the DRIVE Awards that will be presented at next year’s managers’ conference.

We recognize that if we are able to make processes easier for our staff, it gives them more time to focus on the customer. We took a significant step forward in modernizing




44

49

55 5551

2010Plan

2011Target

2010 Actual

2009 Actual

2008 Actual

employee engagement index (%)

our business in 2010 when we switched from microfiche to electronic content management for vehicle registration documents. The new technology allows us to create electronic copies of insurance documents and quickly and easily access these documents when we need them. All of the new systems we have been buying will give us modern, more integrated technology to serve our customers better and improve the experience for our employees, customers and business partners.

We believe in investing in the communities where our employees live and work and supporting causes important to them. In 2010, ICBC and its employees gave generously

to several charities, including more than $200,000 to the Canadian Red Cross and other charitable organizations for the Haiti relief effort. ICBC and its employees contributed $1 million dollars to United Way and their registered charities, making our 2010 campaign our most generous ever. Our Giving Back to Communities program recognizes and supports employees who volunteer and teams that fundraise for registered charities in their community by making a donation to their chosen charity. ICBC staff who took advantage of this program were able to raise more than $20,000 for the Movember campaign, which supports prostate cancer.

performance measures, targets and results:

employee engagementThis measure represents the overall level of engagement of our employees, as defined by how positively they speak about the organization to co-workers, potential employees, and customers; the level of desire they have to be a member of the company; and the degree of extra effort and dedication they are willing to apply to doing the best job possible.

We made significant progress in improving our employee engagement score in 2010. The employee opinion survey was sent to each of the approximately 5,200 full-time equivalent employees in the fall. The participation rate increased to 84%, the highest ever. The 2010 result, at 55%, exceeded both the plan of 51% and results from prior years, indicating that our efforts to improve employee experience are having a positive impact on our workplace environment.

In 2011, we have set our target at 55%, equal to the 2010 actual result. One of the key factors affecting our employee experience is our outdated work tools and processes. Our goal is to maintain a workforce of engaged and committed employees while we do the transformative work necessary to modernize our systems and processes. In keeping with the company’s long-term corporate strategy, we strive to improve the employee experience by cultivating a workforce of engaged, inspired and confident leaders and employees.

18 icbc.com


Being financially responsible has provided us with a strong foundation that allows us to continue to provide value to our customers and achieve our other objectives. Our strong financial results over the past several years have also helped us to build our capital levels. Capital acts as a contingency to help protect our customers, providing them with the confidence that their claims will be paid and contributing to low and stable rates.

The strong capital came from investments and operational performance. Achieving our corporate vision will require investment in the renewal of our aging technology, systems and processes over the coming years and, as a result, our operating cost structure is expected to increase temporarily. Our strong financial position, however, allows us to make this overdue investment in business renewal which, in the long-term, will allow us to better serve and provide greater value to our customers. The Transformation Program is necessary to support our corporate strategy and will be critical for delivering on the objective of improving customer perception while also increasing the efficiency and effectiveness of our business.

The most significant cost pressure to our business continues to be the cost of bodily injury claims. In 2010, we saw an increase in the number and cost of bodily injury claims, which are a major challenge for the insurance industry as a whole, particularly due to the increases in average costs of these types of claims (severity) over the past several years. Managing the growth of bodily injury claims costs remains a key strategic focus for us and strategies include claims handling based on risk, increased management oversight, and road safety enhancements.

We also continue to be an industry leader with low operating costs. Similar to previous years, about five cents of every premium dollar was used for administrative costs to operate our insurance business in 2010. We also work closely with our partners and suppliers to ensure that our customers receive high-quality services at reasonable prices.

We are continuing to move towards driver-based pricing where premium rates are more reflective of risk. Drivers who take more risks and, overall, bring more costs to the system will pay higher premiums, which will benefit lower risk drivers. This will allow us to continue to provide value to our customers and to provide them with the ability to make decisions that influence the premiums they pay.

One way we help prevent traffic-related deaths, injuries and crashes is through our road safety programs. Fewer and less severe crashes benefit us all by helping to keep people and our communities safe, and by helping keep claims costs and insurance premiums low. ICBC invested almost $60 million in road safety and loss management initiatives in 2010. We supported the BC government’s legislation to prevent the use of hand-held cell phones and other electronic devices while driving, and the enhanced impaired driving laws. To help reduce intersection crashes, the provincial government, ICBC and police are working on upgrading and expanding the intersection safety camera program.

In order to fight auto theft, we continued our Ford F-Series Immobilizer program, which provided almost 5,000 customers who have F250 or F350 trucks with vouchers for the installation of a two-point electronic immobilizer. This program prevents a significant number of very expensive claims from occurring, and the savings more than cover the cost of the program. It is one part of our comprehensive auto crime strategy, which has contributed to a 64% decline in auto theft claims since 2003.

We know many cost-savings initiatives affect both our bottom line as well as the rates for our customers. In 2010 we released our new environmental sustainability policy, which increases our emphasis on sustainability, through material and energy conservation, as well as maintaining the commitment that we have always had to environmental risk management. We’re excited about the opportunity to contribute to the provincial government’s climate change objectives, and we are looking forward to building on our carbon neutral program to support our commitment to make our business environmentally sustainable.

maintain financial stabilitymulti-year strategy and measures: 2010 – 2012 Service Plan*

measures

minimum capital test•

combined ratio•

loss ratio•

expense ratio•

investment return•


strategy

Streamlined, efficient, and cost-effective systems and processes



* Revised from 2010 – 2012 Service Plan.source: ICBC financial systems

2010Plan

2011Target

2010 Actual

2008 Actual

2009 Actual

209

240

218

Min170*

Min170

minimum capital test (%)

source: ICBC financial systems


Claims, claims-related and insurance expenses

2010Plan

2011Target

2010 Actual

2009Benchmark

2008 Actual

2009 Actual

95.9100.8 99.4

105.4 106.7 107.8

combined ratio (%)

performance measures, targets and results:

minimum capital test Minimum capital test (MCT) is an industry measure set by the Office of the Superintendent of Financial Institutions (OSFI) for federally regulated insurance companies across Canada. MCT measures capital available, compared to capital required, and is used to assess whether a company has sufficient capital to protect policyholders from financial risk and provide long-term financial stability. Appropriate levels of capital help protect customers by providing stability in rates in the face of significant, externally-driven negative impacts to the business.

Pursuant to a legislative change effective April 2010, ICBC now transfers to the Government of BC on an annual basis Optional capital in excess of the MCT determined by ICBC’s actuaries in accordance with federal regulatory guidance, and validated by an independent actuary, less a deduction for the remaining Transformation Program reserve as approved by the Treasury Board.

As a result of the legislative change, the new minimum management corporate MCT target is now set at 170%. Our 2010 MCT was 218%, higher than this revised minimum target of 170%, and was built from strong net income over the past years. Net income increases the amount of retained earnings held by us, thereby increasing available capital and payments to the Province reduce retained earnings. 2010 MCT is lower than 2009 due to the excess Optional capital paid and payable to the Government of BC.

combined ratioThe combined ratio is a key measure within the insurance industry for overall profitability and is the ratio of costs to premium dollars earned. A ratio below 100% indicates an underwriting profit (i.e., premiums are sufficient to cover costs) while a ratio above 100% indicates an underwriting loss (i.e., premiums are not sufficient and investment income is needed to help cover costs). Costs that affect the combined ratio are claims costs, claims-related costs, operating costs and acquisition costs.

Our combined ratio is higher than typical for the P&C industry and reflects the unique nature of our business model. Our premiums are not set to generate large underwriting profits, but together with investment income are set to recover all costs and achieve and maintain capital targets. We deliver non-insurance services on behalf of government and in 2010, non-insurance costs represented almost three percentage points of the combined ratio.

The 2010 results are slightly better than plan mainly due to lower material damage claims costs, favourable prior years’ claims costs, and lower operating costs and timing relating to the Transformation Program offset by increasing claims severity and higher frequency of reported injury claims. The 2010 combined ratio, including non-insurance services, is higher than 2009 primarily due to higher

20 icbc.com


85.377.6

69.6

83.8 84.8

2010Plan

2011Target

2010 Actual

2009Benchmark

2008 Actual

2009 Actual


81.4

loss ratio (%)

acquisition costs, claims costs and our investment in the Transformation Program of approximately one per cent. The P&C 2009 industry benchmark was 99.4. 1

For 2011, the expected increases in claims and operating costs are forecasted to outpace the expected increase in premium revenue resulting in a higher combined ratio.

loss ratioA key performance indicator within the insurance industry is the loss ratio, which is a measure of the insurance product’s profitability. This measure is the ratio of the total of claims and claims-related costs, including loss management costs but excludes administrative and acquisition costs, to insurance premium dollars earned. From a customer perspective, the higher loss ratio means more of each premium dollar collected is used for claims costs.

Our loss ratio is typically higher than the P&C industry because our premiums are set to recover costs and to achieve and maintain capital targets. We use our investment income to offset rates for our customers, thereby allowing rates to be lower than they would be if we had to generate an underwriting profit as private insurers do. As reflected in the expense ratio, we have lower relative operating costs and can pay more of each premium dollar towards claims and related costs. This results in a higher loss ratio. In addition, we are mandated to provide Basic insurance to all drivers in BC, including the category of high-risk drivers whose claims costs are proportionately higher. This results in a higher loss ratio for us relative to those insurers who may limit their exposure to such business.

In 2010, ICBC’s loss ratio was 83.8%, lower than the plan ratio primarily due to lower material damage claims costs resulting from lower claims frequency, in part from reduced traffic during the Vancouver 2010 Olympic Winter Games, and a favourable prior years’ claims adjustment as older claims reserves are reduced. This was offset by increasing claims severity from inflationary pressures, higher frequency of reported injury claims and an unfavourable discounting adjustment as a result of lower prevailing interest rates. The 2010 loss ratio was higher than 2009 actual results primarily due to higher claims costs due to increased claims severity, higher frequency of reported injury claims and an unfavourable discounting adjustment as a result of lower prevailing interest rates. The 2009 P&C industry benchmark was 69.6%. 1

The 2011 target is higher than 2010, reflecting longer-term claims costs trends and expected increases in claims-related costs.

1 MSA Research Inc., MSA Benchmark Report, Property and Casualty, Canada, 2010. Total Canadian Property Casualty Industry (including Lloyds, excluding ICBC and SAF).





TPexpense

Insurance expense (industry compatible)

2010Plan

2011Target

2010 Actual

2009Benchmark

2008 Actual

2009 Actual

18.8 19.3

29.8

20.8 21.5 22.2

expense ratio (%)expense ratioThe expense ratio is a standard industry measure for assessing the operational efficiency of an organization and is the ratio of non-claims costs to insurance premium dollars earned. It includes operating costs that are directly related to selling insurance such as general administration, commissions paid to brokers, taxes paid to government on premiums written, product design (underwriting), and non-insurance costs such as those associated with driver licensing and vehicle registration.

Beginning in 2010, our expense ratio consists of three key components: the insurance expense ratio, the Transformation Program (TP) expense ratio, and the non-insurance expense ratio. We incur costs for non-insurance expenses such as driver licensing, vehicle registration and licensing, and government fines collection that other insurance companies do not incur. Segregating expenses in this manner allows us to better manage the costs of operating our insurance and non-insurance businesses, and to separately reflect the impact on this ratio of our investment in the business through the Transformation Program.

The 2010 expense ratio of 20.8% is lower than plan due to lower operating expenses as we continued to demonstrate our commitment to operating efficiently and managing costs effectively, and timing of Transformation Program expenses. The expense ratio for 2010 is higher than 2009 mainly due to the impact of the Transformation Program, which increased the overall expense ratio by 0.9 per cent and higher administrative expenses.

Our expense ratio which, unlike the insurance industry, includes non-insurance costs, is still considerably lower than the 2009 P&C industry benchmark of 29.8% 2 (an expense ratio specific to auto insurance is not available). We believe that while the auto insurance expense ratio for the industry would be slightly lower than the overall P&C expense ratio, our expense ratio is lower than industry due to our ability to achieve economies of scale, the benefits of integrated operations, and lower marketing, underwriting, acquisition and general administration costs.

The 2011 target for our expense ratio reflects higher operating costs impacted by general inflationary increases, increased supplier costs, and higher acquisition costs.

2 MSA Research Inc., MSA Benchmark Report, Property and Casualty, Canada, 2010. Total Canadian Property Casualty Industry (including Lloyds, excluding ICBC and SAF).

22 icbc.com


* Restated to include real estate returns.source: return calculated by

independent firm 3

Actual Benchmark

PolicyMarket

Benchmark Return

2008

2009

2010

2011

4.13*4.77* 4.54

5.09

3.984.58

investment return3

(four year annualized) (%)

investment return ICBC manages an investment portfolio with a carrying value of $11.6 billion at the end of 2010. The portfolio is conservatively invested with the majority of assets held in investment grade bonds. These assets are held primarily to provide for future claims payments, unearned premiums, and retained earnings. The income earned on these investments also helps to reduce the amount of premiums needed from policyholders.

Investment returns, which incorporate both changes in market value of assets and income generated, are closely monitored. Individual asset class returns are measured relative to the performance of standard market benchmarks. In addition, the return of the overall portfolio is measured against a policy market benchmark calculated as the average of individual asset class market benchmark returns weighted according to the portfolio’s strategic asset mix. Asset class benchmarks and strategic asset mix are outlined in the ICBC Statement of Investment Policy and Procedures established by ICBC’s Board of Directors.

Investment returns over the last four years have benefited from the portfolio’s fixed income holdings as bond and mortgage investments have outperformed equity investments.

ICBC’s investment returns continue to compare favourably to market returns. The 2011 – 2013 investment portfolio performance targets are set at the policy market benchmark return, net of investment management expenses. For performance measurement purposes, ICBC does not forecast the policy market benchmark return as it is the result of market forces beyond the company’s control.

For 2010, ICBC’s four year annualized return was 4.58% and the comparable policy market benchmark was 3.98%. 3 In comparison, for 2009, ICBC’s four year annualized return was 5.09%, or a 0.55% higher return compared to the market benchmark.

3 Sources: DEX Debt Market Indices; S&P TSX Composite Capped Index; Morgan Stanley Capital International (MSCI) EAFE Index; S&P 500; Merrill Lynch US Bond Indices; ICREIM/IPD Canadian Property Index; (ICREIMIPD = Institute of Canadian Real Estate Investment Managers/Investment Property Databank).

232010 annual rep

ort


summary of objective and performanceThe table below provides an overview of ICBC’s historical performance as well as the 2011 target performance. The results reported below are based on the objectives, strategies and measures outlined in the 2010 – 2012 Service Plan tabled in February 2010.

maintain financial stability

Streamlined,efficient,andcost-effectivesystemsandprocesses

minimum capital test 3

combined ratio

• claims costs, claims-related expenses, and insurance expenses

• non-insurance expenses

total

loss ratio

expense ratio

• insurance expense ratio (excludes DPAC)

• transformation program expense ratio

• non-insurance expense ratio

total

investment return 5

• ICBC portfolio

• policy benchmark

excess

improve customer perception

Understandourcustomersandexceedtheirexpectations

93% 96% 97% 93% 93%

85% 88% 89% 85% 85%

93% 93% 94% 92% 93%

improve employee experience

Engaged,inspired,andconfidentleadersandemployees employee engagement index 44% 49% 55% 51% 55%

insurance services satisfaction

claims services satisfaction

driver licensing satisfaction

Objective Strategy Measures

Actual1 Plan1 Target 2

2008 2009 2010 2010 2011

209% 240% 218% Min 170% 4 Min 170%

93.0% 97.9% 102.4% 103.8% 104.6%

2.9% 2.9% 3.0% 2.9% 3.2%

95.9% 100.8% 105.4% 106.7% 107.8%

4.77% 5.09% 4.58% Benchmark

4.13% 4.54% 3.98% +0.275%

0.64% 0.55% 0.60%

77.6% 81.4% 83.8% 84.8% 4 85.3%

15.9% 16.4% 16.9% 17.1% 4 18.1%

– – 0.9% 1.5% 4 0.9%

2.9% 2.9% 3.0% 2.9% 3.2%

18.8% 19.3% 20.8% 21.5% 4 22.2%

1 Financial information for 2008 to 2010 was prepared based on Canadian generally accepted accounting principles (GAAP).2 Target 2011 was prepared based on International Financial Reporting Standards (IFRS).3 Pursuant to legislative change effective April 2010, ICBC transfers its excess Optional capital to the Government of BC on an annual basis.4 Restated to reflect current year reporting.5 Four year annualized investment return includes real estate returns.


Return

Working with our brokers

One of the biggest partnerships that we have is with our 900 broker offices across the province. And Lesley Maddison, Credit Union Insurance Services Association president, and Richard Pindral, Insurance Brokers Association of BC president, would agree.

“Our feedback has helped ICBC develop a suite of products to fit the needs of customers. We can tell ICBC what the issues are with processing, we can tell them how to improve coverage, and it’s all important to make the process go smoothly,” says Richard.

The Insurance Brokers Association of BC has more than 730 member offices and represents independent agencies from every region of the province, as does the Credit Union

Insurance Services Association who are owned or partly owned, controlled by, or affiliated with any credit union.

ICBC works closely and collaboratively with both associations to improve the Autoplan distribution system for the benefit of our customers. ICBC is proud of the gains the broker partnership has made for customers across BC and looks forward to continuing this work to make the distribution system even better.

Richard Pindral, president, IBABC & Lesley Maddison, president, CUISA

25

Consistent with good governance and insurance sector practices, we manage risk from an organization-wide perspective. Our Corporate Risk Management Framework is approved by our Board of Directors and defines our approach towards effective assessment and management of significant corporate risks. The framework considers both external and internal environments, and risks and challenges associated with each. The objective is to identify risks, raise awareness of those risks throughout the company, and initiate further action to mitigate significant risks. Executive management reviews key corporate risks and the status of related mitigation strategies quarterly and updates are provided to the Board of Directors and relevant Board sub-committees. Through monitoring and review of the external environment, as well as refinements to our corporate strategy, our key strategic risks are expected to change over time. New risks may emerge and identified risks may be reduced or eliminated through mitigation strategies or changes in the risk profile.

In 2010, strategic risks included claims costs, workforce planning, Transformation Program, financial markets, business renewal and customer approval which are included in the following framework.

For 2010, we have organized our strategic risks using our framework of corporate objectives:

business risks and risk management

Reputation:• Establishing and maintaining our reputation as a responsible and reliable company is critical in building trust and support for our company. Our reputation, particularly the trust afforded by our customers and key stakeholders, could be diminished due to perceived or real breaches in our ability, or the ability of third parties with which we are associated, to conduct business securely, ethically and responsibly, and be customer-focused. We must demonstrate integrity and dedication to our customers every day and at every level, and respond appropriately to issues.

Management’s risk management framework explicitly considers the impact on our reputation associated with business practices and decisions, while ongoing brand-related work and proactive communications in 2010 helped build customer trust and confidence. Communications to employees, together with risk management training, have reinforced the importance of proactively identifying and assessing reputation risk. We also re-wrote the Code of Ethics in 2010 to increase the clarity of the language and communicated it to all employees.

Business Partner and Stakeholder Management:• There is a risk that business partners and stakeholders who influence customers do not support our business model and strategy. A Stakeholder Strategy framework was completed in 2010. We are seeking input from business partners and stakeholders who influence our

customers to align support for changes that will enhance our customers’ experience and perception of price and value.

Customer Approval:• There is a risk that customer approval remains low. Customers have expectations around prices, choice, convenience and the way they are treated including service. In addition, they want to be able to access their insurer in a variety of ways, including face-to-face, via the telephone or the Internet. Continuing to provide value to all of our customers as expectations change and increase is an ongoing challenge, particularly in the face of claims cost pressures and the constraints of aging legacy systems that will continue until the Transformation Program, which will adapt our business processes to be more customer-centric, is completed.

In 2010, a communication plan to address some of the misconceptions customers have regarding ICBC and our services was presented to our Board. The implementation of the media portion of the campaign commenced in November 2010. We introduced an on-demand, over-the-telephone translation service for customers who need language assistance during the handling of their claim, so they are now able to converse freely with us in more than 170 languages through an interpreter. As well, our Chinese and Punjabi speaking customers can now access information in their own primary language on icbc.com.

improve customer perception

26 icbc.com


improve employee experience

Workforce Planning:• There is a risk that ICBC may not be able to deliver its core business or change initiatives due to alignment, capability and readiness of its leaders and employees. In 2010 we developed a longer-term plan to shape ICBC’s workforce and culture to align with the business model we are defining through the Transformation Program that is underway. In 2010, we also continued to focus on recruitment, compensation, training and leadership development to attract, develop, and retain talent for the future. In this way, we will ensure that we can deliver our core business and dedicate the appropriate number of people with the right skill sets to work on the Transformation Program.

Employee recognition is an area of focus as part of our ongoing commitment to improving our employees’ experience. We are encouraged by the six percentage point increase in our employee engagement measure in 2010, on top of our five percentage point increase in 2009.

maintain financial stability

Bodily Injury Claims Costs:• The risk that insurance rates increase due to bodily injury claims cost increases arise from internal factors such as claims handling and external factors such as increased claims fraud, medical cost increases, legal precedents and/or litigation.

In 2010, we continued with strategies to reduce crashes and claims costs which are a priority for us and include public awareness campaigns on high-risk driving, the transition to risk-based pricing and road safety activities. The strategies to manage bodily injury claims costs through improvements to the claims handling process include: increased management accountability, increased responsiveness to customers, and increased focus on file quality and risk management.

Financial Markets:• Like all insurers, we hold investment assets to provide for unpaid claims costs, unearned premiums, and retained earnings. Earnings from these investments contribute to net income. There is a risk that investment assets and/or income is negatively impacted by adverse changes in market credit and liquidity conditions, equity prices, interest rates or currency exchange rates.

In managing these risks, our investment policy, established by the Investment Committee and approved by the Board of Directors, provides the framework for balancing risk and returns. We follow a long-term strategy and diversify investment holdings to manage investment return fluctuations, and we hold a

conservative portfolio with the majority of monies invested in fixed income assets. Given the heavy weighting in fixed income assets, we are subject to interest rate risk. However, this asset mix profile is developed with our liability profile and cash flow needs to cover future claims payments which moderates the risk. For example, an increase in the interest rate would decrease the market value of fixed income assets but claim liabilities would also decrease as a result of a higher discounting rate used. In 2010, an ICBC investment compliance officer was hired to strengthen our investment compliance and monitoring activities.

In addition to the above, our risk management process identified additional corporate level risks that are actively monitored and mitigated. These risks and their mitigation strategies are discussed below.

other significant corporate risks

Business Renewal:• There is a risk that we will not fully achieve the intended outcomes of the Transformation Program. The Transformation Program has a comprehensive governance model to oversee it and strong ownership from the business to foster corporate commitment and collective success. In 2010, the Transformation Program developed an integrated plan containing key intra-dependencies and inter-dependencies between the multiple Transformation Program projects so that key decisions are made in the right sequence, thereby reducing the risk of not achieving the intended program outcomes. The progress being made by project along with costs incurred is monitored closely.

Technology Risk:• There is a risk that the business cannot achieve its objectives due to any of the major technology or solutions being unavailable or becoming unsuitable, thus requiring additional time, cost and risk to change them. In 2010, we developed strategies and roadmaps for technology investments to meet our strategic direction and future business needs and aligned the governance over technology decisions with other corporate governance processes, including the Transformation Program governance model. We are using proven methods, tools and experienced technology partners to deliver intended technology solutions within the planned timeframe. In late 2010, we signed a Preliminary Services Agreement with IBM for Systems Integrator (SI) services. The SI will play an important role in helping ICBC implement new systems and integrate them with our existing and new systems. The SI brings experience with similar, large-scale business renewal programs and our ICBC staff will learn from them as they work together on project teams.



Privacy:• We maintain personal information relating to our customers and employees, and deal with business partners and customers over the Internet. There is a risk that customers’ and employees’ trust will be diminished if there are breaches because either we or our business partners inadequately safeguard personal information.

We use a combination of preventative and detective controls involving people, process and technology to manage our privacy risk. We have a Privacy Incident Protocol in place to ensure that if there are any incidents, they are handled effectively. In 2010, our revised Code of Ethics reinforced employees’ obligation to protect access to information and an annual review and confirmation is now required for all employees and contractors.

We also worked on maintaining a strong relationship with the Office of the Information and Privacy Commissioner that supports our privacy and strategy programs. As a result of one of their recommendations, a privacy module has been incorporated in our Claims Adjuster training programs.

Access to Systems:• There is a risk that our data and/or system-dependent operations could be intentionally or unintentionally compromised by unauthorized access. System access controls include layered defences, encryption of data on portable media, strong passwords and access to information and resources granted to individuals only as necessary for business purposes. We have an enterprise-wide Information Technology Security Program, as well as the ICBC Code of Ethics governing access and use of corporate data. To strengthen awareness and compliance, a privacy/security tutorial was developed in 2010 and completion will be mandatory for all employees in 2011. As well, in 2010, we initiated a data audit process to proactively detect inappropriate system access and potential privacy breaches, and embedded security assessments in all Transformation technology projects.

Business Interruption:• There is a risk that the operations may not be maintained or essential products and services cannot be provided due to business interruption arising from physical and/or technical events. This risk is managed through three related programs: Emergency Response Program (employee safety, building evacuations), Business Continuity Planning (continued essential customer services during an interruption), and Information Technology Disaster Recovery Planning (our data centre). In 2010, components of the plans were tested and improvements are being worked on to programs as needed.

Catastrophic Loss:• There is a risk that our capital strength could be eroded in the event of a major disaster. We have financial protection through a reinsurance policy in the event of losses resulting from catastrophes. This policy is reviewed and renewed annually. Losses experienced in excess of a specified amount will be covered by the reinsurance policy up to the policy limits in any given year.

Competition:• There is a risk that ICBC will lose capital strength due to changes in the competitive landscape. Insurance is a complex business affected by external trends, risks, and other factors that can present both significant opportunities and risks for the company. Changing conditions in the Optional insurance market and past profitability in the Canadian P&C insurance industry create the potential for increased competition.

We are moving toward a pricing model that will be better aligned to driver risk to prepare us for potential changes in the competitive landscape.

Working with our rehabilitation providers

Carol Paetkau has seen the devastating effects a car crash can have on a person. As the executive director of the Fraser Valley Brain Injury Association — a charitable organization that offers support and services to people with brain injuries and their families — she knows their challenges are unique.

“People with a brain injury may have significant personality changes, which can cause barriers with the community. We try and assist them to getting connected to a peer network of other people with brain injuries and their families who have a real understanding of what they’re going through and work towards connecting them back to their communities,” says Carol.

The Fraser Valley Brain Injury Association also offers a variety of support groups and education sessions, including ArtWorks, which allows survivors to experiment

with various art mediums and then learn how to display their pieces with the assistance of professional artists.

ICBC works with groups such as the Fraser Valley Brain Injury Association to help our clients’ integration back into their community, and provide social networking opportunities, life skills and other resources after their funds run out or their claim settles.

We work with the medical community to help individuals severely injured in car crashes to maximize their recovery and regain their independence. We were the first North American insurance company to establish a dedicated rehabilitation department. With offices across the province and a team of 50 caring and well-trained professionals, we help more than 2,700 clients annually.

Carol Paetkau, executive director Fraser Valley Brain Injury Association

29

Our financial results for 2010 remain strong in the face of increasing claims costs, higher acquisition costs and the start of costs related to the Transformation Program. Net income of $361 million in 2010 was $202 million lower than the 2009 net income of $563 million.

Premiums earned were $3,667 million in 2010 — $17 million increase over 2009. This reflects a moderate vehicle •growth of 1.9% with higher sales of Optional insurance coverages. In November 2010, Basic and Optional insurance rates were reduced by 2.4% and 3.0% respectively.

Net claims incurred costs were $2,752 million in 2010 — $102 million higher than 2009 largely due to increasing •injury claims costs.

Premium acquisition costs were $477 million in 2010, which were $42 million higher than 2009 due to a higher •adjustment to deferred premium acquisition costs (DPAC) (see description on page 33) and higher commissions resulting from higher premiums earned and increased commission rates.

Investment income in 2010 was $506 million, which was $26 million lower than 2009 but still strong. We have been •able to continue our strong investment performance since the recovery in the capital markets.

Operating costs continue to be prudently managed. In 2010, operating costs, excluding Transformation Program •costs, of $577 million were $8 million higher than 2009 mainly due to general inflationary increases.

The Transformation Program started in 2010 and incurred costs of $35 million. The Transformation Program is fully •funded by Optional insurance.

management’s discussion and analysis

premiumsTotal premiums earned increased to $3,667 million from $3,650 million in 2009. In 2010, as compared to 2009, the number of policies sold increased by over 63,000 or 1.9% and sales of Optional insurance coverages also increased reflecting an improving economy. These increased sales of policies and coverages were partially offset by the impact of the 3.0% average reduction in Optional insurance rates effective October 1, 2009. The November 2010 Basic and Optional insurance rate reductions of 2.4% and 3.0% respectively had minimal impact in 2010; the full impact of these rate reductions will be realized in 2011.

service feesService fees primarily comprise of interest and other fees received from policyholders who have chosen to finance their insurance premiums over a period of six or 12 months. In 2010, service fees decreased by $4 million from 2009 due to decreasing interest rates.

30 icbc.com


2009 2010200820072006

500

0

1,000

1,500

2,000

2,500

3,000

Injury Material Damage


net claims incurred costs ($ millions)

0

4

8

12

16

Accident & DeathBenefits

Bodily Injury

800

400

1,200

1,600

20102009

0


current year injury claims incurred (major categories) ($ millions)

For 2010, the total number of injury claims increased approximately 4% while the number of material damage claims decreased by approximately 6% from 2009. The overall average cost of claims that occurred in 2010 increased by approximately 3% over 2009, for each of injury and material damage claims, mainly reflecting inflationary increases.

injury claimsInjury claims account for approximately 60% of claims incurred costs in 2010, and include bodily injury claims, and accident and death benefits. Injury claims include amounts for pain and suffering, future care, past and future wage loss, medical expenses, and external claims handling expenses.

claims costsClaims incurred costs account for approximately three-quarters of our total expenditures and are the expected costs to settle claims for all crashes that have occurred during the calendar year, regardless of when the crash is reported to us.

Claims incurred costs are comprised of payments made to settle claims, case adjusters’ reserves of the ultimate probable cost of claims, actuarial estimates of claims costs not yet reported, and the actuarial estimate of the additional costs that will be paid out on known claims.

Claims incurred costs are based on the number of claims that take place in a year and the average expected costs to settle those claims. The number of claims is influenced by factors that include driving behaviour, driving experience, weather, and the effectiveness of road safety and loss management programs. The average cost of claims is influenced by inflation, settlement awards, legal, medical, vehicle repair, and independent adjusting costs.

Overall 2010 net claims incurred costs of $2,752 million were higher than the $2,650 million in 2009 mainly driven by current year claims costs increasing by $106 million compared to 2009 partially offset by a small favourable adjustment to prior years’ claims.

Overall, the total cost of injury claims increased in 2010 compared to 2009 reflecting inflationary increases in the average cost of injury claims combined with an increase in the number of injury claims.

Bodily injury claims costs accounted for 93% of all injury claims costs and increased by $117 million to $1,561 million in 2010 compared to 2009. For 2010, the total number of bodily injury claims is higher by 5% when compared to 2009 which experienced a decrease in the number of claims.



Property Damage Collision WindshieldComprehensive

150

300

450

0

2009 2010


current year material damage claims incurred (major categories) ($ millions)

breakdown of bodily injury costs (typical accident year) (%)

0End ofYear 2

End ofYear 4

End ofYear 3

End ofYear 6

End ofYear 5

End ofYear 1

20

40

60

80

100

Paid Unpaid


material damage (non-injury) claimsThe main categories of material damage claims are property damage, collision, comprehensive, and windshield claims. In 2010, there was a decrease in the number of material damage claims resulting in part from the favourable effect of reduced traffic during the Vancouver 2010 Olympic Winter Games. The effect of reduced traffic also carried over for the rest of the year.

Adjustments to the prior years’ claims reserves are due to the re-estimation of future claims costs for claims in progress and those incurred in prior years but not yet reported. We commission the services of an external appointed actuary to provide an independent assessment of the unpaid claims reserves and, as part of the annual audit of the financial results, the external auditor reviews the adequacy of the unpaid claims reserves.

The estimate of unpaid claims at the end of 2010 was $6,183 million; however, estimates for these future claims costs can change significantly due to the time frame in which certain types of claims are settled, which can be over a number of years. Unpaid bodily injury claims costs account for nearly 89% of total unpaid claims costs. As illustrated in the following chart, only a small percentage of bodily injury claims costs are paid and known in the first year of the claim’s occurrence with a greater portion of the costs being an estimate of claims costs payable in future years. As time passes, more claims are paid and more information becomes available, enabling the estimate of the remaining future claims payments to be refined. This results in adjustments to the unpaid claims reserve to reflect the most current forecast of claims costs.

The average cost for most material damage claims was higher than 2009 mainly due to general inflationary increases for the cost of repair parts and labour as part of the Collision Repair Industry Agreement.

Even though the average material damage claims costs increased in 2010, this was more than offset by the favourable impact of the lower volumes of claims, thereby resulting in a lower total material damage current year claims costs in 2010 compared to 2009.

unpaid claims and prior years’ claims adjustmentsThe unpaid claims reserve is money set aside in anticipation of future claims payments relating to claims that have already happened. The adequacy of this unpaid claims liability is reviewed and adjusted periodically throughout the year based on revised actuarial estimates which includes a provision for adverse deviation (see note 2e to the Consolidated Financial Statements).

32 icbc.com



0

3,000

6,000

9,000

12,000

15,000

18,000

2009 2010200820072006

total theft of vehicles (number of claims reported)

operating costs ($ millions)


Insurance Non-insurance

100

0

200

300

400

500

600

700

2009 2010200820072006

TP

Our 2010 auto crime investment continued to effectively decrease auto theft. Support for programs like Bait Car, Stolen Auto Recovery, Auto Crime Enforcement month and an immobilization strategy targeting high-theft vehicles contributed to a 20% claims reduction in auto theft across BC in 2010 from 2009. Since 2003, when auto crime peaked in BC, our combined efforts, including changes in vehicle design such as anti-theft devices, have contributed to a 64% claims reduction across the province, as shown in the preceding chart. The reduction in auto crime partially offsets claims cost pressures related to inflationary increases.

We actively pursued our Zero Tolerance for Fraud policy, which protects customers from adverse impacts on premiums when fraud occurs. A Special Investigation Unit manages programs that prevent, detect and investigate fraud in all aspects of our business.

operating costsOperating costs are costs (compensation and operating costs) required to operate the insurance and non-insurance businesses with the exception of claims payments, commissions and premium taxes. 2010 is the inaugural year for the Transformation Program (TP) and those related costs are now included as part of operating costs.

We earn investment income on funds set aside for unpaid claims, between the time that premiums are collected and the time claims are ultimately paid. In accordance with accepted actuarial practice in Canada, we report our unpaid claims balance on a discounted basis to reflect the time value of money. The discounted amount takes into account the expected timing of future payments related to unpaid claims. The discount rate is based on the weighted average of the expected rate of return on our current investment portfolio. An increase in the discount rate applied to claims costs will reduce the unpaid claims balance while a decrease in the discount rate will increase the unpaid claims balance. Overall, we reduced our estimated cost to pay for these claims that are not yet settled. However, this reduction was almost entirely offset by an increase in estimated costs due to a lower discount rate that increases the unpaid claims amount.

road safety and loss managementWe invest in road safety and loss management programs to help prevent crashes, auto crime and fraud. This contributes to low and stable rates for customers. In 2010, we invested $46 million in road safety and $14 million in loss management programs, which include auto crime and fraud prevention, investigation and detection.

We target our road safety investments on the major risks that impact customers and costs in our business, including impaired driving, speeding, crashes at intersections and the use of occupant restraints. We also have continued our successful partnership with road authorities in 2010 to reduce crashes at high-risk road locations by sharing the cost of 290 road safety engineering projects. Road Safety programs have contributed to an approximate 8% claims reduction in the traffic crash injury claim rate in BC in the past five years.



investment income ($ millions)

50

-50

150

250

350

450

550

650

Interest, dividends and other income

Gains (losses)


2009 2010200820072006

At December 31, 2010, 73% of the carrying value of the portfolio took the form of high-grade corporate and government bonds, money market, securities and mortgage instruments, while 27% of the portfolio was invested in equity and real estate investments.

investment incomeWe continued to achieve strong investment income results since the recovery in the capital markets. In 2010, our investment income was $506 million — a decrease of $26 million from 2009.

This $26 million decrease was primarily due to a decline in bond gains as there were significant bond gains realized in 2009 and lower interest income as a result of declining interest rates. This decrease to investment income was partially offset by higher equity gains of $108 million as the equity markets continue to recover from the economic downturn experienced in 2008.

Overall, these results equate to an accounting investment return of 4.6% in 2010 compared to 5.1% in 2009, based on the average investment balance during the year on a cost basis. The accounting return is reflective of the slightly lower investment income in 2010 resulting in most part from lower interest rates on ICBC’s fixed income portfolio as the average size of the investment portfolio remained consistent year over year.

Included in total operating costs are non-insurance costs of $82 million, which consist of costs for administering driver licensing, vehicle registration and licensing, and government fines collection. Non-insurance costs are funded from Basic insurance premiums.

We continued to focus on prudently managing our total 2010 operating costs. General operating costs, excluding the Transformation Program, of $577 million were 1.4% higher than 2009 due to inflationary trends. 2010 was the first year for the Transformation Program, incurring $35 million of expenses.

acquisition costsAcquisition costs represent the amounts paid to brokers for the sale of our insurance products, and for administering driver and vehicle licensing transactions. Acquisition costs also include premium taxes (4.4% of premiums) collected and paid to the provincial government. Premium acquisition costs were $42 million higher than 2009 primarily due to a higher write-down to DPAC and more commissions resulting from higher premiums earned and increased commission rates. Consistent with the recognition of premium revenue earned over the duration of the policy, commissions and premium taxes are expensed on a similar basis. At year end, the unexpended portion of these costs are deferred and reflected as DPAC in the amount of $171 million in note 12 of the accompanying Consolidated Financial Statements. DPAC is written down when future claims and related expenses, after consideration of investment income, are expected to exceed unearned premiums. Conversely, where there has been a previous write-down of DPAC, a positive adjustment is made when unearned premiums are expected to exceed future claims and related expenses.

investmentsWe have an investment portfolio with a carrying value of $11.6 billion which represents 88% of the company’s total assets at the end of 2010.

Funds available for investment purposes come primarily from the premiums collected and set aside for unpaid claims, unearned premiums, and retained earnings. We maintain a conservative investment portfolio which has a high degree of liquidity.

34 icbc.com


capital expendituresIn 2010, we incurred $44 million in capital expenditures relating to technology enhancements and facilities upgrades. In order to deliver service to our customers, we have commenced the Transformation Program and have purchased off the shelf systems for claims management and commercial rating and underwriting.

basic and optional operationsWe operate as an integrated company providing Basic and Optional insurance products and services. Integrated operations provide benefits to our customers such as ease of service and savings achieved through economies of scale.

The majority of premium revenues and claims costs are specifically identifiable as Basic or Optional; however, certain costs are not tracked separately. For those revenues and costs that are not specifically identified as Basic or Optional, a financial allocation methodology, as approved by the BCUC, is used to allocate costs between these two lines of business. We operate and manage the company on an integrated basis as well as report our financial and performance results in the annual report on an integrated basis. However, the more complex nature of the financial allocation methodology does not lend itself to a broader-based discussion of business impacts and trends. Further explanations and detailed financial information on our Basic and Optional lines of business are included in the 2010 Consolidated Financial Statements (note 16) included in this annual report. The following paragraph provides a high-level summary of impacts for both the Basic and Optional lines of business, while the balance of the annual report discusses results based on integrated operations.

The Basic insurance business generated net income of $49 million which was $126 million lower than 2009. Basic net income decreased from prior year due to higher injury claims costs, higher acquisition costs and lower investment income. The Basic insurance rate reduction of 2.4% effective November 2010 had minimal impact on 2010 results; the impact of this rate reduction will be more fully realized in the 2011 fiscal year. The Optional insurance business generated net income of $312 million in 2010. Optional net income decreased $75 million from prior year mainly due to higher injury claims costs, Transformation Program costs, which started in 2010 and the full impact of the 3.0% Optional rate decrease in October 2009 which was partially offset by increased sales of Optional insurance coverages. Optional insurance rates were also reduced in November 2010 by an average of 3.0% with minimal impact to 2010 results. Similar to the Basic rate reduction in November 2010, the full impact of the Optional rate reduction would be realized in the 2011 fiscal year.

equityOur equity includes retained earnings of $3.0 billion and accumulated other comprehensive income (AOCI) of $493 million as at December 31, 2010.

Retained earnings help to absorb significant unexpected increases in claims costs and volatility in the financial markets. We have a strong capital base enabling us to withstand adverse claims experience, unfavourable financial market situations like those experienced at the end of 2008, protect our policyholders and be able to continue to deliver low and stable insurance rates. Bonds and equities are measured at fair value on the Consolidated Statement of Financial Position, with changes in fair value (unrealized gains and losses) included in a component of equity called AOCI, which increased from $402 million at January 1, 2010 to $493 million at December 31, 2010. This increase primarily reflects the increase in unrealized equity gains as the equity markets continue to recover from the 2008 downturn.

Similar to the private insurance industry, the adequacy of equity or capital base is an important factor in assessing the financial stability of a company and is closely monitored by regulators.

The common industry method used to measure financial stability is MCT, a risk-based capital adequacy framework which assesses assets, policy liabilities, and other potential liabilities to determine appropriate capital levels. OSFI requires its regulated P&C insurers to meet MCT targets.

Although not regulated by OSFI, we have established management targets for MCT in excess of the regulatory targets to take into consideration relevant factors such as business risks and requirements, and the volatility inherent in the insurance business such as changes to claims costs and in the investment markets. We have set an internal management target level for MCT of a minimum of 170% of MCT for 2010. At December 31, 2010, our total corporate MCT level of 218% exceeds the internal management target.

For further information on the Basic insurance and Optional capital framework, please refer to notes 13 and 14 of the accompanying Consolidated Financial Statements.



operating subsidiariesWe do not have any active and operating subsidiary companies. All other holdings are nominee companies with no operations in their own right, and all financial information is included in our financial statements.

International Financial Reporting Standards (IFRS)We, as a government business enterprise, are adopting IFRS effective January 1, 2011. We have assessed and implemented the required accounting policy changes under IFRS and our financial statements for the year ended December 31, 2011 and thereafter will be prepared in accordance with IFRS. Please see note 3 of the accompanying Consolidated Financial Statements for additional information on IFRS.

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Total earned revenues 3,709 13 3,722 9 3,713 3,741 3,834 3,933

Net claims incurred 2 2,650 (102) 2,752 6 2,758 2,816 2,905 3,021

Claims service and loss management 320 (3) 323 15 338 331 337 340

Insurance operations expenses 169 (3) 172 10 182 206 206 211

Transformation Program Nil (35) 35 21 56 35 42 66

Premium taxes and commissions 3 435 (42) 477 (25) 452 471 476 489

Total expenses 3,574 (185) 3,759 27 3,786 3,859 3,966 4,127

Underwriting income / (loss) 135 (172) (37) 36 (73) (118) (132) (194)

Investment income 532 (26) 506 23 483 527 530 553

Income – insurance operations 667 (198) 469 59 410 409 398 359

Non-insurance operations expenses 80 (2) 82 – 82 93 94 96

Non-insurance commissions 24 (2) 26 (1) 25 26 27 28

Net income 563 (202) 361 58 303 290 277 235

Transfer of excess Optional capital to the Government of British Columbia Nil 576 487 185 225 225

Long-term debt Nil Nil Nil Nil Nil Nil

summary financial performance and forecast1

The table below provides an overview of ICBC’s 2010 financial performance relative to its 2010 – 2012 Service Plan and a forecast of financial results for the next three years as set out in ICBC’s 2011 – 2013 Service Plan. These results and forecasts form the basis upon which key performance targets are set. The financial forecasts take into account the estimated Optional capital amounts that will be transferable to the Government of British Columbia under the new framework.

1 The above financial information for 2009 Actual and 2010 Plan was prepared based on Canadian GAAP while Financial forecasts for years 2011 to 2013 was prepared based on IFRS.

2 Claims incurred include prior years’ claims adjustments. 3 Premium taxes and commissions include DPAC adjustments.

2009 Prior Year 2010 Plan 2010 2011 2012 2013($ millions) Actual Variance Actual Variance Plan Forecast Forecast Forecast



comparison of 2010 results to the planOur net income for 2010 was $361 million, which was $58 million higher than plan. Earned revenues improved by $9 million from 2010 plan mainly due to higher than expected number of policies sold in the year. Investment income was $23 million better than the plan due to increases in gains from the sale of bonds and equities offset by lower interest income.

Overall, net claims incurred costs were $6 million lower than plan. This was due to current year claims costs being higher than plan resulting from increased injury severity and higher number of injury claims partially offset with a lower number of material damage claims. The current year claims costs increase was offset by lower expected costs to settle outstanding prior years’ claims combined with an unfavourable discounting adjustment due to lower interest rates.

Operating costs of $495 million, inclusive of claims service, road safety and loss management, and insurance operations expenses, were $25 million below plan, reflecting our continued commitment to the prudent management of costs. Transformation Program expenses of $35 million were also $21 million lower than plan mainly due to the timing of when program expenditures started. Premium taxes and commissions of $477 million were $25 million higher than the plan due to a negative adjustment to DPAC. This is associated with the decreased profitability of the Basic insurance business from higher expected future injury claims costs (see page 33 for further discussion of DPAC).

financial forecasts Our financial forecasts take into consideration the business risks and risk mitigation strategies currently in place. The net income forecast for 2011 – 2013 reflects expected growth in premiums, a return to longer term claims cost trends, and investment income based on current investment market conditions. Capital expenditures primarily comprise Transformation Program costs and the ongoing renewal of information technology and facilities. The forecast also takes into account the estimated Optional capital amounts that are to be transferred to the Government of BC under the new legislative framework. More detailed information on ICBC’s forecasts is provided in ICBC’s 2011 – 2013 Service Plan.

Working with police

Superintendent Mike Diack is pretty grateful to be keeping roads safe in British Columbia.

“I hear from all across Canada that we are the envy of Canada because of enhanced road safety, which is funded by ICBC. That is a model that doesn’t exist anywhere and without them we would not have a traffic program in this province and our fatal crashes and injuries would be up significantly,” says Mike.

Mike was the inspector in charge of the Integrated Municipal Provincial Auto Crime Team (IMPACT), which started the Bait Car program. Under his management, IMPACT focused on theft by drug addicts — the most common form of vehicle theft. The program was instrumental in turning around our province’s growing auto theft problem. In spite of increases in population and vehicles, auto theft has decreased by 64% in BC since 2003 — partly because of the success of the Bait Car program.

Mike now leads the RCMP’s “E” Division Traffic Services, which focuses on four key areas: impaired drivers, seat belt compliance, aggressive driving, and intersection violations. Over the past six years, their harm-reduction programs have contributed greatly to the reduction in the number of fatal and serious injury collisions in the province.

ICBC knows the RCMP and other police agencies are central partners in preventing crashes and auto crime. It’s why support for enhanced traffic policing is such an integral part of our annual $46 million investment in road safety programs. Traffic and auto crime enforcement work seamlessly with a host of initiatives, including ICBC’s road safety advertising campaigns, and community volunteer programs like Speed Watch and Lock Out Auto Crime.

Superintendent Mike Diack, RCMP “E” Division Traffic Services

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management’s responsibility for financial statements

Scope of ResponsibilityManagement prepares the accompanying consolidated financial statements and related information and is responsible for their integrity and objectivity. The statements are prepared in conformity with Canadian generally accepted accounting principles. These consolidated financial statements include amounts that are based on management’s estimates and judgements, particularly our reserves for unpaid claims. We believe that these statements present fairly ICBC’s financial position, results of operations, and cash flows, and that the other information contained in the annual report is consistent with the consolidated financial statements.

Internal ControlsWe maintain and rely on a system of internal accounting controls designed to provide reasonable assurance that assets are safeguarded and transactions are properly authorized and recorded. The system includes written policies and procedures, an organizational structure that segregates duties, and a comprehensive program of periodic audits by the internal auditors, who independently review and evaluate these controls. There is a quarterly risk assessment process, the results of which influence the development of the internal audit program. We continually monitor these internal accounting controls, modifying and improving them as business conditions and operations change. Policies that require employees to maintain the highest ethical standards have also been instituted. We recognize the inherent limitations in all control systems and believe our systems provide an appropriate balance between costs and benefits desired. We believe our systems of internal accounting controls provide reasonable assurance that errors or irregularities that would be material to the financial statements are prevented or detected in the normal course of business.

Board of Directors and Audit CommitteeThe Audit Committee, composed of members of the Board of Directors, oversees management’s discharge of its financial reporting responsibilities. The Committee recommends for approval to the Board of Directors the appointment of the external auditors and the external actuaries, and fee arrangements. The Committee meets no less than quarterly with management, our internal auditors, and representatives of our external auditors to discuss auditing, financial reporting and internal control matters. The Audit Committee receives regular reports on the internal audit results and evaluation of internal control systems and it reviews and approves major accounting policies including alternatives and potential key management estimates or judgements. Both internal and external auditors have access to the Audit Committee without management’s presence. The Audit Committee has reviewed these financial statements prior to recommending approval by the Board of Directors. The Board of Directors has reviewed and approved the financial statements.

Independent Auditors and ActuaryOur independent auditors, PricewaterhouseCoopers LLP, have audited the financial statements. Their audit was conducted in accordance with Canadian generally accepted auditing standards, which includes the consideration of our internal controls to the extent necessary to form an independent opinion on the financial statements prepared by management.

Eckler Ltd. is engaged as the appointed actuary and is responsible for carrying out an annual valuation of ICBC’s policy liabilities which include a provision for claims and claims expenses, unearned premiums and deferred premium acquisition costs. The valuation is carried out in accordance with accepted actuarial practice and regulatory requirements. In performing the evaluation, the actuary makes assumptions as to the future rates of claims frequency and severity, inflation, reinsurance recoveries, and expenses taking into consideration the circumstances of ICBC and the insurance policies in force. The actuary, in his verification of the underlying data used in the valuation, also makes use of the work of the external auditor.

Geri PriorChief Financial Officer

March 3, 2011

Jon SchubertPresident and Chief Executive Officer

March 3, 2011

independent auditors’ report

Minister of Public Safety and Solicitor GeneralMinister Responsible for the Insurance Corporation of British ColumbiaProvince of British Columbia

We have audited the accompanying consolidated financial statements of the Insurance Corporation of British Columbia (“ICBC”), which comprise the consolidated statement of financial position as at December 31, 2010 and the consolidated statements of operations, equity and cash flows for the year then ended, and related notes including a summary of significant accounting policies.

Management’s responsibility for the consolidated financial statementsManagement is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with Canadian generally accepted accounting principles and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ responsibilityOur responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of ICBC as at December 31, 2010 and its results of operations and cash flows for the year then ended in accordance with Canadian generally accepted accounting principles.

Chartered Accountants

Vancouver, British ColumbiaMarch 3, 2011

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actuary’s report

I have valued the policy liabilities in the consolidated statement of financial position of the Insurance Corporation of British Columbia as at December 31, 2010 and their changes in its consolidated statement of operations for the year then ended in accordance with accepted actuarial practice in Canada, including selection of appropriate assumptions and methods.

In my opinion, the amount of the policy liabilities makes appropriate provision for all policy obligations, and the consolidated financial statements fairly present the results of the valuation.

William T. Weiland

Fellow, Canadian Institute of ActuariesEckler Ltd.

Vancouver, British ColumbiaMarch 3, 2011



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Consolidated Statement of Financial PositionAs at December 31, 2010

Approved by the Board

Nancy McKinstryChair of the Board of Directors

T. Michael PorterDirector

($ ThouSandS) 2010 2009

assets Cash and investments (note 4) $ 11,593,565 $ 11,129,061 Accrued interest 50,148 57,950 Amount recoverable from reinsurers (notes 5 & 8) 5,807 7,807 Premiums and other receivables (note 5) 1,010,331 1,022,530 Deferred premium acquisition costs and prepaid expenses (note 12) 184,298 207,104 Accrued pension benefits (note 10) 175,762 127,039 Property, equipment, and intangible assets (note 7) 122,246 92,108

$ 13,142,157 $ 12,643,599

Liabilities and equity

Liabilities Cheques outstanding $ 57,896 $ 41,723 Accounts payable and accrued charges 221,904 240,353 Excess Optional capital payable to Province of BC (note 13) 275,712 – Bond repurchase agreements and investment-related liabilities (note 4) 963,278 861,786 Accrued post-retirement benefits (note 10) 146,182 131,734 Premiums and fees received in advance 57,876 55,888 Unearned premiums 1,743,001 1,730,958 Provision for unpaid claims (note 8) 6,183,007 5,964,342 9,648,856 9,026,784

Equity Retained earnings 3,000,436 3,214,655 Accumulated other comprehensive income 492,865 402,160

3,493,301 3,616,815

$ 13,142,157 $ 12,643,599 Contingent liabilities and commitments (note 15)

The accompanying notes are an integral part of these financial statements.



Consolidated Statement of OperationsFor the year ended December 31, 2010

($ ThouSandS) 2010 2009

Revenues

Net premiums writtenVehicle $ 3,657,670 $ 3,649,874 Driver 21,697 17,271

$ 3,679,367 $ 3,667,145

Net premiums earned Vehicle $ 3,647,995 $ 3,633,560 Driver 19,329 16,465 3,667,324 3,650,025

Service fees 54,628 58,807

Total earned revenues 3,721,952 3,708,832

Claims and operating costs Provision for claims occurring in the current year (note 8) 2,754,077 2,648,193 Prior years’ claims adjustments (note 8) (2,039) 2,355Net claims incurred (note 8) 2,752,038 2,650,548 Claims services 262,400 263,243 Road safety and loss management services 59,790 56,334 3,074,228 2,970,125 Operating costs – insurance (note 11) 206,993 169,158 Premium taxes and commissions (note 12) 477,195 434,824

3,758,416 3,574,107

underwriting (loss) income (36,464) 134,725 Investment income (note 6) 506,051 532,477

Income – insurance operations 469,587 667,202

non-insurance operations Provincial licences and fines (note 13) 531,253 517,314 Licences and fines transferable to the Province of BC (note 13) 531,253 517,314 Operating costs – non-insurance (note 11) 82,273 79,840 Commissions (note 12) 25,821 24,418

639,347 621,572

Loss – non-insurance operations (108,094) (104,258)

net income for the year $ 361,493 $ 562,944


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Consolidated Statement of EquityFor the year ended December 31, 2010

($ ThouSandS) 2010 2009

Retained earnings (note 14) Balance, beginning of year $ 3,214,655 $ 2,651,711

Excess Optional capital transfer to Province of BC (note 13) (575,712) –

Net income 1 361,493 562,944

Balance, end of year 3,000,436 3,214,655

accumulated other comprehensive income (note 6) Balance, beginning of year 402,160 99,671

Other comprehensive income

Net change in unrealized gains on available for sale securities 1 90,705 302,489

Balance, end of year 492,865 402,160

Total equity $ 3,493,301 $ 3,616,815

1 Comprehensive income (net income and net change in accumulated other comprehensive income) $ 452,198 $ 865,433




Consolidated Statement of Cash FlowsFor the year ended December 31, 2010

($ ThouSandS) 2010 2009

Cash flow from operating activities

Cash received for:Vehicle premiums and others $ 4,025,717 $ 3,990,492 Licence fees 502,580 484,517 Social service and harmonized sales taxes 112,356 98,365

4,640,653 4,573,374

Collection for receivables, subrogation, and driver penalty point premiums 170,543 163,106 Salvage sales 58,786 51,958 Interest 301,009 341,368 Dividends and other investment income 34,777 36,104 Other 273 –

5,206,041 5,165,910

Cash paid to: Claimants or third parties on behalf of claimants (2,669,626) (2,539,258)Province of BC for licence fees, fines, and social service and harmonized sales taxes collected (641,058) (613,709)Suppliers of goods and services (232,012) (209,617)Employees for salaries and benefits (447,964) (408,689)Agents for commissions (311,009) (304,042)Policyholders for premium refunds (321,731) (316,015)Province of BC for premium taxes (163,722) (162,964)

(4,787,122) (4,554,294)

Cash flow from operating activities 418,919 611,616

Cash flow used in investing activities Purchase of investments (7,380,203) (6,662,821)Proceeds from sales of investments 7,253,020 5,900,468 Securities sold under repurchase agreements 34,546 12,142Payments to vendors of property, equipment, and intangible assets (44,607) (19,175)Proceeds from sale of property, equipment, and intangible assets 27 60

Cash flow used in investing activities (137,217) (769,326)

Cash flow used in financing activities Excess Optional capital transferred to Province of BC (note 13) (300,000) –

Cash flow used in financing activities (300,000) –

decrease in cash and cash equivalents during the year (18,298) (157,710)Cash and cash equivalents, beginning of year (18,621) 139,089

Cash and cash equivalents, end of year $ (36,919) $ (18,621)

Represented by: Investments – cash and cash equivalents (note 4) $ 20,977 $ 23,102 Cheques outstanding (57,896) (41,723)

$ (36,919) $ (18,621)


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Notes to Consolidated Financial StatementsFor the year ended December 31, 2010

1. PurposeThe Insurance Corporation of British Columbia (the Corporation or ICBC) is a Crown corporation, not subject to income taxes under the Income Tax Act (Canada), incorporated in 1973 and continued under the Insurance Corporation Act, R.S.B.C. 1996 Chapter 228. The Corporation operates and administers plans of universal compulsory automobile insurance and optional automobile insurance as set out under the Insurance (Vehicle) Act, and is also responsible for non-insurance services under the Insurance Corporation Act and the Motor Vehicle Act. Non-insurance services include driver licensing, vehicle registration and licensing, violation ticket administration and government fines collection. As a result of amendments to the Insurance Corporation Act in 2003, the Corporation is subject to regulation by the British Columbia Utilities Commission (BCUC) with respect to universal compulsory automobile insurance rates and services (note 16).

Universal compulsory automobile insurance (Basic) includes the following coverage: $200,000 third party liability protection (higher for some commercial vehicles), access to accident benefits including a maximum of $150,000 for medical and rehabilitation expenses and up to $300 per week for wage loss, $1,000,000 underinsured motorist protection, and also protection against uninsured and unidentified motorists within and outside the Province of BC. The Corporation also offers insurance in a competitive environment (Optional), which includes, but is not limited to, the following coverages: extended third party liability, comprehensive, collision, and loss of use. The Corporation’s Basic and Optional insurance products are distributed by approximately 900 independent brokers located throughout the Province of BC. 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 primary automobile insurer.

2. Summary of Significant accounting Policies

Basis of reporting

The consolidated financial statements of the Corporation are prepared in accordance with Canadian generally accepted accounting principles (Canadian GAAP) as required by the Budget Transparency and Accountability Act (which supercedes the Insurance Corporation Act effective April 2010). The consolidated financial statements include the accounts of the Corporation, its wholly-owned subsidiary companies and a variable interest entity (VIE). The Corporation also reports revenues and expenses attributable to Basic insurance and non-insurance separately from the other operations of the Corporation (note 16).

The following are the significant accounting policies adopted by the Corporation:

a) Basis of consolidation

The Corporation consolidates the financial statements of all subsidiary companies and a VIE where the Corporation is the primary beneficiary. The primary beneficiary is the entity that absorbs the majority of the expected losses, and/or is entitled to the majority of the expected residual returns of the VIE. All significant inter-company balances and transactions are eliminated upon consolidation.

b) Premiums earned

The Corporation recognizes vehicle premiums, net of reinsurance premiums, over the term of each vehicle policy written. The driver premiums are earned over the driver’s penalty point year. Unearned premiums are the portion of premiums relating to the unexpired term, net of any premium refunds.

c) Service fees

Service fees on ICBC’s Payment Plan are recognized monthly over the term of the policy. For six or twelve month term Autoplan policies, ICBC’s Payment Plan enables customers to make monthly or quarterly payments.



d) deferred premium acquisition costs

To the extent premium acquisition costs such as commissions and premium taxes are recoverable from unearned premiums, they are deferred and amortized to income over the term of the related policies. An actuarial evaluation is performed to determine the amount allowable for deferral. The method in determining the deferred costs limits the amount of the deferral to the amount recoverable from unearned premiums derived from each of the Basic and Optional coverages, after giving consideration to the investment income, claims costs, and adjustment expenses expected to be incurred as the premiums are earned. A premium deficiency exists when future claims and related expenses are expected to exceed unearned premiums. Premium deficiencies are recognized first by writing down the deferred premium acquisition costs with any remaining premium deficiency recognized as a liability. The Corporation presents deferred premium acquisition costs and any premium deficiency reserves on a net corporate basis in the consolidated statement of financial position.

e) Provision for unpaid claims

The provision for unpaid claims represents the estimated amounts required to settle all unpaid claims, including an amount for unreported claims and claims expenses, and is gross of the recovery for reinsurance (note 2f). Claims liabilities are established according to accepted actuarial practice in Canada. They are carried on a discounted basis (note 8) and therefore reflect the time value of money, and include a provision for adverse deviations (PFAD).

To recognize the uncertainty in establishing best estimates, the Corporation includes a PFAD, consisting of two of the three elements, as set out in the Standards of Practice of the Canadian Institute of Actuaries: a claims development portion that reflects considerations relating to the Corporation’s claims practices, the underlying data and the nature of the lines of business written and a portion for the investment return rate that reflects uncertainty in the investment portfolio yield, the investment climate in general and the rate at which claims are paid. The PFAD margins used are determined by evaluating the above considerations. The third element is a reinsurance recovery portion included in the discounted amount recoverable from reinsurers (note 2f).

The margin for claims development is a percentage of the unpaid claims gross of reinsurance, excluding the PFAD. The margin for investment return rate is a reduction from the expected rate of return per annum.

In common with the insurance industry in general, the Corporation is subject to litigation arising in the normal course of conducting its insurance business, which is taken into account in establishing the provision for unpaid claims and other liabilities. As with any insurance company, the provision for unpaid claims is an estimate subject to random volatility, which could be material in the near term. Variability can be caused by receipt of additional information, significant changes in the average cost or frequency of claims over time, the timing of claims payments, and future rates of investment return. All changes to the estimate are recorded as incurred claims and prior years’ claims adjustments in the current period. Methods of estimation have been used which the Corporation believes produce reasonable results given current information.

The estimation of claims development involves assessing the future behaviour of claims, taking into consideration the consistency of the Corporation’s claims handling procedures, the amount of information available, and historical delays in reporting claims. In general, the longer the term required for the settlement of a group of claims, the more variable the estimates will be. Short settlement term claims are those which are expected to be substantially paid within a year of being reported.

The ultimate cost of long settlement liability claims is challenging to predict for several reasons, which include some claims not being reported until many years after a policy term, or changes in the legal environment, case law or legislative amendments. Provisions for such difficult to estimate liabilities are established by examining the facts of tendered claims and are adjusted in the aggregate for ultimate loss expectations based upon historical experience patterns, current socio-economic trends and structured settlements provided in the form of consistent periodic payments as opposed to lump sum payments.

f) Reinsurance

The Corporation reflects reinsurance balances on the consolidated statement of financial position on a gross basis to indicate the extent of credit risk related to reinsurance and its obligations to policyholders, and on the consolidated statement of operations on a net basis to indicate the results of its retention of premiums written.

The amount of reinsurance recoverable from reinsurers is recorded as an asset on the consolidated statement of financial position. PFAD (note 2e) is included in the discounted amount recoverable from reinsurers consisting of a reinsurance recovery portion that reflects considerations relating to the ceded claims ratio and potential collectability issues with reinsurers.

g) Investments and investment income

The Corporation designates its financial instruments as available for sale (AFS), held for trading (HFT) or loans and receivables (Loans). The Corporation’s financial assets and liabilities, including any derivatives, are recorded on the consolidated statement of financial position at fair value on initial recognition and subsequently accounted for based on their classification as follows:

48 icbc.com


available for Sale Financial assets that are not classified as loans or held for trading are classified as AFS. The Corporation has designated its cash and cash equivalents, money market securities, and its bond and equity portfolios, which comprise the majority of the Corporation’s assets, as AFS.

AFS financial assets are measured at fair value based upon available information. When neither an active market nor independent prices are available, the Corporation applies other valuation techniques to estimate fair value.

Changes in the fair value of AFS securities are recorded in accumulated other comprehensive income (AOCI) in the consolidated statement of equity, until the financial asset is disposed of or becomes other than temporarily impaired, at which time the gain or loss will be recognized in the consolidated statement of operations.

held for Trading HFT financial assets are purchased for short-term investment objectives. The Corporation does not have any HFT financial assets. Financial assets and derivatives classified as HFT are carried at fair value on the consolidated statement of financial position with realized and unrealized gains and losses recognized in investment income.

Loans and Receivables Loans are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Mortgages not traded in an active market are classified as loans and carried at amortized cost using the effective interest rate method. Premiums and other receivables are classified as loans and receivables.

Real estate held for investment consists of income-producing properties, which are recorded at amortized cost.

Income on interest-bearing securities is accrued daily. Dividends on equity investments are recognized as income on their ex-dividend dates. Transaction costs are included in the initial carrying amount of the item with the exception of transaction costs related to assets classified as HFT, which are recognized in net income. For AFS financial assets that have fixed or determinable payments, the transaction costs are amortized to net income using the effective interest rate method. If the AFS financial assets do not have fixed or determinable payments, the transaction costs are recognized in net income when the assets are sold.

If an AFS investment suffers a loss in value that is other than temporary, the unrealized loss is reclassified from AOCI and recognized as a charge to earnings.

For investments, other than AFS, carried at cost that suffer a loss in value that is other than temporary, the difference between the cost and fair value is recognized as a charge to earnings.

The Corporation also participates in the sale and repurchase of Government of Canada, Provincial and United States Treasury bonds which are sold and simultaneously agreed to be repurchased at a future date with the market repurchase rate determining the forward contract price. These sale and repurchase arrangements are accounted for as financial liabilities. The difference between the sale price and the agreed repurchase price on a repurchase contract is recognized as expense.

h) Pensions and post-retirement benefits

The cost of pension and post-retirement benefits earned by employees is actuarially determined using the projected benefit method pro-rated based on services and management’s best estimate of expected plan investment performance, compensation levels, retirement ages of employees and expected healthcare costs.

The expected return on plan assets is calculated using the expected long-term rate of return on plan assets and the fair value of the assets.

Past service costs from plan amendments are amortized on a straight-line basis over the expected average remaining service period of employees active at the date of amendment.

The excess of the net actuarial gain or loss over 10% of the greater of the accrued benefit obligation and the fair value of plan assets at the beginning of the year is amortized over the expected average remaining service period of active employees.

The transitional asset, created when the Corporation adopted the recommendations of Canadian Institute of Chartered Accountants Handbook Section 3461, “Employee Future Benefits” in 2000, is amortized on a straight-line basis over the average remaining service period of employees expected to receive benefits under the benefit plan.

Certain employees, formerly of the Motor Vehicle Branch, belong to the BC Public Service Pension Plan. This is a multi-employer plan for which the Corporation applies defined contribution accounting.



Amortization is provided on a straight-line basis which will amortize the cost of each asset over its estimated useful life at the following annual rates:

•Buildings 5–10%

•Furnitureandequipment 10–33%

•Intangibleassets 10–33%

•Leaseholdimprovements Termofthelease

j) Cash and cash equivalents

For purposes of the consolidated statement of cash flows, the Corporation considers all cash on hand, deposits with financial institutions that can be withdrawn without prior notice or penalty and money market securities with a term less than 90 days from the date of acquisition, net of outstanding cheques as equivalent to cash.

k) Translation of foreign currencies

Foreign currency investment transactions are translated at exchange rates at the date of sale or purchase. Foreign currency assets and liabilities considered as monetary items are translated at exchange rates in effect at the year-end date. Foreign currency revenues and expenses are translated at transaction date exchange rates. All realized exchange gains and losses, as well as unrealized exchange gains and losses on HFT assets and Loans, are included in the determination of net income. Unrealized exchange gains and losses on AFS assets are included in AOCI.

l) use of estimates

The preparation of financial statements in conformity with Canadian GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. The more subjective of such estimates and assumptions are provisions for unpaid claims and the related net claims incurred, provisions for doubtful accounts, impairment of investments, discount rate, accrued pension benefits, accrued post-retirement benefits, and deferred premium acquisition costs. Management believes its estimates and assumptions to be appropriate; however, actual results may be significantly different and would be reflected in future periods.

m) Fair value

Fair value is the amount of the consideration that would be agreed upon in an arm’s length transaction between knowledgeable, willing parties who are under no compulsion to act. The estimated fair value of money market securities is cost. The estimated fair value for bonds and equities is based on quoted market values. The estimated fair value for mortgages is based upon the net present value of the payment stream using mortgage rates currently available. The estimated fair value of ICBC’s real estate investments is based on independent appraisals made during the year, and when not available, on discounted cash flows using current market capitalization rates. Where an active market does not exist, and quoted bid prices are unavailable, fair values are determined using valuation techniques that refer to observable market data. Where observable market data is unavailable, the estimated fair value is the lower of cost or expected net realizable value.

The Corporation classifies financial instruments measured at fair value into one of three levels of a fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. Level 1 fair values are quoted prices in active markets for identical assets or liabilities, Level 2 fair values are based on quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, and Level 3 fair values are based on unobservable market data inputs for the asset or liability.

i) Property, equipment, and intangible assets

Property, equipment and intangible assets are recorded at cost less accumulated amortization. Software development costs, which are comprised of labour and material costs for design, construction, testing, implementation and other related costs, are capitalized for major infrastructure projects expected to be of continuing benefit to the Corporation, or expensed where the potential future benefits are uncertain or not quantifiable.

Capitalized software that is an integral part of the operating system equipment is accounted for as equipment. Capitalized software that is not an integral part of the operating system equipment is accounted for as an intangible asset.

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4. Investments

a) Cash and investments

($ ThouSandS) 2010 2009

Carrying Carrying Classification Value Value

Cash and investments

Cash and cash equivalents AFS $ 20,977 $ 23,102

Money market securities AFS 113,524 166,479

Bonds

Canadian

Federal AFS 2,910,303 3,011,822

Provincial AFS 891,122 918,359

Municipal AFS – 9,905

Corporate AFS 2,935,373 2,653,886

Total Canadian bonds 6,736,798 6,593,972

United States

Federal AFS 298,552 359,244

Corporate AFS 273,671 183,953

Total United States bonds 572,223 543,197

Total bonds 7,309,021 7,137,169

Mortgages Loans 993,489 904,517

Equities

Canadian AFS 1,544,133 1,487,514

United States AFS 580,901 588,124

Europe, Australia, Far East AFS 673,350 550,651

Total equities 2,798,384 2,626,289

Real estate Other 358,170 271,505

Total cash and investments $ 11,593,565 $ 11,129,061

3. International Financial Reporting Standards The Canadian Accounting Standards Board has confirmed that, on January 1, 2011, International Financial Reporting Standards (IFRS) will replace Canadian GAAP for publicly accountable enterprises. The Public Sector Accounting Board has confirmed that government business enterprises, as self-sustaining commercial operations, shall adhere to the standards for publicly accountable enterprises. In addition, pursuant to a provincial Treasury Board directive in 2010, the Corporation is directed to consult with the Office of the Comptroller General of British Columbia, who will provide guidance to the Corporation prior to the adoption of accounting policy choices and elections related to applicable accounting standards or guidelines.

ICBC, as a government business enterprise and subject to complying with the Treasury Board directive above, is adopting IFRS effective January 1, 2011. The Corporation has implemented the required accounting policy changes under IFRS and the Corporation’s financial statements for the year ended December 31, 2011 and thereafter will be prepared in accordance with IFRS.



The carrying value of investments for 2010 approximates their fair value except for real estate that has an estimated net fair value of $451.1 million (2009 – $340.4 million), and mortgages that have an estimated fair value of $1,024.4 million (2009 – $921.5 million).

($ ThouSandS) 2010 2009

Bond repurchase agreements and investment-related liabilities

Bond repurchase agreements $ 879,553 $ 861,786

Investment-related liabilities 1 83,725 –

$ 963,278 $ 861,786

1 investment-related liabilities relate to a VIE, which is a pooled equity fund with total assets of $181.4 million as at December 31, 2010.

The following table presents the fair value hierarchy for financial assets and liabilities measured at fair value in the consolidated statement of financial position. There were no movements between Level 1 and Level 2 during the year.

($ ThouSandS) Fair Value Measurements at Reporting Date

Quoted Prices in Active Markets Significant Other Significant for Identical Observable Unobservable Fair Value Assets Inputs Inputsdescription Dec 31, 2010 (Level 1) (Level 2) (Level 3)

Cash $ 20,977 $ – $ 20,977 $ –

Money market securities 113,524 – 113,524 –

Bonds 7,309,021 – 7,307,368 1,653

Equities 2,798,384 2,797,564 – 820

Total financial assets $ 10,241,906 $ 2,797,564 $ 7,441,869 $ 2,473

Bond repurchase agreements $ 879,553 $ – $ 879,553 $ –

Total financial liabilities $ 879,553 $ – $ 879,553 $ –

($ ThouSandS) Fair Value Measurements at Reporting Date

Quoted Prices in Active Markets Significant Other Significant for Identical Observable Unobservable Fair Value Assets Inputs Inputsdescription Dec 31, 2009 (Level 1) (Level 2) (Level 3)

Cash $ 23,102 $ – $ 23,102 $ –

Money market securities 166,479 – 166,479 –

Bonds 7,137,169 – 7,127,774 9,395

Equities 2,626,289 2,625,469 – 820

Total financial assets $ 9,953,039 $ 2,625,469 $ 7,317,355 $ 10,215

Bond repurchase agreements $ 861,786 $ – $ 861,786 $ –

Total financial liabilities $ 861,786 $ – $ 861,786 $ –

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The following table shows the movements of financial assets where fair value has been determined based upon significant unobservable inputs (Level 3):

($ ThouSandS) Fair Value Measurements using Level 3 Inputs

Bonds Equities

Balance as at december 31, 2008 $ 31,526 $ 3,812

Total gains (losses)

- in net income 5 424

- in other comprehensive income (2,496) (982)

Settlements for investments sold (35,961) –

Purchases 29,873 –

Transfers to Level 2 hierarchy (13,552) –

Other than temporary impairment – (2,434)

Balance as at december 31, 2009 $ 9,395 $ 820

Total losses in net income (3,175) –

Settlements for investments sold (4,567) –

Balance as at december 31, 2010 $ 1,653 $ 820

b) other financial assets

Other financial assets include accrued interest, amount recoverable from reinsurers, and premiums and other receivables. The fair values of other financial assets approximate their carrying values.

c) Financial liabilities

Financial liabilities include cheques outstanding, accounts payable and accrued charges, and bond repurchase agreements. The fair values of these financial liabilities approximate their carrying values.

5. Financial Instruments Risk Management As a provider of automobile insurance products, effective risk management is fundamental in protecting earnings, cash flow, and ultimately shareholder value. The Corporation, through its financial assets and liabilities, is exposed to various types of risks. The following outlines the Corporation’s financial risks and related exposures:

a) Equity price risk

General economic conditions, political conditions and other factors affect the equity market, thereby also affecting the fair value of the securities held by the Corporation. Fluctuations in the value of equity securities impact the recognition of unrealized gains and losses on securities held. At December 31, 2010, the impact of a 10% change in equity prices, with all other variables held constant would result in an estimated corresponding change in AOCI approximately $272.0 million (2009 – $263.0 million).

The Corporation has policies in place to limit and monitor its exposure to individual issuers.

b) Interest rate risk

Fluctuation in interest rates will have a larger market value impact on instruments with a long duration compared with instruments with a short duration. Fluctuations in interest rates have a direct impact on the market valuation of the Corporation’s fixed income portfolio. When interest rates increase or decrease, the market value of fixed income securities will decrease or increase respectively.



The Corporation has policies in place to limit and monitor its exposure to interest rate risk to allow for duration matching of claim liabilities to bond assets.

The carrying values reported in the consolidated statement of financial position for cash and cash equivalents, accounts receivable, accounts payable, and bond repurchase agreements approximate their fair values and are not significantly impacted by fluctuations in interest rates.

In 2010 and 2009, the Corporation did not use derivative financial instruments to hedge interest rate risk on its investment portfolio.

2010 2009

Average Yield Duration Average Yield Duration (%) (Years) (%) (Years)

Bonds

Canadian

Federal 2.3 2.5 2.7 2.6

Provincial 2.9 3.1 3.6 3.1

Municipal – – 3.7 3.3

Corporate 4.0 2.1 4.4 2.3

United States

Federal 1.8 2.7 1.9 2.5

Corporate 2.9 2.4 3.8 2.7

Total bonds 3.0 2.4 3.4 2.6

Mortgages 5.5 2.8 5.6 2.5

Total bonds and mortgages 3.3 2.4 3.7 2.5

As at December 31, 2010, a 100 basis point change in interest rates would result in a corresponding change of approximately $202.0 million (2009 – $204.0 million) in the fair value of the Corporation’s fixed income portfolio and a corresponding impact of approximately $202.0 million (2009 – $204.0 million) on AOCI. Interest rate changes would also result in an offsetting change to the provision for unpaid claims and the corresponding claims costs.

Service fees earned on the ICBC Payment Plan are also impacted by changes in the interest rate. A change in the Bank of Canada average prime rate of 100 basis points would result in an estimated corresponding change in income of approximately $10.8 million (2009 – $10.8 million).

c) Credit risk

Credit risk is the potential for financial loss to the Corporation if the counterparty in a transaction fails to meet its obligations. Financial instruments that potentially give rise to significant concentrations of credit risk include fixed income securities, accounts receivable, reinsurance receivables and recoverable, and structured settlements (note 15).

Fixed income securities

The Corporation mitigates its exposure to credit risk by placing fixed income securities with high-quality institutions with investment grade credit ratings. Credit risk in mortgages is addressed through a stringent underwriting process that incorporates an internal credit scoring mechanism, and all mortgages are subject to an independent review annually.

The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings, where available, or to historical information about counterparty default rates.

The maximum credit risk exposure for fixed income securities equal their carrying amount of $5.1 billion (2009 – $4.7 billion).

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The following table highlights the cash equivalents and money market securities, and bonds by credit quality according to the Dominion Bond Rating Service at December 31, 2010:

($ ThouSandS) 2010 2009

Carrying Carrying Value Value

Cash equivalents and money market securities

R1 – HIGH $ 113,524 $ 156,496

R1 – MID – 9,983

$ 113,524 $ 166,479

Bonds

AAA $ 3,792,861 $ 3,878,051

AA 1,247,276 1,511,123

A 1,723,513 1,415,085

BBB 545,371 323,580

Not rated – 9,330

$ 7,309,021 $ 7,137,169

Accounts receivable

The Corporation has a diverse customer base as it provides basic insurance to all drivers in British Columbia. While there is no significant concentration of credit risk, the Corporation’s accounts receivable can be comprised of customers with varying financial conditions. Subrogation recoveries and recoveries from customers in respect of violation of their policies are fully provided for due to the uncertainty of collection. The credit risk for premium receivables is mitigated as a customer’s policy may be cancelled if the customer is in default of a payment. The maximum credit risk for all other receivables equals their carrying amount.

As at December 31, 2010, the Corporation considered $33.8 million (2009 – $34.9 million) of its accounts receivables to be uncollectible and have provided for them. The following table outlines the aging of these accounts receivables as at December 31, 2010:

($ ThouSandS)

Past Due Past Due Over Current 1 – 30 days 31 – 60 days 60 days Total

2010

Premiums and other receivables $ 989,106 $ 7,944 $ 228 $ 46,892 $ 1,044,170

Provision on accounts receivables (839) (436) (138) (32,426) (33,839)

$ 988,267 $ 7,508 $ 90 $ 14,466 $ 1,010,331

2009

Premiums and other receivables $ 1,013,716 $ 4,160 $ 767 $ 38,832 $ 1,057,475

Provision on accounts receivables (423) (406) (470) (33,646) (34,945)

$ 1,013,293 $ 3,754 $ 297 $ 5,186 $ 1,022,530

Reinsurance receivables and recoverable

Failure of reinsurers to honour their obligations could result in losses to the Corporation. The maximum credit risk exposure equals the carrying amount of $5.8 million (2009 – $7.8 million). The Corporation has policies which require reinsurers to have a minimum credit rating of A-. No single reinsurer represents more than 15% of the total reinsurers’ share of the provision for unpaid claims and adjusting expenses in a contract year. Both these items mitigate the Corporation’s exposure to credit risk. No amount owing from the reinsurers has been considered impaired at December 31, 2010.



d) Liquidity risk

A significant business risk of the insurance industry is the ability to match the cash inflows of premiums and the investment portfolio with the cash requirements of the policy liabilities and operating expenses. The timing of most policy liability payments is not known, and may take considerable time to determine precisely, and may be paid in partial payments.

The Corporation has taken the overall historical liability settlement pattern as a basis to define diversification and duration characteristics of the investment portfolio.

To meet the cash requirements for claims and operating expenses, the Corporation has policies to limit and monitor its exposure to individual issuers or related groups and to ensure that assets and liabilities are broadly matched in terms of their duration.

Liquidity risk is further controlled by holding Government bonds and other highly liquid investments. Bond repurchase agreements are accounted for as financial liabilities and are considered to be short term in nature. The following table summarizes the maturity profile as at December 31, 2010 of the Corporation’s financial instruments by contractual maturity or expected cash flow dates:

($ ThouSandS)

Within One Year After One Year to Five Years Five Years Total

2010

Bonds

Canadian

Federal $ – $ 2,810,280 $ 100,023 $ 2,910,303

Provincial – 845,318 45,804 891,122

Corporate 771,009 2,104,796 59,568 2,935,373

United States

Federal – 298,552 – 298,552

Corporate 15,004 255,869 2,798 273,671

Total bonds 786,013 6,314,815 208,193 7,309,021

Mortgages 158,130 713,579 121,780 993,489

$ 944,143 $ 7,028,394 $ 329,973 $ 8,302,510

2009

Bonds

Canadian

Federal $ – $ 3,011,822 $ – $ 3,011,822

Provincial – 912,586 5,773 918,359

Municipal – 9,905 – 9,905

Corporate 568,209 2,059,977 25,700 2,653,886

United States

Federal – 359,244 – 359,244

Corporate 14,109 165,402 4,442 183,953

Total bonds 582,318 6,518,936 35,915 7,137,169

Mortgages 117,225 672,695 114,597 904,517

$ 699,543 $ 7,191,631 $ 150,512 $ 8,041,686

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e) Currency risk

Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Corporation is exposed to foreign exchange risk on its cash and cash equivalents, its international equity portfolio and its fixed income portfolios.

A 10% change in the United States exchange rate at December 31, 2010 would change the fair value of these investments and a corresponding change in AOCI of approximately $115.0 million (2009 – $113.0 million). As all other foreign currency investments comprise five per cent or less of the total investment portfolio in both 2010 and 2009, the impact of a change in the exchange rate of these currencies is not expected to have a material impact on the portfolio.

The Corporation has policies in place to limit and monitor its exposure to currency risks. These policies include the maintenance of United States dollar denominated assets to generate cash flows to satisfy United States dollar ongoing operational cash flow requirements.

6. Investment Income

($ ThouSandS) 2010 2009

Classification

Interest Money market AFS $ 1,032 $ 4,987

Bonds AFS 215,172 247,755

Mortgages Loans 53,217 47,973

269,421 300,715

Gains on the sale of investments

Equities AFS 143,657 35,889

Bonds AFS 55,848 146,427

199,505 182,316

Dividends and other income (expenses)

Equities AFS 66,661 67,786

Real estate Other 20,829 12,413

Investment management fees Other (8,582) (9,135)

Other than temporary impairment AFS (36,762) (14,876)

Other Other (5,021) (6,742)

37,125 49,446

Total investment income $ 506,051 $ 532,477



($ ThouSandS) 2010 2009

Accumulated other comprehensive income

Balance, beginning of year $ 402,160 $ 99,671

Unrealized gains 290,210 484,805

Realized gains (199,505) (182,316)

Balance, end of year $ 492,865 $ 402,160

During the year, the Corporation recognized an other than temporary impairment on its investment assets. The impairment loss decreased investment income by $36.8 million (2009 – $14.9 million).

The Corporation participates in a securities lending program managed by a federally regulated financial institution whereby it lends securities it owns to other financial institutions to allow them to meet delivery commitments. The Corporation receives securities of equal or superior credit quality as collateral for securities loaned and records commission on transactions as earned. At December 31, 2010, there were $295.4 million of securities loaned (2009 – nil), and $310.0 million received as collateral (2009 – nil).

7. Property, Equipment, and Intangible assets

($ ThouSandS) 2010 2009

Net Book Net Book Cost Value Cost Value

Land $ 33,526 $ 33,526 $ 32,943 $ 32,943

Buildings 158,251 34,700 151,538 31,188

Furniture and equipment 118,964 29,443 102,496 20,554

Intangible assets 1 59,001 21,321 40,656 5,645

Leasehold improvements 12,556 3,256 10,567 1,778

$ 382,298 $ 122,246 $ 338,200 $ 92,108

1 includes software that is not an integral part of the operating system

The balances in property, equipment, and intangible assets include $29.6 million (2009 – $9.2 million) in assets under construction. Amortization expense for all other assets for the year ended December 31, 2010 amounted to $14.2 million (2009 – $14.7 million).

During 2010, included in property, equipment, and intangible assets are $13.2 million ($11.1 million for intangible assets, $1.0 million for furniture and equipment and $1.1 million for leasehold improvements) of costs capitalized for the Transformation Program (note 14).

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8. Provision for unpaid ClaimsThe changes in the provision for unpaid claims recorded in the consolidated statement of financial position and their impact on claims incurred for the year are as follows:

($ ThouSandS) 2010 2009

unpaid claims net — beginning of year $ 5,956,535 $ 5,711,912

Change in estimates for losses occurring in prior years

Prior years’ claims adjustments (63,418) (54,679)

Prior years’ changes in discounting provision 61,379 57,034

(2,039) 2,355

Provision for claims occurring in the current year 2,754,077 2,648,193

Net claims incurred 2,752,038 2,650,548

Less:

Net payments on claims incurred in the current year 943,053 933,585

Net payments on claims incurred in prior years 1,588,320 1,472,340

2,531,373 2,405,925

unpaid claims net — end of year 6,177,200 5,956,535

Amount recoverable from reinsurers 5,807 7,807

unpaid claims gross — end of year $ 6,183,007 $ 5,964,342

The Corporation discounts its provision for unpaid claims at an investment rate of return of 4.46% (2009 – 4.64%). The Corporation determines the discount rate based upon the expected return on its investment portfolio of assets and uses assumptions for interest rates relating to reinvestment of maturing investments. Included in the prior years’ changes in the discounting provision, is $26.0 million resulting from the decrease in the investment rate of return from 4.64% at December 2009 to 4.46% at December 2010.

The following table shows the effect of discounting on the provision for unpaid claims:

($ ThouSandS)

Effect of Undiscounted Present Value PFADs Discounted

2010

Provision for unpaid claims $ 6,118,109 $ (631,500) $ 690,591 $ 6,177,200

Amount recoverable from reinsurers 5,758 (535) 584 5,807

$ 6,123,867 $ (632,035) $ 691,175 $ 6,183,007

2009

Provision for unpaid claims $ 5,945,600 $ (646,035) $ 656,970 $ 5,956,535

Amount recoverable from reinsurers 7,895 (969) 881 7,807

$ 5,953,495 $ (647,004) $ 657,851 $ 5,964,342



9. ReinsuranceThe Corporation maintains casualty and catastrophe reinsurance to protect against significant losses.

The Corporation entered into one year casualty and catastrophe reinsurance contracts beginning January 1, 2010 as follows:

a) for catastrophic occurrences, portions of losses up to $225.0 million in excess of $25.0 million; and

b) for individual casualty loss occurrences, portions of losses up to $45.0 million in excess of $5.0 million.

The Corporation entered into one year casualty and catastrophe reinsurance contracts beginning January 1, 2009 as follows:

a) for catastrophic occurrences, portions of losses up to $225.0 million in excess of $25.0 million; and

b) for individual casualty loss occurrences, portions of losses up to $45.0 million in excess of $5.0 million.

These reinsurance arrangements do not discharge the Corporation’s obligation as primary insurer. The Corporation evaluates the financial condition of its reinsurers to minimize the exposure to significant loss from reinsurer insolvency.

10. Pension Plans and Post-Retirement BenefitsThe Corporation sponsors a defined benefit registered pension plan for its current and former management and confidential employees (the Management and Confidential Plan). In addition, it sponsors two supplemental pension plans for certain employees.

The Corporation also contributes to two other defined benefit pension plans for which it is not the sponsor. Current and former employees of the Corporation who are or were members of the Canadian Office & Professional Employees Union (COPE) Local 378 are members of the COPE 378 / ICBC Pension Plan (the COPE Plan). The COPE Plan is a jointly trusteed plan. Trustees of the plan are appointed by each of the Corporation and COPE Local 378.

Certain current and former employees of the Corporation who were formerly employed in the Motor Vehicle Branch are members of a separate plan, the BC Public Service Pension Plan. This is a multi-employer plan for which the Corporation applies defined contribution accounting.

The Corporation is the legal administrator of the Management and Confidential Plan and the two supplemental pension plans. The Corporation has no fiduciary responsibility for, or role in the governance of, the COPE Plan or the BC Public Service Pension Plan.

The Corporation pays Medical Services Plan, life insurance premiums, extended healthcare and dental costs as post-retirement benefits for its retirees. Benefit entitlements differ for management and confidential, and bargaining unit staff.

Total cash payments for employee future benefits for 2010, consisting of cash contributed by the Corporation to all of the funded pension plans and in respect of its unfunded pension and post-retirement benefits were $53.7 million (2009 – $32.8 million).

The Corporation measures its accrued benefit obligations and the fair value of plan assets for accounting purposes as at December 31 of each year. The Management and Confidential Plan had an actuarial valuation as of December 31, 2009 which was extrapolated to December 31, 2010. The next expected valuation date is December 31, 2012. The COPE Plan had an actuarial valuation as of December 31, 2008 which was extrapolated to December 31, 2010. The next expected valuation date is December 31, 2011. The post-retirement benefits had an actuarial valuation as of December 31, 2009 which was extrapolated to December 31, 2010.

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Information regarding the pension plans and post-retirement benefits is as follows:

($ ThouSandS) Pension Plans Post-Retirement Benefits

2010 2009 2010 2009

Plan assets

Fair value at beginning of year $ 1,033,026 $ 896,362 $ – $ –

Actual return on plan assets 107,619 114,235 – –

Employer contributions 49,432 28,680 3,285 3,109

Employees’ contributions 22,088 20,260 – –

Benefits paid (32,973) (26,511) (3,285) (3,109)

Fair value at end of year $ 1,179,192 $ 1,033,026 $ – $ –

accrued benefit obligation1

Balance at beginning of year $ 939,300 $ 754,464 $ 159,331 $ 106,504

Current service cost 22,142 12,348 6,066 3,759

Employees’ contributions 22,088 20,260 – –

Interest cost 64,108 57,028 10,812 8,023

Actuarial losses 162,970 121,387 23,938 44,154

Plan adjustments – 324 – –

Benefits paid (32,973) (26,511) (3,285) (3,109)

Balance at end of year $ 1,177,635 $ 939,300 $ 196,862 $ 159,331

Funded status – plan surplus (deficit) $ 1,557 $ 93,726 $ (196,862) $ (159,331)

Unamortized net actuarial losses 203,852 71,913 51,484 28,602

Unamortized plan adjustments 292 324 (804) (1,005)

Unamortized transitional asset (29,939) (38,924) – –

accrued benefit asset (liability) $ 175,762 $ 127,039 $ (146,182) $ (131,734)

1 Estimated accrued benefit obligation – end of year with:

1% increase in healthcare trend rate $ 220,000 $ 178,464

1% decrease in healthcare trend rate $ 176,460 $ 142,897

The pension plans’ assets consist of:

Percentage of Plan assets

2010 2009

Cash and accrued interest – 1%

Equities

Canadian 41% 37%

Foreign 19% 24%

Fixed income

Government 26% 23%

Corporate 7% 8%

Mortgages 7% 7%

100% 100%



The following amounts are included in the accrued benefit obligation in respect of plans that are not funded:


2010 2009 2010 2009

Accrued benefit obligation and plan deficit $ 12,822 $ 10,228 $ 196,862 $ 159,331


2010 2009 2010 2009

Current service cost $ 22,142 1 $ 12,3481 $ 6,066 $ 3,759

Interest cost 64,108 57,028 10,812 8,023

Expected return on plan assets (78,465) (59,576) – –

Amortization of transitional asset (8,985) (8,985) – –

Plan adjustments 32 – (201) (201)

Amortization of net actuarial losses (gains) 1,877 1,341 1,056 (446)

Net expense $ 709 $ 2,156 $ 17,733 $ 11,135

Estimated net expense with:

1% increase in healthcare trend rate $ 21,473 $ 12,357

1% decrease in healthcare trend rate $ 14,722 $ 9,748

1 net of employees’ contributions of $22,088 (2009 – $20,260)

The Corporation’s net benefit plan expense for the pension plans and post-retirement benefits is as follows:

The Corporation contributed $1.0 million in 2010 (2009 – $1.0 million) to the BC Public Service Pension Plan.

The significant actuarial assumptions adopted in measuring the Corporation’s accrued benefit obligations are as follows (weighted-average assumptions as of December 31):

Pension Plans Post-Retirement Benefits

2010 2009 2010 2009

Discount rate 5.61% 6.61% 5.61% 6.61%

Expected long-term rate of return on plan assets 7.5% 7.5% n/a n/a

Rate of compensation increase 3.8% 3.8% 3.8% 3.8%

Inflation rate 2.5% 2.5% 2.5% 2.5%

In 2010, the Medical Services Plan trend rate is assumed to be six per cent per annum for the first nine years, decreasing to three per cent per annum thereafter. In 2009, the Medical Services Plan trend rate was assumed to be six per cent per annum for the first 10 years, decreasing to three per cent per annum thereafter.

In 2010, the extended healthcare trend rate is assumed to be eight per cent per annum for the first two years, decreasing linearly over eight years to five per cent per annum thereafter. In 2009, the extended healthcare trend rate was assumed to be ten per cent per annum for the first three years, decreasing linearly over eight years to six per cent per annum thereafter.

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11. operating CostsThe Corporation’s activities include insurance and non-insurance operations as described in note 1. Details of the expenses are as follows:

($ ThouSandS) 2010 2009

operating costs – insurance

Administrative and other expenses $ 116,730 $ 106,053

Insurance services 55,488 63,105

Transformation Program costs (note 14) 34,775 –

$ 206,993 $ 169,158

operating costs – non-insurance

Administrative and other expenses $ 31,320 $ 33,370

Driver licensing 50,953 46,470

$ 82,273 $ 79,840

12. deferred Premium acquisition Costs and Prepaid Expenses

As at December 31, 2010, there were premium acquisition costs of $210.6 million (2009 – $207.7 million) related to future periods. An actuarial valuation determined that $170.8 million (2009 – $199.1 million) of this amount is allowable for deferral. The allowable amount for deferral is comprised as follows:

($ ThouSandS) 2010 2009

Deferred premium acquisition costs $ 170,800 $ 199,100

Prepaid expenses 13,498 8,004

$ 184,298 $ 207,104

($ ThouSandS) 2010 2009

Optional $ 135,400 $ 134,800

Basic 35,400 64,300

$ 170,800 $ 199,100



The commission and premium tax expenses reflected in the consolidated statement of operations are as follows:

($ ThouSandS)

Commissions Premium Taxes Total

2010

Amount payable $ 309,698 $ 165,018 $ 474,716

Amortization of prior year deferred premium acquisition costs 126,092 73,008 199,100

Deferred premium acquisition costs (108,596) (62,204) (170,800)

Premium taxes and commission expense $ 327,194 $ 175,822 $ 503,016

Represented as:

Insurance $ 301,373 $ 175,822 $ 477,195

Non-insurance 25,821 – 25,821

$ 327,194 $ 175,822 $ 503,016

2009

Amount payable $ 298,962 $ 162,580 $ 461,542

Amortization of prior year deferred premium acquisition costs 123,548 73,252 196,800

Deferred premium acquisition costs (126,092) (73,008) (199,100)

Premium taxes and commission expense $ 296,418 $ 162,824 $ 459,242

Represented as:

Insurance $ 272,000 $ 162,824 $ 434,824

Non-insurance 24,418 – 24,418

$ 296,418 $ 162,824 $ 459,242

13. Related Party TransactionsAll transactions with the Province of BC ministries, agencies and Crown corporations occurred in the normal course of providing insurance, registration and licensing for motor vehicles and are valued at the exchange amount, which is representative of fair value unless otherwise disclosed in these notes.

The Corporation acts as agent for the Ministry of Finance regarding the collection of social service taxes and tax on designated property on privately sold used vehicles and motor vehicle related debts, and the collection of the provincial portion of harmonized sales tax on imported vehicles.

The Corporation is responsible for collecting all vehicle-related income for acquiring and distributing licence plates and decals including permit and other fees under the Motor Vehicle Act and fines under the Offence Act and these are remitted in full to the Province of BC. Income from the issuance of drivers and other licences and permits and from fines is recognized on an accrual basis. The costs associated with the licensing and compliance activities conducted on behalf of the Province of BC are borne by the Corporation and are included in the consolidated statement of operations as operating costs – non-insurance (note 11).

During the year the Corporation transferred $300.0 million of excess Optional capital to the Province of BC (note 14). At December 31, 2010, $275.7 million was accrued as a payable to the Province of BC. There were no amounts transferred or accrued in 2009. Other related party transactions have been disclosed elsewhere in the notes to the consolidated financial statements.

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14. Capital Management The Corporation’s capital is comprised of retained earnings and AOCI. The Corporation’s objectives for managing capital are to maintain financial strength including the management of ongoing business risks and protect its ability to meet the obligations owed to policyholders and others.

ICBC has set an internal corporate management target for the minimum capital test (MCT) as defined by the Office of the Superintendent of Financial Institutions (OSFI), of a minimum of 170.0% for 2010 (2009 – 180.0%). The MCT utilizes a risk-based formula to assess the solvency of an insurance company by defining the capital available that is required to meet the minimum standards. The Corporation was in compliance with internal management targets throughout 2010. As at December 31, 2010, the Corporation’s MCT was 218.4% (2009 – 239.6%).

The corporate management target for MCT is comprised of two components being the Basic and Optional insurance business. For the Basic insurance business, the British Columbia Government’s Special Direction IC2 requires the Corporation, through BCUC oversight, to maintain capital available equal to at least 100% of MCT.

For the Optional insurance business, the Insurance Corporation Act requires the Corporation to maintain a management target comprised of the supervisory target as set out in the MCT guideline, and the margin, calculated by the Corporation’s actuary and validated by the independent actuary appointed by the Board of the Corporation, that reflects the Corporation’s risk profile and its ability to respond to adverse events that arise from those risks, the MCT guideline, and the Guideline on Stress Testing issued by OSFI.

Any excess Optional capital at fiscal year-end, net of any deductions approved by the Treasury Board are to be transferred to the Province of BC by July 1 of the following year.

The Corporation has embarked on a business renewal program known as the Transformation Program to address key business issues, including increased customer expectations regarding products, service and price along with replacing aging technology systems. The Transformation Program includes multiple projects to collectively help the Corporation achieve its strategy and future objectives and up to $400.0 million is funded from Optional capital. The balance of the Transformation Program reserve, net of costs expensed, is a Treasury Board approved deduction from the excess Optional capital transfer and is as follows:

($ ThouSandS) 2010 2009

Transformation Program Reserve

Balance, beginning of year $ – $ –

Transfer from retained earnings (Optional capital) 400,000 –

Costs expensed during the year (34,775) –

Balance, end of year $ 365,225 $ –

In addition to the Transformation Program costs expensed during the year, there were also $13.2 million of Transformation Program costs capitalized in property, equipment and intangible assets (note 7).

15. Contingent Liabilities and Commitments

a) Structured settlements

Certain injury claims are settled through the use of various structured settlements which require the Corporation to provide the claimant with periodic payments. The Corporation’s injury claims are primarily settled through the use of Type 1 structured settlements.

The Corporation purchases an annuity from an approved life insurance company to make these payments. In the event the life insurance company fails in its obligation, the risk to the Corporation is mitigated as the claimant will continue to receive payments, up to certain limits, from a not-for-profit organization that is funded by the insurance industry and endorsed by the Federal Government. The Corporation is only responsible for making payments for the excess, if any, between the claimant’s annuity payments and the payment from the not-for-profit organization. At present, four federally licensed life insurance companies are approved for use by the Corporation. The list of approved insurance companies is determined by an ongoing analysis of total assets, credit rating analysis, and past service history. The present value of these structured



settlements at December 31, 2010 is approximately $1.01 billion (2009 – $0.96 billion), which are not recorded in the financial statements of the Corporation. To date, the Corporation has not experienced any losses resulting from these arrangements.

b) Lease payments

The Corporation has entered into operating leases of certain rental properties for varying terms. The annual rental payments pursuant to these leases over the next five years are as follows:

($ ThouSandS)

2011 $ 11,977

2012 10,280

2013 7,820

2014 5,432

2015 3,439

$ 38,948

16. Rate RegulationAs discussed in note 1, the Corporation is subject to regulation by BCUC. BCUC has jurisdiction over the Corporation’s rates and services for Basic insurance, and responsibility for ensuring that the Basic insurance business does not subsidize the Corporation’s Optional insurance business. In addition, BCUC sets rates for Basic insurance that allow it to achieve the regulated capital targets and is responsible for directing ICBC to achieve regulated targets for total Corporation and Optional insurance.

For the regulation of the Corporation’s Basic insurance rates, BCUC is required to ensure that the rates are just, reasonable, not unduly discriminatory and not unduly preferential. BCUC is required to fix rates on the basis of accepted actuarial practice, to pay for certain specified costs, to ensure the Corporation maintains the required capital, to ensure rates are not based on age, gender or marital status, and to ensure increases or decreases in rates are phased in, in a stable and predictable manner.

BCUC requires the Corporation to follow the financial allocation methodology it has approved with respect to allocating costs between Basic and Optional insurance business, and non-insurance business.

BCUC initiates regulatory processes on its own initiative or upon application by the Corporation. It uses oral hearing, written hearing, or negotiated settlement processes to review applications and subsequently issue legally binding decisions.

The Corporation is required to incur a portion of BCUC’s general operating expenses as well as its costs associated with each ICBC proceeding. BCUC can also order the Corporation to reimburse other proceeding participants for specified costs such as legal and expert witness fees.

allocation of Basic and optional amounts

The Corporation operates its business using an integrated business model. Although the majority of premium revenues and costs are specifically identifiable as Basic or Optional (note 1), certain costs are not tracked separately. For those revenues and costs that are not specifically identified as Basic or Optional, a pro-rata method of allocation has been used to allocate the revenues and costs between the two lines of business. This method allocates revenues and costs to each line of business based on the drivers of those revenues and costs, the degree of causality and any BCUC directives. BCUC directives have been applied on a prospective basis.

Included in Basic are non-insurance costs, as the Corporation is required to provide non-insurance services such as driver and vehicle licensing and vehicle registration.

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($ ThouSandS) Basic Coverage optional Coverage Total

2010 2009 2010 2009 2010 2009

Revenues

net premiums written $ 2,070,487 $ 2,071,259 $ 1,608,880 $ 1,595,886 $ 3,679,367 $ 3,667,145

net premiums earned $ 2,066,572 $ 2,061,254 $ 1,600,752 $ 1,588,771 $ 3,667,324 $ 3,650,025

Service fees 29,827 32,167 24,801 26,640 54,628 58,807

Total earned revenues 2,096,399 2,093,421 1,625,553 1,615,411 3,721,952 3,708,832

Claims and operating costs

Net claims incurred during the year (note 8) 1,785,765 1,716,107 968,312 932,086 2,754,077 2,648,193

Prior years’ claims adjustment (note 8) (1,385) 1,575 (654) 780 (2,039) 2,355

Claim services, road safety and loss management services 214,184 212,334 108,006 107,243 322,190 319,577

1,998,564 1,930,016 1,075,664 1,040,109 3,074,228 2,970,125

Operating costs – insurance (note 11) 86,918 83,408 120,075 85,750 206,993 169,158

Premium taxes and commissions (note 12) 171,203 140,140 305,992 294,684 477,195 434,824

2,256,685 2,153,564 1,501,731 1,420,543 3,758,416 3,574,107

underwriting income (loss) (160,286) (60,143) 123,822 194,868 (36,464) 134,725

Investment income (note 6) 317,603 339,875 188,448 192,602 506,051 532,477

Income – insurance operations 157,317 279,732 312,270 387,470 469,587 667,202 Loss – non-insurance operations (108,094) (104,258) – – (108,094) (104,258)

net income for the year $ 49,223 $ 175,474 $ 312,270 $ 387,470 $ 361,493 $ 562,944

Equity

Retained earnings, beginning of year $ 1,334,432 $ 1,158,958 $ 1,880,223 $ 1,492,753 $ 3,214,655 $ 2,651,711

Net income for the year 49,223 175,474 312,270 387,470 361,493 562,944

Excess Optional capital transfer to Province of BC (note 13 and 14) – – (575,712) – (575,712) –

Retained earnings, end of year 1,383,655 1,334,432 1,616,781 1,880,223 3,000,436 3,214,655

Accumulated other comprehensive income 319,391 262,464 173,474 139,696 492,865 402,160

Total equity $ 1,703,046 $ 1,596,896 $ 1,790,255 $ 2,019,919 $ 3,493,301 $ 3,616,815

($ ThouSandS) Basic Coverage optional Coverage Total

2010 2009 2010 2009 2010 2009

Liabilities

Unearned premiums $ 973,119 $ 969,205 $ 769,882 $ 761,753 $ 1,743,001 $ 1,730,958

Provision for unpaid claims (note 8) $ 4,578,991 $ 4,470,409 $ 1,604,016 $ 1,493,933 $ 6,183,007 $ 5,964,342



17. Role of the actuary and auditorsThe responsibility of the Board appointed actuary is to carry out an annual valuation of the Corporation’s policy liabilities which include provisions for claims and claims expenses, unearned premiums and deferred premium acquisition costs in accordance with accepted actuarial practice and regulatory requirements, and report thereon. In performing the valuation, the actuary makes assumptions as to the future rates of claims frequency and severity, inflation, reinsurance recoveries, and expenses taking into consideration the circumstances of the Corporation and the insurance policies in force. The actuary, in his verification of the underlying data used in the valuation, also makes use of the work of the external auditors. The actuary’s report outlines the scope of his work and opinion.

The external auditors have been appointed by the Board of Directors. Their responsibility is to conduct an independent and objective audit of the consolidated financial statements in accordance with generally accepted auditing standards and report thereon. In carrying out their audit, the auditors also make use of the work of the actuary when considering the provision for claims and claims expenses, unearned premiums, and deferred premium acquisition costs. The auditors’ report outlines the scope of their audit and their opinion.

Working with our driver training schools

Kaniz Dhirani knows how to take a challenge and turn it into an opportunity. She started Ladybug Driving School six years ago after she couldn’t find a female driving instructor for her daughter. The school specializes in teaching women how to drive defensively in a safe environment, and focuses on those who lack confidence due to ethnic backgrounds, language barriers or challenging circumstances.

“We have a lot of students who have international licences, and need direction on how to change their licence to a BC licence. ICBC has given us the knowledge to do that. A lot of our students are also multicultural and ICBC has translated the Road Sense for Drivers book into several different languages, which is very beneficial for our students,” says Kaniz.

Driver training schools provide a valuable road safety education service to the public in BC. There are over 500

licensed private driver training businesses in BC and they employ over 2,000 qualified driver training instructors.

ICBC and the driver training industry hold a common vested interest in providing positive customer experiences and promoting road safety education. This mutual interest in safety and service to customers forms the foundation of our business relationship.

Our Driver Licensing division works with members of the industry to establish driver education and testing standards that focus on the knowledge, skills and attitudes essential to licensing safe drivers. It’s supported by a range of interactions, which range from casual information sharing conversations to formal collaboration on major projects.

Kaniz Dhirani, president, Ladybug Driving School

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corporate governance

Governance defines the roles, relationships, powers and accountability among shareholders, the Board of Directors and management. Governance of a Crown corporation also requires that responsibility be clearly articulated for meeting public policy objectives.

ICBC’s relationship to governmentAt the highest level, governance of a Crown corporation is defined through legislation applicable to all Crown corporations, such as the Budget Transparency and Accountability Act, the Financial Administration Act, the Financial Information Act, and the Freedom of Information and Protection of Privacy Act. Under these provincial laws, ICBC is accountable for making public our strategic plan (i.e., Service Plan) and performance against the plan (i.e., Annual Report), as well as providing financial and other information as the legislation requires.

Individual Crown entities are governed by legislation specific to each Crown corporation. The specific legislation to which ICBC must adhere includes:

the • Insurance Corporation Act,

the • Insurance (Vehicle) Act,

the • Motor Vehicle Act,

the • Motor Vehicle (All Terrain) Act,

the• Commercial Transport Act,

the • Social Service Tax Act, and

the • Offence Act.

ICBC was created under the Insurance Corporation Act. This legislation was amended in 2003 to establish the BCUC as the independent regulator for Basic insurance rates. As ICBC is the sole provider of Basic insurance in BC, this regulatory environment is important, providing customers with an independent and transparent review of our Basic insurance operations and an opportunity to be involved in the review. The non-insurance services we provide on behalf of the provincial government are set out in a Service Agreement between ICBC and the Province and are funded by Basic insurance premiums.

Individual Crown entities are also governed by the Shareholder’s Letter of Expectations established between each Crown corporation and the minister responsible. The Shareholder’s Letter of Expectations is an agreement on the respective roles and responsibilities of the provincial government and the corporation. It outlines high-level performance and reporting expectations, public policy issues and strategic priorities, as well as providing direction specific to ICBC in several key areas.

As demonstrated through the results reported in ICBC‘s 2010 Annual Report, ICBC has complied with the performance expectations outlined in our 2010 Shareholder‘s Letter of Expectations. This includes the specific items outlined on the following page.

70 icbc.com


shareholder’s letter of expectations ICBC alignment

climate change

Contribute to the BC Provincial Government’s climate action • objectives and comply with requirement for Crown agencies to achieve carbon neutrality by 2010.

ICBC established the 2007 baseline of the company’s • environmental footprint and implemented government’s SMARTTOOL to track and report the company’s greenhouse gas emissions.ICBC has met the requirement to be carbon neutral• by 2010.ICBC continues to implement initiatives to reduce our carbon • footprint, e.g. energy retrofits, switching to recycled paper, and building a LEED Gold Driver Licensing Centre.ICBC’s campaigns help drivers understand how good driving • practices can reduce fuel costs, carbon emissions and improve road safety.

legislative framework

Comply with applicable legislation and regulations, including • the Optional insurance framework under the Insurance (Vehicle) Act, and data-sharing provisions authorised by the Minister under that Act.Comply with direction from the BCUC in its regulation of • ICBC’s Basic insurance rates.

ICBC is in compliance with the Optional insurance framework • and continues to support work on data-sharing provisions.ICBC continues to comply with BCUC direction on Basic • insurance rates.

service agreement

Operate within the Service Agreement between the Ministry • of Public Safety and Solicitor General, on behalf of the Province, and ICBC.

ICBC continues to operate within the terms and conditions• of the Service Agreement and to work with the Shareholder on any changes.

insurance rates

Operate the business in an efficient and effective manner to • keep rates low and stable.Provide auto insurance rates that are not based on age, • gender or marital status.Develop and implement effective strategies to manage rising • bodily injury insurance costs.

ICBC operates in a fiscally responsible manner to help keep • rates low and stable for the benefit of customers.ICBC continues to provide insurance rates that are not based • on age, gender or marital status.ICBC continues to monitor, develop and implement effective • strategies to manage rising bodily injury insurance costs.

business processes and systems

Continue reinvesting in critical business systems in support• of efficiency and effectiveness.Support and invest in the redevelopment of critical• road safety business systems and processes on a timelinethat accommodates the mutual priorities of governmentand ICBC.

ICBC is implementing a major reinvestment program• to address end-of-life systems and ensure ongoing customer-focused services.ICBC supports investment in road safety business systems • and processes on a timeline that accommodates mutual priorities.

road safety

Deliver road safety initiatives that provide claims savings and • work with the shareholder on initiatives that can complement its road safety objectives.Work with government and stakeholders on public education • and awareness on road safety priorities.Undertake systems and business process changes to support • government’s road safety priorities.

ICBC continues to deliver a number of road safety programs • that provide claims savings and is working with the provincial government on road safety initiatives.ICBC works with government and stakeholders on road safety • initiatives, and supports these initiatives through public education and awareness strategies.ICBC, in accordance with the Service Agreement, undertakes • changes needed to support road safety priorities.

government and administrative framework

Ensure that corporate priorities reflect government’s goals.• Comply with the Shareholder’s requirements for Crown • corporations, including reporting and information-sharing, Board appointment processes, Public Sector Employers Act and related requirements, rules related to lobbyists, etc.

ICBC continues to align corporate priorities with • government’s goal.ICBC continues to comply with the Shareholder’s guidelines • and directions for Crown corporations.



shareholder’s letter of expectations ICBC alignment

other initiatives

Support the Province’s Healthier Choices initiative.• Ensure the Shareholder is advised in advance of the release • of information requests under the Freedom of Information and Protection of Privacy Act.Comply with the international Payment Card (PCI) Data • Security Standards.Work with government on the new regulatory framework for • off-road vehicles.Increase promotion of the Enhanced Driver’s Licence (EDL) • Program.Work with the Shareholder on an Optional insurance dividend • policy.

All vending machines in facilities owned or leased by ICBC, • for which ICBC has governance of the vending machine, meet the Nutritional Guideline for Vending Machines in Public Buildings.ICBC worked with the Shareholder on a process for • Freedom of Information and Protection of Privacy Act requests that meets the Shareholder’s needs and does not delay response times.ICBC is fully compliant with the PCI Data Security Standards.• ICBC is working with the government to support • government’s policy objectives.Revised capital management frameworks for Basic and • Optional insurance were established by the Shareholder in 2010. ICBC is complying with these revised frameworks.

The 2011 Shareholder’s Letter of Expectations is posted on our website at icbc.com. It continues ICBC’s mandate to provide Basic and Optional auto insurance in an integrated manner with rates that are not based on age, gender or marital status, and to provide vehicle registration and licensing, driver licensing, violation ticket administration and government fine collection services on behalf of the provincial government. It also continues many of the expectations from the 2010 Shareholder’s Letter of Expectations and, for 2011, includes new directions regarding complying with revised capital management frameworks for Basic and Optional insurance established by the Shareholder, and working with the Shareholder to prepare an annual plan for ICBC projects that support government initiatives.

ICBC board governanceThe Board of Directors guides ICBC in fulfilling its mandate and sets our corporate direction. The Board and management approve our vision, mission, and values that guide us. The Board sets overall corporate strategy, our goal and the objectives and strategies upon which accountability and performance are evaluated. Performance is reviewed and reported regularly.

As a Crown corporation, ICBC’s Board members are appointed by the Lieutenant Governor-in-Council. The Board of Directors consists of nine members with a broad range of expertise and experience. The individual members each play an important role and also contribute as members of committees of the Board. The chart on page 75 shows ICBC’s Board of Directors and its committees, members and mandates.

The governance processes and guidelines outlining how the Board will carry out its duties of stewardship and accountability are set out in the Board Governance Manual, which is updated annually by the Governance Committee. ICBC’s Board complies with the provincial government “Board Resourcing and Development Office Guidelines” and has adopted the guiding principles of the “Governance Framework for Crown Corporations: Best Practices Governance and Disclosure Guidelines”. Additional information is available on our website at icbc.com.

ICBC’s Board of Directors has adopted the guiding principles included in the provincial government “Governance Framework for Crown Corporations”. These principles provide an understanding of the roles and responsibilities for all parties that are part of the Crown corporation governance environment:

Stewardship, leadership and effective functioning of the Board•

Clarity of roles and responsibilities•

Openness, trust and transparency•

Service and corporate citizenship•

Accountability and performance•

Value, innovation and continuous improvement•

72

Neil de Gelder, Stacy Shields, T. Michael Porter, Jatinder Rai, Jeff Schulz Sheila Eddin, Betty Weigel, Paul Haggis, Donnie Wing, Nancy McKinstry

ICBC board of directors and executives

73

Mark Blucher, Jon Schubert, Geri Prior, Len Posyniak, Catherine Aczel Boivie Fred Hess, Craig Horton, Todd G. Stone, Ward Chapin, Cindy Brown

Jon Schubert, President & Chief Executive Officer

Mark Blucher, Senior Vice-President, Insurance

Cindy Brown, Vice-President, Communications

Ward Chapin, Chief Information Officer

Sheila Eddin, Vice-President, Business Transformation

Fred Hess, Vice-President, Driver Licensing

Craig Horton, Senior Vice-President, Claims

Len Posyniak, Vice-President, Human Resources

Geri Prior, Chief Financial Officer

Jeff Schulz, Vice-President, Strategic Marketing

Betty Weigel, Corporate Secretary

Donnie Wing, Senior Vice-President, Corporate Affairs

Board Members

Nancy McKinstry, Chair

Neil de Gelder, Vice-Chair

Catherine Aczel Boivie

Paul Haggis

T. Michael Porter

Jatinder Rai

Stacy Shields

Todd G. Stone



board governance structure

audit committeepurpose: To assist the Board in fulfilling its oversight responsibilities by reviewing: (i) financial information; (ii) systems of internal controls and risk management; and (iii) all audit processes.

chair: T. Michael Porter

members: Paul Haggis, Stacy Shields

governance committeepurpose: To provide a focus on governance for ICBC and its subsidiaries that will enhance ICBC’s performance.

chair: Neil de Gelder

members: Catherine Aczel Boivie, Jatinder Rai

investment committeepurpose: To recommend and review investment policy for both ICBC and any pension fund of which ICBC is an administrator.

chair: Paul Haggis

members: Nancy McKinstry, Todd G. Stone

board of directorsmandate: To foster the corporation’s short and long-term success consistent with the Board’s responsibilities to the people of British Columbia as represented by the Government of British Columbia.

chair: Nancy McKinstry

vice-chair: Neil de Gelder

members: Catherine Aczel Boivie, Paul Haggis,T. Michael Porter, Jatinder Rai, Stacy Shields, Todd G. Stone

executive teammandate: The primary role of the Executive Team is to lead the management of ICBC’s business and affairs, and to lead the implementation of the plans and policies approved by the Board of Directors (Board) of ICBC.

president and CEO: Jon Schubert

members:

Mark Blucher, Senior Vice-President, Insurance

Cindy Brown, Vice-President, Communications

Ward Chapin, Chief Information Officer

Sheila Eddin, Vice-President, Business Transformation

Fred Hess, Vice-President, Driver Licensing

Craig Horton, Senior Vice-President, Claims

Len Posyniak, Vice-President, Human Resources

Geri Prior, Chief Financial Officer

Jeff Schulz, Vice-President, Strategic Marketing

Betty Weigel, Corporate Secretary

Donnie Wing, Senior Vice-President, Corporate Affairs

transformation program committeepurpose: To assist the Board in overseeing the management of ICBC’s business renewal efforts.

chair: Neil de Gelder

members: Catherine Aczel Boivie, T. Michael Porter, Todd G. Stone

human resourcesand compensation committeepurpose: To assist the Board in fulfilling its obligations relating to human resource and compensation policies.

chair: Nancy McKinstry

members: Jatinder Rai, Stacy Shields

2010 annual report

PI186R (042011)

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head office151 W Esplanade North Vancouver, BC V7M 3H9

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Additional information about ICBC and electronic copies of this report are available at icbc.com

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