The Insurance Corp. of B.C. is paying its brokers a one-time fee of $6m to cover extra costs associated with the new driver-centered rate model that took effect Sept. 1.
“It was offered and accepted,” said Chuck Byrne, executive director of the Insurance Brokers Association of B.C.
“I think this is a very appropriate top-up for brokers by the corporation and is, dare I say it, a relative bargain for the effort that brokers are going through . . . ramping up for the new rating model.”
A spokeswoman for the government-owned auto insurer said the rate redesign is the biggest change ICBC has ever made to the way it calculates basic insurance premiums.
“We know many people will have questions about the new rate system, and that means spending extra time with Autoplan brokers to make sure they purchase the right level of coverage,” she told Thompson’s.
“Autoplan renewals that took only a few minutes before can now sometimes take longer.
“Brokers are key to helping drivers understand and transition successfully to the new system. This includes making sure customers can access the applicable discounts they may be eligible for.
“That’s why we’re providing brokers with a one-time transition payment to help ensure continued high levels of customer service.”
She said the fee, which will vary from broker to broker, will help compensate brokers for taking ICBC training on the new system, extending office hours and spending more time on renewal transactions.
“I would suggest brokers still represent one of the most efficient distribution systems of any auto insurance product in Canada, averaging out at about 8% over all compensation,” Mr. Byrne said. “This still only works out to about 95 cents a transaction on average.
“Out of context, it can attract attention. In context, I think it measures up as extremely fair and entirely appropriate.”
(For more independent coverage of Canadian p&c industry news, please choose the ‘Subscribe’ tab on our main page or email email@example.com).