May 19, 2020

ICBC Requests Insurance Rate Increase

Canadian Insurance
British Columbia insurance
British Columbia insurance rates
ICBC
Bizclik Editor
3 min
ICBC Requests Insurance Rate Increase

 

ICBC has announced its request to the British Columbia Utilities Commission (BCUC) for a basic insurance rates increase. Explained in an open letter to customers from IBCB CEO Jon Schubert, ICBC hopes increasing costs from claims will be mollified by the basic increase.

ICBC says the company is still striving to provide customers with great service, coverage and low rates, but the current insurance market has taken a toll on the sustainability of the company. Currently, ICBC provides coverage for 3.3 million British Columbians annually and processes 900,000 claims as well as 1.5 million driver licensing transactions each year.

“We provide our customers with some of the best insurance coverage in Canada. As just one example, our customers’ medical and rehab benefits are three-times more than those offered in Alberta and New Brunswick, and six-times those of Nova Scotia,” said Schubert in the open letter.

What issues have been plaguing ICBC in its pursuit of sustainable business? ICBC claims there are new pressures in the market including the impact of the worldwide financial market. First of all, ICBC has offered more reductions than increases of the last few years to ICBC customers—so much that ICBC claims their insurance rates are equal to those of 2008. Additionally, ICBC investment income has dropped $38 million in the past year and is estimated that income at year-end will be reduced $90 million less than compared to 2010 figures.

 

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Another big issue is claims costs for insurers. ICBC saw an increase of $200 million directly related to claims over the past year, specifically bodily injury claims costs. In 2011, ICBC’s bodily injury costs are going to be approximately $1.7 billion, an increase of $350 million in comparison to figures five years past.  In the end, ICBC claims that 88 cents of every premium dollar has been utilized in accident victims compensation.

“Other jurisdictions are facing the same issues. Over the past two years, injury claims in Ontario have increased by approximately nine per cent. In Alberta, the 2010 increase was five per cent. The net result of our diminishing investment income and rising claims costs is a $279 million drop in our net income for the first nine months of 2011,” said Schubert.

ICBC is asking the BCUC for a basic insurance rate increase for those reasons, and expects the rate increase to only affect customers by less than $30 a year on average.

“Going into 2012, we remain committed to providing our customers with the best service and coverage at the lowest possible price,” explained Schubert. 

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Jun 8, 2021

Six issues at the top of tax and finance leaders’ agenda

Tax
Compliance
financeleaders
Deloitte
Kate Birch
4 min
As businesses accelerate their transformation journeys, tax leaders are under increasing pressure to add strategic value. Deloitte reveals six tax trends

New Deloitte research reveals that tax leaders are under increasing pressure to add strategic value as companies accelerate business model transformation, from undergoing digital transformations to rethinking their supply chains or investing in green initiatives.

According to Phil Mills, Deloitte Global Tax & Legal Leader, to “truly deliver value to the business, the tax function needs to rethink its resourcing model and transform its technology infrastructure to create capacity and control costs”.

And the good news, according to Mills, is that tax and business leaders have more options at their disposal to achieve this.

Reflecting the insights of global tax and finance executives at global companies, Deloitte’s Tax Operations in Focus study reveals the six issues at the top of tax and finance leaders’ agenda.

Trend 1: Businesses seek more strategic counsel from tax

Companies are being pushed to develop new digital products and distribution channels and accelerate sustainable transformation and this is taking them into uncharted tax territory. Tax leaders say their teams must have the resources and skills to give deeper advisory support on digital business models (65%), supply chain restructuring (49%) and sustainability (48%) over the next two years. This means redrawing the boundaries of what tax professionals focus on, and accelerating adoption of advanced technologies and lower-cost resourcing models to meet compliance requirements and free up time.

According to Joanne Walker, Group Tax Director, BT Group PLC, "There’s still a heavy compliance load today, but the vision for the future would be that much of that falls away, and tax people become subject matter experts who help program the machine, ensure quality control, and redirect their time to advisory activity.”

Trend 2: Tipping point for resourcing models

Business partnering demands in the tax department are on the rise, but 93% of tax leaders say their department’s budget is remaining flat or falling. To ensure that the tax function can redefine itself as a strategic function at the pace that is required, leaders are choosing to move increasing amounts of compliance and reporting to a combination of shared service centers, finance departments, and outsourcing providers that have invested in best-in-class technology.

Trend 3: Digital tax administration is moving faster than expected

in addition to the rising focus of the corporate tax department partnering with their business counterparts, transformative changes to the way companies share tax information with revenue authorities is also creating an imperative to modernize operations at a faster pace. Nine in 10 (92%) respondents say that shifting revenue authority demands on digital tax administration will have a moderate or high impact on tax operations and resources over the next five years—and several heads of tax said the trend is moving faster than expected.

"It’s really stepped up in the last couple of years," says Anna Elphick, VP Tax, Unilever. "Tax authorities don't just want a faster turnaround for compliance but access into a company’s systems. It's not unreasonable to think that in a much shorter time than we expect, compliance will be about companies reviewing a return that's been drafted by the tax authorities."

Trend 4: Data simplification and lower-cost resourcing are top priorities

Tax leaders said that simplifying data management (53%) and moving to lower-cost resourcing models (51%) must be prioritized if tax is to become more proactive at delivering strategic insights to the business. Many tax teams are ensuring that they have a seat at the table as ERP systems are overhauled, which is paying dividends: 56% of those that have introduced NextGen ERP systems are now highly effective at supporting the business with scenario-modeling insights. Only 35% of those with moderate to low use of NextGen ERP systems said the same.

At Stryker, “we automated the source P&L process for transfer pricing which took a huge burden off of the divisions," says David Furgason, Vice President Tax. "Then we created a transfer price database to deposit and retrieve data so we have limited impact on the divisions. We are moving to a single ERP platform which will help us make take the next step with robotics.”

Trend 5: Skillsets are shifting

Embedding a new data infrastructure and redesigning processes are critical for the future tax vision. Tax leaders are aligned — data skills (45%) and technology process experience (43%) are ‘must have’ skills in a tax department of the future, but more traditional tax specialist knowledge also remains key (40%). The trick to success will be in tax leaders facilitating the way these professionals, with their different backgrounds, can work together collectively to unlock lasting value.

Take Infineon Technologies, which formed a VAT technology and governance group "that has the right knowledge about how to change the system to ensure it generates the right reports", according to Matthias Schubert, Global Head of Tax. "Involving them early was key as we took a greenfield approach, so we could think about what the optimal processes would look like and how more intelligent systems could make an impact 

Trend 6: 2020 brought productivity improvements

Improved productivity (50%) and accelerating shifts to remote working (48%) were cited as the biggest operational benefits to emerge from COVID-19-driven disruption. But, as 78% of leaders now plan to embed either hybrid or fully remote models in the tax function long term, 34% say maintaining productivity benefits is a top concern. And, as leaders think about building their talent pipeline and strengthening advisory skill sets, 47% say they must prioritize new approaches to talent recognition and career development over the next two years, while 36% say new processes for involving tax in business strategy decisions must be established.

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