The B.C. government review of the province’s public auto insurer, the Insurance Corporation of British Columbia (ICBC), has observed that broker Basic Autoplan licenses have become a hot commodity in the province.
A network of 906 individual Autoplan brokers sells Basic (mandatory) and Optional insurance from ICBC and Optional insurance from private insurers in a competitive marketplace. ICBC has an option to increase its broker force, but it has not issued new broker licenses since 1992, a recent government review of ICBC notes.
The study, Review of Insurance Corporation of British Columbia, notes that ICBC feels more brokers are not required to sell its Basic auto insurance and supporting a larger broker network would be more costly for the government insurer. The upshot is that B.C. broker licenses are highly desirable.
“An Autoplan agency license is valuable given the limited number,” the government review notes. “It can only be obtained from an existing broker and cannot be terminated unilaterally by ICBC. The requirement to purchase Basic insurance from an Autoplan agent guarantees business.”
Consequently, some larger brokers have purchased multiple licences. “There are only 250 distinct brokers in the market and 57% of total premiums are sold by the top 20 broker-groups,” the government review reports.
ICBC has 5,000 employees and has $3.7 billion in premium revenue. It is the sole provider of Basic Autoplan, which is the mandatory auto insurance in British Columbia, regulated by the British Columbia Utilities Commission. In addition, vehicle owners may purchase from a variety of Optional insurance products, either from ICBC or other private sector insurance companies, to increase their protection.