June 11, 2010

$92 million rebate and 4 per cent overall average rate decrease
proposed by Manitoba Public Insurance
Average customer will receive $115 per policy next spring, if approved by PUB

Manitoba Public Insurance is proposing to decrease auto insurance rates next year, in addition to providing its customers with a $92 million rebate in the spring.

In its general insurance rate application filed with the Public Utilities Board today, the corporation is proposing an overall average four per cent decrease in premium revenue for the 2011/12 insurance year.  Manitoba Public Insurance is also proposing a 12.9 per cent rebate which would return about $115 per vehicle to policyholders.

This rebate ─ the fifth in 11 years ─ is based on the Basic Autopac rates paid in the 2009/10 insurance year. Rebates will be mailed to policy holders in the spring of 2011, if approved by the PUB.

“Our record of rate stability is unparalleled, having held the line or reduced rates 12 of the last 13 years,” Manitoba Public Insurance’s President and Chief Executive Officer Marilyn McLaren said.

“Manitoba’s public auto insurance system clearly works for the benefit of vehicle owners. We’re continually reviewing our processes and programs, making the necessary changes to better serve our customers.”

In addition to the new, one-piece driver’s licence and multi-year renewal system, the implementation of the new Driver Safety Rating last year continues to evolve to the benefit of Manitoba vehicle owners and driver’s licence holders.

Driver Safety Rating Discount

In this rate application, Manitoba Public Insurance is proposing to raise the Driver Safety Rating (DSR) vehicle premium discount to a maximum of 30 per cent from the current 25 per cent discount which long-time safe drivers now receive. Additionally, DSR levels 11 to 14 are being implemented and will provide vehicle discounts of 26 to 29 per cent respectively, if approved by the PUB.

Of the 673,300 vehicles that are eligible for vehicle discounts, 250,685 (37.2 per cent) will receive higher vehicle discount levels.  The remaining vehicles will see no change. 

“Our business plan to reduce auto theft in this province has also been highly successful and continues to result in savings for Manitobans,” said McLaren. “Manitobans hold us to high standards of service, which the rate application clearly shows that we’re able to accomplish.

“Over the last 11 years we will have provided our customers with five rebates worth $352 million. More than a decade of rate stability demonstrates that we have achieved the institutional security and rate stability that Manitobans value so much,” McLaren said.

As always, individual insurance premiums and rate changes are calculated by examining the owner’s driving record, the kind of vehicle they drive, where they drive it and what they use the vehicle for.

If the application is approved by the public regulator, 650,948 (68 per cent) of Manitobans will pay less for basic compulsory coverage next year, while 106,434 (11 per cent) will pay the same amount and 206,636 (21 per cent) vehicle owners will pay more. Most increases and decreases will be less than $50.

AVERAGE ADJUSTMENTS IN REVENUE

The proposed rates would be effective March 1, 2011, but because renewal dates are staggered, some vehicle owners wouldn’t pay the new rates until February 28, 2012.

The average premium family passenger vehicles will be $881, down $33 from the 2010/11 rates.

Motorcycle Rates

The corporation has requested a 1.02 per cent overall increase to motorcycle rates, boosting the average premium to $1,078. In total, 4,200 motorcycle owners ─ most in Territory 1 ─ will see a decrease in their premium.

Stronger investment income, continued operational efficiency and revenue increases from a larger and more modern provincial vehicle fleet will offset projected inflationary increases in claims costs and contribute to the rate reduction, McLaren said.

In 2009-10, a total of 269,135 claims were reported in Manitoba at a cost of $628.4 million, and the value of the average claim decreased $101 to $2,335.

Annual Report

Manitoba Public Insurance also released its 2009 annual report this week. The report demonstrates the company’s current financial strength and ability to continue to deliver the value Manitobans expect.

Manitoba Public Insurance reported income from annual operations of $86.9 million. Investment income of $96.3 million helped reduce the cost of the average Basic Autopac premium by $103. The Basic plan also surpassed its goals by providing claimants with 86 cents in benefits for every $1 in premium – significantly better than the national average – and Basic’s operating costs are 53 per cent of the Canadian industry average.

Manitoba Public Insurance realized these achievements without sacrificing customer service. In 2010, the company met or exceeded corporate-wide customer service standards 96 per cent of the time.

Last year, Manitobans filed an average of 1,079 claims every working day. This represents about $2.3 million in claims every working day.

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