| October
2 , 2000 MPI boosts dividend to 600,000 Manitobans Strong investments, higher revenue, up one-time payment to $45 million Manitoba Public Insurance moved today to pass on improved financial results to consumers by doubling its proposed one-time dividend to 10 per cent. "This is a rate application that leaves more money in the pockets of Manitoba families," said MPI President and CEO Jack Zacharias. "MPI's strong investment performance and increased premiums from vehicle upgrading means we are in a position to pass even more of a financial break on to Manitobans than we originally hoped." The public auto insurer amended its 2001 basic Autopac rate application to the Public Utilities Board, doubling the amount it will return to Manitoba policyholders to $45 million. The one-time dividend will be applied to all basic Autopac premiums reducing the amount that more than 600,000 vehicle owners pay for their auto insurance next year. The dividend will benefit all regions and every vehicle class. Family passenger vehicle owners will be the biggest winners with 91 per cent paying less beginning March 1, 2001. Nearly 137,000 vehicle owners will save more than $100 and more than 520,000 owners will receive a dividend of more than $20 for every vehicle they own. "This is a proud day for Manitoba Public Insurance," Zacharias said. "Our employees work hard every day to serve Manitobans and today we're standing up and saying our good fortune is Manitoba's good fortune. "When we do well, whether through lower claims costs or increased revenues, Manitobans pay less for their insurance. I can't think of any company in Manitoba's history that has given its customers $45 million." Last spring, MPI applied for a one-time five per cent surplus dividend to take effect March 1, 2001. As the current fiscal year has progressed, MPI's financial performance has continued to improve, making a larger one-time dividend feasible. For example, Manitobans are responding to a robust provincial economy by purchasing new vehicles at a rate up to four times faster than in the past - modernizing and increasing the size of the provincial fleet by about 10,000 vehicles. A larger vehicle fleet increases MPI's premium revenue and improves the corporation's bottom line. As well, MPI's successful investment strategy is also forecast to increase Basic Autopac investment income by $6.6 million to the end of the current fiscal year. MPI diversified its investment portfolio several years ago to include more equities. Strong growth in North American stock markets and gains made on the sale of some of these investments held by MPI continues to contribute to a healthier bottom line. "We felt very strongly that Manitobans deserved to benefit as soon as possible from our improved bottom line,'' Zacharias said. "This is the third year in a row in which most Manitoba drivers will be paying less for their insurance. "For the coverage offered, it also cements Manitoba's position as the lowest cost insurer in Canada. In the last three applications, the amount people pay for insurance will be reduced by a total of 16 per cent.'' If approved by the PUB, the one-time surplus dividend will be distributed starting March 1, 2001 by reducing the cost of Autopac by 10 per cent. While the dividend will be applied to all policies, individual vehicle rates will decrease or increase depending upon risk factors such as driving and claims records, make and model of vehicle, how the vehicle is used and where the owner lives. Vice-President of Corporate Insurance Operations Marilyn McLaren added that other key points in MPI's rate application, which were announced earlier, will not change. The Corporation is proposing to recognize long-term safe drivers by allowing motorists with six or more years without at-fault accidents to keep their 25 per cent merit discount should they cause an accident. A one-time accident surcharge that is lower than the loss of a premium discount, will apply. Accident surcharges and driver licence additional premium increases, designed to ensure those who cause accidents pay a greater share of claims costs, will remain as originally requested. MPI, after consulting with motorcycle representative groups, will also introduce seasonal motorcycle rates and a rating system that more fairly reflects risk and claims costs associated with various classes of motorcycles. The PUB will hold public hearings on MPI's application in November. If approved, premiums will be adjusted beginning March 1, 2001 but individual changes will be noticeable throughout the year as motorists renew or purchase their policies.
Impact of Rate Adjustments by Territory For insurance rating purposes, Manitoba is divided into five territories: Territory 1 -- Winnipeg region, including Bird's Hill, Headingley, etc. Territory 2 -- Rural southern Manitoba excluding Territory 1. Territory 3 - The far north, including Thompson and Churchill. Territory 4 - The mid-north, including communities such as Flin Flon & The Pas. Territory 5 - Applies to commuters travelling Territory 2 to Territory 1. The impact of the rate application - if approved, including the surplus dividend, by territory on all vehicles is shown below:
Key Financial Factors
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