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October 1, 2001 The highest claims volume in five years has cut net income at Manitoba Public Insurance by nearly $44 million, according to a second-quarter financial report released today. For the six months ending Aug. 31, 2001, the Corporation reported net income of $8.5 million - down from the $52.4 million earned during the same time last year. Higher claims costs and lower investment income contributed to the weaker than expected results. "Over the normally slower summer months, we experienced wintertime levels in the number of claims reported this year," said Barry Galenzoski, Vice President of Corporate Finance and Chief Financial Officer. "The August 21 hailstorm that hit parts of Winnipeg and southern Manitoba is affecting our results but we are also seeing increases in the number and severity of many other types of claims." Overall, the cost of claims increased 20 per cent to $271 million compared to the first six months of last year. During this same six-month period, Manitobans reported 20,591 more claims boosting reports to 122,193 - also a 20 per cent increase. This summer Manitobans reported more than 10,000 hail claims and filed 4,313 more collision claims than originally anticipated for the first six months of this year. Auto theft-related (total and partial theft) claims have also jumped more than 17 per cent to 6,482 for the period. This is the second year in a row in which Manitobans had more accidents. The number of claims filed for all of last year jumped 20,000 to nearly 227,000 over the previous year. At $38 million, investment income for the period was down due to lower equity returns. MPI's investment income is an important source of revenue that helps reduce insurance premiums for all Manitoba motorists. "This report does give us pause," said Galenzoski. "Normally, we experience higher claims volumes and costs during the winter months, particularly during the last quarter of our fiscal year - December to February." Manitoba motorists continue to benefit from some of the lowest insurance rates in Canada according to independent agencies. In addition, MPI coverage, including personal injury protection helps make Manitoba coverage superior to packages offered in other provinces. Contact:
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