June 6, 2001

PUB Rate Application

BACKGROUNDER - Motorcycles

• MPI has requested a 15% increase in motorcycle premiums in its 2002/03 rate application to the Public Utilities Board.
• An overall increase of about 30 per cent on current motorcycle premiums would be required to meet forecast motorcycle claims costs. However, as in previous years, a cap of 15 per cent has been implemented to avoid rate shock for these customers.
• If the PUB application is approved, MPI will still pay out $1.30 in claims for every $1 collected in motorcycle premiums.
• Those who continue to compare Manitoba's rates unfavourably with other jurisdictions where rates appear substantially lower may not be comparing "apples to apples". Closer inspection generally reveals that the other jurisdiction's bodily injury protection tends to be vastly inferior to that provided for Manitoba motorcyclists under PIPP.
• Those who continue to compare Manitoba's rates with other jurisdictions generally do not understand that in these jurisdictions insurers have the right to refuse coverage. In fact, in Ontario, less than one-quarter of auto insurers provide any motorcycle coverage.
• Manitoba Public Insurance continues to work with motorcyclists to address their concerns. For example, MPI funding recently made it possible for the Manitoba Safety Council to provide a $100 rebate to successful graduates of its motorcycle operator training course.
• On average, motorcycles make up 1 percent of all registered vehicles in Manitoba, but they accounted for 3 percent of total traffic fatalities in 2000. Between 1995 and 2000, 19 people died and 730 people were injured in motorcycle crashes.
• About two-in-five (41%) motorcycle crashes were single vehicle accidents. That compares with 14 percent of single vehicle passenger accidents.
• Young motorcycle drivers (16-24 years old) represented only 3 percent of the total licensed motorcycle drivers, but they accounted for 15 percent of fatal crashes.
• Other motorcycle drivers represented 97 percent of the total motorcycle licensed drivers, and accounted for 85 percent of the fatal collisions.
• In crashes between a passenger vehicle and a motorcycle where the automobile is at fault, the average claims cost is about $5,300 but when the motorcyclist is at fault, the average cost per claim is about $14,000. About half of the accidents involving a motorcycle were the fault of the motorcyclist.
• Last year the PUB approved MPI's request to isolate sports bikes from other motorcycle types in order to assign ratings even more equitably. The PUB approved a 5% differential for 'sport' bikes only for the 2001 insurance year. In the 2002/03 rate application, MPI is not proposing any change to the risk differential rating for sport bikes (or any other body styles) for 2002.

BACKGROUNDER - Commercial Vehicles

• MPI has requested an 11% increase in premiums for commerical vehicles in its 2002/03 rate application to the Public Utilities Board.
• MPI strives to ensure that the rates Manitobans pay are fair. That means vehicle groups that cost more in claims face higher premiums.
• Vehicle rates have always followed claims costs. For commercial vehicles, this has resulted in swings of decreases and increases. Over the last three years, rates have increased by about 10.5 per cent each year. That followed three years of rate decreases that averaged 17.5%.

1997 - 22% decrease

1998 - 19% decrease

1999 - 12% decrease

2000 - 8% increase

2001 - 14.2% increase

2002 - 17.9% increase

• MPI strives to return about 85 cents of every dollar to rate payers in the form of benefits - keeping its operating costs lower than those charged by private insurance companies for comparable coverage.
• Without a rate increase this year, it is projected that MPI would pay $1.03 in claims for every dollar in premiums collected from this vehicle class. That would mean that drivers in other classes would wind up subsidizing claims costs for commercial vehicles, and Manitobans and our regulators have told MPI that they do not want this.

For more information about MPI's PUB Application, please visit our Newsroom on this Website.

Contact:
Carol Standil/Brian Smiley
MPI Media Relations 985-7300
or toll-free in Manitoba 1-888-554-9549