Manitoba Public Insurance announced today it will seek no general rate increase in basic Autopac premiums for 2003/04.

An application filed with the Public Utilities Board (PUB) will not increase basic Autopac insurance premium revenue. As happens every year, individual premiums will be affected by the make and model of the vehicle, how and where it is driven, and the owner's driving record.

It is the fifth year in a row Manitoba Public Insurance has held the line on rates, continuing its long-term commitment to price stability.

"Since 1999, Manitoba Public Insurance has not increased auto insurance rates,'' said President and Chief Executive Officer Jack Zacharias. "I can't think of a single auto insurer in Canada that can say it has reduced auto rates twice and provided vehicle owners with an $81-million dividend during this time.

"Manitobans in every region of the province are the real winners as they continue to pay among the lowest auto insurance rates in Canada."

It is a record that bucks the national trend. Throughout Canada auto insurance companies increased rates between eight and 28 per cent in 2001. In fact, companies in some provinces have stopped selling insurance to certain groups of vehicle owners.

In the MPI application, the overall amount of premium paid by family passenger vehicles will stay about the same while trailer and off-road vehicle owners will see average reductions of 9.8 and 8.7 per cent, respectively. Because of continuing increases in claims costs associated with this vehicle category, motorcycle owners will see rates increase 15 per cent under the proposal.

If the application is approved, 382,128 vehicle owners will see their premiums decrease or stay the same. Of the vehicles that will receive experience-based increases because of higher claims costs, most will be less than $50. The proposed rates will take effect March 1, 2003 but, because of staggered renewal dates, some vehicle owners will not pay the new rates until February 2004. The new rates will see:

• 46 per cent of premiums will go down (374,279 vehicles)
  (more than half - 192,952 - will decrease by between $20 and $80)
• One per cent of premiums will remain unchanged
• 53 per cent of premiums will increase (428, 825 vehicles)
  (two-thirds will increase less than $50)

The rate application assumes no changes to basic Autopac coverages or benefits. There are some other minor changes to rates including:

• Manitoba Public Insurance will implement a flat $40 annual discount for vehicle owners who have an aftermarket anti-theft device that meets the national standard. This change, which would also take effect March 1, 2003, will result in most owners being eligible for a larger discount than under the current program.
• As requested by the PUB, 125,000 owners of trailers and off-road vehicles will receive premium decreases to better reflect their claims costs.

Annual report: Fiscal stability in tough times

Manitoba Public Insurance also tabled its 2001 annual report in the Legislature today. The report reflects the corporation's ongoing fiscal stability amid challenging economic times.

In 2001, several one-time extraordinary events resulted in a net loss for the Basic Autopac program of $11.7 million. The net loss became $16.5 million when results from competitive lines operated by Manitoba Public Insurance were included.

The corporation's fiscal performance was hampered by significant single events including circumstances surrounding September 11 that reduced investment income and increased reinsurance costs, and a major hail storm last summer that resulted in more than 10,000 claims in the Winnipeg area.

Overall, Manitobans reported claims in record numbers. On average, the equivalent of one in three vehicle owners made a claim last year - boosting claims costs by 17 per cent to $575 million.

"There's no doubt that 2001 was not kind to any auto insurer in Canada," Zacharias said. "But it is times like these that demonstrate the importance of preparing for the bad years with a plan that helps protect customers from the costs of a single bad experience.

"We are confident that our fiscal strength will improve throughout 2002 and we are working hard to continue to provide the rate stability Manitobans value so much."

Zacharias added that all Manitobans can play a role in the future cost of auto insurance.

"While the rising number and value of claims remain significant challenges for Manitoba Public Insurance and its ratepayers, every motorist can help control claims costs by driving safely and responsibly," said Zacharias. "This important commitment, combined with prudent operations and careful planning on our part, will help us hold the line on rates in future years.

"The reality is, however, that Manitobans file more claims than people in other parts of the country, and this continues to be a worrisome trend."