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For the sixth year in seven, Manitoba Public Insurance will hold the line on auto insurance rates, requesting no overall increase in revenue in its 2005/06 application to the Public Utilities Board.
If approved, this rate application means the average family passenger vehicle in Manitoba will pay the same amount for insurance next year as today – $776. Overall, slightly more than half of all Manitoba vehicle owners will pay the same or less next year for the most comprehensive basic coverage in Canada . The amount each vehicle owner will pay for insurance will continue to depend on the make and model of the vehicle, how and where it is driven, and the owner’s individual driving record.
“This record of rate stability is what other provinces can only dream of,’’ said President and Chief Executive Officer Jack Zacharias. “We pride ourselves in the value we provide Manitobans and this application demonstrates yet again that Manitobans will continue to have among the very lowest insurance rates in Canada.
“If it’s approved, it means Manitoba Public Insurance will have an unmatched record of holding the line or reducing rates for six of the last seven years.’’
Throughout Canada in 2003, auto insurance premiums increased on average 21 per cent, according to Statistics Canada. Meanwhile, in Manitoba , rates increased less than one half of one per cent. The new rates take effect on March 1, 2005. Because of staggered renewal dates, some vehicle owners will not pay the new rates until February 2006. No changes to Basic Autopac coverage or benefits are included in the application.
Overall rates for family passenger vehicles will stay about the same, while owners of trailers and off-road vehicles will see reductions of 22 per cent and 41 per cent respectively. The continuing rise of motorcycle claims costs means revenue requirements from the motorcycle class will increase by 15 per cent under the proposal.
The corporation will also move to reduce the administration fees by half for customers who finance their Autopac payments over 12 months. As well, the merit discount plan will be extended to certain light commercial vehicles registered to individuals.
If the application is approved, 444,372 vehicle owners will see their premiums decrease or stay the same in 2004. Of the vehicles that will receive premium increases, most will be less than $50. Overall:
- Premiums will go down for 51.5 per cent of vehicle owners (430,438 vehicles). About 86 per cent or 371,601 of these vehicle owners will see their premiums decrease by up to $50.
- Premiums will remain unchanged for 1.7 per cent of vehicle owners (13,934 vehicles).
- Premiums will increase for 47 per cent of vehicle owners (391,189 vehicles). For about 89 per cent or 349,100 of these vehicle owners, the increase will be less than $50.
Stronger investment income, continued operational efficiency and revenue increases from a larger and more modern provincial vehicle fleet offset projected increased claims costs and eliminated the need for higher overall premiums, Zacharias said. In 2003/04, 243,401 claims were reported in Manitoba at a cost of $662.2 million, an increase of 8.8 per cent over 2002/2003.
“We continue to see claims pressure building, which demonstrates the significant role that Manitobans can play in our continued success,” Zacharias said. “Through a clean driving record, every driver in the province can affect what they pay in auto insurance.
“Safety behind the wheel not only saves lives, it reduces insurance costs.”
Annual Report: Providing Manitobans Access, Coverage, Service and Value
Manitoba Public Insurance also tabled its 2003 annual report to the legislature today. The report demonstrates the company’s current financial strength. All three lines of business reported profits totalling $36.5 million, while investment income of $135 million helped reduce the cost of the average premium by $142. The corporation also met its goals to provide claimants with more than 85 cents in benefits for every $1 in premium – significantly better than the national average – and Manitoba Public Insurance operating costs remained below 50 per cent of the Canadian industry average.
Manitoba Public Insurance realized these achievements without sacrificing customer service. In 2003, the company met or exceeded corporate-wide customer service standards 94 per cent of the time.
Last year, Manitobans filed an average of nearly 1,000 claims every working day. This represents about $2.3 million dollars in claims every working day or nearly $580 million dollars in total claims.
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