Despite an unusually high number of weather-related claims this summer, Manitoba Public Insurance reported today that it finished its second quarter in a strong financial position bolstered by increases in investment income and premium revenue.

For the six months ended August 31, 2005, corporate net income was $86.8 million – up from the $40.8 million earned during the same period in 2004. These results include net income of $71.3 million from the universal Basic Autopac line of business.

“A strong investment environment has put Manitoba Public Insurance in strong financial position,” said Barry Galenzoski, Vice President of Corporate Finance and Chief Financial Officer. “Investment income increased this quarter by $48.8 million to $87.5 million demonstrating the ongoing value of a public insurance system that uses investment income to reduce the cost of auto insurance for all Manitobans.”

Written premiums also increased $17 million over last year to $408 million as Manitobans purchased more and newer vehicles. This however was more than offset by higher claims costs that increased $19.8 million over last year to $325.8 million.

Galenzoski warned that the financial performance of the province’s public auto insurer remains closely tied to claims costs. “This was the worst summer for weather-related claims in the last three years,” he said.

“There were more than 3,000 hail claims opened during the months of June, July and August. Flooding was also a problem in some areas of the province, and accounted for more than 800 claims.”

Traditionally, Manitoba Public Insurance generates profits in the first two quarters of the year that are offset in winter months when claims volume increases. Galenzoski pointed out that through their individual driving records, every Manitoban can directly influence how much they pay for auto insurance.

“These results provide us with some cautious optimism as we head into the first of the so-called winter quarters,” Galenzoski said. “As we do so, I remind Manitobans that every one of us can directly influence these results, and how much we all pay for auto insurance, through our driving behaviour.

“Fewer injuries and claims filed help reduce costs and, in turn, help keep auto insurance premiums in check.”

Manitobans continue to benefit from comprehensive coverage, including personal injury protection, at rates that independent research shows are consistently among the lowest in the country.

- 30 -

Contact:
Brian Smiley
Media Relations
Manitoba Public Insurance
(204) 985-7300 or 1-888-554-9549 (toll-free in Manitoba)