Three out of four Autopac customers could pay less for auto insurance next year because of a 2.6 per cent rate cut made possible by expected reductions in auto theft.

Manitoba Public Insurance filed a rate application with the Public Utilities Board today that would reduce the cost of Basic Autopac for nearly 650,000 policy holders and cut the average family passenger vehicle premium by $25 to $830. If approved, it will be the eighth year in nine that the corporation has either held the line or decreased rates for basic compulsory coverage.

“Manitobans are continuing to enjoy the benefits of the best auto insurance system in Canada,” President and Chief Executive Officer Marilyn McLaren said. “After nearly a decade of rate stability, Manitoba has among the lowest auto insurance rates in the country.

“Just a month after we returned $58 million to Manitobans in the form of a premium rebate, we are dialing back rates for the 2007/08 insurance year.”

The proposed rates would be effective March 1, 2007, but because renewal dates are staggered, some vehicle owners wouldn’t pay the new rates until February 29, 2008.

Overall, the corporation expects:

• Premiums would decrease for 644,050 of the 864,086 policies. The reduction would be $40 or more for about 21 per cent of those receiving reductions. About 31 per cent would pay $30 less and 40 per cent would pay $20 less.
• Of the 19 per cent of customers who would pay more, about two-thirds would see increases of less than $20.

McLaren said the rates are dropping because Manitobans are starting to take action against auto theft by protecting their vehicles with immobilizers. She said the corporation is pleased with the number of “most-at-risk” vehicles that have responded to the free immobilizer program but warned that success and continued rate reductions require all of them to participate.

“We said that all Manitobans would benefit in many ways when we win the fight against auto theft,” McLaren said. “This rate reduction is proposed with the expectation that most at risk vehicle owners will continue to respond to our program and protect themselves from theft.

“One way or another, Manitoba Public Insurance is dedicated to convincing these vehicle owners to act and become part of the solution.”

While the rate application proposes a decrease in the average rate for a passenger vehicle, the motorcycle class would continue to see rate increases. Driven by escalating sport bike claims costs, the overall motorcycle rates will rise by 8.4 per cent bringing the average premium to $1,027. However, for the first time, about as many motorcycle owners in Winnipeg will pay less for insurance next year as those who will pay more. That is because, with the exception of sport bikes, most motorcycles in Winnipeg are paying their fair share of claims costs.

Outside the city, where insurance rates for motorcycles are about one-third less than in Winnipeg, they are paying within 10 per cent of their costs. This is significant progress from just a few years ago.

Stronger investment income, continued operational efficiency and revenue increases from a larger and more modern provincial vehicle fleet will offset projected increased claims costs and contribute to the rate reduction, McLaren said. In 2005/06, 253,080 claims were reported in Manitoba at a cost of $707.2 million, an increase of 13.2 per cent over 2004/2005.

“As claims costs continue to build, we are reminded that every Manitoban can play a direct role in the insurance rates we all pay,” McLaren said. “Safety behind the wheel not only saves lives, it reduces insurance costs.”

The rate application comes as a cross-Canada survey finds that Manitobans will be paying less for auto insurance next year than most Canadians are paying right now. Manitoba’s decade of price stability has not come at the expense of coverage or service.

“This application builds on nearly a decade of rate stability and a proud history of providing the best insurance value in Canada,” McLaren said. “Our coverage is second to none anywhere in Canada and our employees deliver on our service commitment 96 per cent of the time.

“As we prepare for driver’s licensing changes this fall, the corporation is in a strong position to continue to deliver the value Manitobans have come to expect.”

Annual Report: Providing Manitobans Access, Coverage, Service and Value

Manitoba Public Insurance also released its 2005 annual report today. The report demonstrates the company’s current financial strength and ability to continue to deliver on the value that Manitobans expect.

All three lines of business reported profits from annual operations totalling $47.8 million, while investment income of $175.7 million helped reduce the cost of the average Basic Autopac premium by $181. The corporation also surpassed 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 at 50 per cent of the Canadian industry average.

Manitoba Public Insurance realized these achievements without sacrificing customer service. In 2005, the company met or exceeded corporate-wide customer service standards 96.6 per cent of the time.

Last year, Manitobans filed an average of 1,012 claims every working day. This represents about $2.3 million in claims every working day.

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