July 9, 2009

Manitoba Public Insurance reports strong first quarter

Fuelled by stable claims costs, assisted in large part by a 21.9% drop in auto theft rates, Manitoba Public Insurance reported net income of $17.3 million for the first quarter of 2009.

For the three months ended May 31, 2009, earned revenues increased by $10.2 million over the same period last year, as the number and value of vehicles insured increased. Net income from operations increased from the previous year by $4.1 million due to improved underwriting results of $1.7 million and a $2.4 million increase in investment income.

Claims costs for the first three months increased by $1.9 million to $190.5 million, explained Don Palmer, vice-president of corporate finance and chief financial officer, while the number of claims reported by Manitobans during the quarter increased by 2,629 to 62,514.

“The success of corporate initiatives to reduce auto theft, continued to show positive results, benefitting all Basic Autopac rate payers,” said Palmer. “We’re pleased with the first quarter results. At the same time, rising claims costs are a reminder to motorists that they influence their rates through their driving behavior.”

Traditionally, the first two quarters of the corporation’s fiscal year generate a profit, which is then offset by an increase in claims during the winter months.

On June 18, 2009, the corporation released its 2010/11 Basic insurance rate application to the Public Utilities Board, requesting no overall rate increase. If approved, this will be the 11th year out of the 12 in which Manitoba Public Insurance had either held the line on, or decreased, the average rate paid by Manitobans for Basic auto insurance.

“The public auto insurance model continues to achieve its founding goal: to provide the most comprehensive auto insurance at the most affordable cost,” said Palmer.

The PUB is expected to rule on the application in late fall.

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