Propelled by short-term investment gains, Manitoba Public Insurance has reported a healthy first quarter income of $52.8 million.

For the three months ended May 31, 2005, the corporation reported investment income of $41 million – more than double the $17 million reported during the same period in 2004. Barry Galenzoski, Vice-President, Corporate Finance and Chief Financial Officer, said the surge in the market has provided a healthy early buffer.

“These numbers reflect strong short-term investment results, which clearly have put us on a good footing as we start the year,” Galenzoski said. “Our operational results, while positive, are in line with what we would expect in the first quarter.”

In 2004, investment revenue reduced the cost of every premium by an average of about $98. The strong overall results also boosted the Rate Stabilization Reserve to $157.6 million.

Galenzoski cautioned, however, that rising interest rates in Canada and the United States could dampen market performance in the latter half of the year and impact the performance of bonds, which make up the majority of the corporation’s investment portfolio. Traditionally, Manitoba Public Insurance generates a profit in the first two quarters of its fiscal year, which is offset by the typical increase in claims during fall and winter months.

In the first 90 days, claims costs are six per cent lower than a year earlier, while premium income increased nine per cent on the strength of the competitive commercial trucking line of business. Total claims costs for the period decreased $9.1 million from last year to $148 million. This was mainly due to a 23 per cent decline in injury claims costs, with fewer serious injuries so far in fiscal 2005. Physical damage claims costs rose by nearly 10 per cent for the three months.

“We are pleased with these operational results, although we know that rising claims and their costs are dependent on seasonal and specific weather factors,” Galenzoski said. “Still, every Manitoban can directly affect how much they pay for auto insurance through their daily driving behaviour. Fewer claims mean fewer payouts and ultimately lower auto insurance rates.”

Independent research shows Manitobans continue to pay among the lowest rates in the country for comprehensive coverage, including personal injury protection that’s unmatched in Canada.

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