A strong first half of the year has put Manitoba Public Insurance into a strong financial position as it heads into the traditionally claims-prone winter months.

For the six months ended August 31, 2006, the corporation reported net income of $65.4 million. The results are $21.6 million less than in the first six months last year but are consistent with the corporation’s seasonal pattern of earning profit in the first half of the fiscal year and then paying out more for claims during the winter months of the second half.

"There are no surprises in our six-month results," said Barry Galenzoski, Vice-President of Corporate Finance and Chief Financial Officer. "Our revenues, claims costs and expenses are within our projection, which means we’re heading into the fall and winter months in a stable financial position."

Galenzoski noted that net income from operations was down $21.6 million from the second quarter of 2005, mainly because weaker equity markets reduced investment income by $13.7 million for the six months.

The corporation’s earned revenues from insurance premiums increased $17.9 million in the first six months of the fiscal year as the size and value of the Manitoba vehicle fleet continued to grow. This was offset by higher claims costs as the number and value of crashes and injuries increased compared to the first six months of 2005.

Overall, claims costs for the six months ended August 31, 2006 increased 7.8 per cent to $351.1 million over the same period last year. There were 124,155 physical damage claims filed in the first half of 2006, increasing costs by $9.2 million to $197 million. The number of people injured in vehicle crashes increased by 457 compared to the first six months of 2005, bringing the total injury claims to 7,920. The severity of these claims also contributed to an 11.5 per cent increase in injury costs to $115.3 million.

During the first six months, the corporation also paid a $57.7 million premium rebate to vehicle owners who paid basic Autopac in the 2004/05 insurance year.

"We are pleased with these results," Galenzoski said, "although we know that rising claims and their costs are always a significant challenge in the colder weather."

Galenzoski noted investment revenue, while down somewhat from last year, continues to benefit customers by helping to lower premiums. 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)