Manitoba Public Insurance reported stable financial results today as it enters the final quarter of fiscal 2006—traditionally the most claims-heavy period.

Despite a rise in claims costs and a decrease in investment returns, Manitoba Public Insurance reported net income from operations of $59.1 million for the nine months ended November 30, 2006. This is down $61.6 million from the same nine month period a year ago.

Barry Galenzoski, Vice-President of Corporate Finance and Chief Financial Officer, said claims costs for the nine months ended November 30, 2006 increased by 8.2 per cent to $546.6 million. Physical damage claims incurred increased by $16.3 million to $290.6 million. This is due mainly to a 3.9 per cent rise in the number of claims reported. For the same period, benefits associated with injury claims increased 11.5 per cent.

“It is important for every Manitoban to understand that they determine what we will pay for auto insurance in the future,” Galenzoski said. “Because we provide insurance at cost, the amount of premium we collect is directly related to the number of crashes that take place. By taking more care on the road, every Manitoba driver can make a difference.”

The corporation typically generates a surplus in the first two quarters of the year, when the number of claims tend to be lower, and then experiences higher costs in the fall and winter months, when the number of claims reported increase.

Investment income for the nine months was $92.9 million, a decrease of $45.1 million compared to the same period last year. This was primarily a result of lower gains on the sale of bonds and equities, explained Galenzoski. This decrease was offset by the continued expansion and upgrading of Manitoba’s vehicle fleet, which increased earned revenues by $25.7 million or 4.9 per cent.

Manitobans continue to enjoy among the lowest auto insurance rates in Canada, and effective March 1, 2007, overall average Basic Autopac rates will decrease by 2.6 per cent reducing the cost of insurance for three-out-of-four Manitobans.

In 2007 Autopac customers will also receive a 10 per cent rebate on Basic Autopac premiums they paid during the 2005/06 insurance year. The rebate is estimated to be $60.4 million. It will be paid to customers in the spring of 2007, although it has been recorded in this quarter.

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