September 30, 2008

Manitoba Public Insurance reports stable financial results

Manitoba Public Insurance finished its second quarter in a stable financial position, despite a decrease in both net income and investment income from the previous year.

For the first six months ended August 31, 2008, corporate net income was $40.3 million – down from the $80.3 million earned during the same period in 2007. Investment income for the six months decreased by $48.8 million compared to the same period last year.

“The decrease in investment income is the result of lower gains on the sale of equities,” said Don Palmer, Vice-President of Finance and Chief Financial Officer. “There were no surprises in our six-month results. Our revenues, claims costs and expenses are within our projection, as we head into the fall and winter months.”

The corporation’s earned revenues from insurance premiums increased $18.5 million over the same period last year. The majority of this increase was attributed to Manitobans purchasing more and newer vehicles. This modest gain was offset by higher claims costs, which increased by $8 million, or 2.1 per cent, over last year.

Palmer said that the financial performance of the province’s public auto insurer remains closely tied to claims costs. Traditionally, Manitoba Public Insurance generates profits in the first two quarters of the year, which are offset in winter months when claims volume increases.

“The corporation remains committed to maintaining the financial stability that allows us to continue improving the services provided to Manitobans,” said Palmer. “These results provide us with cautious optimism as we head into the fall and winter months.”

On June 13, 2008, the corporation released its 2009-10 Basic Autopac Insurance rate application to the Public Utilities Board (PUB), proposing an overall rate decrease of 1 per cent. The PUB is expected to make a ruling later this year.

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