January 14, 2009

Manitoba Public Insurance financial performance stable
Nine-month results positive as company enters heaviest claims period

Despite a volatile investment market and uncertain economic climate, Manitoba Public Insurance reported positive financial results today as it enters the final quarter of fiscal 2008 – traditionally the most claims-heavy and costly period.

For the nine months ended November 30, 2008, the public auto insurer reported net income after surplus distribution of $1.8 million. This is down $15.4 million from the same nine-month period a year ago. Net income from operations (before surplus distribution) declined by $78.6 million as investment income dropped by $93.3 million.

“Auto theft rates continue to decline which has a favourable result on our financials, but Manitoba Public Insurance, as with many companies and individuals, has been affected by the volatility of the investment market,” said Don Palmer, Vice-President, Finance and Chief Financial Officer.

Auto theft claims in the province dropped by 40 per cent since 2004 and are expected to decrease by another 40 per cent by the end of 2009. The volatile investment market was reflected in a decline of  $93.3 million in investment income, while claims costs rose by $7.7 million.

Injury claims costs rose by $27 million, while physical damage claims costs decreased $23.8 million during the first nine months. Meanwhile, total written premium for the nine-month period was $684.6 million, an increase of $35.9 million as the number and value of vehicles continue to rise in Manitoba.

“The rise in injury claims was attributed to expected inflationary increases,” explained Palmer. “Because we deliver insurance at cost, fewer crashes and injuries mean fewer payouts and that helps us keep rates stable and premiums affordable.”

―30―

Contact: