January 12, 2010

Manitoba Public Insurance reports stable financial performance

Manitoba Public Insurance reported favourable financial results today as it enters the final quarter of the fiscal year, the time when winter driving weather conditions traditionally result in a greater number of claims.

“After three quarters of the year, the corporation is in a strong financial position thanks primarily to a rebound in the investment markets,” said Donald Palmer, Vice-President, Finance and Chief Financial Officer, Manitoba Public Insurance.

Buoyed by strong investment returns, Manitoba Public Insurance reported net income of $32.1 million for the nine months ended November 30, 2009 compared to net income of $1.8 million for the same period last year. This improvement was achieved in part by improved investment income of $50.6 million.

Palmer pointed out claims costs for the nine months ended November 30, 2009 increased by $30.6 million or 5.3 per cent compared to last year. Physical damage claims incurred increased by $15.9 million or 5.6 per cent. A severe hailstorm struck southern Manitoba including Winnipeg, Brandon and Steinbach regions on August 13 and 14, 2009 resulting in almost 11,000 claims with an estimated value of $35 million. Manitoba Public Insurance holds reinsurance coverage against this loss which will limit its exposure to $13.3 million.

Bodily injury claims incurred rose by $10.2 million because of inflationary increases.

Manitobans continue to benefit from the public automobile insurance system, said Palmer. Recently, the Public Utilities Board approved Manitoba Public Insurance’s rate application for the 2010-11 insurance year which once again holds the line on rates ─ the 11th year in 12 that Manitoba Public Insurance has held the line or decreased basic Autopac rates.

Most Manitoba vehicle owners will pay the same or less for auto insurance next year, explained Palmer.

“All our customers benefit when our balance sheet is positive,” said Palmer. “Motorists can contribute to this by driving responsibly and avoiding collisions during the final quarter which is usually a difficult period of time for driving.”

In just over six weeks, when a new insurance year starts, Palmer said owners of 333,290 passenger vehicles, 18,000 commercial vehicles, 2,900 motorcycles, 4,300 public vehicles, 72,000 trailers and 49,000 off-road vehicles will be paying less for Basic Autopac. The average passenger vehicle premium will fall by $2 to $886.

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