Manitoba Public Insurance reported a net income of $110.1 million for the first three months of its fiscal year, ending June 30, 2020. The net income after surplus distribution was nil, compared to $94.7 million for the same period last year. The surplus distribution of capital of $110.1 was intended as financial relief to policy holders during COVID-19.
Total earned revenues for the first three months rose by $8.5 million from the same period last year. This increase was driven mainly by an increase in the number of motor vehicles insured and the value of those vehicles.
Recently, MPI applied to the Public Utilities Board (PUB) for a provisional 10.5 per cent overall decrease in Basic insurance premiums for the 2021/22 insurance year. Approximately 98.9 per cent of vehicles will experience either no change or a reduction in rates from the previous year.
Factoring out impacts of changing interest rates on outstanding claims reserves, claims incurred dropped approximately 21 per cent year over year largely due to lower frequency of auto collisions in the quarter.
“While the first quarter results are favourable, net income remains subject to change throughout the year based on weather-related factors that drive claims costs, and variations in investment results affected by the financial markets,” said Mark Giesbrecht, vice-president, Finance and Chief Financial Officer, Manitoba Public Insurance.
“Historically, the first two quarters of the Corporation’s fiscal year generate a profit, which is then offset by an increase in claims during the winter months,” said Giesbrecht. MPI remains committed to delivering on its mandate to provide exceptional coverage and service at rates that are affordable, predictable and stable over the long-term, explained Giesbrecht.
“MPI entered the pandemic on a strong financial footing which allowed for the $110.1 million surplus to be distributed to Manitobans when they needed it most. We are proud to now have followed this up with a subsequent rate decrease request to the PUB. Prudent claims management practices, including an increased focus on detecting fraudulent claims, along with management actions to maximize operational efficiencies, will ensure we continue delivering on our promise to provide value to all Manitobans.”