Manitoba Public Insurance completed the first six months of the 2014 fiscal year with a net income of $37.6 million – a $4.3 million decrease over the same time period last year.
“It’s important to note that while the first two quarters of the Corporation’s fiscal year can be favourable, this situation can quickly reverse and be offset by an increase in claims and costs during the winter months,” said Heather Reichert, vice-president of Finance and Chief Financial Officer, Manitoba Public Insurance.
Claims costs for the six months increased by $34.7 million compared to last year. The increase was primarily due to an increase of $9.1 million in physical damage and $26.3 million in bodily injury claims incurred, offset by a decrease in claims expense. The increase in physical damage claims incurred is primarily due to severe winter driving conditions and greater severity of claims, and the increase in bodily injury claims is driven by changes to interest rates on unpaid claims, compared to the same period last year.
Total earned revenues for the six months increased from the previous year by $23.7 million, primarily attributed to an increase in driver’s premiums earned of $3.8 million, an increase in motor vehicle earned revenues of $17.6 million, special risk extension premiums earned of $1.2 million and an increase in service fees of $1.1 million.
“The increase in premiums earned revenues is primarily due to the growth in the number of vehicles on the road in Manitoba,” noted Reichert. “The value of these vehicles and movement of drivers down the Drivers Safety Rating scale resulted in higher premiums.”