Manitoba Public Insurance reported net income from operations of $188.8 million for the first six months of its fiscal year, ending September 30, 2020. The net income after surplus distribution was $78.6 million, compared to $175.4 million for the same period last year. The surplus distribution of capital ($110.2 million) in the spring was intended to provide financial relief to policy holders during the onset of the COVID-19 pandemic.
Meanwhile, total earned revenues for the first six months rose by $19.0 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.
“While the first six months’ results have been favourable, net income remains subject to change throughout the year based on weather-related factors which can drive claims costs as well as the on-going pandemic situation and its impact on both claims experience and investment returns,” said Mark Giesbrecht, Vice-President, Finance and Chief Financial Officer, Manitoba Public Insurance.
Factoring out impacts of changing interest rates on outstanding claims reserves, claims incurred dropped approximately 12 per cent year over year largely due to lower frequency of auto collisions in the first two quarters.
“In a time filled with so much uncertainty, we are pleased with the financial performance of the Corporation and our resulting ability to return premium dollars to Manitobans. First with the $110 million rebate, followed by a rate decrease request currently before the Public Utilities Board, and now with a second proposed surplus rebate of a further $69 million also before the Public Utilities Board. If approved, the sum total of this relief returned to Manitobans will exceed $270 million over the rating years,” added Giesbrecht.
While auto insurers in North America are hiking up customer premiums, MPI is the exception. Recently, MPI updated its application to the Public Utilities Board, requesting an 8.8 per cent overall decrease in Basic insurance premiums for the 2021/22 insurance year. This is the highest rate decrease in more than 30 years. If approved, approximately 96.6 per cent of vehicles will experience either no change or a reduction in rates from the previous year.