Insurer requests no change in overall auto rates

Despite cost overruns related to a new digital platform, Manitoba’s public auto insurer is requesting no change in the overall rates for the 2024/25 insurance year.

If the province’s Public Utilities Board approves Manitoba Public Insurance’s (MPI) general rate application, basic overall vehicle rates will remain unchanged, MPI said in a press release Thursday. Premiums drivers pay will vary according to individual placement on the Driver Safety Rating (DSR) scale, type of vehicle and use.

Last July, MPI applied for its fourth consecutive annual rate decrease, with an average 0.9% rate decrease. If MPI’s 2024/25 rate application is approved, 52% of private passenger class rivers — which make up two-thirds of all policies — will see a decrease in 2024/25, MPI’s vice president and chief customer officer, Satvir Jatana, said in the release.

The latest rate application comes on the heels of significant changes at the public auto insurer. One is the tech project, dubbed Project Nova, which had an initial budget of $106 million. But that escalated to between $257 million and about $290 million last year, and MPI requested increased staffing levels related to work on the project.

The first release of Project Nova, which moved brokers from a paper-based system onto a new digital platform, launched in February 2023. MPI’s latest rate application includes a number of product enhancements, including a second Nova release “in the coming months,” and third and fourth releases in 2024 and 2025.

“The latter releases will mark the beginning of visible change for Manitobans, with replacement of front-end systems used by brokers and MPI staff to issue products and services to customers, as well as the introduction of some online services,” MPI said.

The auto insurer is also in the final stages of selection for a governance and advisory services vendor that will “help ensure Nova is managed diligently, responsibly and with transparency at all levels.”

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“Project Nova is continuing on schedule and within budget to replace outdated and unsupported legacy technology systems,” Ward Keith, chairman of MPI’s board of directors, said in a statement on June 6. “While the implementation to date has not been without issue, I am optimistic that the right budget and resources are being put in place to deliver on the remainder of the project.

“That said, greater oversight from the Board is required to ensure that Nova stays on track.”

In addition to filing for a 0% overall rate, MPI is also required to file an accepted actuarial practice rate indication (the insurer’s own forecasted rate) with the Public Utilities Board.

“The near-flat overall rate indication proposed for 2024/25 is possible because MPI is in good financial shape overall, and the reserves put aside to address unexpected or unanticipated claims costs are in line with legislated targets,” Jatana said. “[MPI] is moving forward with a renewed focus on fiscal prudence, reducing operating costs in 2024/25 and holding the staff complement at a consistent level.”

Other proposed product enhancements include:

• Continued expansion of the DSR system. If approved, MPI will increase the top of the scale by one increment (to DSR Level 18), offering a 48% vehicle premium discount to drivers at the highest level. Those in the mid-range (DSR Level 8+) would also receive greater savings, “offering Manitoba’s safest drivers larger vehicle premium discounts.”
• A new blanket insurance policy framework for Manitoba’s rideshare industry that will bring it in line with other Canadian jurisdictions. If approved, the new policy would seamlessly switch between a registered owner policy and the new basic blanket policy depending on the use of the vehicle.

In addition to tech challenges, MPI has also seen the departure of senior executives. The insurer recently appointed Marnie Kacher as interim president and CEO while it began recruiting for a permanent leader. She succeeded Eric Herbelin, who was let go in the wake of a government review related to Nova, elevated staffing levels and untendered contracts.

Siddhartha Parti, MPI’s chief information and technology officer, also chose to resign in early June. Parti was living in Ontario and the corporation was paying his travel costs to Manitoba, which totalled $19,021 over nine months (including commuting travel and business trips), Canadian Press reported. Parti was asked to relocate to Manitoba but chose to resign, Keith told CP.

Former CEO Herbelin “was dismissed by the board after a review of his workplace conduct,” which “covered more than just his interactions with employees,” Keith told CP.

For MPI’s rate application, a hearing will be held in October and the Public Utilities Board usually issues its order in December.

Proposed rates would be effective Apr. 1, 2024, but because renewal dates are staggered, some vehicle owners won’t pay their new rates until Mar. 31, 2025.

Feature image by iStock.com/SARINYAPINNGAM