MPI offers drivers a break

Manitoba’s drivers could see lower rates on their insurance next year as a result of a strong financial showing by the Manitoba Public Insurance Corporation (MPI) for the fiscal year ending February 29, 2000. MPI saw its net income rise significantly last year to $51.4 million, up from $38.3 million the previous year, largely as a result of higher revenues. Total premiums written rose from $502.3 million to $529.7 million. The corporation also maintained a lower than industry average expense ratio, which resulted in the average claims cost dropping by $64, from $1,926 to $1,862 a claim. The “basic rate stabilization reserve”, which is used to buffer policyholders from rate increases as a result of large unexpected losses, rose from $64.4 million to $104.9 million.

Also, MPI’s investment account brought in $77.2 million for the year, up $2.9 million over the previous year. Without that income, the average premium would have risen by $84 last year, the public insurer estimates. And, for the first quarter of 2000, MPI reported a further $6 million increase in investment income. Along with an 8% decrease in claims costs, this resulted in a net operating surplus of $4.2 million for the quarter. As of May 31, MPI’s rate stabilization reserve stood at $136.3 million. “Financial stability has been achieved while maintaining low premiums”, says MPI president and CEO Jack Zacharias, pointing out that basic Autopac premium rates were held stable for the fourth year in a row for 1999.

As a result of its strong earnings, MPI has applied to give a majority of its policyholders a discount on basic auto rates in 2001, amounting to more than $22 million. The one-time, 5% surplus dividend would apply to all policies purchased or renewed beginning March 1, 2001. Public hearings on the application to Manitoba’s Public Utilities Board will be held this fall.