Manitoba’s public insurer seeks rate increase; blames bad winter

WINNIPEG – Manitoba drivers could end up paying more for auto insurance if the province’s public insurer gets its wish.

Manitoba Public Insurance is seeking a 3.4 per cent rate increase from the Public Utilities Board. The insurer, known for short as MPI, says poor driving conditions this past winter led to a record number of increasingly expensive claims.

It says the cost of claims increased by $114.6 million, while the number of claims jumped to 168,000 from 160,000, the insurer said. The average claim cost $3,000.

“Last winter, we had a lot more claims in a very short period of time,” Dan Guimond, president and CEO of MPI, said Monday. “When people have accidents in bad winters, they tend to be more severe. It costs more money to fix them. You have two things going against you.”

Before the snow had even melted, the NDP government was hinting that a rate increase could be on the horizon. Andrew Swan, minister responsible for public insurance, said in April that Manitoba had experienced one of its worst winters, so it wasn’t surprising MPI received a large number of claims.

The Opposition Tories have argued that the public insurer should look at cutting costs internally before going to ratepayers.

The Public Utilities Board, which will ultimately decide whether to grant the increase, voiced similar concerns last year when it refused to grant a 1.8 per cent increase to MPI.

“The board continues to have significant concerns about the corporation’s operating expenses, and finds that it must control its expenses,” the board wrote in its decision last December. “The board also has concerns with respect to the corporation’s staffing levels.”

Guimond said the corporation is looking at how to reduce operating costs. But he added that MPI is also coming under pressure from a rocky global economy and higher inflation.

“Our operational costs have not increased,” he said. “We can show that, overall, we’re doing OK.”

The hike MPI is requesting would cost an extra $20 or less a year for more than half of all drivers, Guimond noted. Manitoba drivers still pay one of the lowest rates in the country for auto insurance, he said.

“Our customers are really fair and they know that we’ve had a bad winter. They know two bad winters in a row, it’s going to hurt.

“It never feels good when you have to pay more but, at the end of the day, I think they’ll understand.”