MPI reports dramatic increase in fiscal Q1 net profit

Manitoba Public Insurance (MPI) reported a net income of $102.9 million for 2010 Q1, marking an increase over the net income of $17.3 million reported in 2009 Q1.
Claims costs for the first fiscal quarter decreased by $85.2 million (to $105.4 million) when compared with the same period of 2009.
MPI attributes the decrease to a reduction of $78.2 million in bodily injury claims. An MPI release notes physical damage claims costs also decreased, attributed to winter ending earlier than normal.
“This one-time decrease was due to an unusual release in claims reserves caused by a rise in interest rates,” said Don Palmer, MPI’s vice president of corporate finance and CFO.
This decrease in claims costs is not expected to be sustained throughout the year, he continued. “Traditionally, the first two quarters of the corporation’s fiscal year generate a profit, which is then offset by an increase in claims during the winter months,” he said.