MPI reports increase in Q1 net income, despite rising claims costs

Manitoba Public Insurance reported a net income of $17.3 million for 2009 Q1, marking a $10.2-million increase over the same period of 2008.
MPI attributes the increase in net income to stable claims costs — assisted in part by a 21.9% drop in auto theft — and an increase in the number of insured vehicles.
Claims costs for the first three months of 2009 increased by $1.9 million, up to $190.5 million, and the number of claims reported during the quarter increased by 2,629 to 62,514, an MPI release says.
Earned revenues increased by $10.2 million over 2008 Q1, as the number of vehicles insured increased. Also, net income from operations increased by $4.1 million quarter-over-quarter due to improved underwriting results of $1.7 million and a $2.4-million increase in investment income, the release continues.
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, the release adds.
“The success of corporate initiatives to reduce auto theft continued to show positive results, benefiting all Basic Autopac rate payers,” said Don Palmer, MPI’s vice president of corporate finance and CFO.
“At the same time, rising claims costs are a reminder to motorists that they influence their rates through their driving behaviour.”