MPI reports more than Cdn$50 million drop in net income

Manitoba Public Insurance has reported a drop of Cdn$51.6 million in net income for 2008 Q1 as compared to 2007 Q1.
The combined effects of dropping auto theft rates, a larger and higher-quality fleet and a significant decrease in investment income are reflected in the first quarter ended May 31, 2008 results.
“Because of lower gains on the sale of equities, investment income for the first quarter was down by nearly [Cdn]$45 million compared to the same period in 2007, when investment returns were unusually strong,” Don Palmer, vice-president of finance and CFO, said in a release. “On the positive side, the continuing drop in auto crime reduced theft and attempted theft claims by [Cdn]$3.4 million. We also saw a [Cdn]$9.8 million increase in earned revenues, mainly due to improvements in the number and value of vehicles insured in Manitoba.”
Physical damage claims incurred decreased by Cdn$4.5 million during the first quarter of 2008-09 compared to last year, while overall claims costs increased by Cdn$15.5 million or 8.9%.
“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 company reports in the release. “Based on current projections, the corporation expects to end this fiscal year with a net loss from operations of approximately [Cdn]$7.5 million, mainly because of rising claims costs and declining investment returns.”