MPI reports profit growth despite increased claims cost and volume

Manitoba Public Insurance (MPI) credits a Cdn$80.3 million profit for the first half of 2007 to increases in investment and premium revenue, despite enduring the worst summer for weather-related claims in a decade.
The figure includes a net income of Cdn$56.9 million from the basic Autopac line of business, and marks a Cdn$14.6 million increase over the same period of 2006, an MPI statement says.
Written premiums also increased Cdn$13.5 million over last year to $439.5 million as Manitobans purchased more and newer vehicles, the statement says.
This gain, however, was more than offset by higher claims costs, which increased by $23.8 million or 6.8% over last year, the statement says, adding that physical damage claims increased by Cdn$16.4 million.
The August 9-10 hailstorm that struck Dauphin was one of the single largest catastrophic events in the corporations history, resulting in approximately 13,000 claims with an estimated value of Cdn$50 million, MPI says.
Don Palmer, vice president of finance and CFO, MPI, said in a statement that because the corporation purchased reinsurance against such risks, the real exposure to premium payers is limited to Cdn$10 million.
Despite the hailstorm and an increase in claims and bodily injury costs, a strong investment environment continues to put Manitoba Public Insurance in a strong financial position, Palmer said.