MPI sees difficult Q3, but strong nine-month results

Government-run Manitoba Public Insurance (MPI) is reporting solid results for the third quarter 2002, but is casting doubts about the future.
While net income was up for the nine-month period ending November 30, 2002, to $23 million from just over $11 million reported a year earlier during the same period, claims costs are also on the rise. Collision claims rose by more than 8% and injury claims by more than 6% for the same nine-month comparison.
For the most recent quarter, revenue was up to more than $160 million from just under $146 million for the same period a year earlier. However, claims costs were up to more than $155 million versus more than $141 million the year prior. Combined with dropping investment returns for the quarter, MPI actually saw a net loss for the quarter of just over $3 million, versus net income of just over $3 million for the third quarter of 2001.
Nonetheless, rising written premiums and revenues have led to strong results for the nine-month period. Written premiums were $497 million versus $457 million a year earlier, while revenue was $477 million against $435 million for the nine months ending November 30, 2001.
“Higher revenues in all of 2002 have given us a solid base as we enter the winter months, when claims costs are traditionally highest,” says Barry Galenzoski, vice president of corporate finance and CFO for MPI. “Already in the last 90 days, total claims costs have risen 10% a development that deserves some attention.”
In the past year, collision claims have grown by more than 6,000, with associated costs rising by $17.6 million. Injury claims have risen from 10,356 to more than 11,000 comparing 2002 to 2001. Soft tissue injuries are the main culprit, with claims costs rising 12% in the first nine months of 2002. Average claim cost has risen by nearly $100, Galenzoski adds.