MPI’s profit decreases in 2012 Q1 based on higher claims costs

Higher claims costs contributed to Manitoba Public Insurance (MPI) witnessing a reduction in net income for 2012 Q1.

Net income was $30.1 million for the three months ending May 2012, down $10.9 million from the $44.2 million for the same period in 2011, notes a statement from MPI, whose fiscal year begins Mar. 1.

Bodily injury claims rose by $7.1 million and physical damage claims by $5.6 million, making up the lion’s share of claims costs that increased by $13.2 million in 2012 Q1.

Total earned revenues for 2012 Q1 rose by $7.2 million — primarily because of $4.6 million more in motor vehicle earned revenues — and revenue from drivers’ premiums increased by $1.1 million.

Overall, the public insurer’s profit decrease in 2012 Q1 follows underwriting results that were $9.1 million lower than in 2011 Q1 and investment income that was $1.2 million higher. In addition, the insurer reported a one-time, $3.1-million gain on disposal of property in 2011-12.

“The corporation remains committed to achieving its corporate goals and best serving our customers,” Heather Reichert, vice president of finance and chief financial officer for MPI, says in the statement. “Actual results will be closely monitored, and corrective actions taken when necessary, to ensure that expected outcomes are realized.”

MPI has applied to the Public Utilities Board for no overall premium increase in the basic insurance rate for 2013-14.