October 5, 2010 by Canadian Underwriter
Manitoba Public Insurance (MPI) is reporting a net loss of $35.5 million for 2010 Q2.
“This net loss reflects an increase in severe weather, including hail-related claims,” said Don Palmer, MPI’s vice president of finance and chief financial officer.
MPI reported a 2010 Q1 net income of $102.9 million, but said this would not likely be sustained throughout the year. In fact, MPI now expects its net income to be reduced down to $67 million as of 2010 Q2, and shrink further down to $42 million by year-end.
“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,” said Palmer, explaining the reasoning for the decrease in net income by year end.
Even at $42 million by year-end, the 2010 profit would be up from the initial forecast of $5.6 million, MPI reported.
Net income from operations increased from the previous year by $47.3 million due to improved underwriting results of $30.8 million and a $16.5 million rise in investment income, MPI reported.
Manitoba’s public insurer has also proposed a $92-million rebate to ratepayers. If approved, the rebate would put MPI’s rate stabilization reserve somewhat above the Public Utility Board’s target of $154 million at year-end.
Additionally, MPI has requested an overall basic insurance rate decrease of 4%.