MPI cruises to $180-M profit By: Larry Kusch Posted: 7:00 PM CDT Wednesday, Sep. 30, 2020

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This article was published 29/09/2020 (1451 days ago), so information in it may no longer be current.

Manitoba Public Insurance has recorded its second-highest profit in two decades, explaining a decision to rebate more than $100 million to customers this spring.

The Crown corporation recorded net earnings of $180.2 million in 2019-20 — $21 million more than the previous year, and highest since a whopping $292.5-million profit nine years ago.

In its annual report for the year ended March 31, MPI credited low claims costs and sound overall management and investment decisions for its financial success.

According to its critics, the huge profit also reflects the fact Autopac rates have been set too high in recent years.

However, only three years ago, the corporation recorded a loss of $85.2 million.

MPI said collision rates have been steadily declining over the last few years. The trend continued in 2019-20, with a nearly nine per cent improvement over the previous fiscal year.

In April, MPI and the provincial government announced customer rebates totalling $110 million — roughly 11 per cent of what policyholders had paid in the past year in premiums.

At the time, the corporation pointed to fewer insurance claims due to COVID-19 restrictions and strong year-end financial results as the main reasons for the rebates.

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Effective March 1, 2020, overall basic auto insurance rates decreased 0.6 per cent in Manitoba. In June, MPI announced it had filed an application with the Public Utilities Board requesting an overall rate decrease of 10.5 per cent in 2021. If approved this fall, it would be the largest Autopac rate decrease in three decades.

Byron Williams, a lawyer representing the Consumers Association of Canada, said the biggest driver of the surge in profits was the large reduction in collision claims.

“From our client’s perspective it also reflects an over-collection of rates from captive ratepayers, as well as modest improvements in efficiency, particularly in terms of MPI’s relationship with the automotive trade and other service providers,” he said Wednesday.

Williams said, in recent years, MPI has sought better rates from the auto repair industry and other service providers, such as chiropractors.

MPI’s revenue from premiums last year totalled $1.5 billion, while net claims totalled $1 billion. The Crown corporation handled 293,649 claims, with an average cost of $3,435 per claim.

After launching its first fraud awareness campaign, the Crown corporation received a record number of calls (594) to its anti-fraud tips line. The campaign highlighted insurance fraud costs ratepayers an average of $50 per year. MPI said fraud prevention efforts saved the corporation about $15 million last year.

The public auto insurer said, in the future, all Autopac customers will receive corporate financial information as part of their annual statement or renewal notices. The statements will include a graphic breaking down where customers’ premium dollars go, including the portion assigned to claims, operating costs, broker commissions and other expenses.

MPI is also launching new coverage levels next year. This will include increased coverage for third-party liability and maximum insured value as well as new deductible levels. For the first time in more than 20 years, customers will have the option of reducing premiums by increasing deductible levels.

larry.kusch@freepress.mb.ca

Manitoba Public Insurance 2019 Annual Report

Larry Kusch
Legislature reporter

Larry Kusch didn’t know what he wanted to do with his life until he attended a high school newspaper editor’s workshop in Regina in the summer of 1969 and listened to a university student speak glowingly about the journalism program at Carleton University in Ottawa.

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