While the COVID-19 pandemic posed significant challenges for our business, Manitoba Public Insurance remains resilient and in sound financial order, focused on our strategic mandate and serving our customers.
Financial results were strong as Manitoba Public Insurance reported a net income after surplus distribution of $115.5 million for the first three months of its fiscal year, ending June 30, 2021, compared to nil for the same period last year. In the prior year, there was a surplus distribution of capital of $110.1 million which was intended as financial relief to policyholders during the COVID-19 pandemic.
Total earned revenues for the first three months rose by $3.3 million from the same period last year. This increase was driven mainly by an increase in Special Risk Extension policies, which increased $6.3 million; offset by a decrease in motor vehicle and drivers premiums.
Claims costs were lower than the same period last year by $89.4 million, representing a 27.3 per cent betterment from the same period last year, primarily as a result of the impact of interest rates on unpaid claims and lower claims due the impact COVID-19 has had on vehicle volumes on the road.
“The first quarter of 2021/22 saw a continuation of the favourable claims experience of 2020/21 with the frequency of collisions occurring at a rate approximately 20 per cent lower than generally expected,” said Mark Giesbrecht, MPI’s Vice President and Chief Financial Officer.
MPI continues to operate with a strong equity position. Recently, MPI applied to the Public Utilities Board for a provisional 2.8 per cent rate decrease in Basic insurance premiums for the 2022/23 insurance year. Approximately 74.1 per cent of vehicles will experience either no change or a reduction in rates from the previous year.
“Due to the reduction of ongoing claims, the basic compulsory auto product continues to collect more revenue than is required which has led MPI to apply to the Public Utilities Board for a third customer rebate since the onset of the pandemic,” said Giesbrecht. “MPI remains committed to delivering on its mandate to provide exceptional coverage and service at rates that are affordable, predictable and stable over the long-term.”
