Manitoba Public Insurance (MPI) is looking to lower its rates significantly – enough to help Manitoba drivers save about $110 a year on auto insurance if approved.
A hearing into MPI’s rate application to lower rates by a historic 8.8% began earlier this week at the Public Utilities Board (PUB). In its original rate application, MPI had requested a 10.5% reduction, but later proposed the 8.8% cut after it found that assumed investment returns were lower than expected due to the COVID-19 pandemic.
“The trends are now normalizing,” MPI lead counsel Steve Scarfone said during the PUB hearing. “MPI has to be careful to avoid a knee-jerk reaction to the pandemic.”
Scarfone added that it would be “foolish to forecast on a claims history” when people have been mostly staying home during the pandemic, which has led to claims dropping by 50%.
In addition to the rate application, the PUB will also look into MPI’s Project Nova – the insurer’s initiative to transition its services online. According to Consumers Association of Canada legal counsel Byron Williams, it appears that MPI has run into “material challenges” with its initiative, citing $12 million in additional costs encountered by the insurer and potential risks.
Winnipeg Free Press reported that a decision over the rate application is expected in December.
