Manitoba Public Insurance (MPI) has submitted its rate adjustment request to the Public Utilities Board, asking for auto insurance rates next year to be reduced by an average of 10.5% – the largest rate cut the insurer has requested in three decades.
If the rate adjustment is approved, the majority of MPI-insured drivers – about 800,000 drivers – will see their insurance costs reduced by April 2021. The rate decrease will translate to an average of about $130 in savings for drivers.
“I actually think it’s a great day for the corporation, but it’s also a great day for Manitobans,” said MPI CEO Ben Graham in a media briefing.
Graham had been hinting about this significant rate decrease earlier this month, saying that Manitobans would be “extremely happy” about the planned rate changes.
The chief executive said that a large part of the proposed rate cut is derived from MPI’s excess capital, since the Crown corporation managed to meet its capital target. Graham also credited MPI’s fiscal prudence and anti-fraud efforts as factors in the rate decrease.
“MPI is really demonstrating the strength of a well-run public insurance company, where basic products are priced at a break-even rate,” he said.
Graham also noted that the proposed rate decrease has nothing to do with the COVID-19 pandemic; MPI had already returned about $110 million to policyholders through rebate cheques earlier this spring.
CBC News reported that while many drivers will see their rate decrease next year, motorcyclists are the only class of vehicle owners not scheduled to see any premium relief. MPI is planning a 1.8% increase in motorcycle rates in 2021.
