Manitoba Public Insurance (MPI) has released its first quarter financial results, revealing a strong start to its fiscal year despite the challenges presented by the COVID-19 pandemic.
The Crown agency posted a net income after surplus distribution of $115.5 million in the first three months of its fiscal year, ending June 30, after registering none in the same period in 2020. Also last year, the insurer had a surplus distribution of capital of $110.1 million but this was intended to provide policyholders relief at the height of the pandemic.
Total earned revenues during the first quarter also jumped $3.3 million compared to the previous year. The company attributed the rise mainly to a strong performance of its special risk extension policies, which posted a $6.3 million ascent. However, the increase was offset by a drop in motor vehicle and drivers’ premiums.
Claims costs were lower than the same period last year by $89.4 million, representing a 27.3% improvement. This was primarily because of the impact of interest rates on unpaid and lower claims as COVID-19 restrictions significantly reduced 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% lower than generally expected,” said Mark Giesbrecht, vice-president and chief financial officer of MPI.
The insurer also continued to operate with a strong equity position, applying to the Public Utilities Board for a provisional 2.8% decrease in the rate of basic insurance premiums for the 2022-23 fiscal year. The company expects around 74% of vehicles to experience sustained or reduced rates compared to 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.”
