MPI asks for first rate increase in five years

Manitoba Public Insurance (MPI) is asking the Public Utilities Board (PUB) to approve a 2.5% increase to its premium base, the first such increase in five years.In filing its annual report with the government, MPI notes that rising claims costs necessitate the increase, which will add about $21 to the cost of a basic auto insurance policy.”After five years of holding the line on rates, including three rate reductions, today’s reality is that higher claims volumes and costs mean we must seek an increase next year,” says MPI CEO and president Jack Zacharias.Trailer and off-road vehicle insurance rates will actually drop 30%, while private passenger vehicle rates will rise 2.9%. Motorcyclists, however, will be hardest hit with a 20% rate increase. Overall, 63% of premiums will increase and 36% will drop.No other changes are being made to the basic auto insurance product, MPI says.For 2002-2003, more than 225,000 claims were filed, for a cost of more than $506 million, $27.2 million more that the year prior.Overall, MPI reported a net loss of $22.6 million for the year ending February 28, 2003, versus a loss of $16.5 million the year prior. Year-on-year, premiums grew to $641.5 million from $595.2 million between February 2002 and 2003. Earned premiums were up to $621.5 million from $567.6 million over the same period. Overall claims costs, including prior years development and road safety initiatives, was $609.5 for 2002-2003, versus $575.3 million the year prior. Other expenses (operational, taxes, commissions and regulation) were up to $101.3 million from $91.7 million.Investment income was also down year-on-year to $52.8 million from $67.9 million.