MPI investment income decreases, claims up in 2006

A strong first half of the year has put Manitoba Public Insurance (MPI) into a stable financial position as it heads into the traditionally claims-prone winter months, the government insurer noted in a press release.For the six months ended August 31, 2006, the corporation reported net income of CD$65.4 million. The results are CD$21.6 million less than in the first six months last year.Nevertheless, MPI stated in a press release, the financial results are “consistent with the corporation’s seasonal pattern of earning profit in the first half of the fiscal year and then paying out more for claims during the winter months of the second half.”Barry Galenzoski, MPI’s vice president of corporate finance and CFO, said net income from operations was down CD$21.6 million from 2005 Q2, “mainly because weaker equity markets reduced investment income by CD$13.7 million for the six months.”The corporation’s earned revenues from insurance premiums increased CD$17.9 million during the first half of the 2006 fiscal year, as the size and value of the Manitoba vehicle fleet continued to grow. This was offset by higher claims costs as the number and value of crashes and injuries increased compared to the first six months of 2005, MPI noted.Overall, claims costs for the six months ended Aug. 31, 2006 increased 7.8% to CD$351.1 million over the same period last year. There were 124,155 physical damage claims filed in the first half of 2006, increasing costs by CD$9.2 million, up to CD$197 million.The number of people injured in vehicle crashes in Manitoba increased by 457 compared to the first six months of 2005, bringing the total injury claims to 7,920. The severity of these claims also contributed to an 11.5% increase in injury costs to CD$115.3 million.”There are no surprises in our six-month results,” Galenzoski said. “Our revenues, claims costs and expenses are within our projection, which means we’re heading into the fall and winter months in a stable financial position.”