MPI calls for provincial rate freeze

Manitoba’s public insurer is asking the province’s Public Utilities Board to “hold the line” on basic auto rates for next year, despite posting a net loss of $16.5 million last year. For the fifth year, Manitoba Public Insurance (MPI) wants to keep rates stable for its basic “Autopac” coverage, according to its annual submission to the PUB.

At the same time, MPI tabled its annual report, noting that for the basic Autopac line, it suffered a net loss of $11.7 million in 2001, and an overall loss of $16.5 million including competitive lines. Much of this loss came as a result of increased claims, including summer hailstorms that brought in more than 10,000 claims. Also, changes in the reinsurance and investment markets following September 11 were a factor, MPI reports.

Claims costs grew 17% to $575 million in 2001, a record year with one in three vehicle owners on average reporting a claim. “There’s no doubt that 2001 was not kind to any auto insurer in Canada,” says CEO Jack Zacharias. “But it is times like these that demonstrate the importance of preparing for the bad years with a plan that helps protect customers from the costs of a single bad experience.”

While encouraging safer driving, he notes, “The reality is, however, that Manitobans file more claims than people in other parts of the country, and this continues to be a worrisome trend.” Nonetheless, Zacharias expects the government insurer’s financial results for 2002 to show improvement. And, although basic Autopac rates will remain the same, 53% of premiums will increase based on individual policy factors such as vehicle make and model, how and where it is driven and driving records, he notes. In two-thirds of these cases, the increase will be less than $50 per year. Motorcyclists will be the hardest hit, with a 15% increase.

For those receiving rate reductions, about 46%, most will decrease between $20 and $80. Trailer and off-road vehicles will see average reductions of 8.7-9.8%. For 1% of drivers, the rate will remain the same. Other changes include a $40 annual discount for vehicle owners who have installed recognized aftermarket anti-theft devices. “Since 1999, Manitoba Public Insurance has not increased auto insurance rates,” says Zacharias. “I can’t think of a single auto insurer in Canada that can say it has reduced auto rates twice and provided vehicle owners with an $81-million dividend during this time.” MPI notes that on average, auto premiums from private insurers increased from 8%-28% last year.