MPI worries about claims growth

While provincial insurer Manitoba Public Insurance (MPI) produced solid financial return for third-quarter 2002, it has expressed doubts about rising claims costs and the impact on the company’s future bottom-line.

While net income for the nine month period to end November of last year rose to $23 million compared with the $11 million reported 12 months before, claims costs clocked in significantly higher primarily on the back of collision-related claims which climbed by more than 8%. Injury claims rose by more than 6% year-on-year for the same period. For the third quarter, the insurer’s revenue was up to more than $160 million from just under $146 million for the same period a year earlier. However, claims costs were up to more than $155 million versus the $141 million disclosed the year prior.

The company’s revenue for the first nine months of the 2002 financial year came in at $477 million against the $435 million made for the same period a year prior. “Higher revenues in all of 2002 have given us a solid base as we enter the winter months, when claims costs are traditionally highest,” says Barry Galenzoski, vice president of corporate finance for MPI. “Already in the last 90 days, total claims costs have risen 10% – a development that deserves some attention.”