MPI reports net income of $14.2 million for first quarter

Despite the hit from recent severe weather, a return to normal levels of bodily injury claims contributed to Manitoba Public Insurance (MPI) posting net income of $14.2 million for the three months ended May 31, 2014.

The corporation faced significant increased frequency and severity this past winter that continued into March and April, resulting in an increase of $9.6 million – or 8.1% – in physical damage claims, notes a statement from MPI. The increase, however, was offset by a drop in bodily injury claims from last year of $35.7 million.

“Bodily injury claims have appeared to return to normal levels from last year’s abnormally high levels,” Heather Reichert, vice president of finance and chief financial officer for MPI, notes in the statement.

“As a result, total claims costs for the first quarter of the fiscal year decreased $26.6 million compared to last year,” Richert reports.

The corporation, however, remains cautious given the impact of claims severity as a result of the harsh driving conditions most Manitobans experienced over the past winter, the ongoing volatility of interest rates and the nearly depleted Rate Stabilization Reserve (RSR.

In June, MPI announced that the underwriting loss was up 77% in the wake of an “arduous” winter leading to more auto collisions. At the time, the insurer reported an underwriting loss of $219.97 million in 2013-2014, up from $124.27 million in the previous year.

As well, the public insurer noted net claims in 2013-2014 were $861.1 million, up 15% from $746.5 million in 2012-2013; direct claims incurred were $866 million in the fiscal year ending February 28, 2014; and total claims cost was $1.009 billion in 2013-2014, up 13% from $889.2 million in 2012-2013.

Noting that MPI is committed “to keeping rates stable for all Manitobans over the long term,” Reichert suggests that motorists need to play their part by “driving to the conditions of the road and avoid collisions during the remaining three quarters of the fiscal year.”