Hey there, time traveller!
This article was published 9/5/2014 (750 days ago), so information in it may no longer be current.
Following a record-setting winter for collision claims, Manitoba Public Insurance is eyeing a significant hike in Autopac rates for 2015.
MPI will seek a general rate increase of about five per cent when it appears before the Public Utilities Board next month, sources told the Free Press.
Huge collision claim costs caused the corporation to sustain another big annual loss for the fiscal year ended Feb. 28. One source said the deficit was even larger than the $48.1-million loss MPI posted the previous year.
Last year, MPI applied for a rate increase of 1.8 per cent when it appeared before the PUB, but the regulator ordered an increase of just half that -- 0.9 per cent -- saying the auto insurer needed to do more to control its costs.
Brian Smiley, a spokesman for MPI, said it was premature to comment on the Crown corporation's PUB submission.
'One of the things we noticed is that the severity of these collisions increased, meaning there were more vehicles written off and greater levels of damage to the vehicles'
"We are still producing our general rate application. It's very preliminary to speculate whether there will be a rate increase," he said Friday.
He also wouldn't comment on the corporation's financial performance this past fiscal year. "We're still in the midst of reviewing our numbers at this stage," he said.
MPI publishes its annual report in mid-June.
Smiley did say MPI received 56,000 collision claims for December, January and February -- about 6,000 more than the same three-month period a year earlier.
"One of the things we noticed is that the severity of these collisions increased, meaning there were more vehicles written off and greater levels of damage to the vehicles," he added.
The rate hike would be only the third in 15 years imposed by MPI.
Progressive Conservative house leader Kelvin Goertzen said Manitoba consumers are already "tapped out" because of increasing hydro rates and higher taxes, including last year's percentage point increase in the PST.
"They (the government) like to brag about how things are low-cost in Manitoba, but that's not the reality of what people are facing with their bills. They're facing increases on everything that the NDP touch," he said.
Andrew Swan, minister responsible for MPI, hinted last month the corporation would seek a rate increase for the coming year because of high claims.
Swan also justified a recent $50,000 MPI consulting contract to its former CEO, Marilyn McLaren, saying her advice would prove "very helpful" in guiding the corporation through the PUB application process.
Goertzen noted the PUB has repeatedly rebuked MPI for its high administration costs.
Instead of preparing Manitobans for a rate hike, Swan should have been giving them some confidence the corporation is doing everything it can to minimize the costs that are under its control, the PC MLA said.
Byron Williams, a lawyer representing the Manitoba branch of the Consumers' Association of Canada, said MPI's staffing and information technology (IT) costs have been a concern to the CAC for some time.
He questioned whether one bad winter for collisions is reason enough for MPI to seek a rate hike for 2015.
"The hard winter might affect the adverse results for the 2013-2014 (fiscal) year," Williams said. "But unless there's something systemic going on, it wouldn't be an explanation for (rate hikes) going forward."
Williams noted MPI has significant reserves in place to smooth out such bad years.
As of Nov. 30, the corporation's rate-stabilization reserve stood at $172 million, according to its third-quarter report. MPI's total retained earnings -- savings -- were close to $390 million.
What's more, before the harsh winter hit, MPI's profits were a handsome $64.5 million through the first nine months of the fiscal year.
The final three months are usually the most expensive for MPI, however, and this past year was no exception.