Manitoba Public Insurance recorded a profit of $38.9 million in the first three months of its fiscal year, after boosting car insurance rates by an average of 3.7 per cent.
In a news release Friday, MPI said the first-quarter profit was $31.4 million higher than for the same period last year.
Every Manitoban can directly affect how much they pay for auto insurance through their daily driving behaviour-- Peter Yien, chief financial officer, Manitoba Public Insurance
MPI ultimately lost $85.2 million over the course of the last fiscal year and, last fall, sought a 4.3 per cent interest-rate hike, its highest since the mid-1990s, but the Public Utilities Board of Manitoba granted the Crown corporation the 3.7 per cent instead.
In June, MPI announced it had applied to the PUB for a further 2.7 per cent increase in basic insurance premiums for next year.
A decision on that request is not expected until December.
MPI usually posts better results in its first two financial quarters than its last two, when winter conditions increase claims volume. The corporation’s fiscal year begins March 1.
"We are pleased with these operational results, although we know that rising claims and their costs are dependent on seasonal and specific weather factors," said Peter Yien, MPI chief financial officer.
Yien noted, however, "Every Manitoban can directly affect how much they pay for auto insurance through their daily driving behaviour."
Largely due to the rate hike, MPI had its revenues jump by nearly $17 million in the first three months this year compared with the same period last year.
The number of insured vehicles also rose, boosting revenues.
The total cost of claims during the quarter increased by $33.7 million — including a $34.5-million leap in bodily injury claims. Claims for physical damage to vehicles dropped by $5.5 million compared with the same period last year.
MPI said it asked for premium rates to be boosted again next year due to increasing claims costs, costly vehicle design changes and the "ongoing volatility in financial markets."
In addition to the 2.7 per cent overall rate increase next year, MPI is proposing changes that would result in high-risk drivers paying premiums that better reflect their claims costs.
Critics, reacting to MPI’s premium-increase requests, have repeatedly accused the public insurer of failing to manage its investments wisely. They also claim MPI has failed to properly control costs, particularly in the area of information technology.