More crashes and a weak return on investments -- not to mention two years of rebates and frozen rates -- will see Manitoba Public Insurance ask its rate watchdog for what it calls a "moderate" 1.8 per cent hike in basic-coverage premiums for the 2014-15 insurance year.
The Crown auto insurer signalled the increase, the first one in a decade, on Friday as it filed the paperwork with the Public Utilities Board.
It comes on the heels of a net operating loss of $48.1 million for MPI in the last fiscal year, a $78.4-million worse result than the previous year, according to MPI's just-released 2012 annual report.
If approved by the PUB, a total of 707,090 vehicle owners will see a premium increase of about $50, MPI said.
MPI also said if approved, a total of 342,319 vehicle owners will see a premium decrease or the same rate in 2014. The average passenger-vehicle premium will be $898.
MPI president and CEO Marilyn McLaren blamed two things for the requested increase: MPI doesn't sit on the money it collects from vehicle owners -- it invests it, and returns on those investments were not as high as MPI anticipated. Returns were down 30.1 per cent ($83.2 million) last year from $119 million the year before.
Second, McLaren said collision claims are up over past years.
"Collision claims increase a bit every year because we have more vehicles, but the frequency -- the collisions per 1,000 vehicles -- had ticked down a bit, but now it seems to be coming back to more consistent patterns," she said Friday. "We're going to have to watch that. We had a lot more crashes last year. That's not a good trend."
Last year, overall claims increased by $44.6 million from the year before. Injury claims were down, but damage claims went up.
McLaren said the high number of collisions is partly due to the several snowstorms last winter. MPI also saw $23.7 million in hail claims last year.
"I think the winter was a big part of it, but I think there's more to it than just the winter," she said.
In total, there were 161,466 collision claims last year, up from 149,764 the year before.
Last year, MPI said Manitobans filed an average of 1,153 claims daily. The average cost per claim is $2,600.
Whether MPI gets the rate increase is anyone's guess. That's because the PUB has put MPI through the wringer during the past three years. As a result, rates decreased four per cent in 2011, eight per cent in 2012 and remained stable in 2013. In 2011, the PUB ordered an unprecedented 45 per cent rebate, a refund of about $320 million, to vehicle owners.
MPI was also on track to tell the PUB about its proposed plan -- called the Roadway Infrastructure Investment Partnership program -- to pay for small municipal road repairs and other projects to make roads safer for drivers.
But Attorney General Andrew Swan, the minister responsible for MPI, recently pulled that card out of their deck, saying it would unnecessarily compete against Ottawa's and the province's own infrastructure spending plans.
"We won't be asking the PUB to look at infrastructure at all," McLaren said.
She said the new rate proposal will see many vehicle owners in the north get rate decreases.
MPI says 97.3 per cent (9,897) of passenger vehicles will see rate decreases in all areas north of the 55th parallel, including Thompson, Lynn Lake and Churchill. As well, 85.6 per cent (12,733 vehicles) will receive rate decreases in the near north, including Flin Flon, The Pas and Grand Rapids.
McLaren said MPI has applied for an average rate decrease of 7.6 per cent, or $83, for motorcycles. If approved, the average motorcycle rate will decrease to $1,001 from $1,084.
Mopeds and small-engine scooters -- more are on the road each year -- will see an average rate increase of 15.1 per cent if approved by the PUB. The average rate for these vehicles will increase $43 to $330 per year from $287.