New MPI boss blames strike, leadership turmoil as long-delayed tech upgrade pushed back again

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This article was published 05/03/2024 (552 days ago), so information in it may no longer be current.

A major, multimillion-dollar technology overhaul at Manitoba Public Insurance is facing further delay as the auto insurer continues to grapple with significant backlogs from last year’s 10-week employee strike.

Newly appointed MPI chief executive officer Satvir Jatana said the Crown corporation’s $290-million Project Nova is no longer set for completion in the 2025-26 fiscal year after little to no progress was made on it for nearly 12 months.

“Nova is the largest and most complex business transformation in MPI’s history. Unfortunately, there have been significant challenges thus far in our journey,” Jatana told a legislative committee meeting Tuesday.

“We have further faced challenges in staying on track with Nova delivery timelines due to changes in leadership at the senior leadership level last year and the ongoing impact of the strike.”

Jatana took questions from legislators for the first time after stepping into the role on Feb. 6. The former MPI vice-president replaced Eric Herbelin, who was fired by the board of directors in May following a review of his workplace conduct.

The corporation is forging ahead with Nova, which will eventually allow customers to renew driver’s licences, register vehicles and make claims online.

However, bugs in its online platform for special risk extension products, which launched last January, and other delays have caused MPI to “rethink and re-plan” how it moves forward with future phases, Jatana said.

“There has not been much work in the last 12 months on Nova,” she said, attributing the lack of progress to turmoil at the top of the corporation, including Herbelin’s firing, the resignation of former chief information technology officer Siddhartha Parti and the strike.

Despite the delays, the budget for Nova has not changed, Jatana said.

The price tag ballooned from the $107 million presented in the 2019 business case to $290 million following a re-evaluation and extended rollout of the program.

In its 2024-25 rate decision, the Public Utilities Board said Nova remains at high risk of budget overruns and delays and could far exceed the estimated cost.

MPI will share its plan for Nova in the spring when it also releases information about its updated corporate strategy work, Jatana said.

How MPI plans to deliver basic customer services online needs a second look and at this point a timeline to complete Project Nova is uncertain, she explained.

“That is the largest implementation portion of the overall project but also where there could be larger exposure if it’s not implemented properly,” she said.

Matt Wiebe, the minister responsible for MPI, said it is incumbent on the public auto-insurer to bring forward a plan that meets the PUB’s expectations and demonstrates ratepayers are getting good value out of the overhaul.

“Customers haven’t seen a real tangible result from the work that’s been done on Nova and that’s why it’s important to pause, to reset, to think about how we can offer a good product to customers,” he said.

Progressive Conservative MLA Doyle Piwniuk said it’s critical for the NDP government to support MPI so Project Nova can be completed.

“Manitobans need that convenience, they need that technology, and MPI can move forward to be competitive in the market,” the Tory critic for MPI said.

Meanwhile, MPI is making progress on the pileup of appointments, claims and estimates left in the wake of the strike by Manitoba Government and General Employees’ Union members that ended Nov. 1 with a new contract that included general wage increase of 13 per cent over four years.

Jatana said the labour disruption was “one of the worst situations MPI could have been in.”

Throughout the strike, MPI was able to process just three per cent of the claims it received, she said.

About 29 per cent of customers who needed estimates were helped through repair-shop partners and just 10 per cent of total-loss claims were processed, Jatana said. In total, more than 32,000 appointments were backlogged.

“If everything goes as is, where the reserves are, then there’s a good chance that our board will approve (a rebate). All indications are pointed in the right direction.”– MPI chief executive officer Satvir Jatana

At the end of February, MPI staff had reduced that number substantially, with 50 per cent of the adjustment backlog and 66 per cent of the estimate backlog cleared.

“We are making significant progress,” Jatana said. “I feel that we can accomplish this by spring. That would be our goal.”

On Tuesday, MPI also published quarterly reports for the fiscal year after missing statutory financial reporting deadlines.

MPI posted a $7-million net loss from operations for the nine months ending Dec. 31, 2023. The main drivers of the loss were increased claims costs and lower-than-expected profits on extension and special-risk extension products.

Settling the new collective bargaining agreement with the MGEU also cost MPI $10 million in the third quarter, including retroactive payments, signing bonuses and recognition pay.

Despite the third quarter hit, Jatana said MPI could be in a position to issue rebates to policyholders later this year.

MPI’s stabilization reserves currently exceed mandated levels but a decision to return cash to customers won’t be made until after the fiscal year wraps up and financial statements are audited in early June, the CEO said.

“If everything goes as is, where the reserves are, then there’s a good chance that our board will approve (a rebate),” she said. “All indications are pointed in the right direction.”

MPI will submit its next general rate application to the PUB in June.

danielle.dasilva@freepress.mb.ca