Manitoba Public Insurance (MPI) filed its provisional 2023/24 General Rate Application with the Public Utilities Board (PUB) today, requesting an average rate decrease of 0.9 per cent.
“During this time of widespread volatility in financial markets as well as increasing inflation, we are pleased to be in a position to request a rate decrease for Manitobans as a result of the Corporation’s ongoing prudent fiscal management,” said Mark Giesbrecht, Vice President and Chief Financial Officer, MPI.
This fourth consecutive annual rate decrease request is primarily the result of emerging claims trends and the continued strength of MPI’s rate stabilization reserve. By ensuring sufficient capital is available in the reserve to absorb any unforeseen variations in revenues and claims costs allows Basic compulsory rates to be kept as stable, predictable and affordable as possible for Manitoba drivers.
This reserve has been additionally important in 2022 as MPI has seen claims volumes increase substantially from the beginning of the COVID-19 pandemic as Manitobans returned to more predictable driving patterns through a very difficult winter season as well as continued inflationary pressures.
“Over the course of the last two years, the COVID-19 pandemic resulted in fewer claims, which meant MPI returned nearly $500 million to policyholders in rebates – $312 million in February 2022, $110 million in May 2020 and $69 million in December 2020,” said Giesbrecht.
If approved the rate reduction means private passenger vehicles will see premiums reduced by 0.4 per cent.
However, motorcycle rates will increase by 1.6 per cent, and commercial vehicles will see a 3.7 per-cent increase. Rates for public class vehicles will also rise by 1.7 per cent, while trailers will decrease 8.6 per cent.
In this year’s application, the Corporation is also proposing an expansion to the Driver Safety Rating (DSR) system to allow the safest drivers to receive the greatest benefits, consistent with the five-year plan first brought forward in last year’s application.
One of the ways MPI encourages and rewards safe driving is through the DSR system, which recognizes safe driving behaviour in a fair and simple way. Manitobans’ position on the scale depends on an individual’s driving record. If approved, in 2023/24, the top of the DSR scale will expand from +16 to +17.
As part of this application, MPI will also be requesting to remove the Capital Release Provision, which previously has translated into a discount of five per cent as part of the overall rate.
The capital release was a one-time discount based on the state of the Corporation’s capital reserve fund when rates were being determined. It appeared on customers’ annual statement of accounts and renewal notices and did not affect the customer’s base premium in future years. All of the Corporation’s excess capital has now been returned to Manitobans through the last round of rebates.
MPI’s request at the time of the filing is provisional, based on its fiscal-year end financials and current interest rates. MPI routinely adjusts its overall rate indication after the initial filing as it refines its forecast closer to the start of the hearing.
The PUB hearings will begin in October, concluding later in the month, and the board normally issues its order in December. The proposed rates would be effective April 1, 2023, but because renewal dates are staggered, some vehicle owners won’t pay their new rates until March 31, 2024.
