Manitoba Public Insurance posts $130M loss, seeks 3% rate hike for 2025-26
CBC
Manitoba Public Insurance is requesting permission for a three-per-cent rate hike for 2025-26 fiscal year after the Crown corporation reported a $130-million loss it blamed on ballooning expenses as well as a hailstorm last summer.
The provincial public insurer said Friday it has asked the Public Utilities Board to approve a three-per-cent hike that would be phased in as customers renew their insurance between April 1, 2025, and March 31, 2026.
MPI said the rate hike is required in order to bolster its revenues following an operating loss of $130 million for the 2023-24 fiscal year.
The corporation said the main reason for the loss is a $334-million increase in insurance expenses, from $1.38 billion in 2022-23 to $1.72 billion during the most recent year.
MPI said a hailstorm in August 2023 in and around Winnipeg played a large role in the rise in expenses, calling the barrage of hail "the largest natural catastrophic event in MPI's history."
MPI said more than 15,000 hail-related claims were filed last year, resulting in an approximately $50 million impact on its net income.
Katrine Dilay, a lawyer with the Public Interest Law Centre, said MPI's requested rate hike is akin to a four-per-cent hike when you factor in a $10 increase in the base driver premium the Crown corporation is also requesting in its rate application to the Public Utilities Board.
She nonetheless said she is curious why the rate hike request is only three per cent plus the $10 surcharge, as she noted MPI's actuaries requested a six-per-cent rate hike for 2025-26 in order to recover costs.
"That's not how insurance works," Dilay said in an interview.
"MPI needs to recover its costs at the end of the day," she added. "How will MPI make up that difference?"
Dilay said she is "concerned about affordability, but not at the risk of creating significant risk for higher rate increases for future customers."
She also expressed concerns about the continuing cost of Project Nova, MPI's troubled digital transformation, and a proposal to hire 374 more staff, which she described as "a big number" of new people.
The Public Utilities Board is expected to consider MPI's rate application at a hearing in October and make a decision in December. The board often orders lower-than-requested rate hikes.
MPI CEO Satvir Jatana said in March she expected the corporation to issue another rebate cheque this year. That is no longer on the table, communications manager Kristy Rydz said in a statement.
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