Most Manitobans to pay less as Manitoba Public Insurance holds the line on rates in 2006

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June 27, 2005 — For the seventh year in eight, Manitoba Public Insurance filed a rate application that holds the line on Basic Autopac rates � helped in part by a bold new plan to theft-proof up to 90 per cent of Winnipeg vehicles within the next five years.
In its application to the Public Utilities Board (PUB) today, the corporation is requesting no overall increase in revenue for Basic Autopac rates beginning March 1, 2006. If approved by the public regulator, 62 per cent of Manitoba vehicle owners will pay the same or less for Basic Autopac next year, and the average passenger-vehicle premium will fall $4 to $797. Of the 38 per cent of Manitobans who will pay more, most will face increases of less than $20. Because of staggered renewal rates, some vehicle owners will not pay the new rates until February 2007.

�This application builds on nearly a decade of rate stability and a proud history of providing the best insurance value in Canada,� President and Chief Executive Officer Marilyn McLaren said. �This application also recognizes that to be successful in the future, we need to deal with growing problems right now, and one of the worst is auto theft.
�Manitoba�s theft problem poses a risk, not only to public safety, but also to our financial stability. Without concrete action this year, Manitobans would have been paying more for auto insurance because of auto theft.�

Effective immediately, Manitoba Public Insurance will begin providing financial incentives to encourage vehicle owners to participate in a program to theft-proof their vehicles, reduce insurance costs, and protect their community. It is a five-year $40- million strategy to protect more than 130,000 vehicles and drive Winnipeg auto theft rates to levels not seen since 1993.

The cost of the program will be recouped within four years, and the financial plan tabled with the PUB shows the corporation expects to reduce claims costs by $95 million.

�This is the most progressive auto theft initiative ever proposed in Canada,� McLaren said. �We�re doing more to get immobilizers into vehicles than any other organization.

�Every day in this city, there are 30 vehicles stolen and driven through our communities by thieves with little regard for public or personal safety. Today, we are announcing an investment to stop auto theft by making vehicles impossible to steal. Not one vehicle has been started and stolen in eight years anywhere in Canada when it�s been protected by an electronic immobilizer that meets the Canadian standard.�

By working with CAA Manitoba, Manitoba Public Insurance has negotiated a substantially reduced price for immobilizers that meet the Canadian standard. CAA Manitoba has agreed to supply and provide standard installations for $280, and will provide quality assurance by approving qualified installers, conducting site checks, and inspecting workmanship.

�CAA Manitoba is committed to making our communities safer places to live and raise a family,� president Mike Mager said. �We have been calling for this sort of program for two years and we believe it will have an impact.�
Manitoba Public Insurance is proposing a 50/50 partnership with vehicle owners. The corporation will:

  • provide vehicle owners with a $140 financial incentive to purchase an immobilizer that meets the Canadian standard;

  • offer interest-free financing for the remainder for up to five years;

  • provide an annual $40 discount on Basic Autopac premiums.

�This is protection that every Manitoban can afford,� McLaren said. �By financing the $140 over five years, participants will pay $28 each year but receive $40 annually in Autopac discounts. That actually puts $12 in their pocket.�

While open to all vehicle owners in Manitoba, the corporation will specifically target Winnipeggers who own vehicles that are most at risk of theft. Vehicles that make up the corporation�s �top 100� theft list represent 17 per cent of the Winnipeg automobile fleet but account for 68 per cent of theft claims in the city. For some of these vehicles, the odds of being stolen in Winnipeg are as bad as one in eight.

�Auto theft is almost exclusively a Winnipeg problem,� said McLaren. �You�re at risk wherever you live in the city, but you�re at far greater risk if you own one of the vehicles that thieves know they can steal quickly. We will be working with these vehicle owners to encourage them to participate, for their sake as well as for the good of their fellow ratepayers and the community as a whole.�

Funding for the program is being provided through the Rate Stabilization Reserve, which benefited from the corporation�s continued financial strength and lower claims costs in 2004/05. In the corporation�s annual report tabled in the legislature today, Manitoba Public Insurance reported net income of $78.5 million, while investment income of $88.6 million helped reduce the cost of the average premium by $98. In 2004, the corporation returned 87 cents of every revenue dollar to Manitobans in the form of claims benefits.
For more information on the immobilizer incentive program, Manitobans can visit the Manitoba Public Insurance Web site ( http://www.mpi.mb.ca ).