PUB ruling increases rebate to $63 million, or $100 per vehicle owner
Manitoba, Dec. 6, 2007 — Most Manitoba vehicle owners will pay the same or less for auto insurance next year, and everyone who paid for auto insurance in 2006-07 will receive a 10 per cent rebate, the Public Utilities Board (PUB) ruled recently.
It will be the ninth year in 10 that Manitoba Public Insurance has held the line or reduced basic Autopac rates without lowering customer service or reducing coverage. The rebate will be the fourth provided to vehicle owners in the last six years, bringing the total returned to more than $260 million.
“Today’s ruling confirms the strength of the public auto insurance system,” says Marilyn McLaren, president and chief executive officer of Manitoba Public Insurance. “Our record is unmatched anywhere in Canada, and demonstrates our commitment to providing Manitobans with the rate stability they value so much.
“In one decade, we have reduced auto insurance rates five times, held the line on rates four times, and had just one small rate increase. During this same period, strong investment growth has provided the opportunity to provide four rebates, putting more than $260 million back into people’s pockets.”
In its ruling today, the PUB upheld the rates that Manitoba Public Insurance requested earlier this summer, and boosted the rebate from 7.75 per cent to 10 per cent of Basic Autopac paid in 2006-07. The regulator did not accept proposals by Manitoba Public Insurance to streamline the PUB process at this time.
The ruling means that the average passenger-vehicle premium next year will be $833 – the same as it was last year – and the average vehicle owner will receive a $100 rebate that will be mailed out late next spring.
“Because the first half of this year was strong, the PUB felt the rebate could be larger,” McLaren says. “While vehicle owners in other provinces are worried about the cost of auto insurance next year, Manitobans have price stability and rebates.” The ruling means that 480,283 vehicles will pay the same or less when the new rates take effect on March 1, 2008. Because of staggered renewal dates, some vehicle owners will not pay the new rates until February 2009.
The PUB ruled:
- Overall, 46.6 per cent of all vehicles – 411,116 – will pay less for auto insurance next year.
- Premiums will be cut by more than $20 for 22.9 per cent of vehicles.
- Premiums will be reduced by between $1 and $20 for 23.7 per cent of vehicles.
- Premiums will remain unchanged for 7.8 per cent or 69,167 vehicles.
- Premiums will increase for about 45.5 per cent or 401,223 vehicles.
- Premiums will increase by $20 or more for 27.6 per cent of vehicles.
- Premiums will increase between $1 and $20 for 19 per cent of vehicles.
As always, the rates individuals pay for insurance will be determined by their driving record, the kind of vehicle (make, model and year) they drive, what the vehicle is used for, and where they live. In any given year, an individual’s premium may increase, decrease or remain the same, based on the actual claims experience associated with these rating factors.
The rebate is fueled by the corporation’s investment income. It will be funded through the corporation’s Rate Stabilization Reserve (RSR), which is designed to cushion Autopac rates from unexpected cost fluctuations, and will therefore have no impact on the corporation’s future revenues.
The PUB increased the value of the rebate because Manitoba Public Insurance continues to demonstrate its financial stability. The regulator said lower claims costs and higher investment income have increased the RSR above the $106 million cap confirmed by the PUB today. It also said a number of initiatives that Manitoba Public Insurance has embarked on – such as the Immobilizer Incentive Program and the driver licensing changes – should ensure future financial strength.
“Clearly, this ruling acknowledges the financial strength of Manitoba Public Insurance,” McLaren says. “The PUB increased the rebate to Manitobans, believing it would not put the corporation’s financial strength at risk. It is also recognition that we are doing the right things to stay that way into the future.
“This is a testament to the work we do to provide value to Manitobans every day.”