Manitoba Public Insurance Wants Insurers to Cut Rates, Go Online for 2020

Manitoba Public Insurance (MPI) has submitted a request to the provincial Public Energy Council to reduce auto insurance by about between 0.6 percent and 0.9 percent next year. The average savings per plan must have something to do with $10 per year if the MPI request is approved. While Manitoba’s car insurance costs are sure to fall, MPI calls for an average 5.1 percent increase for motorcycles.

MPI hasn’t asked for a price cut in 8 years. Inning according to MPI Brian Smiley, “We are one of the minority auto insurance providers in Canada to ask for price reductions.” If approved by the Manitoba Public Energy Council, the lower prices will take effect on March 1, 2020.

Why did MPI ask to lower the price of car insurance in Manitoba?

MPI runs under rules that require it to exceed its Minimum Funding Test targets ensuring that it will have sufficient reserve funds. MPI achieved 100 percent of the previous Minimum Funding Test target this year. The company also reports that they have effectively lowered operating costs and improved claims management.

MPI’s price reduction requests matched its rate increases of 2.2 percent in 2018 and 3.7 percent in 2017. The company said that collision claims increased by about 5 percent in 2017 and 2018, leading to demands for a tariff increase. MPI also reported a loss of $85.2 million in 2017.

In contrast, Ontario auto insurance prices increased by a typical 2.60 percent in Q3 2019. Car insurance in Ontario is provided by private companies, allowing customers the opportunity to browse for the best rates, while Manitobans are required to purchase insurance from a general insurance provider.

Manitoba General Insurance also wants to move more solutions online

Since May, MPI has requested that the Public Energy Council allow it to provide more insurance and driver solutions online. Currently, Manitoba drivers need to visit the broker’s workplace for any driving-related purposes, which consists of changing their address on their driver’s license and renewing their insurance without a plan change.

Manitoba Public Insurance Wants Insurers to Cut Rates, Go Online for 2020

Manitoba has 12 solutions and claims centers and 300 Autopac representatives to offer drivers. The provincial auto insurance brokerage employs about 2,600 people, according to Grant Wainikka, CEO of Manitoba’s Insurance Brokers Organization. Some jobs would definitely be at risk if online solutions were enabled, Wainikka told CBC.

MPI said it had no plans to develop more solution centers or include other “traditional” locations. Would have preferred to include some online solutions to save provincial drivers money and time.

The hearing to decide on MPI’s suggested prices and the future of online driver and insurance solutions in Manitoba is expected to last through November, according to CBC Manitoba.

Over the years, various studies have been conducted to find out whether insurance is more affordable if it is provided by a private insurance provider or a crown company like MPI. Study results dispute because there are so many individual factors that go into insurance costs and estimates.

Canadian drivers living in provinces where public companies can compete, such as Ontario, Alberta and Quebec, can use the online price contrast tool to find their own premium car package.

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