Regulator urged to force MPI to lower rates, tackle claims costs

A citizen-led coalition has urged the Public Utilities Board to order Manitoba Public Insurance to lower its rates, which it says would force the Crown corporation to tackle rising claims costs.

The Consumers Coalition described MPI as “risk-averse,” at a hearing this week to discuss its application for a rate increase.

“The last three (general rate applications) have demonstrated that the corporation is running out of ideas and tools to mitigate rate increases and are executing a strategic plan grounded in their legacy business model,” said Katrine Dilay, a lawyer for the Public Interest Law Centre who spoke on behalf of the coalition.

Dilay said the coalition believes MPI is riding out the cost pressures and passing them on to ratepayers rather than preparing for the future.

“Our clients believe that these themes are symptomatic of a corporation that is comfortable and somewhat lethargic in its status of monopoly,” Dilay said.

The coalition said it wants to see the PUB act as a guardrail for MPI since it has no competition.

The group is made up of the Manitoba branch of the Consumers Association of Canada and the Manitoba Seniors Equity Action Coalition.

The board has been reviewing MPI’s application for a 2.38 per cent increase to auto rates since Oct. 13. Numerous groups and individuals have made presentations in favour or against the application.

The Crown insurer has requested the increase to account for the expected increase in claims costs, operating costs and investment income.

The coalition said MPI needs to better maintain affordable insurance rates and quality of service for customers in light of “external transformative forces” such as increasingly complex vehicles with rapidly evolving technology, unpredictable macroeconomic circumstances and severe weather events.

“They note that dealing with transformative forces may require MPI to be a fast follower in taking some measured risks to adapt the business model and to mitigate cost pressures on behalf of ratepayers,” Dilay said.

A series of summer storms in southern Manitoba resulted in nearly 41,000 claims and forced MPI to open satellite claims centres to deal with the high number of calls.

The board was told most claims relate to hail damage. MPI’s reinsurance premiums could double to $46 million next year owing to storm claims.

During the opening day of the hearings, MPI’s chief actuary admitted the insurer didn’t factor in reinsurance costs related to the summer storms because the future reinsurance price tag was too uncertain.

MPI purchased an additional $200 million in reinsurance from July 2026 to April 2027 in response to the floods.

The board estimates MPI requires a rate increase that’s two percentage points higher than its request.

On Thursday, the board questioned why the coalition would suggest a lower rate be imposed since it knows the Crown corporation is facing strong economic headwinds.

Dilay acknowledged the coalition is asking MPI to analyze the sustainability of basic insurance rates.

“Our clients are flagging this as a concern regarding basic (insurance) sustainability. They don’t believe that higher rate increases automatically are the answer. Based on the record of this proceeding, they believe that a rate decrease is appropriate based on the alternative assumptions,” Dilay said.

In January 2025, the board approved a 5.7 per cent rate increase for vehicle insurance — up from the three per cent increase sought by MPI — because it said the insurer’s initial request would result in prices rising later.

The PUB found no evidence the three per cent increase would help MPI dig itself out of the $130-million hole it posted in the 2023-24 fiscal year, which MPI blamed on a massive hailstorm and a 10-week strike, along with major cost overruns on its IT overhaul, Project Nova, which has since been abandoned.

In December, the PUB rejected MPI’s request for a 2.07 per cent rate increase and instead approved a 1.77 per cent increase.

nicole.buffie@winnipegfreepress.mb.ca