'Good chance' MPI will issue another rebate, despite lingering questions with over-budget tech overhaul

Despite the high costs associated with its technology overhaul project and clearing the backlog after a lengthy strike, the head of Manitoba Public Insurance says "there's a good chance" ratepayers will receive another rebate cheque in the coming months.

Satvir Jatana, who was announced as the provincial Crown corporation's new CEO in February, said MPI's reserves for the current fiscal year have reached the threshold at which it can think about issuing rebates.

The fiscal year isn't complete yet, and MPI's books must still be audited, but "if everything goes as is where the reserves are, there's a good chance that our board" will approve another round of rebate cheques, Jatana told reporters Tuesday, following a legislative committee hearing.

"All indications are pointed in the right direction," she added.

MPI got into the habit of issuing rebates during the COVID-19 pandemic.

The corporation issued three rounds of cheques, totalling around $491 million, because its costs dropped with fewer vehicles on the road, and thus, fewer claims to pay out.

At the end of the third quarter for the 2023-24 fiscal year, Jatana said MPI's reserves have so far exceeded the target at which a rebate can be considered.

That threshold is based on the corporation's minimum capital test ratio — a standardized measure for insurers that compares capital available over the minimum capital required.

Currently, the corporation's MCT ratio is 143 per cent, a spokesperson said, surpassing the rebate threshold of 120 per cent.

Dogged by problems

The potential financial returns could be seen as encouraging news for a public auto insurer dogged in the last year by heavy criticism. An external review recently found the corporation to be top-heavy, dealing with instability from constant leadership changes and goals that are unclear and overly ambitious.

MPI was also embroiled in a 10-week strike late last year that left thousands of road tests to be rescheduled and thousands of claims delayed. 

One of the most high-profile blights on the Crown corporation's record has been its technology overhaul, dubbed Project Nova, which significantly overshot cost projections. The budget reached about $290 million — almost three times the original figure.

Jatana told the committee Project Nova, a replacement of MPI's outdated information technology systems, cannot be abandoned. 

"We do need to rethink, re-plan and we do need to deliver Nova — not changing technology is not the answer for MPI."

Once completed, Project Nova would let customers and brokers complete more auto insurance business online. MPI is expected to publicly release its plan for Project Nova this spring.

MPI is evaluating whether it should enlist more outside help to complete the project, Jatana said, explaining the Crown corporation is sometimes constrained for various reasons such as governments requiring cost-control measures. 

She said MPI is taking lessons from the first phase of Project Nova, which involved shifting trucking and commercial insurance customers to an online-based solution. The new system has dealt with some operational problems, Jatana said.

The second phase of Project Nova, slated for release in summer 2024, will move online the vehicle registration system for trucks and buses operating between Manitoba and other jurisdictions, she said.

Timeline for Project Nova uncertain

As for the rest of the overhaul, which would impact the rest of MPI's ratepayers, Jatana said the corporation would provide new details in the coming months. At one point, it was estimated the entire project would be complete by the 2024-25 fiscal year, but that's no longer the case. 

Jatana said little work was completed on Project Nova in the last year as MPI endured leadership changes and a strike that hampered its ability to help customers. 

Over the last year, MPI dismissed its CEO, after a tenure that included cost overruns and a steep rise in projected staffing levels, and its chief information technology officer quit after he was told he either had to move from Toronto to Winnipeg, or resign. 

The NDP government brought in a new board shortly after it won last October's election.

Matt Wiebe, the minister responsible for Manitoba Public Insurance, blamed the previous PC government for the lack of progress on Project Nova. 

"The frustration there is that the instability that has been caused by the previous government and their mishandling of MPI has had an impact on the rollout of Project Nova. Ultimately, what that means is that customers haven't seen a real tangible result from the work that's been done on Nova," Wiebe said.

Doyle Piwniuk, the Progressive Conservative critic for MPI, said the Tories realized a technology overhaul was needed and now it is up to the NDP to move forward. He was one of three Tories who directed questions to MPI brass at the committee hearing.

"It is important that this technology gets advanced and make sure that the the system is up and going so that Manitobans can have the convenience of getting their insurance when they need it and also making sure that it's affordable for Manitobans."

Regarding the strike, Jatana said she was hopeful the corporation would clear its backlog this spring.

As of February, she said MPI eliminated 50 per cent of the backlog on adjustments, 66 per cent on estimates and 87 per cent of the total lost claims.

To help with this work, the corporation spent $1.5 million on overtime for front-line staff and hired around 20 more adjusters.