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Technological changes forcing MPI's hand: CEO [Winnipeg Free Press (Canada)](Winnipeg Free Press (Canada) Via Acquire Media NewsEdge) Technological advances in the auto industry are going to drive up the costs of repairing vehicles and Manitoba Public Insurance needs to prepare for this "new normal," its president and CEO says. In a presentation to the Public Utilities Board of Manitoba Wednesday, Dan Guimond said new automotive design, building parts and technology on a new generation of vehicles will cause vehicle damage costs to rise by at least $30 million a year for the next five years. "That is in addition to the usual inflationary increases," Guimond told a PUB hearing into MPI's request for a 3.4 per cent rate increase for the coming year. He said MPI must deal with the new cost realities. That will take some investments on the part of the corporation, which also wants to build up its reserves to keep rates predictable in the future, the CEO said. Guimond said 240 new vehicle makes and models are expected to be introduced by 2016. Much of the change in the industry is being dictated by new fuel-economy requirements. And then there is the information technology revolution. "Think of your car in the future as having an IP address and being visible on the Internet. And that car, for example, can communicate with other machines," the MPI boss said. The PUB has warned MPI it needs to get its costs under control. Last year, it gave MPI only half the increase it sought -- an average rate hike of 0.9 per cent rather than the 1.8 per cent it asked for. Hearings into MPI's rate application are expected to take weeks and a decision by the PUB on the latest request is anticipated by the end of the year. Raymond Oakes, a lawyer representing the Coalition of Manitoba Motorcycle Groups, said the organization was concerned about "imprudent expenditures" by MPI, including payments to former president and CEO Marilyn McLaren, who did no work for the money. McLaren paid back $27,300. Oakes said motorcycle owners saw a 277 per cent increase in insurance rates over a 10-year period without a corresponding increase in claims. "This historic over-collection has to stop," he said. Irvin Frost, lawyer for the Automotive Recyclers of Manitoba, said MPI is missing out on millions of dollars in savings by eschewing used parts in favour of new ones in repairing vehicles. Over an 11-year period, the use of recycled parts saved MPI $113 million compared with new products, Frost said. But since MPI assumed control of the Recyclers Central Office in December 2012, those savings have largely evaporated, he added. MPI spokesman Brian Smiley said the corporation is working to address those concerns. He disagreed with the notion that the corporation is taking a bath because it is approving the use of new parts repairing vehicles. [email protected] (c) 2014 F.P. Canadian Newspapers Limited Partnership |