MPI unveils recovery plan to regulator after years of financial strife

Manitoba Public Insurance is preparing to reorganize its management structure to improve its “internal alignment” in response to a government-ordered review that found its operations were top-heavy and highly dysfunctional.

A member of the executive committee will be assigned the file in an attempt to address the Crown insurer’s long-term goals under five key areas, CEO Satvir Jatana told the Public Utilities Board at a hearing Tuesday.

“This is a plan rooted in responsibility,” Jatana said. “This is a plan that prioritizes people, aiming to restore and reinforce trust, both internally and externally.”

Jatana presented the strategic plan to the regulator in relation to MPI’s proposed three per cent rate hike and $10 increase to base driver premiums for the 2025-26 year.

The insurer has undergone a difficult few years that culminated in the former Tory government ordering an external review of its organizational structure in April 2023, following revelations the cost of its information technology overhaul, known as Project Nova, had tripled to $290 million. Its former CEO, Eric Herbelin, was let go one month later.

In the fall of that year, workers went on strike in response to wage freezes, at a time when management had received pay increases. The walkout was resolved on Oct. 31, weeks after the NDP was sworn in to government. The NDP appointed a new board chairperson and replaced all but one of the Crown corporation’s directors as one of its first acts in government.

It released the results of the Ernst & Young investigation in January of this year. The review found MPI had an inflated and inefficient management structure; some managers had no defined role and in some cases, no staff reported to them. The review found significant turnover had created instability and there was a lack of solid strategic, financial and human resources planning.

On Tuesday, Jatana outlined MPI’s plan to get back on track, under categories labelled “optimizing value for customers,” “building engagement and pride,” “deliver on our promises,” “strengthen our financial practices” and “be ready for what’s ahead.”

The goal is to build up customer service, employee well-being, corporation accountability and sustainability, performance targets and internal organization.

Amanada Hildahl, the director of strategy and customer experience, told the board the plan focuses on coming back from a “particularly challenging period that we can all acknowledge.”

“It’s about recovery and resilience,” she said.

The external review had found the corporation had too many managers for an organization of its size and complexity — 349 employees held managerial titles.

“I am personally committed to keeping this plan live by ensuring it evolves with and for the needs of the corporation and for Manitobans, meaning that it is not intended to be once and done.”– Manitoba Public Insurance CEO Satvir Jatana

In April, MPI cut 32 management positions following recommendations outlined by the audit. The Crown corporation “parted ways” with a number of leaders, maintained vacancies and rightsized roles during the cuts, a spokesperson said at the time.

The new strategic plan, which will be implemented next year, subject to the completion of its IT overhaul, will be a living document and subject to change, Jatana said.

“I am personally committed to keeping this plan live by ensuring it evolves with and for the needs of the corporation and for Manitobans, meaning that it is not intended to be once and done,” she said.

At the hearing, she defended MPI’s request for a three per cent rate hike in the face of those who say it isn’t high enough.

In MPI’s general rate application, Cara Low, a fellow of the Canadian Institute of Actuaries, said after reviewing the data, “the indicated rate change, based on a zero per cent profit provision, was calculated to be 6.15 per cent in accordance with (accepted actuarial practice) in Canada.”

An MPI board member had claimed three per cent wouldn’t cover MPI costs and maintain adequate rates during the rating period and customers may have to pay more in future to make up the difference.

Jatana said she remains confident a three per cent increase is on the mark.

“That is definitely a hypothetical scenario… there’s many things that could happen in the future. I believe that, you know, we made the right decision, and I’m going to continue to state that I remain confident with (it),” Jatana said.

The Crown corporation said the proposed rate hike is necessary to address increased operational and claims costs, which resulted in a $130-million net loss in the 2023-24 fiscal year.

The Aug. 24, 2023 hailstorm prompted more than 15,000 claims that resulted in a $50-million hit to MPI’s net income. The Crown corporation was also plagued by backlogs related to the 10-week strike.

If approved, the rates would be in effect as of April 1, 2025.

nicole.buffie@freepress.mb.ca

Nicole Buffie
Multimedia producer

Nicole Buffie is a multimedia producer who reports for the Free Press city desk. Born and bred in Winnipeg, Nicole graduated from Red River College’s Creative Communications program in 2020 and worked as a reporter throughout Manitoba before joining the Free Press newsroom in 2023. Read more about Nicole.

Every piece of reporting Nicole produces is reviewed by an editing team before it is posted online or published in print — part of the Free Press‘s tradition, since 1872, of producing reliable independent journalism. Read more about Free Press’s history and mandate, and learn how our newsroom operates.

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