External review finds organizational issues caused MPI’s instability
External review finds organizational issues caused MPI’s instability | Insurance Business Canada
Insurance News
External review finds organizational issues caused MPI’s instability
The public insurer ‘lacked the direction of a strategic plan’
Insurance News
By
Abigail Adriatico
An external review of Manitoba Public Insurance (MPI) has revealed that frequent leadership changes, as well as its unclear goals, have led to the instability at the Crown corporation.
The report, conducted by Ernst and Young (EY), found that the MPI had a top-heavy structure, with 30% of managerial roles having three or fewer people directly reporting to them. It urged the Crown-owned auto insurer to consider addressing issues as it crafts a new corporate strategy.
Reviewers said the insurer’s frequent organizational changes have hindered the trajectory of its long-term vision and caused confusion in its leadership.
Carmen Nedohin, the MPI’s board chair, said that the review by EY serves as a blueprint for the organization to move forward.
“The message that I got from the report was while the organization is a very good organization… it really lacked the direction of a strategic plan and obtainable goals and key performance indicators,” she said in a news conference last week.
MPI’s organizational woes
The external review was launched by Manitoba’s former Progressive Conservative (PC) government in April 2023 to examine the Crown insurer’s expenditure management, forecasting reporting, and organizational structure.
According to the report, MPI executives found a previous five-year strategy revolving around the modernization of its systems to be “misaligned and overly ambitious,” and that leaders responsible for business initiatives were not always clear.
These, along with 20 organizational changes over two years, have contributed to MPI’s instability.
A technology overhaul called Project Nova was also found to have overshot cost projections. Its budget reached three times the original figure, amounting to around $290 million.
Some of the expenses with the project were also linked to a lack of clear responsibilities among leaders, according to the external review.
NDP Justice Minister Matt Wiebe said the review suggests the mismanagement of the Progressive Conservative (PC) government, which greatly impacted the insurer.
The report further found that there was a “leadership crisis” in the organization. Twenty leaders were found not to have direct reports or staff, while 84 out of 349 leadership positions had less than four.
“MPI must demonstrate progress in the next six months underpinned by robust financial and operational data to regain the confidence of MPI’s stakeholders,” the review said. “It is vital that MPI ensures that it sets a clear long-term corporate strategy, defines its goals and assigns accountability to guide the way forward.”
The board is poised to announce MPI’s new CEO next week. The new CEO will be tasked with drafting a new strategic plan within 30 days.
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