Challenging year for SGI CANADA and the Saskatchewan Auto Fund
April 17, 2012
Storm claims and volatile investment markets significantly impacted the bottom lines of SGI CANADA and the Saskatchewan Auto Fund in 2011.
SGI released its financial and operational highlights today when the 2011 annual reports for both entities were tabled in the Legislative Assembly.
SGI CANADA is the competitive arm of SGI, selling property and casualty insurance in seven provinces. The Saskatchewan Auto Fund is the self-sustaining, compulsory auto insurance plan administered by SGI on behalf of the province. It is a public fund for motorists, cannot pay dividends and is not intended to earn profits.
SGI CANADA saw a record for net storm claim costs in 2011, totalling $32.4 million. Its out-of-province operations experienced a high number of fire losses. All regions posted a small loss, with the exception of Ontario where the Coachman Insurance Company posted a profit of just over $3 million. The consolidated profit for SGI CANADA and its subsidiaries was $441,000.
“These results demonstrate why it’s sound business for insurance companies like SGI CANADA to spread their risk across different geographic regions,” Minister responsible for SGI Tim McMillan said. “Despite the challenges faced in most regions, including here in Saskatchewan, SGI CANADA was able to stay in the black thanks to its Ontario operation.”
While the Auto Fund faced the same challenges as SGI CANADA in 2011, it benefitted from its Rate Stabilization Reserve (RSR). The RSR acts as a cushion that allows the Auto Fund time for regular and reasonable rate changes.
“Last year the RSR did exactly what it was intended to do,” McMillan said. “While the rate proposal currently before the Saskatchewan Rate Review Panel addresses longer term trends, the RSR was able to absorb the impact of 2011 claim costs and investment volatility.”
The RSR declined by $142.9 million during 2011, but maintained a balance of $134.3 million at the end of the year.
The Auto Fund remained focused on traffic safety in 2011, with the introduction of the Motorcycle Graduated Driver’s Licensing Program and the province-wide expansion of the Report Impaired Drivers program. SGI continued to reward safe drivers. Customers earned $104.5 million in discounts under the Safe Driver Recognition and Business Recognition programs in 2011, an increase from $97.6 million in 2010.
About SGI CANADA
SGI CANADA has been in business for more than 60 years, selling property and casualty insurance. It operates as SGI CANADA in Saskatchewan; SGI CANADA Insurance Services Limited in Alberta and Manitoba; and Coachman Insurance Company in Ontario. Saskatchewan Government Insurance (SGI) is the province's self-sustaining auto insurance fund.