Canadian Underwriter

Flood coverage applied to more than three in four eligible SGI home insurance policies

July 21, 2017   by Canadian Underwriter

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Saskatchewan Government Insurance reported Thursday a consolidated loss ratio of 60.4% for the year ending March 31, 2017, while 77% of all eligible homeowner policies have optional water protection coverage introduced last year.

SGI Canada – the trade name of Regina-based crown corporation SGI – introduced a new optional water protection coverage for home customers as of October, 2016, wrote Andrew Cartmell, SGI’s chief executive officer, in its annual report released July 20.

“Flood insurance is still a fairly new product in the Canadian insurance market, but when offered to SGI Canada homeowners, the coverage was applied to 77% of eligible polies,” Cartmell wrote. “The efforts of SGI Canada’s broker partners ensured this important coverage will help preserve people’s homes and financial security in the event of a devastating flood loss.”

Coverage for losses from overland flood were generally not available on Canadian home insurance policies until 2015, the year that The Co-operators and Aviva announced residential flood coverage. Other home insurers have since followed suit with their own flood coverage for homeowners.

The availability of overland flood coverage has “served to add an additional layer of complexity,” wrote MSA Research Inc. CEO Joel Baker in an article in MSA’s Quarterly Outlook Report for Q1 2017, released in June.

In addition to operating the Auto Fund, which has a monopoly on compulsory auto insurance in Saskatchewan, SGI also owns 100% of SGI Canada Insurance Services Ltd. and writes property and casualty insurance – in Saskatchewan, British Columbia, Alberta, Manitoba and Ontario – in competition with private insurers. Its Ontario subsidiary is Coachman Insurance Company.



In 2015, the province directed SGI to change its fiscal year end from Dec. 31, to March 31. SGI reported underwriting income of $6.8 million for the year ending March 31, 2017, compared to underwriting income of $42.4 million for the 15 months ending March 31, 2016.

SGI also provided some figures for the 12 months ending March 31, 2016. SGI reported net premiums earned of $656.4 million in the most recent fiscal year, up $57.8 million from $598.8 million during the 12 months ending March 31, 2016.

Net claims incurred were $397 million during the 2016-17 fiscal year, up $54 million from $343 million in the year ending March 31, 2016.

The consolidated loss ratio deteriorated 3.2 points, from 57.2% in the year ending March 31, 2016 to 60.4% during the year ending March 31, 2017.

“Storm claim losses totaled $51.6 million in 2016-17, with a substantial number of claims streaming in following powerful weather events,” Cartmell wrote in the annual report. “In Saskatchewan, these included a pounding hailstorm that hit Moose Jaw and heavy rains that caused flash flooding in Estevan; and in Alberta, two significant summer storms – all in July of 2016.”

Of $738.86 million in gross premiums written in the 2016-17 fiscal year, SGI reported $500.2 million was from Saskatchewan, $132.6 million was from Alberta, $74.3 million was from Ontario and $31.8 million was from Manitoba and B.C.

“The corporation’s split of business in 2017 was 61.4% property and 38.6% auto, consistent with 2016, SGI added.

In B.C., the loss ratio increased from 41.7% in the 2015-16 fiscal year to 88.6% in the most recent fiscal year “due primarily to large losses in personal lines.”



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