Canadian Underwriter
News

Record underwriting profits for SGI CANADA, reduced Saskatchewan rate stabilization reserve


April 16, 2013   by Canadian Underwriter


Print this page Share

The competitive arm of Saskatchewan Government Insurance (SGI) witnessed record underwriting profits in 2012, although a current rate increase proposal seeks to replenish the Saskatchewan Auto Fund’s rate stabilization reserve (RSR), which took a hit as a result of poor winter driving conditions.

Profits

SGI released its financial and operational highlights yesterday when the 2012 annual reports for SGI CANADA (SGI’s competitive arm that sells property and casualty insurance in seven provinces) and the Saskatchewan Auto Fund (the self-sustaining, compulsory auto insurance plan administered by SGI on behalf of the province of Saskatchewan) were tabled in provincial legislative assembly.

At $55.6 million, the highest underwriting results in SGI CANADA’s history combined with improved investment income to produce a record dividend of $52 million to its shareholder – the province, notes an SGI statement.

SGI CANADA posted a consolidated profit of $82.1 million in 2012, with a record $18.7 million coming from operations outside Saskatchewan, the statement notes. The corporation and its subsidiaries were profitable in every jurisdiction last year.

“This is a real accomplishment for SGI CANADA, especially since the company achieved this success while operating in a highly competitive marketplace,” comments Donna Harpauer, Saskatchewan’s minister responsible for SGI.

However, the Saskatchewan Auto Fund’s RSR had to be drawn down by $11.5 million as a result of poor winter driving conditions that led to high claim costs in 2012 Q4. The reduction left the RSR with a balance of $127.1 million at year-end, putting the fund below its target range for capital adequacy.

In February, SGI submitted a proposal to the Saskatchewan Rate Review Panel seeking a 1.03% increase on auto fund rates and a 1.23% surcharge on rates (meant to help replenish the RSR), which would be applied for three years.

“The Auto Fund operates on a break-even basis and these changes are required to cover claim costs in the next rating year,” SGI president and CEO Andrew Cartmell said at the time.

In addition, SGI reported yesterday that it provided $108.8 million in discounts through the Safe Driver Recognition and Business Recognition programs to customers with safe driving records in 2012.


Print this page Share

Have your say:

Your email address will not be published. Required fields are marked *

*