SGI applies for first rate increase in nine years

The Saskatchewan Auto Fund is applying to the Saskatchewan Rate Review Panel (SRRP) for a rate increase and rate rebalancing — the first increase since 2000.
If approved, customers would see an average increase of 4.2%, effective Nov. 1, 2009.
The proposal would result in an increase of less than $5 a month, or an average of $55 annually, for 553,000 (55%) of Saskatchewan vehicle owners, SGI says.
Thirty-two per cent of vehicle owners would see no rate change and 126,000 (or 13%) would see a rate decrease of $21 annually.
SGI says it offers the lowest average insurance rates for private vehicles in Canada based on a comparison of the 34 most frequently registered vehicles in Saskatchewan.
“With more new vehicles on the road, the cost to repair vehicles is increasing,” says Ken Cheveldayoff, Crown Corporations minister. “And the cost of auto injury claims is growing due to increased income replacement benefits, [since] Saskatchewan’s wages are increasing.”
In addition, Cheveldayoff says, the Auto Fund’s finances are affected by changes to its investment income.
“Investments form a significant portion of an insurance company’s asset base and helps keep auto premiums low,” Cheveldayoff said. “The significant downturn in global investment markets in the last half of 2008 resulted in a significant decrease in investment earnings for the entire insurance industry.”