SGI Canada reports most profitable year ever in 2009

SGI Canada has reported a net income of $52.4 million – the most profitable year in the corporation’s history – in part due to a low number of storm losses.
Continued growth in the provincial economy provided premium growth of 8% in Saskatchewan in 2009, the corporation reported.
Out-of-province operations provided $2.8 million to the consolidated net profit in 2009.
In SGI’s other business arm, higher claim costs contributed to the Saskatchewan Auto Fund posting a $40.8-million loss in 2009.
The Auto Fund is a self-sustaining, compulsory auto insurance plan administered by SGI on behalf of the province. The trust fund is for motorists, cannot pay dividends and is not intended to earn profits.
“The Auto Fund again saw growth in the number of vehicles it insures as it continues to serve a growing province,” said June Draude, minister responsible for SGI.
“As expected, this was accompanied by higher claim costs, resulting in the Rate Stabilization Reserve being drawn down to $67.2 million from $102.5 million at the end of 2008.”
Improvements in investment markets put SGI in a stronger financial position in 2009.
A 4.2% rate increase for 2010, effective Nov. 1, 2009, in addition to a modest improvement in investment returns, is expected to bring the Auto Fund back to a break-even point.