Rating agency A.M. Best has assigned an initial financial strength rating of A- (excellent) to Saskatchewans public insurer, Saskatchewan Government Insurance Canada (SGI Canada). A rating of B+ (very good) has also been given to SGI Canada Insurance Services Ltd. and The Insurance Company of Prince Edward Island, of which SGI is the majority owner. The rating of Ontario-based Coachman Insurance Company, purchased by SGI last summer, has been upgraded to B+ (very good). The rating is based on SGIs “dominant market position” as the provinces public insurer, writing mandatory auto coverage as well as optional personal and commercial policies. It also reflects the companys “consistently favorable operating performance”, and the support of Saskatchewans Crown Investment Corporation, parent of the government insurer. “SGI Canada has demonstrated consistent profitability, disciplined underwriting and effective claims management,” states an A.M. Best release. “Its strong position in Saskatchewan provides SGI Canada with significant pricing flexibility.” The rating also refers to the economies of scale afforded SGI by “the synergies between the Auto Fund (mandatory auto insurance product) and the competitive activities of the company”. Offsetting the rating are challenges faced by SGI in operating these out-of-province subsidiaries. “While A.M. Best views SGI Canada’s efforts to diversify its business favorably, the subsidiaries are, at present, small and operate in difficult markets,” the release states. “The ratings for the three subsidiaries reflect the disparity that exists between SGI Canada’s strength in its home province and the very difficult market conditions and adverse operating results that challenge the subsidiaries in Ontario and Prince Edward Island.” At the same time, those ratings also take into account the support provided by SGI Canada to its subsidiary operations in terms of capital, investment management, reinsurance buying power, systems and management.