July 15, 2004 by Canadian Underwriter
Saskatchewan’s public insurer, Saskatchewan Government Insurance (SGI), is asking for a 10% increase on its auto rates, effective January 1, 2005.
In a submission to the province’s Rate Review Panel, SGI says the increase is need to keep pace with claims.”SGI is requesting the increase primarily because we’re not taking in enough premiums to cover the cost of claims,” says new president Jon Schubert. “This would be the first rate increase in Saskatchewan since 2000. Even with an increase in 2005, SGI’s customers will still be paying the lowest auto insurance premiums in the country.”
SGI says the rate increases will also help it to double discounts to a maximum 20% for the best drivers under its “Safe Driver Recognition” program, and up to 10% for the “Business Recognition” program. Schubert says policyholders want to see better drivers rewarded, and with the safe driver discounts will reach almost $60 million in 2005, versus $34.5 million in 2004.
These discounts mean about 60% of drivers will actually see premiums drop next year, and 40% will see premiums rise. With 6% of the premium increase going to new discounts, SGI will increase its revenue by 4%.