SGI’s 2011 results reflect “challenging year”

SGI Canada reported record net storm claims costs of more than $32 million in 2011, according to the company’s annual report released Apr. 17.

The competitive arm of Saskatchewan General Insurance (SGI), SGI Canada said that a “high number of fire losses” contributed to the claims figure. It was exposed to the Slave Life wildfire of May 2011, which resulted in more than $700 million in insured losses.

All regions of SGI Canada posted a small loss except for Ontario subsidiary Coachman Insurance Company, which reported a profit of $3 million. SGI Canada operates in seven provinces. Overall, the company posted a profit of $441,000 — its lowest return since 2002.

The Saskatchewan Auto Fund, the province’s compulsory auto insurance plan, also experienced “the same challenges as SGI Canada in 2011,” according to the report. It was hit by increased injury and damage claims last year, causing claims costs to rise to $806.9 million from $604.7 million in 2010, an increase of $202.2 million. This resulted in a decrease to the Auto Fund’s rate stabilization reserve of $142.9 million.

“2011 was a challenging year for both sides of the company,” said SGI Minister Tim McMillan. He cited investment volatility and higher claims costs as the main reasons for the deterioration in results.