REGINA - Saskatchewan Government Insurance has released its 2022 annual report, with Minister for SGI Don Morgan touting another good year for SGI for the corporation.
“That’s not to say there weren’t challenges like volatility in the investment markets and a massive hail storm with a record number of claims,” Morgan said.
"SGI weathered those challenges. Even in times of uncertainty, SGI has remained on track. Year-after-year, SGI delivers value to the people of Saskatchewan by offering affordable insurance, leading traffic safety initiatives and providing a dividend back to the province.”
Here are five things from Tuesday’s release of the SGI annual report for 2021-22 which you should know about.
Financials strong for SGI Canada
Morgan noted the past fiscal year was good for the Sask. Auto Fund and SGI Canada. SGI Canada is the competitive arm of the corporation selling insurance for home, property, farm or business, or additional insurance for vehicles in five provinces. It makes money in two ways, through selling insurance and investments.
On both those fronts, Morgan reported, SGI Canada had strong financials for 2021-22.
The numbers include:
- $81.8 million net income, with a pre-tax return on equity of 16.4 per cent, which returned a dividend of $57.5 million back to the province;
- $52.1 million underwriting profit with particularly good results in Saskatchewan;
- $32.3 million in investment earnings;
- $1.145 billion in direct premiums written, with 41 per cent written outside Saskatchewan;
- $54.3 million in catastrophe claims (all provinces);
- Overall growth rate of 7.1 per cent.
Saskatchewan Auto Fund strong performance
The Saskatchewan Auto Fund is the compulsory auto insurance plan administered by SGI on behalf of the province, which administers driver training and licensing, vehicle registration and requirements, and traffic safety awareness activities. It is not intended to make a profit but is meant to break even over time while maintaining a Rate Stabilization Reserve.
That reserve remains healthy at $1.1 billion. This is a $39.8 million reduction from last year.
In 2021 the Auto Fund collected over $1 billion in vehicle premiums.
On the expense side, claims made up the biggest expense at $926 million.
Damage from the hail storms to vehicles and trailers was approximately $65 million, but SGI was able to limit its losses due to reinsurance, so the net cost to the Auto Fund was $24.5 million.
SGI also gave back to the province with $89.3 million in rebates to customers, with a $100 rebate for everyone who had a vehicle registered as of March 9, 2022.
That was part of the government efforts to help people manage the increased cost of living. SGI customers already benefit from on average the lowest basic auto insurance rates in Canada and the best comprehensive package of benefits.”
SGI also provided $160.9 million in discounts to customers through the Safe Driver Recognition and Business Recognition programs. Morgan said they were pleased with SGI’s leadership on traffic safety, saying that thanks to that workmates of impaired driving and traffic collisions are trending downwards.
2021 saw the second lowest number of people losing their lives on Saskatchewan roads since the 1950s.
“A lot of the focus in the annual report is on all the numbers dollars and cents customers and claims premiums and profits, but to SGI the most important numbers are the lives saved and the injuries avoided through safer driving,” said Morgan.
Hail storm made impact
SGI reported it was a busy year for SGI’s adjusters with a 30% increase over the companies five-year average claim volume. The massive August 31-Sept. 1 hail storm was largely responsible.
“If you were in the Northwest part of Regina there’s a good chance that the storm directly impacted. Nearly a year later, roofing companies and auto body shops are still catching up from the work from that one.”
It was not the only storm to impact SGI Canada customers, said Morgan. The company saw $54 million in storm related claims during the year, the lions share of which occurred in Saskatchewan.
Diversification a key
The fact that so many storm claims came from Saskatchewan is one reason the company wants to grow in the four other provinces where it does business, said Morgan: Alberta, Manitoba, Ontario and British Columbia.
“Geographic diversification allows the company to offset losses due to catastrophic storms in one region with profits from another. Currently 41 per cent of SGI Canada’s business is written outside Saskatchewan. The company is focused on taking a stable, consistent and sophisticated approach to long-term growth.”
No plans for lower rates
Despite the strong financials, Morgan confirmed there are no plans to lower rates during the current affordability crunch facing Saskatchewan residents.
“We already have the lowest rates in Canada on average. We are over $7300 less per year than Ontario, we’re less than half of what Alberta pays on average, we have the most comprehensive benefits. So our intention at this point in time is not to look at a reduction.”
