Released on July 20, 2017
Robust investment earnings helped Saskatchewan Government Insurance (SGI) achieve strong results in 2016-17. SGI released its financial and operational highlights today, as the 2016-17 annual reports for both the Saskatchewan Auto Fund and SGI CANADA were tabled.The Saskatchewan Auto Fund is the self-sustaining, compulsory auto insurance plan administered by SGI on behalf of the province. It is a public fund for motorists, cannot pay dividends and is not intended to earn profits. The Auto Fund had a strong 2016-17, thanks in large part to solid earnings ($173.8 million) from a well-managed investment portfolio. Despite an increase of $63 million in claims over the previous fiscal year, investments meant the Auto Fund was able to absorb increased claim costs without raising insurance rates for customers.
“The Auto Fund’s sound financial position allowed the company to focus on offering affordable insurance and comprehensive injury benefits, while also promoting traffic safety,” Minister Responsible for SGI Joe Hargrave said. “In 2016-17, SGI guided stronger legislation to combat impaired and distracted driving, bolstered awareness, and also invested in traffic safety measures like additional automated licence plate readers to help police catch high-risk drivers.”
Auto Fund highlights for 2016-17 include:
- $188.7 million added to the Rate Stabilization Reserve (RSR), which acts as a cushion that protects customers from severe rate increases due to a sudden influx of claims from summer storms or downturns in investment markets. The RSR balance was $565.9 million as of March 31, 2017.
- $933.5 million in gross premium written
- $134.7 million in discounts to customers through SGI’s Safe Driver Recognition and Business Recognition programs
- $173.8 million in investment earnings, resulting from strong equity returns
- $798.0 million in claims, including net $26.7 million in storm claims
- $53.5 million underwriting loss, compared to planned underwriting loss of $56.1 million
- Tougher traffic safety legislation was introduced January 1, 2017, including stronger ignition interlock consequences for impaired drivers, an increased zero-tolerance age (raised to 21 and under from under 19) for drivers who use alcohol or drugs, and three-day vehicle seizures for experienced drivers with a blood alcohol content between .04 and .08 on a first offence. Newly clarified legislation also specifies that drivers cannot hold, view, use or manipulate a handheld cellphone while operating a motor vehicle. Impaired driving and distracted driving are the two leading causes of traffic fatalities in Saskatchewan.
- SGI also bolstered traffic safety awareness efforts through awareness campaigns and other channels.
It was also a strong year for SGI CANADA, the competitive side of SGI’s operations, selling property and casualty insurance in Saskatchewan, Alberta, Manitoba, Ontario and British Columbia. SGI CANADA’s financial results for 2016-17 show solid investment earnings and strong growth in premiums written.
“In challenging economic times, SGI CANADA continues to serve the people of our province, while growing its business in Alberta, Manitoba, Ontario and British Columbia,” Hargrave said. “Sound financial management, built on the foundation of strong broker partnerships, meant SGI CANADA showed a solid profit last year, allowing it to pay a healthy dividend of $43.0 million to the people of Saskatchewan.”
SGI CANADA highlights for 2016-17 include:
- $65.2 million profit
- 10.7 per cent premium growth (industry approximately three per cent)
- 18.5 per cent return on equity, after tax (industry approximately eight per cent)
- $56.0 million in investment earnings thanks to a well-managed and diversified investment portfolio driven by strong equity returns
- $6.9 million underwriting profit
- $738.9 million in premium (including $238.7 million – or 32.3 per cent – written outside Saskatchewan)
- $51.6 million in storm claims
- $43.0 million dividend paid to Crown Investments Corporation, representing 66 per cent of SGI CANADA’s net income over the fiscal year.
The complete Saskatchewan Auto Fund annual report can be found at www.sgi.sk.ca.
The complete SGI CANADA annual report can be found at www.sgicanada.ca.
*Note: The Auto Fund and SGI CANADA annual reports for 2015-16 incorporated a 15-month period, as a result of a change in fiscal year to align with other Crowns and the rest of government. The 2016-17 annual reports cover a 12-month period, ending March 31, 2017. All year-to-year comparisons in this news release refer to an equivalent 12-month period in the previous fiscal year.
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For more information, contact:
Marie Schultz
Saskatchewan Government Insurance
Regina
Phone: 306-751-3516
Email: mschultz@sgi.sk.ca
Cell: 306-527-0787