Released on April 8, 2014
Both SGI CANADA and the Saskatchewan Auto Fund persevered in 2013, despite weathering some difficult challenges related to snow, ice and rain.SGI released its financial and operational highlights when the 2013 annual reports for SGI CANADA and the Saskatchewan Auto Fund were tabled in the Legislative Assembly today.
SGI CANADA is the competitive arm of SGI, selling property and casualty insurance in seven provinces. It posted a consolidated profit of $39.2 million in 2013, despite experiencing an underwriting loss of $14.4 million. The underwriting loss was due primarily to several major weather events, including summer storms and a protracted winter season with large snow loads causing roof ice dams in Saskatchewan, and extreme flooding in both Alberta and Toronto.
In total, SGI CANADA handled storm claims totalling $28.7 million, with another $22.8 million in ice dam claims. Favourable investment market returns, contributing to profitable results in all jurisdictions except Alberta, helped offset the cost of these claims.
“The challenging year SGI CANADA experienced in 2013 illustrates the importance of spreading risk geographically,” Minister responsible for SGI Donna Harpauer said. “Losses in some regions were offset by profits in others. Spreading risk enhances SGI CANADA’s financial stability, which benefits customers in all jurisdictions since it helps control the cost of providing insurance coverage.”
SGI CANADA paid a dividend of $25.6 million to Crown Investments Corporation in 2013.
The other side of SGI’s operations, 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.
In 2013, the Saskatchewan Auto Fund increased the Rate Stabilization Reserve (RSR) by $32.3 million, an improvement of $43.8 million year-over-year compared to the $11.5 million decrease in 2012. Stronger operating performance and investment earnings contributed to the successful results. The RSR is needed to protect customers from unexpected events, similar to a savings account in case of emergencies.
Despite the increase to the RSR, its balance of $162.8 million at the end of 2013 remains below the target level to ensure financial stability. SGI currently has a proposal before the Saskatchewan Rate Review Panel that includes a capital amount to help replenish the RSR.
Storm claims also impacted the Saskatchewan Auto Fund, when a July 19 hail storm in the Regina area resulted in $42.8 million in claim costs, making it the largest catastrophe in the Auto Fund’s history. The net cost on that storm was lowered to $10 million thanks to a strong reinsurance program.
Customers with safe driving records were rewarded with $114.1 million in discounts through the Safe Driver Recognition and Business Recognition programs in 2013. SGI also remained dedicated to promoting road safety through traffic safety education efforts in schools and communities around the province, province-wide child restraint clinics and partnership with law enforcement on monthly traffic safety blitzes.
“SGI and the Government of Saskatchewan are committed to reducing the high rate of injuries and deaths on Saskatchewan roads, taking action on the 2013 recommendations coming from the Special Committee on Traffic Safety,” Harpauer said. “Tougher legislation is anticipated to be passed during this sitting of the Legislature, with a targeted effective date by end of June. SGI also undertook a review of motorcycle safety and, with input from the Motorcycle Review Committee that was formed last year, took important first steps toward reducing motorcycle crashes in the province.”
The complete SGI CANADA annual report can be found at www.sgicanada.ca. The complete Saskatchewan Auto Fund annual report can be found at www.sgi.sk.ca.
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For more information, contact:
Kelley Brinkworth
Saskatchewan Government Insurance
Regina
Phone: 306-751-1837
Email: kbrinkworth@sgi.sk.ca
Cell: 306-535-6207