SGI CANADA posts record profit in 2009
April 26, 2010
A low number of storm losses in Saskatchewan helped SGI CANADA record the most profitable year in the corporation's history, producing a net income of $52.4 million.
SGI released its financial and operational highlights when the 2009 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.
"The key to SGI CANADA's success is its ability to grow while maintaining profitability in a highly competitive industry," said Minister Responsible for SGI June Draude. "SGI CANADA continues to build on its reputation for ease of doing business for brokers and high quality insurance products at competitive prices."
Highlights for 2009 include:
- Continued growth in the provincial economy provided premium growth of eight per cent in Saskatchewan.
- Strong customer service ratings from independent brokers.
- Paid a dividend of $34 million to Crown Investments Corporation.
- Out-of-province operations provided $2.8 million of the consolidated net profit.
"The company's success and growth is a result of efforts of employees and SGI CANADA's independent broker partners," said Draude. "Employees and brokers do an excellent job for customers and owners of the company, and I thank them."
In SGI's other business arm, higher claim costs contributed to the Saskatchewan Auto Fund posting a $40.8 million loss in 2009. The 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 again saw growth in the number of vehicles it insures as it continues to serve a growing province," said Draude. "As expected, this was accompanied by higher claim costs, resulting in the Rate Stabilization Reserve being drawn down to $67.2 million from $102.5 million at the end of 2008."
On the operational side, 2009 was very similar to 2008 for the Auto Fund. However, improvements in investment markets in 2009 put SGI in a stronger financial position. For 2010, the 4.2 per cent rate increase effective Nov. 1, 2009, and a modest improvement in investment returns, are expected to bring the Auto Fund back to a break-even point.
Safe drivers in Saskatchewan were rewarded with close to $90 million in discounts through the Safe Driver Recognition and Business Recognition programs in 2009.