Successful year for SGI in 2015-16
July 18, 2016
SGI had a successful year in 2015-16 for both sides of its operations. SGI CANADA had a profitable year and the Saskatchewan Auto Fund also saw strong results.
Financial and operational highlights for the period of Jan. 1, 2015 to March 31, 2016 for SGI CANADA and the Saskatchewan Auto Fund were tabled today.
SGI CANADA is the competitive arm of SGI, selling property and casualty insurance in Saskatchewan, Alberta, Manitoba, Ontario and British Columbia. The corporation posted positive results for 2015-16, realizing a profit of $84.5 million despite significant storm losses across the prairies and forest fire claims in Northern Saskatchewan.
"SGI CANADA's profitability is due to both favourable underwriting results and investment earnings," Minister responsible for SGI Don McMorris said. "In addition, SGI CANADA achieved growth in all provinces where it operates, despite economic downturns in Alberta and Saskatchewan. This growth is a direct result of the positive partnerships SGI CANADA has built with its broker partners across the country."
SGI CANADA highlights for 2015-16 include:
- $46 million in investment earnings, resulting from a well-managed and diversified investment portfolio
- $42.4 million underwriting profit
- $797 million in premium written; $235 million of that premium written outside Saskatchewan
- $55.1 million in claim losses due to summer storms and wildfires in Northern Saskatchewan
- $47.3 million dividend paid to Crown Investment Corporation to benefit the people of Saskatchewan
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.
Overall, 2015-16 was a good year for the Auto Fund. Strong investment earnings and favourable underwriting results resulted in the Auto Fund increasing the Rate Stabilization Reserve (RSR) by $159.1 million, bringing the balance to $377.2 million, just slightly below its target capital level. The target is in place to ensure the Auto Fund has adequate capital to pay future claim obligations.
Relatively low damage and injury claims resulted in positive underwriting results, attributed in part to the unusually mild winter and positive effect of recent traffic safety initiatives. Traffic safety laws were strengthened in 2014, with further impacts and changes implemented or continuing in 2015-16.
"Early signs show traffic safety initiatives such as the dedicated traffic enforcement unit in the central and southeast regions of the province, the photo speed enforcement pilot in high-volume highway corridors and school zones, and motorcycle engine size restrictions for new riders, are having a positive impact on road safety in our province," McMorris said. "Preliminary numbers for 2015 are encouraging – with 121 fatalities in 2015, it is the lowest number of fatalities on Saskatchewan roads in decades and we hope to see that continue in the years to come."
Auto Fund highlights for 2015-16 include:
- $111.8 million in investment earnings due to strong foreign equity returns and positive fixed income results
- $934.3 million in claims ($25.7 million of those claims resulting from summer hail storms)
- $155.7 million in discounts provided to customers with safe driving records through the Safe Driver Recognition and Business Recognition programs
- To ensure programs and coverage continued to meet customer needs, the Auto Fund implemented a new choice in injury coverage for motorcyclists, made changes to the Business Recognition program to be more fair and balanced, and received government approval for changes to auto injury coverage and the Safe Driver Recognition program.