SGI Minister Don Morgan says the Saskatchewan Auto Fund and SGI Canada are in good financial shape despite weathering storms figuratively and literally in a year marked by the pandemic, inflation and the most expensive storm in Saskatchewan history.
“Every year there’s claims, there’s losses and there’s surprises,” Morgan said Tuesday at a press conference following the release of the crown’s 2021-2022 annual report.”
“But this was a good year as to the number and type of claims that came in but most significantly it was a really strong year for investment market returns. Whether that will continue remains to be seen.”
But despite new calls for a reduction in vehicle insurance rates from the Saskatchewan NDP, Morgan said there are currently no such plans.
“It’s an ongoing process. We look to SGI to give us advice as to what they anticipate the outstanding amount of claims are and what their projected returns are on investments. There’s certainly nothing there now that would indicate that should be the case,” he said.
While Auto Fund investment earnings of $108.7 million helped put the province in a position to provide a $89.3 million dollar rebate program for registered vehicle owners, Rate Stabilization Reserve (RSR) did drop $39.8 million to $1.1 billion.
Still, the RSR remains “financially strong” according to the province.
The minimum capital test (MCT) score, a measurement which monitors the adequacy of the RSR, was 149 per cent as of March 31. Its 12-month rolling average MCT score of 176% was above the 2021-22 target of 174%.
Meanwhile, gross premiums written by the Auto Fund totalled just over $1 billion, an increase of 1.9 per cent year-over-year which the province says comes as a result of more vehicles on roads following an initial pandemic slowdown in 2020.
$926.3 million was incurred in total auto claims.
The August 31, 2021 hail storm alone resulted in approximately $65 million in auto claims although about $40 million was ceded to reinsurers. Overall, incurred catastrophe claims were still 29.9 per cent higher than in 2020-21.
SGI Canada reported a net income of $81.8 million, $52.1 million in underwriting profit, $32.3 million in investment earnings and paid $57.5 million in dividends to the Crown Investments Corporation.
The August 2021 storm resulted in approximately $40 million in estimated damages for SGI Canada customers, though the storm’s impact on the crown was again softened by its reinsurance program. Total incurred storm claims were worth $54.3 million.
The SGI Canada report noted the province is “preparing for more challenging claim years ahead as climate change impacts extreme weather events across the country.”
The Saskatchewan opposition was quick to respond Tuesday morning, pointing out that SGI’s long-term MCT goal is 140 per cent.
“The Auto Fund is still nearly 10 per cent over where it should be as of year-end,” SGI Critic Aleana Young said.
“Instead of stroking cheques for a million bucks a pop to an out-of-province Ontario company every time a rebate needs to be issued, what we’re calling for is an overall lowering of rates. Even if the government claims it won’t make much of a difference, this will allow people to plan and allow Saskatchewan to continue to have the lowest rates in Canada.”
Young said that, while outdoor knocking, she’s consistently heard concerns from residents about cost-of-living “regardless of the income level of the household”.
“Saskatchewan is facing a generational affordability crisis. Coming out of today’s annual report from SGI what we see is an incredibly profitable, well-run crown corporation,” Young said.
“But what we don’t see are any real solutions to help Saskatchewan families address the crushing cost-of-living and affordability crunch we all know we’re under.”
According to SGI the latest round of rebate cheques, which were announced in March and began reaching mailboxes in May, cost around $700,000 to print, process and deliver.
Raising or lowering insurance rates involves SGI submitting a proposal to the Saskatchewan Rate Review Panel which then seeks public feedback before submitting recommendations to cabinet. SGI’s most recent proposal was submitted June 1, 2021 and the new rates came into effect April 1, 2022.
As for further rebates for SGI customers, Morgan said that’s a “possibility” to be considered “further down the road’.
“We’re in a period of some fairly significant instability and volatility in the market and we’d like to maintain healthy reserves to make sure we’re able to maintain the current rates being charged and maintain the benefits we’re giving to customers,” he said.
The annual report also noted $160.9 million in discounts to SGI Auto Fund customers through the Safe Driver Recognition (SDR) and Business Recognition programs, and $2.6 million in grants to 210 Saskatchewan community projects for road safety improvements through the Provincial Traffic Safety Fund Grant program.
Crown annual reports will continue to be released this week.
Reports for SaskPower, SaskEnergy, SaskTel and the Crown Investments Corporation are still to be released.
Comments