Toronto, Ontario — After sending out rebate cheques, SGI submitted a proposal to the Saskatchewan Rate Review Panel (SRRP) for a revenue-neutral rate rebalancing, which would result in increases for some customers and decreases for others.
If approved, rates will be rebalanced so that each vehicle group pays a “sufficient” amount to cover the cost of insurance claims for their respective group and the proposed changes would result in a net zero percent change overall to the Auto Fund.
SGI’s proposal would result in rate decreases for about 52 percent of Saskatchewan vehicles with an average annual reduction of $102 and increases for about 48 percent of Saskatchewan vehicles with an average annual increase of $96. And there will be no rate change for the remaining one percent of vehicles.
Increases will be capped to reduce rate shock–a maximum of $150 per year for an annual premium under $1,000 and a cap of 15 percent for premiums over $1,000 per year.
If approved, the rate changes would take effect Jan. 21, 2022.
“SGI is confident that the premiums currently being collected are enough to offer all of our customers coverage in the event of a collision; by rebalancing rates so some vehicle types pay more and others pay less, we can move closer towards rate fairness,” said SGI President and CEO Andrew Cartmell. “SGI is committed to ensuring fairness in rates between vehicle types, while also keeping Saskatchewan’s basic auto insurance rates among the lowest in Canada.”
The Saskatchewan Rate Review Panel will review SGI’s proposal and seek feedback from the public. The SRRP will then submit a report with its recommendations to the Minister of Crown Investments Corporation to inform Cabinet’s decision.
“In recent years, we have seen expenses for repairing more intricate and complicated car systems increase,” Cartmell said. “Despite that, we have been able to avoid significant increases in premiums due to a reduction in collisions, injuries and fatalities on Saskatchewan roads, thanks in part to stronger traffic laws, increased enforcement and effective awareness campaigns.”
In contrast to the $285 million in rebates that it issued to customers in May, which was done to address excess capital. The rebates were issued because the Rate Stabilization Reserve (RSR)—which protects customers against sudden rate fluctuations due to unexpected cost pressures—had an excess of funds due to higher-than-anticipated investment returns and a lower-than-expected number of collision claims during the pandemic.
“Decisions on rates are made based on longer term trends, while the excess in the RSR resulted from conditions that cannot be expected to be repeated every year.” said SGI Chief Financial Officer Jeff Stepan. “Rebates were the best way to return that one-time windfall to SGI customers.”
Comments on the rate proposal can be provided to the SRRP in a variety of ways: via the SRRP’s website, Facebook page, Twitter account, calling toll free 1-877-368-7075, emailing firstname.lastname@example.org, or at one of series of public hearings.