Saskatchewan Government Insurance (SGI) is under mounting financial pressure as claims climb and its reserve fund shrinks, driven by rising vehicle repair costs. According to a report by Keenan Sorokan, the provincial auto insurer is grappling with increased claim volumes and higher expenses per claim, which have eroded its rate stabilization reserve.
Claims and Reserve Trends
Data shows that SGI's claims frequency has risen, while the reserve—used to smooth premium fluctuations—has fallen. In the 2024-25 fiscal year, the reserve dropped to $150 million, down from $200 million the previous year, a 25% decline. Meanwhile, average repair costs per claim increased by 12% over the same period, reaching $4,500 per claim. SGI attributes the cost surge to inflation in parts and labor, as well as more complex vehicle technology.
Impact on Premiums
"We are closely monitoring the situation and will make adjustments as needed to ensure the long-term sustainability of the rate stabilization reserve," said an SGI spokesperson. The insurer is considering a premium rate increase, which would require approval from the Saskatchewan Rate Review Panel. Any change could affect the 800,000 policyholders across the province.
Broader Context
The financial strain on SGI reflects a national trend, with auto insurers across Canada facing similar pressures. Industry reports indicate that repair costs have risen 15% nationally over the past two years, driven by supply chain disruptions and advanced driver-assistance systems. SGI's reserve decline is among the steepest, raising concerns about future rate stability.
