Full report - SGI Canada

All jurisdictions were profitable in 2010. Saskatchewan operations provided 84.3% of the pre-tax profit
in 2010, with out-of-province business contributing 15.7%. Saskatchewan operations had a 95.7%
combined ratio. Alberta operations continued to experience strong premium growth and posted a 94.6%
combined ratio in 2010, while Manitoba business was adversely impacted by several large losses in 2010,
contributing to a lower profit compared to 2009. Maritime operations improved due to fewer large losses
during the year. Ontario posted a $1.2 million profit in 2010 compared to a loss of $761,000 in 2009. While
returning to profitability in 2010, Coachman continues to have unfavourable underwriting results primarily
from standard auto, symptomatic of the current Ontario industry in general.
Premium revenue
Consolidated net premiums written in 2010 increased by $36.6 million or 9.3% compared to 2009.
Claims incurred
Consolidated claims incurred increased by $50.4 million (26.6%) to $240.0 million in 2010, compared to
$189.6 million in 2009. The increase is the result of unusually severe storm activity in Saskatchewan in
2010, compared to very mild storm activity in the prior year. The consolidated loss ratio of 58.9% increased
7.7% from 2009.
The following table highlights the ratio of claim costs in relation to premiums earned, commonly known as
the loss ratio, for each operating segment:
Loss Ratios
Net premiums written by operating segment
2010
% of net
premium
written
2009
% of net
premium
written
(thousands of $)
SGI CANADA - Saskatchewan $ 318,120 73.9% $ 306,531 77.8%
SGI CANADA - Manitoba and
Alberta 46,475 10.7% 40,015 10.2%
Coachman (Ontario) 45,162 10.5% 29,459 7.5%
ICPEI (Maritimes) 20,803 4.9% 17,909 4.5%
Net premiums written $ 430,560 100.0% $ 393,914 100.0%
Saskatchewan operations had an increase in net premiums written of 3.8% for the year, while out-ofprovince
operations increased written premium by 28.7% compared to the prior year. Personal lines and
farm premiums contributed the largest share (over 90%) of the increase in Saskatchewan premiums.
Personal auto also contributed to the increase, a result of a 3% increase in the number of vehicle
exposures. Growth in out-of-province premiums was driven by a 53.3% increase from Ontario operations
(primarily auto) and continued growth in SGI CANADA’s newer markets of Nova Scotia (32.8% increase),
New Brunswick (25.1% increase) and Alberta (23.5% increase).
When viewed from a consolidated line of business basis, the Corporation’s split of business in 2010 was
approximately 48% property (2009 – 49%), 43% auto (2009 – 42%) and 9% liability and other (2009 – 9%).
The 1% shift between property and auto is primarily attributable to the significant growth of auto business
in Ontario and Alberta operations.
Claim costs related to Saskatchewan operations increased $35.5 million to $175.1 million in 2010 from
$139.6 million in 2009. Correspondingly, the Saskatchewan loss ratio grew to 56.7% in 2010, compared
to 47.5% in 2009. The increase is a reflection of the significantly higher storm costs in 2010. The 2010
Saskatchewan storm activity is summarized on an event basis as follows:
Date of Storm Description Net Claims
Incurred (000s)
Early April Windstorm: province-wide $ 8,629
Mid-April Sewer back-up: Humboldt 1,372
Mid-June Sewer back-up: Maple Creek 4,788
Late June Sewer back-up: Regina 2,984
June/July Sewer back-up: Saskatoon/Yorkton 6,217
Mid-July Hail: Radville 2,312
Mid-July Sewer back-up: Battleford 1,104
Late July Hail: Carlyle/Buffalo Pound 1,898
Early September Sewer back-up: Regina 3,165
$ 32,469
34 | 2010 MANAGEMENT’S DISCUSSION AND ANALYSIS MANAGEMENT’S DISCUSSION AND ANALYSIS 2010 | 35