It was announced this week by the Government of Saskatchewan that SGI will implement a revenue-neutral rate rebalancing on the Saskatchewan Auto Fund premiums.

Minister responsible for SGI Don Morgan provides some details on the announcement.

"It is expected to operate at a neutral or break-even level because of the size and complexity of it, it's required to have a fairly significant cash reserve. The cash reserve is expected to be in the range of one billion dollars. If it goes up above that because of investments in the portfolio or reduced claims,  we usually would do a rebate to the customers or a reduction."

Rate rebalancing means that some vehicle classes will have rate increases and others will have decreases. 

Morgan adds that the rate review panel recommended a modest reduction and they decided to defer on doing that due to the turbulence in the market so they will be maintaining rates at the current level. 

Morgan details a recommendation they will be acting on gathered from public and stakeholder feedback.

"We received feedback from people that the motorcycle rates do not change. It's a small group and their motorcycles usually only operate for a few months of the year. So we accepted that recommendation."

In addition, there will be no rate changes for taxis and no customer will see an annual increase in their premiums higher than 10% on premiums higher than $1000.

Morgan says that in the past they have worked with motorcycles to try and bring claims rates down but inherently they are more dangerous because of more complex and serious injuries. 

There are multiple different rate groups within SGI. Within motorcycles, there are five or six such as heavy cruisers and sportbikes. They look at the performance within each one of the different groups and compare the type of vehicle with the number of claims with an average cost of so much and the premiums producing so much revenue. Morgan adds that they want to adjust the premiums up and down so that it matches the size of the claims that are taking place in any given year. 

In addition, Morgan adds that the rest of the changes being made are fairly modest. If any one rate group would have a change of more than 10% Morgan says they would phase it in over more than a year. 

Overall, some premiums will go up and some will go down but for the most part, there will not be a significant difference in the premiums people will pay. 

 All changes will be implemented on April 1st, 2022

By Tara Garcia