Car insurers in Sask. saved an estimated $169M last year, according to analysis company

A report by Hellosafe, an insurance analysis company, says car insurers in Saskatchewan saved an estimated $169 million last year.

With fewer cars on the road as people stayed home because of the pandemic, Hellosafe estimates accidents were down 22.5 per cent and car-related claims were down 26.7 per cent.

"It will be interesting to see if all the insurance companies will make refunds, and which forms will take those refunds," said Hellosafe CEO Antoine Fruchard in a news release.

Fruchard said customers should benefit from a slight drop in car insurance premiums in the coming month.

"However, in certain provinces, the presence of (almost) car insurance monopolies is problematic, not allowing policyholders to benefit from a diverse offer which would result in lower premiums for them."

Hellosafe, a company based in France that specializes in insurance analysis, also estimates:

• The City of Saskatoon saved almost $40 million in car insurance payouts in 2020 – the greatest total among the cities of Saskatchewan.

• Regina saved $34.3 million, Prince Albert saved $4.8 million and Moose Jaw saved $4.4 million.

SGI would be the biggest beneficiary of those savings.

Jeff Stepan, chief financial officer at SGI, said he couldn't vouch for Hellosafe.ca's numbers.

Stepan said SGI wasn't in a position to give out full year numbers as the company's fiscal years runs from April 1 to March 31.

He did say SGI's collision claims were down 20 per cent over the last nine months of 2020.

He said those savings have been somewhat offset by the average cost of each claim going up five to 10 per cent.

Stepan said SGI's investments dropped $200 million in March because of COVID-19, though markets have since recovered.

One province over, Manitoba Public Insurance (MPI) returned about $170 million in refunds to its customers last year, averaging out to more than $200 per customer.

Manitoba's Public Utilities Board approved an average rate decrease of 8.8 per cent, a savings of roughly $110 per customer.

Stepan said there are no plans right now for SGI to issue any refunds.

He said any savings SGI accumulates will go into its rate stabilization reserve and stays in the auto fund. 

"That's used as a cushion to prevent against big increases in rates in future years," Stepan said.

"When we're looking at setting our rates, we set our rates based on long term averages, not just what we saved in the last year or what our claim costs were in the last year."

He said this strategy is why there hasn't been a rate increase in seven years.

To change insurance rates, SGI has to make an application to the Saskatchewan Rate Review Panel.

"We're not in a position right now to see whether rates will be going up or down, that rate indication is still getting finalized," Stepan said.

He said something like a massive hailstorm or other weather catastrophe could still cost SGI millions of dollars.

"So even the fact that we have had lower claim costs in the first nine months of our fiscal year because of COVID, that doesn't automatically translate into savings or lower rates."

Nationally, Hellosafe estimates there was a 32.9 per cent decline in car-related claims and $6.7 billion in payouts was saved.