Saskatchewan Government Insurance (SGI) said it maintained some of the lowest average auto insurance rates in Canada during fiscal year 2025-26, despite rising claim costs driven by inflation and severe weather.
The Crown corporation's annual financial results showed the Saskatchewan Auto Fund recorded $1.191 billion in net claims incurred against $1.177 billion in gross written premiums, meaning claims outpaced premium revenue for the year.
SGI said higher vehicle repair and replacement costs, combined with the effects of extreme weather, continued to put pressure on the Auto Fund.
Jeremy Harrison, Minister Responsible for SGI, said the corporation continues to provide some of the lowest auto insurance rates in the country while advancing road safety and supporting communities as they strengthen infrastructure.
The Auto Fund's results help explain a rate increase already underway. In January, SGI applied to the Saskatchewan Rate Review Panel for its first general rate increase since 2014, proposing a two-year program with net increases of 3.75% in June 2026 and June 2027, for a combined impact of 7.6%.
The first-year increase took effect on an interim basis on June 1, ahead of the panel's final review, and will affect roughly 98% of Saskatchewan vehicles with an average annual increase of $38, while about 1% of vehicles will see a small average decrease.
SGI has attributed the increase directly to the same claims pressure reflected in this year's results. Average vehicle damage claims rose 25% over five years, climbing from $4,880 in 2019-20 to $6,101 in 2024-25, driven by inflation and increasingly complex vehicle repair technology.
The Auto Fund's Minimum Capital Test ratio, a solvency measure, had climbed to a 12-month rolling average of 133% but is expected to fall back to around 97% by the end of March 2026 as the corporation works to hold rates closer to its internal targets of a 90% minimum and 125% operational target.
That dynamic reflects a structural feature of Saskatchewan's public auto insurance model that sets it apart from private markets. The Auto Fund operates on a not-for-profit, break-even basis over time, one of just four Canadian jurisdictions, alongside British Columbia, Manitoba, and Quebec's hybrid system, that run compulsory basic auto coverage through a public insurer rather than a competitive private market.
That structure has historically kept Saskatchewan premiums moderate relative to provinces like Ontario, but it also means the fund cannot simply absorb sustained claims cost inflation the way a diversified private insurer might.
Rate increases become necessary once premium revenue falls persistently short of claims, which is the position SGI describes itself in now.
The Auto Fund still provided $189.5 million in discounts through its Safe Driver Recognition and Business Recognition programs during the year. Investment earnings totaled $170.3 million, while the Auto Fund's Rate Stabilization Reserve stood at $633.6 million after declining by $93.3 million. SGI also administered the Provincial Traffic Safety Fund, which awarded $3.5 million to 139 community road safety projects across the province.
SGI CANADA, the corporation's competitive property and casualty insurance division, reported net income of $75.7 million for the year, allowing it to return a $16 million dividend to the provincial government.
The division recorded $1.474 billion in gross written premiums, a 3.4% increase over the prior year, with investment earnings of $103.4 million and net catastrophe claim losses of $143.5 million. SGI CANADA also invested $1 million in sponsorships, partnerships, and community initiatives focused on safety, security, and inclusion.
The division operates in Saskatchewan, Alberta, Manitoba, Ontario, and British Columbia through a network of more than 260 brokers across nearly 1,900 locations. Its $143.5 million in catastrophe losses this year point to the same severe weather pressure squeezing the Auto Fund, even though the two divisions operate under very different financial models.
SGI said the results reflect its continued effort to balance affordability for customers against the long-term financial sustainability of the Saskatchewan Auto Fund.
That balancing act looks different depending on which side of SGI's business absorbs the weather: a diversified, competitive insurer like SGI CANADA can spread catastrophe losses across a broader book and still turn a profit, while the not-for-profit Auto Fund has far less room to do the same, a distinction now playing out directly in the rate increase working through Saskatchewan's regulatory process.
