SGI focus in B.C. will be commercial

A focus on the mining, oil and gas sector is part of SGI Canada’s expansion into the British Columbia market, as that company looks westward for organic growth.

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A focus on the mining, oil and gas sector is part of SGI Canada’s expansion into the British Columbia market, as that company looks westward for organic growth.

“We would like to focus on commercial, and on the rural markets, avoiding the major urban centres,” said Paul MacDonald, the vice president of Canadian operations for SGI Canada. “The closest model would be when we entered the Alberta market about eight years, starting with one employee and one policy. Now, we’re probably going to hit $100 million in premium within the next few months.”

SGI Canada recently received a license to sell property and casualty insurance in B.C., with SGI Canada’s President and CEO Andrew Cartmell calling the move further west a good fit for the company.

“This move also allows us to further spread our risk, meaning losses due to events like catastrophic storms in one region are offset by profits in other regions,” said Cartmell. “This benefits customers in all regions by assisting with rate stability.”

But that growth won’t include any movement into Vancouver or the island, MacDonald told Insurance Business, as earthquake risk “absolutely’ played a part in SGI Canada’s decision to steer clear of the urban market.

“We’re nervous; we don’t have any quake exposure, which is a positive for our reinsurers,” he said. “We want to avoid it as much as possible, at least to begin with. I know that B.C. brokers have said they are welcoming our entry into the market to help write quake; but for now, we aren’t.”

Being able to say no to underwriting quake is part of the luxury of SGI’s organic growth, said MacDonald, as opposed to the merger and acquisition route.

SGI Canada has also deliberately chosen not to have an auto license, as it didn’t want to be seen as competing with ICBC – given SGI has a similar business in Saskatchewan. (continued.)
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Over the last 20 years, SGI Canada has been expanding its business outside of Saskatchewan, with success in Alberta, Manitoba and Ontario, while selling off its assets in Prince Edward Island, Nova Scotia and New Brunswick.

“The west is certainly growing at a higher clip than the east is,” said MacDonald. “Part of that thinking – divesting in the east – would be that we would in lockstep invest in the west.”

SGI Canada plans to start operating in B.C. in the summer of 2015.
 

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