File BS 12-1-3-9-2.1 - "A"

The first government-run insurance programs in Saskatchewan were public hail insurance programs created in 1901 and 1912; however these were limited to crop insurance.

Economic conditions in the 1930's and early 1940's had resulted in the failure of many small local insurers. Almost 80% of fire insurance premiums issued between 1934 and 1944 were underwritten by British or other non-Canadian firms. The twenty-two percent of companies that were Canadian were not in Saskatchewan but located primarily in Ontario and Quebec. During the same period, less than half of the premiums paid in by customers were returning in the form of claims paid out. Little of those premiums were remaining in the province either in the form of claims paid or as profit for local business.

In 1944, the only other general government insurance program in Canada was a dormant system in Alberta.

The Saskatchewan Government Insurance Office (SGIO) was established by The Government of Saskatchewan Insurance Act, assented to on November 10, 1944. In January 1945, Oakland W. Valleau, Minister of Social Welfare, was appointed Minister-in-Charge of SGIO.

There were three main reasons for its creation: to retain revenue from insurance premiums within the province; to create new revenue sources in order to provide additional social services to residents; to reduce insurance rates for Saskatchewan residents.

The Insurance Act allowed for the sale by SGIO of policies covering fire, life, automobile and twelve other forms of insurance. Although the act allowed for the sale of life insurance, it was not sold by SGIO.

The office was established in March 10, 1945 and Michael Francis Allure was chosen as the first general manager. He was provided with a staff of 3, a 10 x 12 foot room at the Legislature and a $12,000 loan to start.(1) Allure sold the first policy to Valleau on May 1, 1945. The General Manager served as the Chief Executive Officer of the company.

The company continued to operate out of the Legislative Building until early in 1946 when it moved into the old Canada Life Assurance building on Cornwall Street and 11th Avenue in Regina. It had grown from a staff of four to sixty employees at head office with more than 150 brokers across the province. The SGIO annual report for 1946-1947 states that finding and training sufficient staff was a major challenge due to this rapid expansion.

Although the head office was located in Regina, a policy of decentralization resulted in the opening of branch offices in Prince Albert and Saskatoon in 1946. By December 31, 1947, 110 people were employed at the Head and Branch offices. A branch in North Battleford opened in 1948 followed by branches in Yorkton, Estevan and Swift Current in 1949 and Moose Jaw in 1950. In the 1970's claims branches were also created in Lloydminster, Meadow Lake, Tisdale, Weyburn and Kindersley.

The first SGIO agency was opened in Maple Creek on May 17, 1945. It was started by Oscar Sawby whose only experience at the time consisted of operating a general store. Fifty years later, his family was still operating Blythman Agencies Ltd.

By the end of the first year of business, SGIO had paid back the $12,000 startup loan and showed a surplus of $6388 while providing insurance rates ten percent lower than the competition.

As World War II was coming to a close, the number of motorists and vehicles in Saskatchewan grew at a rapid rate but less than 10% had any form of insurance, leaving accident victims and their families without any form of compensation. This resulted in the creation of The Automobile Accident Insurance Act, 1946. By combining vehicle registration and insurance, the provincial government ensured that all drivers had basic coverage.

In 1949, the Saskatchewan government purchased a 75% share in a joint stock company in the hopes of expanding the business of the SGIO over a larger area to provide a more stable income. The Saskatchewan Guarantee and Fidelity Company Limited (SGFCL) applied to practice insurance in Ontario, Manitoba, Alberta and British Columbia but was denied on the basis that a company owned by one provincial government should not do business in territory of another. Reinsurance agreements with companies in other countries allowed the SGFCL to reduce its financial risk. It was administered by SGIO but as a joint stock company its status as a Crown corporation is historically questionable.

By 1950 SGIO had 215 employees and 675 agents. By 1952, it held about 25% of the general insurance business in the province.

The change in government in resulting from the 1964 election posed a threat to the continuation of SGIO and other Crown corporations. Ross Thatcher expressed a philosophy of encouraging the industrial development of Saskatchewan by private enterprise. SGIO survived but some of its monopoly advantages were removed.

SGFCL was not so lucky. Seen as surviving on monopoly advantages and contracts from SGIO and losing money as well, it was put up for sale. On July 31, 1965, rather than being sold, it was absorbed by SGIO.

Throughout the late 1960's the Liberal government was accused by the opposition of planning to sell SGIO which it denied. In fact, a firm offer to buy the company was received in 1969 but was rejected by the government.

The 1970's marked a return to CCF (now NDP) government. SGIO was handling almost all of the insurance sales in Saskatchewan, partially due to lower pricing and because most of the competition had quit the field. It was a regular practice for insurance companies to have one rate for Alberta and Manitoba and a lower rate for Saskatchewan. Many decided it wasn't worth the trouble.

In 1979, SGIO was re-branded SGI - Saskatchewan Government Insurance but remained SGIO as a legal entity.

Various departments and divisions existed within the Office over its history(2) including as follows:

The Statistical Department existed in 1946. It continued to appear on a 1950 organizational chart but was apparently absorbed by the Accounting Department sometime between 1951 and 1953.

The Claims Department existed in 1946. By August 18, 1948 it had been divided into Claims - General; Claims - Accident; Claims - Collision.

The Accounting Department existed in 1946.

The Agency Department first appeared on October 18, 1946 and continued to show on an August 18, 1948 organizational chart.

The Fire Department existed in 1946. On September 1, 1947, the Fire Department was divided into two departments: Fire Department - Agency and Fire Department - Direct.

On December 1, 1947, the Inspection Department was established to inspect various types of risks and supply data to the Underwriting Department.

The Salvage Division was established in 1947 to provide a sales outlet for used automotive parts salvaged from vehicles which were damaged beyond repair in accidents. Salvage allowed SGIO to recover a portion of losses incurred in auto claims. The Divisional head office was originally located in North Battleford and opened on July 10, 1947. Additional depots were later established in Regina (1961), Saskatoon (1966), Yorkton (1969), and Moose Jaw (1971). The Divisional office was re-located to Saskatoon in September 1966.

The Reinsurance Department was set up in 1950. It was responsible for placement, negotiating and handling Fire and Inland Marine reinsurance as required.

The Personnel Department was formed in 1956.

A Promotion and Advertising Department was created in 1957.

The Multi-Peril Department was established in 1957 to provide all general insurance needs in one package. In 1961 the department was assimilated into various sections of the Fire Underwriting Department.

The Loss Prevention Department was established in 1973. It was previously part of the Property Department.

An Internal Audit department was created in 1976.

The Motor Vehicle Division was established on April 1, 1977, when the driver license and motor vehicle registration delivery system formerly administered by the Department of Finance was transferred to the SGIO.

The Customer Relations Department was established in 1977 to handle consumer complaints and inquiries. It seems to have taken over responsibilities and functions of Public Relations.

The Automobile Experimental Centre was set up in Regina in 1974 to monitor and conduct research into cost-effective automotive repair techniques, train SGIO auto adjusters, assist auto body shops with the application of new repair techniques, and supply data on repair costs and vehicle design.

The Saskatchewan Government Insurance Act, 1980 (C. S-19.1) assented to on April 29, 1980 officially dropped "Office" from the legal title of the company and creating SGI.

At that time, SGI's organizational structure consisted of: Minister in Charge / Chair of Board of Directors; Office of the General Manager / President; Administration Division (Policy services; Administration and Coordination; Administration services); Claims Division; Salvage Operations; Corporate Relations Division; Marketing Division; Systems Planning and Research; Systems Development Motor Vehicle Division; Finance; Legal; Motor Licensing Division; Special Accounts Department; Underwriting (Casualty; Commercial Property; Loss Prevention; Personal and Farm Property).

Footnotes:

1)One source lists the staff as four, but this may have included Allure.

2) Tracking the organizational structure of SGIO is difficult because annual reports consisted primarily of financial information and seldom documented these changes or contained organizational charts.