SGI has ‘high-level’ preliminary talks with 16 companies over partial sale

NDP MLA worries talk of selling could put Crown’s dividend at risk

The president of SGI says the Crown corporation has had discussions with 16 different firms about a partial sale of the insurance company. Those talks are “preliminary” and “high-level” according to Joe Hargrave, the minister responsible for SGI.

Insurance businesses across Canada have seen a significant consolidation over the past few years and SGI maintains selling off a portion of the company would allow it to compete.

“SGI has strong performance in the insurance industry, but in the whole entire insurance industry over the last number of years there has been considerable consolidation, and sometimes it is about strength in numbers,” said Hargrave.

With the passing of Bill 40 during the past legislative session, the government can now look at selling up to 49 per cent of Crown corporations.

Andrew Cartmell, the president and CEO of SGI, said the last conversation with a company about a partnership took place a couple of weeks ago.

He said there is “some interest in the industry” but outside of that, those conversations are preliminary.

Added Hargrave: “They’re not to that point where we exchange information or anything like that.”

The province has also spoken to companies about the possible partial sale or a partnership around SaskTel.

Premier Brad Wall has said only sales beneficial to the people of Saskatchewan and that included things like assurances head offices would remain in the province would be considered.

Hargrave maintained that point in speaking about a partial sale of SGI during the news conference for the Crown corporation’s annual report, which was released Thursday.

That report showed SGI made a $65.2 million profit, resulting in a $43-million dividend to provincial coffers.

NDP MLA Carla Beck said the province’s talk of potentially selling parts of SGI put that dividend in “peril.”

“One question I guess I would ask is, ‘What’s the problem we’re trying to solve here?’ ” she said. “We’ve seen SGI achieve growth well above industry standards across the province; they’ve returned over $300 million in dividends to the people of Saskatchewan over the last decade; they have achievable growth rates, I think, over the next several years ... across the country with their plan right now.”

The Auto Fund annual report was also released Thursday. It showed the rate stabilization fund, which acts as a cushion against significant rate increases, had $565.9 million in it. Storm claims from the Auto Fund hit $26.7 million, in part due to a significant hailstorm in Moose Jaw.