In April 2018, SGI CANADA announced it had converted a previous loan to acquire a $3 million, 15% equity stake in Alberta-based, tech-focused brokerage Nuera Insurance Inc. As a Crown corporation, this investment required special, one-off government approval. Since then, however, SGI CANADA has sought the introduction of new guidelines to allow for a permanent expansion of its powers to invest in the insurance marketplace.
Few sectors of the economy are changing at a pace similar in speed or magnitude to that of insurance. Consolidation has accelerated throughout the value chain, the buying experience is now increasingly digital, and the adoption of ‘smart’ new technologies like artificial intelligence is becoming a requisite for company survival.
For these reasons, IBAS believes it is imperative that SGI CANADA has access to the levers needed to keep pace with other Canadian insurers. This includes investing in out-of-province brokerages and other businesses that enhance SGI CANADA’s long-term competitiveness as an insurer partner and contribute to its profitability. Specifically, IBAS supports acquisitions made by SGI CANADA:
- Whereby SGI CANADA is not the largest equity partner;
- Whereby SGI CANADA holds a minority position only;
- That promote the independence of the broker channel;
- That are not in direct competition with Saskatchewan-based brokerages;
- That are in the best interest of insurance consumers;
- That are in the best interest of Saskatchewan taxpayers and businesses;
- That follow industry-accepted best practices for valuation; and
- That are disclosed to the public in a timely and transparent manner.
Just as these changes are necessary to protect the ongoing competitiveness of SGI CANADA, however, it is our concurrent position that SGI CANADA should be subject to the same rules as other insurers to foster a level playing field. IBAS’s support for expanded investment powers is conditional on this basic consumer and broker protection.