SGI Canada sells shares in PEI company; exits Maritimes in favour of Western Canadian expansion

SGI Canada entered into an agreement Friday to sell its shares in the Insurance Company of Prince Edward Island to EGI Financial Holdings Inc. at book value, estimated to be $10 million, with an additional $3.5 million to licence the use of SGI’s computer systems.

The deal is expected to close this summer, SGI said in a statement Friday. SGI Canada is the property and casualty insurance division of Saskatchewan Government Insurance (SGI), which offers products in that province, Alberta, Manitoba and Ontario.

SGI Canada purchased 75% of ICPEI’s shares in 2001. Its employees who supported that operation are in Regina, and none of them will lose their jobs, but will instead have their duties shift to the other regions where SGI operates.

The carrier said it now plans to “redirect resources” and focus on Ontario and Western Canada. It also recently applied for a licence to compete in the British Columbia P&C market.

“Like any insurer in today’s evolving business climate, SGI CANADA continuously evaluates its market position,” Andrew Cartmell, SGI’s president and CEO said in its press release.

“The opportunity to divest ourselves of ICPEI arrived at the right time,” he said. “British Columbia is a region with strong growth potential that also fits with SGI CANADA’s plans to build expertise in providing insurance to Western Canadian industries such as mining and oil and gas, so moving further west is a natural fit.

“Our plans to exit the Maritimes and move into B.C. will allow us to achieve geographic diversification targets faster, spreading risk more effectively and helping ensure financial stability for the company and, ultimately, providing enhanced security for customers in all regions,” he added.

SGI said it plans to retain its operations in all other jurisdictions.