Insurance Daily News

Intact Financial Q3 Profits Hit by Severe Weather Losses

Intact Financial Corporation reported a significant decline in third-quarter earnings, driven by widespread severe weather events across North America. Net income attributable to shareholders fell to CA$562 million, down from CA$861 million during the same period last year. Consequently, net operating income per share decreased by 19% to CA$3.63, while diluted earnings per share dropped by 36% to CA$3.03.

The group’s financial results were heavily impacted by approximately CA$660 million in pre-tax catastrophe losses, net of reinsurance. The vast majority of these losses—CA$615 million—occurred in Canada, stemming from wildfires in British Columbia, as well as wind and flood damage. Within the Canadian market, personal property insurance was the hardest hit, absorbing CA$390 million in losses and pushing that line’s combined ratio to 105.0%. Commercial lines faced CA$173 million in losses, with personal auto accounting for CA$52 million.

Despite the group-wide challenges, Intact’s US operations demonstrated resilience. The US business achieved a combined ratio of 85.2%, significantly outperforming the group’s overall combined ratio of 94.0%. Premiums in the US rose 3% to CA$989 million, bolstered by strong new business in profitable segments. CFO Ken Anderson noted that total catastrophe losses over the trailing 12 months reached CA$1.29 billion, slightly exceeding the annual guidance of CA$1.20 billion.

Other financial indicators showed mixed results. Group operating direct premiums written increased 5% to CA$7.006 billion, and operating net investment income grew by 5% to CA$422 million. Distribution income also rose, climbing 16% to CA$171 million, largely due to contributions from BrokerLink and On Side. The company’s book value per share increased by 8% to CA$111.11, supported by CA$581 million in share buybacks over the past year. The board has declared a quarterly dividend of CA$1.47 per common share, payable on December 31.

For industry observers, Intact’s results highlight the ongoing pressure that elevated catastrophe losses place on property pricing, making a near-term softening of rates in homeowners and commercial property lines unlikely. Brokers should anticipate continued underwriting discipline from carriers regarding flood exposure, deductible structures, and risk mitigation requirements.

Why it matters

Intact's results serve as a bellwether for the broader property insurance market, suggesting that persistent catastrophe losses will likely maintain firm pricing and strict underwriting standards for the foreseeable future.

FAQ

What caused the majority of Intact's catastrophe losses this quarter?
The losses were primarily driven by weather events in Canada, including flooding, wind damage, and wildfires in British Columbia.

How did the US business perform compared to the overall group?
The US business performed better than the group, achieving a combined ratio of 85.2% compared to the group's 94.0%.

What was the impact of catastrophe losses on Canadian personal property insurance?
Catastrophe losses added 33 points to the Canadian personal property line, resulting in a combined ratio of 105.0%.

Source: Insurance Business America. See the original source for full details.