Canadian Underwriter

Intact reports net income of $587 million for 2012

February 6, 2013   by Canadian Underwriter

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Intact Financial Corp., Canada’s largest provider of property and casualty insurance,  has reported a jump in its earnings for the last quarter of 2012, as well as for the entire year compared to 2011 results.

FinancialThe company reported Wednesday a net operating income of $194 million for the fourth quarter of 2012, up 25% per share over the same period the previous year.

Intact’s net income for the quarter was $181 million, compared to $84 million in Q4 2011, which the company attributes to improved operating results and higher investment gains.

“Direct premiums written increased 7% year-over-year to reach $1.7 billion, reflecting the acquisition of JEVCO and organic growth,” the company reported, referring to its $530 million acquisition, which closed in September.

Overall, Intact reported a combined ratio of 92.1% for the quarter.

For 2012, the company’s net operating income was $675 million, up $215 million from 2011. Its net income for the year was $587 million, compared with $465 million in 2011.

Intact’s combined ratio  was 93.1%, with direct premiums written for the year increasing 35% to reach $6.9 billion, which the company says reflects the acquisitions of AXA Canada and JEVCO.

“Our excellent fourth quarter underwriting performance is indicative of the progress that we achieved in 2012,” Charles Brindamour, Intact’s CEO noted in a statement. “Throughout the year, we continued to strengthen our operating performance despite the low yield environment and the impact of weather events which challenged the industry.”

“Given our solid financial position and strong operating earnings, we are increasing our dividend for the eighth consecutive year,” he added. “As we begin another year, we are confident that we will outperform the industry and continue to build a world-class P&C insurer.”

Overall, Intact said it expects personal property results in the industry to improve in a continued hard market this year, while conditions for commercial lines should improve at a “moderate pace.”

“At an industry level, we do not expect a significant improvement in personal auto as Ontario reforms have largely brought about the expected cost savings,” it added.

The company said it’s well-positioned to outperform the P&C industry this year, because of its “ pricing and underwriting discipline, claims management capabilities, prudent investment and capital management practices and solid financial position. Given these attributes, the company believes that it will outperform the industry’s ROE by at least 500 basis points in the next 12 months.”