Has Intact noticed the impact of pot legalization on auto claims?

Recreational cannabis has been legal for nearly four months, but it’s too early for Canada’s largest property and casualty insurer to tell whether it’s having an impact on auto claims frequency.

Senior managers with Intact Financial Corp. were asked Wednesday whether marijuana legalization is having an impact on Intact’s financial performance in personal auto.

“From the file-by-file claims handling, we haven’t seen cases where there is clear evidence of that, but it’s tough to get that information,” replied Patrick Barbeau, senior vice president of claims.

“It is still very early in terms of the process,” added Darren Godfrey, Intact’s senior vice president of personal lines, during a conference call discussing Intact’s 2018 financial results, released Tuesday.

Federal legislation that took effect this past October makes it legal for people 18 and older to possess and share up to 30 grams of dried cannabis. It is also no longer a criminal offence for Canadians 17 and younger to possess up to five grams.

A year ago, in its annual report for 2017, Intact noted some concerns arising from marijuana legalization, including “higher frequency and severity of auto insured losses as a result of impaired driving.”

States south of the border that legalized marijuana saw some “pressure” on auto insurance claims arising from marijuana impairment, “from a frequency standpoint,” Godfrey suggested about a year ago, during the 2017 earnings call.

During Wednesday’s call, Intact CEO Charles Brindamour suggested that personal auto claims frequency dropped during the second, third and fourth quarters of 2018, for various reasons. “We were on high alert in November [2018] to the [legalization of recreational marijuana] to identify signs of [increased auto accident frequency] but there is no clear evidence of that.”

Intact reported Tuesday its combined ratio in personal auto was 99.5% in 2018, a 1.2-point improvement over 101.7% in 2017.

Intact has introduced a number of measures over the past few years aimed at improving profitability in auto. Among them is asking provincial regulators for rate increases even at the risk of losing market share. The action plan also included reducing the number of times a vehicle needs to be towed by determining earlier whether a vehicle is a total loss or whether it is repairable, as Brindamour said this time last year during the 2017 earnings call.

On Tuesday, Intact reported net earned premiums in personal auto dropped 1%, from $3.782 billion in 2017 to $3.727 billion last year. Company-wide, Intact reported net earned premiums of $9.7 billion in 2018, up from $8.5 billion in 2017. Intact said Tuesday its income dropped from $792 million in 2017 to $707 million in 2018.

Intact closed its acquisition of commercial specialty insurer OneBeacon in late 2017.