Canadian Underwriter

How far Intact’s specialty reach has expanded

February 15, 2022   by Jason Contant

Concept of improved financial results

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Intact Financial Corporation CEO Charles Brindamour says Canada’s largest P&C insurer has established a “truly global platform” that can now reach 70% of the global specialty solutions market with the expertise it has on board.

“The thing that I like about the position we’re in at this stage is we can grow in the markets where we are,” Brindamour said last week during a conference call discussing the carrier’s 2021 Q4 results. “We don’t need to expand from a geographic point of view because we have all the tools in the toolbox, which means greater focus, greater depth, greater scale. One of the things we want to do in the next 24 months is to bring far more science in pricing and risk selection across the platform.”

Brindamour and other senior Intact executives discussed the insurer’s latest quarterly financial results along with other topics such as the recent RSA acquisition. Brindamour said more information will be shared at the upcoming Investor Day, “both in terms of growth opportunities, but also performance and outperformance opportunities.”

Intact’s operating direct premiums written (DPW) increased 33% from $2.47 billion in 2020 Q4 to $3.28 billion in 2021 Q4 for its Canadian segment. The Canadian combined ratio was relatively flat at 84.4% in the latest quarter from 84.0% in 2020 Q4. It decreased 1.3 points last year to 86.7% from 88.0% in 2020.

In the insurer’s P&C Canada segment (which includes RSA Canada results), personal property premiums grew by 33%, mainly driven by RSA and five points of organic growth due to firm market conditions. The operating combined ratio remained very strong at 79.5%, Intact reported, but was 6.3% higher than last year, reflecting 4.4 points of higher Cat losses.

Personal auto premiums grew by 25%, driven by RSA, “while we continue to operate in a muted rate environment,” Intact said in a press releasing announcing its latest quarterly results. Although up from the prior year, driving activity remains below pre-pandemic levels, with a combined ratio of 87.5%.

Intact’s acquisition of RSA mainly drove Intact’s commercial lines premium growth of 41%. The combined ratio of 84.3% improved 11 points from one year ago.

“We’ve taken a fairly cautious stance in terms of the high volatility of the environment in which we operate from a reserving point of view that clearly contributes as well,” Brindamour said of the insurer’s strong financial results, which beat its own expectations.

Looking at the RSA acquisition, the deal contributed a 12% accretion in the seven months since Intact closed its largest acquisition to date. The transaction, which completed at the beginning of June 2021, saw Intact acquire RSA Canada and some of RSA’s international operations. “We’re pretty bullish about the assets we have now in specialty lines,” Brindamour said during the conference call.

“The integration is on track and certainly contributing to the earnings power in line, if not a little bit better, than what we thought when we did the transaction,” he added last month during the 25th annual CIBC Western Institutional Investor Conference. “It came sooner than we thought, quite frankly. A portion of it is [that the] performance is a little bit better than what we thought, and then the integration is going really fast.”

In Canada, policy conversion in the broker channel is well underway. More than 40% of personal lines broker policies, and nearly 40% of commercial lines small business and fleet policies have converted to Intact systems to date.


Feature image by Almqvist