How Intact’s third quarter results shaped up

Intact saw premium growth in 2023 Q3, but its profitability took a hit because of inflation and the Canadian wildfires, the company reported.

Intact saw single-digit premium growth in its personal and commercial lines in 2023 Q3, and predicts this growth will continue over the next 12 months, which should see continuing hard market conditions. 

Overall, Intact’s Canadian operations wrote direct premiums written (DPW) of $3.9 million in the third quarter — an 8% increase from the previous year’s CAD $3.6 million, the company reported in its 2023 Q3 results.  

So far, the company’s written $11.9 million in direct premium in 2023, a 6% increase from its $10.5 million over the same period last year. 

Intact’s third-quarter combined ratio sits at 101.8%, thanks largely due to a record season of Canadian wildfires. This is a 9.3% increase from 92.5% at the same time last year. 

Intact Financial Corporation CEO Charles Brindamour said the company is working to get customers back to normal after several months of severe weather events.  

“We have a long track record of successfully navigating volatility in catastrophe losses,” Brindamour said. “The third quarter was no different, as we delivered an operating ROE [return on equity] of 12.2%, and our balance sheet remained strong with $2.8 billion of total capital margin.”  

Line by line 

Despite high single-digit premium growth in its Canadian operations, Intact predicts hard market conditions will continue for most lines of business, largely driven by inflation and natural disasters. 

Personal auto premiums increased by 9% in 2023 Q3, driven by rate increases Intact made during the hard market, as well as its improved unit growth trajectory.  

The personal auto combined ratio sits at 95.4%, which includes roughly two points worth of higher-than-expected catastrophe losses and industry pools, Intact reported. 

Personal property premiums also grew by 9% — an increase of 2% from the previous quarter. This is also thanks to rate actions Intact took, coupled with improved unit growth.  

The company’s elevated combined ratio sits at 123.7%, which includes 34 points worth of excessive catastrophe losses. Intact had previously reported an estimated $335 million in catastrophe losses in Canada for the second quarter of 2023. 

“We remain well positioned to protect profitability through rate actions in supportive market conditions, while continuing to control costs through supply chain and other claims improvements.” 

Intact predicts both its personal property and auto premiums will grow by high single digits to make up for a higher severity of losses.  

In its Canadian commercial lines segment, Intact’s premiums grew by 7%, a one-point increase from the second quarter. This increase was driven largely by continued rate increases and strong retention. The commercial combined ratio of 92.7% was 5.1 points higher than the previous year, due to elevated catastrophe costs. 

“We remain well-positioned to continue to deliver a low-90s or better combined ratio, as a result of our profitability actions in the prevailing hard market conditions,” the company said of its commercial line.  

As for its 12-month outlook, Intact predicts hard market conditions will continue in most commercial and specialty lines business and expects mostly high single-digit premium growth.  

Feature image by iStock.com/oatawa