March 28, 2018 by Greg Meckbach
Canada’s largest property and casualty insurer is prepared to lose market share on auto in order to improve its bottom line, company officials said Monday.
“We have been and continue to be prepared to lose market share in order to fix our short-term challenges,” Darren Godfrey, senior vice president of personal lines for Intact Insurance, said Tuesday during a presentation at Intact’s investor day.“We are losing (market share) in terms of non-renewing, where customers are cancelling their renewal book.”
Godfrey added that customers are choosing not to renew their personal auto insurance with Intact because they are being quoted a higher price. Consequently, he said, “what comes through the door from a new business standpoint [in personal auto] is important.”
Godfrey’s comments concerned Intact’s rate increases in personal auto insurance. Intact expected a 5% rate increase Canada-wide in auto this year.
So far in 2018, Intact has been approved for auto rate increases in Ontario, Alberta and Atlantic Canada. Starting in the summer of 2016, Intact decided to take rate increases “pretty much coast to coast” Godfrey said.
Asked by an analyst how price increases affect the Intact brand, chief strategy officer Monika Federau said Intact is “not seeing a deterioration in the brand.”
Intact reported last month that in 2017, its combined ratio in personal auto was 101.7%, up from 99.9% in 2016. One reason is the cost to repair vehicles, which has increased because of more expensive parts and newer technologies.