Mild winter boosts Intact’s 2012 Q1 results

Buoyed by reduced claims frequencies because of mild weather and Ontario’s auto insurance reforms, Intact Financial Corporation reported a 2012 Q1 profit of $177 million, 13% higher in year-over-year comparisons.

“This was a particularly strong quarter as we continued to reap the benefits from our robust auto and home initiatives and our results were helped by the mild winter weather conditions with a significant decrease in claims frequencies across all of our businesses,” said Charles Brindamour, CEO of Intact Financial Corporation.

The company reported an overall combined ratio of 92.3% in 2012 Q1, posting investment income that was 37% higher than the same quarter in 2011 and underwriting income that rose from $58 million to $123 million in year-over-year comparisons.

In personal auto lines, the company’s underwriting income increased from $12 million in 2011 Q1 to $36 million in 2012 Q1. “The combined ratio improved 2.5 percentage points to 95.2% primarily as a result of a decline in the frequency of claims due to the mild winter weather,” the company reported.

Mild weather conditions again played a factor in Intact’s personal property lines, with underwriting income in this segment improving from $20 million in 2011 Q1 to $59 million in 2012 Q1. “The exceptional combined ratio of 83.5% improved 8.8 percentage points from the first quarter of 2011 as a result of benefits from our home improvement action plan and mild winter conditions,” the company reported in statement.

Commercial lines presented a somewhat different story. “Commercial P&C underwriting income amounted to $9 million from $20 million recorded in the first three months of 2011,” Intact disclosed. “The combined ratio in commercial P&C insurance increased by 7.7 percentage points to 97.6%, due to an unusually high number of large claims losses and an increase in ceded reinsurance premiums.”