August 1, 2017 by Canadian Underwriter
Intact Financial Corp. reported Tuesday its underwriting income was $103 million during the three months ending June 30, up $87 million from $16 million during the same period in 2016.
Toronto-based Intact said direct premiums written rose 2%, from $2.458 billion in Q2 2016 to $2.5 billion in the most recent quarter.
Intact attributed the increase in underwriting income mainly to lower catastrophe losses. In 2016, Intact was affected by the most expensive natural catastrophe so far in Canadian history (when measured by insured losses), which was the set of wildfires that resulted in the evacuation of Fort McMurray, Alberta.
Intact’s combined ratio fell 4.2 points, from 99.2% in Q2 2016 to 95% in the most recent quarter.
Intact said Tuesday its proposed acquisition of OneBeacon Insurance Group Ltd. – which is currently majority-owned by Bermuda-based White Mountains Insurance Group Ltd. – “is progressing well and on track to close in Q3 or early Q4-2017.”
OneBeacon’s operations include New York City-based International Marine Underwriters. Of US$1.1 billion in net premiums written in 2016, OneBeacon reported, in a previous securities filing, that US$344.9 million was from general liability, US$176 million was from ocean and inland marine, US$88.9 million was from commercial multiple peril and auto physical damage and US$54.6 million was from surety. Other OneBeacon coverages include workers compensation in the U.S., professional liability for architects and civil engineers as well as cyber, among others.
On May 2, Intact announced it agreed to acquire OneBeacon – which is based west of Minneapolis in Plymouth, Minn. – for $2.3 billion.
The same day, White Mountains said it intends to “vote its shares” of OneBeacon in favour of Intact acquiring 100% of OneBeacon.
White Mountains completed in April, 2016 the US$2.6 billion sale of Sirius International Insurance Group Ltd. to CM International Holding Pte. Ltd. Five years earlier, The Allstate Corp. acquired Esurance Holdings Inc. from White Mountains.
Both White Mountains and OneBeacon are traded on the New York Stock Exchange.
Intact’s subsidiaries include Intact Insurance Company, Canada Brokerlink Inc., Jevco Insurance Company (through which it sells non-standard auto in Ontario), Belair Insurance Company Inc. and Equisure Financial Network Inc., among others.
In 2016, about 9% of Intact’s direct premiums written came through BrokerLink, while about 15% came through belairdirect, Intact said earlier this year in its annual report for 2016.
ING Insurance Company of Canada was renamed Intact in 2009 when ING Groep sold its interest in its Canadian subsidiary.
Intact said earlier this year that in 2016, it acquired all of the outstanding shares of InnovAssur assurances, formed through an alliance between between AXA and National Bank of Canada. InnovAssur writes property & casualty insurance through National Bank General Insurance. Intact acquired AXA’s Canadian operations in 2011.
Intact reported Aug. 1, 2017 that its net income increased 243%, from $93 million in Q2 2016 to $243 million in the latest quarter.
For the first six months of 2017, the combined ratio was 96.6%, up 0.8 points from 95.8% in Q1 2016, “as improved underlying performance was muted by more challenging winter conditions, lower favourable prior year claims development and elevated catastrophe losses.”