Slave Lake losses partially offset Intact’s strong first-half performance in 2011

Intact Financial Corporation (TSX: IFC) has reported a net operating income for 2011 Q2 of $95 million, down $24 million from the same quarter of last year.
The decrease reflects after-tax losses of $92 million due to the Slave Lake wildfires and the numerous rain and windstorms that prevailed during the spring months.
“The catastrophic losses we incurred during the spring months, the largest since the 1998 Ice Storm, overshadow one of our best performances in recent years,” said Charles Brindamour, president and CEO of Intact Financial Corporation.
The company reported a profit of $280 million for the first six months of 2011, down from $282 million over the same period last year.
The company’s combined ratio for 2011 Q2 was 97.0%.
The company said a very strong performance in its auto insurance portfolio partly offset its catastrophe losses.
“The performance of our auto insurance portfolio, which has been solid over the last few months, continues to improve, most notably in Ontario, where we have taken a prudent approach to growth and introduced initiatives to reduce fraudulent activities,” Brindamour said. “We continue to be confident that the initiatives adopted by the Ontario government to curb the cost inflation of medical claims will prove successful.”
At an industry level, Intact predicted premiums would likely increase in the next 12 months at a pace similar to last year, with percentage growth in the mid single digits in personal auto and upper single digits in personal property.
“These increases will be driven by rate inadequacies in auto insurance in Ontario and the impact of water-related losses and more frequent and severe storms,” the company said in a press release. “Commercial lines premiums are expected to grow at a low single digit rate.”