Canadian Underwriter

Where Intact CEO sees personal home rates heading

February 7, 2022   by Jason Contant

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Personal home insurance will continue to face a firm pricing environment for the foreseeable future, the CEO of Intact Financial Corporation said at a recent virtual conference.

“You can expect a firm pricing environment, mid- to upper-single-digit range for the foreseeable future, mid-term for sure,” Intact Financial Corporation CEO Charles Brindamour says during a virtual fireside chat at the CIBC Western Institutional Investor Conference. “This is a segment that is in the process of adjusting to the new reality.”

Brindamour made his comments in response to a question from moderator Paul Holden, banks and insurance analyst and managing director with CIBC, about hard pricing conditions in personal and commercial lines.

Brindamour notes home insurance has seen the effects of inflation, driven by parts and construction material costs, “but more importantly, changes in weather patterns. We’ve seen that again this year.”

His findings are in line with what rate aggregator RatesDotCa found: home insurance policyholders can expect an average 5% rate increase in 2022.

Intact CEO Charles Brindamour

Intact CEO Charles Brindamour speaking during a virtual fireside chat at the 25th annual CIBC Western Institutional Investor Conference.

Insurers speaking at a Canadian Underwriter webinar Jan. 25 agreed the hard market in personal property won’t be going away any time soon.

“It’s going to be an interesting time in personal property over the next number of years, particularly looking into next year,” says Gore Mutual CEO Andy Taylor. He pointed to climate change as one factor affecting the hard market. “I think these costs of climate are not yet fully reflected in pricing for personal property across the country.”

Carol Jardine, president of Canadian P&C operations for Wawanesa Mutual Insurance Company, adds that although reinsurance treaties may not have been impacted for catastrophe, “everybody’s got a climate risk loading in their pricing of about 5%.”

For Intact, personal home is one of its most profitable segments. “Yet, there is room to expand the margin, there’s room to outperform in that segment and it’s true in Canada and it’s true in the U.K,” Brindamour says during the Jan. 20 webinar. “So far, we’re positive about what we’re seeing there and think we’ll be able to find opportunities.”

In personal auto, inflation related to technology and parts along with liability has been rising for at least three or four years. “As a result, the market is pretty rational from a competitive point of view,” Brindamour says. “On the other hand, you’ve seen a reduction in driving during COVID, a reduction in frequency, this has clearly tamed the rate increase that would have otherwise taken place in the market.

“As driving returns back to normal, as frequencies will migrate back to normal over time, we do expect that the pricing environment will likely resume its increases some time in the coming months, as you’ve seen a number of competitors start to move in the second half of 2021,” he says.

Commercial lines are “firm to hard everywhere we operate,” Brindamour says. “And that’s a very good environment for us to leverage some of our pricing risk selection tools and expand our margin because the pricing environment offers more opportunity than the inflation we’re seeing in commercial lines. I do expect a pretty strong – call this a ‘trading environment,’ as our friends in the U.K. would say – for us in the next 24 months.”


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