Third quarter reports from Economical Insurance and Intact Financial Corp. each reported a drop in income, reflecting weather-related catastrophes and the Lac-Mégantic rail disaster.
For Intact Financial, net income for the quarter was $47 million, down from $92 million for Q3 in 2012.
“Despite reporting our first underwriting loss in the last 10 years as a result of substantial catastrophe losses incurred by our customers, our underlying operating performance remained sound,” said Charles Brindamour, CEO of Intact. “As severe weather events become more extreme and frequent, we will continue to pursue our efforts to ensure that the protection we offer reflects our country's new climate reality and that governments, consumers, businesses and all stakeholders pursue their efforts to better adapt to climate change."
(see related story, Just the Facts)
Pre-tax catastrophe losses of $273 million, net of reinsurance, incurred during the quarter, ending September 30, from major rain and hail storms in Ontario, Alberta, and Quebec, and from the Lac-Mégantic, Que. train derailment.
The overall combined ratio for Intact in the quarter was 102.8 per cent. (continued.)
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Economical Insurance showed a net income of $13.8 million for the third quarter of the year this week, down $14.7 million from the prior year quarter, while Intact Insurance reported a net operating income of $59 million for the third quarter of the year, down a dramatic $63 million over the same period in 2012.
“Our third quarter results serve as another reminder of the increasing impact of climate change and that weather-related events are becoming more extreme and prevalent,” stated Karen Gavan, president and CEO of Economical. “Our third quarter and year-to-date results demonstrate the resilience of our insurance operations in the face of such devastating natural catastrophes, as well as the strong underlying performance of our insurance book of business.”
Economical reported $40.6 million of weather-related catastrophe losses (net of tax and reinsurance) for the quarter, mainly in Ontario and especially in the Greater Toronto Area. That dwarfs the $12 million of weather-related catastrophe costs for the third quarter results the previous year.
Economical increased gross written premiums by 6.1 per cent in the quarter (from $462.5 million to $490.5 million).
Economical’s combined ratio for Q3 was 103.7 per cent, a 4.6 percentage point slip over the same quarter in 2012.
