Weather woes and burst pipes saw RSA owner Intact’s UK&I division take an underwriting hit in Q4 2022.
The UK&I personal lines operating combined ratio hit 120.8% for Q4, pushing its full year personal lines result to 106.2%.
Commercial performed better, with an operating combined ratio of 92.8% for Q4 and 90.4% for the full year.
RSA owner Intact saw catastrophe losses of CA$167 million (£103 million) in Q4 2022, with CA$90 million of this coming from its UK&I business.
In UK&I personal lines alone, cat losses totalled CA$87 million.
The group’s combined UK&I division reported an operating combined ratio of 104% for the quarter, which it said reflected “the impact of the December freeze event in personal lines, as well as elevated non-CAT large losses and inflation pressures across both lines of business.”
The UK&I segment made an underwriting loss of CA$42 million for the quarter, a deterioration on Q4 2021’s CA$80 million positive result.
For the full year, the UK&I business saw underwriting income of CA$123 million, down on 2021’s CA$152 million.
Intact expects the UK&I personal property market to firm “as it reacts to inflationary pressures, natural disasters and a hard reinsurance market”, Intact said in a press release.
Personal motor has already begun firming, it said, and the insurer anticipates this will increase over time.
Hard market conditions are set to continue in commercial and specialty lines across all geographies, Intact said.
Regarding its RSA integration, the insurer said in an investor presentation that it was “on track to achieve CA$350 million of pre-tax annual run-rate synergies within three years.”
Intact and Tryg closed their £7.2 billion takeover of RSA in 2021, with the buyers having divvied up its business between them and sold Danish business Codan Forsikring.
“The resilience of our platform was again evident in 2022 with a mid-teens ROE despite elevated catastrophe losses and inflation pressures,” said Intact CEO Charles Brindamour.
“At the same time, we made significant progress on the RSA integration, which contributed 16% to net operating income per share for the full year and drove 23% growth in premiums.”
Across its businesses, including its Canadian and US operations, Intact’s operating combined ratio was 91.6% for the full year, which is said was despite catastrophe and inflation pressures.
Net income for the year was CA$2.4 billion, up on CA$2.1 billion in 2021.
“With the business operating at a low 90s combined ratio, positive top line momentum across all segments and a strong balance sheet, we are well positioned to deliver on our financial and strategic objectives in the year ahead,” Brindamour said.
“We are therefore pleased to increase dividends to common shareholders for the eighteenth consecutive year.”
