Intact Financial Corporation reported third-quarter 2024 results, with overall direct premiums written (DPW) rising by 4% and organic growth reaching 6%, driven by rate increases and unit growth across personal lines in a hard market.
In commercial lines, growth was supported by mid-single-digit rate increases, though market competition was significant, particularly in large accounts. The combined ratio reached 103.9%, with catastrophe losses contributing 22 points – approximately 17 points above expectations – mainly impacting the Canadian segment.
Operating net investment income rose to C$394 million, up 13% year-over-year, due to higher reinvestment yields achieved in 2023. Distribution income increased 14% to C$132 million, reflecting contributions from recent mergers and acquisitions as well as improved margins within BrokerLink.
In Canada, personal auto DPW increased by 12%, supported by rate and unit growth. The segment’s combined ratio was 97.6%, impacted by 7 points of catastrophe losses. Personal property DPW grew 8%, with the combined ratio at 147.5% due to 72 points of catastrophe losses. In commercial lines, DPW grew 2%, with the combined ratio at 94.4%, supported by favourable prior-year development.
In the UK and Ireland, excluding the impact of the UK personal lines exit, DPW grew 28%, primarily from the Q4 2023 acquisition of DLG brokered commercial lines. While organic growth was limited due to moderating market conditions, the combined ratio was 91.9%, aligned with expectations following the acquisition.
In the US, DPW grew by 4% as mid-single-digit rate increases were offset by corrective actions in certain lines. The combined ratio improved to 87.4%, a one-point improvement year-over-year, demonstrating sustained underwriting discipline.
Net operating income attributable to common shareholders was C$182 million after accounting for C$1.216 billion in catastrophe losses, reflecting solid underwriting and distribution and investment growth.
Earnings per share increased to C$1.06, supported by gains on equity securities. The operating return on equity (ROE) remained strong at 15.8%, maintaining stability despite elevated catastrophe losses over the past year.
Intact’s balance sheet remains robust, with a total capital margin of C$2.6 billion at the end of the quarter. The adjusted debt-to-total capital ratio stood at 20.3%, slightly up due to recent severe weather impacts and the cancellation of RSA's preferred shares. Book value per share was C$90.60, marking a 17% increase year-over-year.
The company’s board declared a quarterly dividend of C$1.21 per common share, payable on Dec. 31 to shareholders of record as of Dec. 16. Additionally, dividends were approved for several series of preferred shares, also payable on Dec. 31 to shareholders of record on Dec. 16.
CEO Charles Brindamour (pictured above) remarked on the impact of recent severe weather events, emphasising the company’s quick response and support to affected communities through initiatives like On Side Restoration and Intact Service Centres.
“In this context, our operations have shown great financial resiliency, reflected by our strong capital position and mid-teens operating ROE over the last 12 months. It's in these challenging moments that we demonstrate our purpose - to help people, businesses and society prosper in good times and be resilient in bad,” Brindamour said.
Intact projects continued low double-digit premium growth in personal auto and property, and mid-single-digit growth in commercial and specialty lines across all regions, given the current market conditions and elevated catastrophe losses. The company is set to release its 12-month outlook, anticipating ongoing hard market conditions in these lines.
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