Intact Financial Corporation (Intact), the multinational P&C insurance company whose ongoing acquisition of RSA has turned into Canada’s largest P&C insurer has today posted its Q1 2021 results. The quarter has been a positive one for the insurer which saw its net operating income per share increase 49% to CA$2.40 (around US1.98) and its overall return on equity rise by 19%, driven by strong underwriting performance and distribution results.
Premiums grew 1% for the group, impacted by an additional CA$75 million of COVID-19 related relief for personal auto customers while Intact revealed a strong combined ratio of 89.3%. Canada’s combined ratio stands at 88.2% while, in the US, this stands at 96.3%, the latter of which includes 7.6 points of weather-related catastrophe losses.
Commenting on the results, Charles Brindamour, Intact CEO said: “We’ve had a solid start to the year, providing additional relief to our customers and delivering a robust operating performance. Our fundamentals remain strong on both sides of the border. In 2020, our ROE outperformance versus the industry was 570 basis points, again exceeding our 500-basis point target.”
Discussing the ongoing integration and transition planning with the RSA team, Intact noted that this progressing well with all financing secured and closure expected on June 1, 2021. Brindamour noted that he looks forward to welcoming his new colleagues to the Intact family and said: “We are going to hit the ground running together to deliver on our strategic and financial objectives.”
Offering an industry outlook, Intact highlighted that the Canadian industry combined ratio was 97% and the industry ROE was above 9% for the full year 2020.
“We expect firm to hard market conditions in Canada and hard market conditions in the U.S. to continue, driven by low industry underwriting profitability and low investment yields,” Intact said. “In commercial lines on both sides of the border, hard market conditions are expected to continue. In personal lines, firm market conditions are expected in personal property, while in the personal auto market rates increases are prudently lower in the current environment.”
Looking to the future, Intact said that with its strong financial position and confidence in earnings growth, the group will continue to look to protect its people, support its customers and advance its strategic objectives. The company also noted its intention to increase its dividend this year as it has in the past 15 years.