Cats scratch Intact’s bottom line in 2023

Intact Financial Corporation (IFC) has reported elevated catastrophe losses in 2023, raising its combined operating ratio (COR) by 4.3 points since 2022.

“The past year has been challenging for society, particularly in the face of numerous natural disasters,” said Charles Brindamour, CEO of IFC. “Despite shouldering elevated catastrophe losses as a result, the business demonstrated tremendous resilience.”

The company previously reported its 2023 Q4 catastrophe losses at $6 million in personal lines and $24 million in commercial lines in Canada. However, its losses in Canada paled in comparison to its UK&I losses ($152 million), which were driven by two severe windstorms. Intact previously reported substantial Cat losses in Canada due to a record wildfire season.

Intact’s 2023 full-year COR in Canada (undiscounted) was 94.5% — up from 90.2% in 2022 — for a difference of 4.3 points year-over-year. Its COR in 2023 Q4 was 86.7% — a difference of 0.9 points from the same period in 2022.

Overall, Intact reported its Canadian segment wrote $14.89 billion total in direct premiums written (DPW) in 2023 — about a 6% increase from the previous year. In the final quarter of 2023 alone, the company earned $3.68 billion in DPW.

Intact reported premium growth line by line, thanks to the increased rate action it made in 2023, the company reported.

Personal auto premium growth increased 12%, “reflecting the benefit of our rate actions in hard market conditions and continued momentum in unit growth,” Intact wrote.

At 94.7%, its full-year personal auto combined ratio is in line with expectations, the company reported. “We continue to expect a seasonally adjusted sub-95 combined ratio over the next 12 months.”

In personal property, premiums grew by 8%, “driven by rate increases in hard market conditions and unit growth momentum.”

Aided by underwriting discipline and mild weather, the company reported a “very strong” combined ratio at 75.8% for the fourth quarter. Yet, the combined ratio for personal property in 2023 was 100.7% due to catastrophe losses that exceeded expectations. 

“With pricing, risk selection, product, claims and supply chain actions already underway, we remain well-positioned to deliver sub-95 performance, even with severe weather.”

In commercial lines, premiums grew 4% and combined ratios sat at 84.4% for 2023 Q4, and 89.3% for the year. “We remain well-positioned to continue delivering a low-90s or better combined ratio as a result of our profitability actions.”

As for its Canadian P&C industry outlook, Intact anticipates both personal property and auto premiums will grow by high single-digits. 

In most commercial and specialty lines, the company expect hard market conditions to continue, with a high single-digit premium growth average country-wide.

Expect hard insurance market conditions to continue in most lines of business, the company reported, driven by inflation and catastrophe losses.

 

Feature image by iStock.com/Rudzhan Nagiev