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The increase of premiums loss of volume to Intact insurance automobile


Hubert Roy

10 January 2019 11:30

Charles Brindamour

As she had predicted, Intact financial Corporation has seen its insurance portfolio auto shrink to the result of the rate increases that it has made.

This is what was revealed to Charles Brindamour, chief executive officer of the company, during a discussion with analysts following the disclosure of its results for the third quarter of 2018. Increases have also been carried out by home insurance, but the premiums are up 2 % compared to a year ago.

Caution with the legalization of cannabis as a recreational

The legalization of cannabis as a recreational help it to be Intact to achieve further increases in premiums, has asked an analyst ? Difficult to say for the moment, says the senior vice president of personal lines at Intact, Darren Godfrey.

No study on the frequency of claims related to cannabis as a recreational only exists in Canada, then there are in the United States. The catch is that some say that the legalization of cannabis as a recreational will have negative effects on the loss experience of insurers, while others say that it’s not going to happen.

“We are very careful in our thinking about the impact of the legalization of cannabis as a recreational. We will be very attentive to the frequency of damage and we will adjust the rate accordingly if necessary, ” said Mr. Godfrey.

Adapt to the shortage of labour

The shortage of labor strikes in various economic sectors in Canada. The sector of the automotive body is one, requiring action on the part of Intact.

“The shortage of labor has had a direct impact on the cost of repairs to vehicles, but also loans of cars during the work. In some relationships, there has been a hitch at the end of 2016 and in 2017 “, said Mr. Brindamour. “The relationships we have with members of our Trusted Network we have provided benefits in this sense compared to our competitors,” added Patrick Barbeau, senior vice president, claims.

Such a hitch, however, resolved since. The evidence for the cost of the replacement vehicle and the costs of the rental of Intact decreased.

Intact closely follows the regulations in the United States

The regulation of automobile insurance in some canadian jurisdictions, including Ontario, still retains the attention of financial analysts who follow the stock market performance of Intact. On this subject, Charles Brindamour has revealed that his company was closely following the developments of the regulations south of the border, which he described as mosaic.

“There are a number of jurisdictions, particularly in states in the Midwest, where the regulation in auto insurance is similar to that of Quebec, and where the insurer may itself correct its rates if it has been too aggressive. This is not the case in Ontario, where the government must approve them, which can take up to six months, ” he explained.

Growth of approximately 5 % in Quebec

Mr. Brindamour has also reported on the growth of its business in Quebec. In the course of the last year, it is estimated at around 5 %, and this, both in brokerage and in direct distribution.

“The pressure is really coming from Ontario and Alberta, where the regulatory environment is more restrictive. It moves more quickly than our competitors, with increases in premiums are significant. The markets of Ontario and Alberta are those where the ability fades. These are the markets where the insurers will raise their premiums. This is where I see the biggest delta in terms of growth over the course of nine to twelve months. “

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