8 May 2019 13:30
Photo : Freepik
Intact financial Corporation has reported a net profit of 159 million dollars ($M) in the first quarter of 2019, an increase of$ 56 Million compared to 2018, and this, in spite of a deterioration in the combined ratio, which increased from 99,2 % to 101,5 %.
Excluding the u.s. operations, the combined ratio of Intact to Canada is 102.9% at, which ” reflects the difficult winter conditions in Canada “. This has been offset by ” the strong performance in insurance companies in the United States “, leading to a combined ratio of 94% for the u.s. operations.
“Our teams have put a lot of effort during the quarter to help our customers recover from the winter conditions are particularly difficult,” says Charles Brindamour, ceo of Intact. The underlying performance of all our business lines has improved, particularly in personal auto. Insurance companies in the United States, our action plans continue to provide the expected results. “
The hardening of the market will benefit Intact
The return on equity of 10.6 % is higher than that of the industry, according to Mr. Brindamour. This trend should continue, ” he said. “In a context of tightening of market conditions, we expect that our return on equity is improving and that the upgrade compared to the industry remains important in 2019. We are also in a good position to take advantage of growth opportunities in this context. “
In addition, Intact expects that the premiums increase between 5% and 10% over the next twelve months, thanks to the context of a hardening of the market”, arising from the low profitability of the industry in all sectors of activity “, which puts pressure on the rates.
In the first quarter of 2019, the premiums have increased by 6 % due to rate increases averaging 7 % across all sectors of activity. These are set at a little over 2.2 billion dollars (G$), compared to slightly less than$2.1 billion.
The insurer, however, has recorded a loss from underwriting of$ 37 Million for the quarter ending march 31, while it had a profit of$ 19 Million in the same period of 2018.
Louis Marcotte, senior vice president and chief financial officer, points out that the cost of claims, totaling$ 165 Million before taxes, is responsible for this result. This cost was, however, offset in part by good growth in net investments and earnings before interest, taxes, depreciation and amortization derived from the distribution, as well as a savings tax on the operating income of$ 17 Million “.
Support for flood victims
Intact also announced that it has offered a donation of $ 200,000 to the canadian Red Cross in support of victims of the flooding that occurred in several regions of Quebec, Ontario and New Brunswick.
“During these difficult times, our thoughts are with the people affected. We have implemented our response plan, there are several days and more than 3 600 employees of the compensation are ready across the country to help customers affected by the rapid melting of the snow, the rain and the floods in Quebec, Ontario and New Brunswick, ” said Louis Gagnon, president of canadian operations of Intact.
This payment is in addition to the donations made by ai financial Group, Capital Insurance, Promutuel, the Desjardins group and thecanadian bankers Association.
Last week, the organization announced it had amassed three million dollars in donations and financial assistance from the government. Direct financial assistance of $ 600 will be provided to disaster victims registered with the canadian Red Cross.