TORONTO - Intact Financial Corp. (TSX:IFC) saw a healthy increase in its second-quarter profits compared with the same quarter last year, when the insurance company was affected by extensive flooding in Alberta.
The property and casualty insurer said its net income more than doubled to $215 million, or $1.60 per share, compared with $103 million, or 73 cents per share, in the same quarter last year.
Intact Financial said net operating income was up 67 per cent to $206 million versus $123 million last summer, when floods hit 30 communities in southern Alberta. The flooding began in late June and caused billions in damages to homes, schools, health facillties and highways. On a per share basis, net operating income increased by 73 per cent to $1.53.
"Our operating and financial results improved significantly in the past few months," CEO Charles Brindamour said in a news release on Wednesday.
"Our personal insurance business is performing well, reflecting the successful implementation of our improvement initiatives and the solid contribution of our auto insurance activities. While our commercial auto insurance results were excellent, the performance of our commercial property and casualty insurance portfolio continues to be disappointing, warranting corrective actions," he said.
An Intact spokesman said there have been several steps taken, including a new pricing method introduced this month that will allow the company to make more targeted rate increases based on the risk associated with the businesses they insure.
Intact is also raising the deductibles for businesses - the policyholder's share of costs when a claim is made - in the event of floods, reducing its exposure to earthquake coverage and starting to map the locations of businesses that Intact insures to highlight potential concentration issues.
During the second quarter ended June 30, Intact's direct premiums written were down one per cent at $2.2 billion and were reduced by last yearâ€™s decision to stop offering two-year property policies in Quebec.
Personal property underwriting income was $26 million compared to a loss of $49 million in the same quarter last year. Personal auto underwriting income declined 32 per cent to $72 million largely reflecting a decline in favourable prior-year claims development.
Commercial auto underwriting income increased to $32 million from $16 million a year ago.
Intact said it expects industry premiums will grow at a low-single digit rate. In personal property, it expects industry conditions to remain difficult due to the magnitude of recent catastrophe losses. It also expects that future reductions in Ontario auto premiums will be in line with the government's cost reduction measures.
Intact Financial Corp. is the largest provider of property and casualty insurance in Canada. Intact offers home, auto and business insurance through Intact Insurance, belairdirect, Grey Power, BrokerLink and Jevco.