Intact shares trade up almost 5% after posting improved Q4 performance

By Chris Munro

Feb 12 - (The Insurer) - Shares in Intact Financial Corporation were trading up almost 5 percent on Wednesday afternoon as investors responded favourably to the Canadian company’s Q4 2024 earnings, which included a 3.6 point combined ratio improvement to 86.5 percent, and positive go-forward commentary from management.

Intact’s shares were trading on the Toronto Stock Exchange at C$289.14 each as of 2:20pm on Wednesday, up from the previous day’s close of C$276.23.

The uptick comes after Intact closed Q4 2024 by cutting 3.6 points from its combined ratio to 86.5 percent on the back of improved performances in its Canada, UK and Ireland (UK&I) and US operations.

Intact said the improved consolidated combined ratio was also due to the benefit of its profitability actions, including higher earned premiums, along with milder weather.

The reduction in the combined ratio was also reflected in Intact’s underwriting income which increased 48 percent year on year to C$764mn from Q4 2023’s C$517mn.

In Canada, Intact’s combined ratio improved by 1.8 points year on year to 84.9 percent. Intact’s UK&I business posted a combined ratio of 92.7 percent in Q4 2024, down 11.9 points from the prior year period.

And the US combined ratio fell by 30 basis points from 2023’s fourth quarter to 86.1 percent.

Intact’s net operating income increased 24 percent year on year to C$881mn, while its net income for the final three months of 2024 grew by 26 percent to C$667mn.

Operating net investment income went up by 6 percent compared with Q4 2023 to C$398mn, largely due to higher book yields, Intact said.

Operating direct premiums written (DPW) increased 5 percent year on year to C$5.76bn in 2024’s fourth quarter, driven by expansion in its native Canadian business.

The operating DPW growth was driven by rates and continued unit growth in personal lines, Intact said.

Within commercial lines, Intact said growth was led by mid-single-digit rates and favourable market conditions across most of its business lines.

Canadian operating DPW grew by 8 percent from 2023’s fourth quarter to C$3.98bn. UK&I operating DPW contracted by 3 percent year on year to C$1.14bn, while in the US, operating DPW recorded a small increase to C$631mn, compared with the prior year period’s C$616mn.

On a call with analysts to discuss the Q4 2024 results, Intact’s CEO Charles Brindamour said the company is “really well positioned to continue delivering on our road map in '25”.

Reflecting on Intact’s Canadian operations, Brindamour said the company’s digital marketing and customer experience investments “are really paying off”.

“We're well positioned to continue to deliver strong growth in 2025,” he said about the Canadian business.

“We expect hard market conditions to persist over the next 12 months and our competitive positioning to further improve,” Brindamour declared.

Turning to Intact’s UK&I operation, Brindamour said the company’s integration of the Direct Line brokered commercial lines business it acquired in October 2023 “is progressing well”.

“This acquisition has added 30 percent to our premium base in the UK&I. As expected, we're working on improving its performance,” he said.

“Our refocused UK&I segment is well positioned to evolve the combined ratio towards 90 percent,” Brindamour added.

The executive explained that its US premium growth was flat in Q4 2024, reflecting “ongoing corrective actions taken in underperforming segments”.

“If we exclude these, growth was 4 percent, with healthy rate increases across the rest of our book.

“Given the current market conditions, we expect industry premium growth to be in the mid- to high single digits over the next 12 months,” Brindamour said.

“Going forward, we remain well positioned to continue to run this business in the low 90s or better,” he noted.

“Overall, we're entering '25 with a lot of positive momentum. Growth is in the mid-single digits,” Brindamour added.