For the second quarter ending June 30, 2024, Intact Financial Corporation reported a net profit of $758 million, a significant increase from $260 million during the same period in 2023, marking a 192 per cent rise. 

According to CEO Charles Brindamour, this growth was driven by strong performance across all the markets in which the insurer operates. “Top line momentum continues to be strong, especially in personal lines, and we are focused on making the most of the current market conditions in commercial lines,” he said. 

Premium growth 

The company expects personal insurance premiums (auto and home) to grow by 10 per cent in 2024, while commercial insurance premiums are projected to increase by 5 per cent. 

Direct premiums written (DPW) rose by 6 per cent, reaching $6.7 billion in Q2 2024, compared to $6.2 billion in 2023. 

In Canada, operating DPW increased by 7 per cent, amounting to $4.6 billion in Q2 2024, up from $4.3 billion in the same period in 2023. 

“Eight years ago, 100 per cent of our revenue came from Canada,” Brindamour noted during an analyst conference. In 2024, this share dropped to 67 per cent. “Our sandbox is 10 times bigger than what it was eight years ago,” he added.  

Brindamour said Intact is aiming to achieve the same market-leading performance in other regions as it has in Canada. 

A similar 7 per cent growth was observed in the UK and International markets. Excluding the impact of exiting the personal lines market in the UK, DPW growth surged by 42 per cent in Q2 2024, driven mainly by the acquisition of DLG’s brokered commercial lines in Q4-2023. Organic growth was 6 per cent. 

In the United States, premiums grew by only 1 per cent over 12 months in constant currency. Despite rate increases of around 5 per cent, competition for large accounts and unfavourable timing impact in renewals limited DPW growth, according to the company's management report. 

Combined ratio improvement 

Intact highlighted a 9.2-point improvement in its combined ratio, which reached 87.1 per cent in Q2 2024, compared to 96.3 per cent a year earlier. Of this decrease, 7 points were attributed to a reduction in catastrophe losses compared to the elevated levels of the previous year. 

By segment, the unadjusted combined ratio evolved as follows between Q2 2024 and the same period last year: 

• In Canada, the combined ratio was 85.4 per cent in 2024, down from 97.9 per cent in 2023, a difference of 12.5 points. 
• For RSA (UK & International), the pro forma combined ratio, reflecting the exit from the UK personal lines market, stood at 92.2 per cent in 2024, compared to 94.1 per cent last year, a 1.9-point improvement. 
• In the US, the combined ratio improved by 2.8 points, reaching 88.5 per cent in 2024, compared to 91.3 per cent in 2023. 

Underwriting income 

Net underwriting income soared to $681 million in Q2 2024, up from $184 million in the same period in 2023, representing a 270 per cent increase. 

Detailed results for Q2 2024 compared to the same period in 2023 are as follows: 

• In Canada, net underwriting income reached $543 million in 2024, up from $73 million in 2023. This progress was particularly notable in personal property insurance, where the segment posted a net loss of $173 million in 2023, compared to net income of $213 million in 2024. 
• In the US, net underwriting income was $61 million in 2024, compared to $43 million last year. 
• For RSA (UK & International), net underwriting income was $81 million in 2024, up from $62 million a year earlier. 

Distribution income 

The company also reported a 23 per cent increase in distribution income, which amounted to $169 million in Q2 2024. The company noted that revenue from On Side Restoration is included in this figure. 

Management reiterated its target of $5 billion in premium volume for its BrokerLink subsidiary by 2025. The $4 billion mark was surpassed in 2024, and the subsidiary made nine acquisitions in Q2, adding $235 million in DWP. 

Investment income 

Net investment income reached $387 million in Q2 2024, up from $326 million a year earlier, representing a 19 per cent increase. 

After the first six months of 2024, investment income has grown by 24 per cent year-over-year, reaching $767 million. 

Major losses in July 

Intact’s clients were relatively spared from natural disasters in the first half of 2024, with total losses amounting to $193 million, compared to $529 million for the same period in 2023. 

However, CFO Louis Marcotte noted that floods in Toronto and wildfires in Jasper, Alberta, will impact claims in Q3. Nevertheless, the company maintains its target of $900 million for catastrophe-related losses for the full year 2024. 

During the July 31 conference call, Brindamour emphasized the efforts of the claims teams in response to these major events. “These are tough times, with homes and businesses destroyed and stressful evacuations. We are focused on providing support to customers in a time of need,” he said. 

The claims teams at Intact, On Side Restoration, and their partner Wildfire Defense Systems (WDS) responded swiftly, Brindamour added. 

“We are proactively contacting customers to assess their situation, providing funding for additional living expenses, and are present on the ground where it’s possible to begin rebuilding efforts,” he continued. 

“It’s in these moments that we are reminded of how important our purpose is – to help people and businesses prosper in good times and be resilient in bad times,” he said. 

During the call, COO Patrick Barbeau noted that it was too early to assess the damages in Jasper. However, through WDS, the insurer knows that about 700 households or businesses among its clients were affected by the evacuation order in Jasper. It is estimated that total losses involve 250 residential and commercial properties. 

In the case of the Toronto floods, Barbeau noted that it was the largest volume of claims received by On Side Restoration for a single event since its acquisition by Intact. 

Regarding the disruption caused by the CrowdStrike update on July 19, Barbeau stated that related claims would be minimal. “For business interruption coverage, this risk is not covered unless there is physical damage to covered property,” he clarified. This risk is covered for businesses under their cyber insurance policy, but the interruption lasted only a few hours, and deductibles apply. 

Direct digital sales reached $228 million in premiums in Q2 2024, an increase of 84 per cent over 12 months, noted Guillaume Lamy, Senior Vice President of Personal Lines, during the analyst conference. 

As he did in previous earnings calls, Brindamour reiterated his dissatisfaction with the auto insurance cap imposed by the Alberta government. “Insurers have exited the market, and more will follow if the cap remains below inflation. This is not sustainable in the long term. The ball is in the government’s court,” he stressed.