Intact’s continued focus: Control the experience and the process

At a presentation to the 24th annual CIBC Eastern Institutional Investor Conference on Sept. 25, Intact Financial Corporation’s chief operating officer, Patrick Barbeau discussed the company’s returns, business mix and its broker acquisition ambitions in Canada.

“We’re quite confident that we can sustain the ROE (return on equity) we’ve printed in recent quarters,” he told those gathered for the session. “There’s good reasons for that.” 

First, he says the company’s mix of business has changed dramatically in the past 10 years with commercial lines and specialty lines – those which tend to have higher profit margins, he notes – increasing from 30 per cent of the company’s business in 2015 to more than 50 per cent today. “That change of mix has also helped the ROE sustainability.” 

Aggressively deploying machine learning 

He says the company is aggressively deploying machine learning in commercial and specialty lines pricing. As for the claims experience, he says the company continues in its effort to completely control the claims process with its own employees. Nearly all of the company’s claims are handled by its own employees. “And that’s true in normal time as well as in very busy times,” he says.

The company has built a legal defense team of more than 600 lawyers and legal professionals who handle more than 80 per cent of the company’s legal defense liability claims. “Then we went deep into the supply chain. Today we operate 37 service centres for car repairs.” The effort, he says, has reduced cycle times by 30 per cent in those locations and has increased net promoter scores by 10 points. “These are hard to replicate,” he says. “You need the scale and you need to build the internal expertise to be able to get there.” 

Deep vertical integration 

He adds that the company’s outperformance from claims comes from this effort to control the experience and the process. “We do that through internalization and deep vertical integration to the supply chain in Canada,” he says, adding that the model is also starting to be recreated in the other geographies where the company operates, as well.

BrokerLink Inc., meanwhile, he says, has reached $5-billion in written premium. “It’s probably around 20 per cent of the broker distribution market,” he says. “Our ambition is to grow that to $10-billion by 2030. We’ve done about 100 integrations, acquisitions within Brokerlink since 2020,” he adds. “We’ve built a very good integration playbook.”