Intact Financial Corporation has advanced for the second consecutive quarter.
The insurer reported net income of $370 million in the third quarter of 2022, compared with $300 million in Q3 2021. The increase amounts to 23.3 per cent or $70 million.
Combined ratio
Across all its businesses, Intact reported a combined ratio of 92.6 per cent in the third quarter of 2022, up from 91.3 per cent in Q3 2021. The 1.3-point dip is due to “increasing cost pressures” and “higher weather-related losses in personal lines, while performance in commercial lines continued to be strong,” the insurer writes.
Catastrophe loss costs were $229 million in Q3 2022. They thus plummeted 37.3 per cent or $136 million from $365 million in the same quarter of the previous year.
Looking at the results in closer detail:
- Canada: The combined ratio worsened by 3.5 points. It rose to 92.7 per cent in the third quarter of 2022, from 89.2 per cent in Q3 2021. “The increase was driven by claims inflation and higher frequency in personal auto, as well as active weather in personal property. Strong performance continues in commercial lines,” Intact explains. Catastrophe losses were $190 million in the third quarter of 2022, down 6.9 per cent or $14 million from Q3 2021.
- UK & International: The combined ratio improved by 0.4 percentage points. It was 93.5 per cent in the third quarter of 2022, compared with 93.9 per cent in Q3 2021.
- United States: The combined ratio improved by 2.3 percentage points. It was 90.5 per cent in the third quarter of 2022, versus 92.8 per cent in Q3 2021.
Operating income
Across its business, Intact reported net operating income of $488 million in the third quarter of 2022, compared with $519 million in Q3 2021. The decrease of 6 per cent or $31 million reflects “inflation pressures and higher weather-related losses in personal lines, partially offset by strong investment and distribution results.”
Net underwriting income
Net underwriting income was $362 million in Q3 2022, compared with $426 million in Q3 2021, for all of Intact's operations. The corresponding decrease is 15 per cent or $64 million.
Looking at the results in closer detail:
- Canada: Net underwriting income was $249 million in Q3 2022, compared with $356 million in Q3 2021, for a decrease of 30.1 per cent or $107 million.
- U.K. and International: Net underwriting income was $64 million in Q3 2022, versus $72 million in Q3 2021. This equals a decrease of 11.1 per cent or $8 million.
- Other: Net underwriting income was $4 million in Q3 2022 compared with a net underwriting loss of $32 million in Q3 2021, for an increase of $36 million.
- U.S.: Net underwriting income was $45 million in Q3 2022, versus $30 million in Q3 2021. This represents an increase of 50 per cent or $15 million.
Premiums
For all its business combined, Intact reported direct premiums written of $5.4 billion in the third quarter of 2022, down 0.1 per cent or $4 million from Q3 2021.
Looking at the results in closer detail:
- U.K. and International: Direct written premiums were $1.1 billion in the third quarter of 2022, compared with $1.3 billion in Q3 2021. This amounts to a decrease of 15.3 per cent or $193 million.
- U.S.: Direct written premiums were $708 million in Q3 2022, compared with $619 million in Q3 2021. They thus rose by 14.4 per cent or $89 million.
- Canada: Direct written premiums were $3.7 billion in the third quarter of 2022, versus $3.6 billion in Q3 2021. The increase of 2.8 per cent or $100 million reflects “continued rate momentum across all lines of business and continued strength in specialty lines, tempered by muted unit growth.”
In Canada, personal property premiums rose by 7.1 per cent or $69 million to $1 billion, “driven by rate increases in firm market conditions, solid retention levels and a surge in travel-related premiums.”
Commercial lines grew by 3.7 per cent or $39 million to $1.1 billion. This result reflects “robust rate actions in hard market conditions, partially offset by lower new business volume though retention remains strong. We continue to see good momentum in specialty lines,” Intact says.
In contrast, personal auto insurance dipped by 0.5 per cent or $8 million to $1.5 billion. “This reflected new business pressures driven by reduced policy shopping in a muted rate environment, and rate increases taken ahead of our competitors,” Intact notes, adding that “we increased rates by low to mid-single-digits during the quarter, and expect to progress to high single-digit increases by year-end.”
Investments
Intact reported net investment income of $232 million in Q3 2022, versus $191 million in Q3 2021. This increase of 21.5 per cent or $41 million is “mainly driven by higher reinvestment yields.”
