Intact Financial Corporation outdid its performance of Q2 2020.

The company reported net income attributable to shareholders of $334 million ($M) in the third quarter of 2020. This net income is up 78.6% or $147 million from the third quarter of 2019, when net income stood at $187 million.

The data collected by the Insurance Portal indicate that Intact is breaking its record from the previous quarter. The insurer thus boasts its best net income in the last ten years, for all quarters combined.

Combined ratio improves

Intact improved its combined ratio by 5.2 points in the third quarter of 2020, “with strength across both personal lines and commercial lines.” The ratio was 87.1%, compared with 92.3% in the third quarter of 2019.

The combined ratio improved by 5.8 points in Canada to 86%, pointing to “strong underlying performance across all lines and a low level of catastrophe losses,” Intact says.

In the United States, the combined ratio reached 94.5%, reflecting the seasonal nature of Intact's operations. It improved by 1.4 points, “driven by our profitability actions,” the insurer states.

“Our resilient operations, coupled with the benefit of our action plans over time and benign weather, led to solid underwriting results this quarter,” says Charles Brindamour, Chief Executive Officer of Intact Financial Corporation.

Operating income ballooned

Intact's net operating income was $411 million in Q3 2020 and $277 million in the third quarter of 2019. This amounts to an increase of 48.4% or $134 million.

The company explains this result by “solid underwriting performance across all lines, driven in part by benign weather, and strong distribution results.”

... as did net underwriting income

Intact's net underwriting income was $369 million in Q3 2020 and $198 million in the third quarter of 2019. This income skyrocketed by 86.4% or $171 million to a new record high.

Of this income, $347 million was earned in Canada, compared with $183 million in the third quarter of 2019, for an increase of 89.6% or $164 million. Net underwriting income reported for the United States soared by 50%, or $7 million, from $14 million in the third quarter of 2019 to $21 million in Q3 2020.

Spotlight on premiums

Intact reported direct premiums written of $3.3 billion, compared with $3 billion in the third quarter of 2019. This increase of 8.4%, or $252 million, reflects “strong growth in Canada.”

Direct premiums written by Intact in Canada totalled $2.7 billion in Q3 2020. They were up 9.4% or $233 million compared with the third quarter of 2019, when they were $2.5 billion. This growth was “driven by strong retention and new business and included the benefit of The Guarantee acquisition,” the insurer says.

Looking at the results in detail, the sharpest rise was seen in commercial insurance. For this sector, premiums increased by 11% to $791 million. This growth includes “10 points from The Guarantee acquisition,” yet it was “tempered by the economic slowdown, customer relief measures and from issuing six-month policy renewals to businesses most impacted by the COVID-19 crisis.”
In personal property insurance, premiums increased by 10% to $719 million. They were driven by “strong unit growth, market conditions and The Guarantee acquisition,” Intact explains.

Lastly, personal automobile insurance premiums rose 8% to $1.2 billion. Intact attributes this increase to “robust new business and high retention levels.”

Results in the United States

For the United States alone, Intact's direct written premiums reached $540 million, compared with $521 million in the third quarter of 2019. The corresponding increase is 3.6% or $19 million. It was boosted by about 5 points by the acquisition of The Guarantee Company, but was hindered by “lower volumes in lines impacted by the COVID-19 crisis, such as ridesharing and entertainment, despite strong organic growth in other lines of businesses.”

In its industry outlook, Intact forecast that “the prevailing hard market conditions in personal auto have been tempered as claims frequency remained below historical levels.” It adds that “hard market conditions in personal property are expected to continue, while hard market conditions in commercial lines have returned to pre-crisis levels.” In the US, “hardening market conditions in commercial lines are expected to continue.”

Investments wane

Intact reported a decrease in net investment income. This income was $143 million in Q3 2020, down from $146 million in the third quarter of 2019. This result is primarily due to lower reinvestment yields, partly offset by the benefit of higher invested assets, Intact says.


In response to the COVID-19 pandemic, the company provided $510 million of relief to 1.2 million customers between March and September 30. This amount includes $50 million for a program to assist the most vulnerable small businesses.

Growth in direct premiums written for Q3 2020, at 8.4%, was offset by an estimated 5-point or $150 million decline attributable to customer premium relief measures, Intact says.

Insurers have begun to release their results for Q3 2020. Co-operators has also reached record highs during this period.