Canada's largest P&C insurer, Intact Financial Corporation, ended the year on a high note, with net income up 26% in the final quarter and 74% for the full year 2024.
In the fourth quarter of 2024, net income reached $667 million, compared to $531 for the same period in 2023. For the full year, net income totaled $2.3 billion, compared with $1.3 billion for the previous year.
When presenting the performance review to financial analysts, Intact CEO Charles Brindamour emphasized that “all of our businesses contributed to this result, including strong underwriting across all regions, investment and distribution income.”
Underwriting income
In terms of underwriting income, the company reported net income of $764 million in the fourth quarter of 2024, up 48% from $517 million during the same period of 2023.
For 2024, underwriting income increased by $506 million or 43% to $1.7 billion, compared with $1.2 billion in 2023.
In more detail:
- in Canada, net underwriting income amounted to $596 million in the fourth quarter of 2024, compared with net income of $487 million a year earlier. For the full year 2024, net underwriting income totaled $1.1 billion, compared with $773 million in 2023;
- in the United Kingdom and International, net underwriting income reached $79 million in the last quarter of 2024, compared with a net loss of $47 million for the same period in 2023. For the full year, net underwriting income was $301 million in 2024, nearly double the $151 million reported in 2023;
- in the U.S., net income was $285 million in 2024, compared with $239 million in 2023. In the fourth quarter of 2024, net underwriting income reached $87 million, compared with $80 million in the same quarter of 2023.
Premiums
For all business units, direct premiums written (DPW) stood at $5.8 billion in the fourth quarter of 2024, up 5% on the $5.4 billion announced a year earlier.
For the full year 2024, the increase in DPW was also 5%, reaching $23.7 billion, compared with $22.4 billion for the full year 2023.
In Canada, DPWs reached nearly $4 billion in the fourth quarter of 2024, up 8% over the same period in 2023.
Also in Canada in 2024, DPWs totalled $16 billion, up 8% on the $14.9 billion reported for the year 2023.
In more detail for the year 2024 compared to the previous year, Intact reported an 11% increase in premiums in personal auto insurance, 9% in personal property insurance and 3% in commercial insurance. In the latter case, the company points to increased competition for large accounts.
Personal auto insurance accounts for 41% of the insurer's premium volume in the Canadian market, compared with 33% for home insurance and 26% for commercial insurance. Some 77% of premium volume written in Canada comes from the broker distribution network.
Combined ratio
In the final quarter of 2024, the combined ratio stood at 86.5%, compared with 90.1% for the same period in 2023, a difference of 3.6 percentage points.
For the full year, the combined ratio stood at 92.2%, compared with 94.2% in 2023, a difference of 2 percentage points.
In more detail:
- in Canada, the combined ratio was 84.9% in the fourth quarter and 92.7% for the full year 2024, compared with a combined ratio of 86.7% in the fourth quarter of 2023 and 94.5% for the full year 2023;
- in the United States, the combined ratio remained stable at 86.1% in the last quarter, compared with 86.4% in the fourth quarter of 2023. The difference is more marked for the full year, with a combined ratio of 87.5% in 2024, compared with 88.7% in 2023;
- in the United Kingdom and International, significant progress was observed, with a combined ratio of 92.7% in the last quarter of 2024, compared with 104.6% for the same period of 2023. For the full year, the combined ratio was 87.5% in 2024 and 88.7% in 2023.
Catastrophic claims
The improvement in earnings was achieved despite high losses in the summer of 2024 due to several extreme weather events in Canada. Catastrophe losses totaled $1.5 billion in 2024, up $200 million on 2023.
The catastrophe loss ratio was 7.1% in 2024, compared with 6.6% in 2023. In its management report, the company states that this is its highest ratio since 2013, when it stood at 7.3%.
In 2025, it expects to pay $1.2 billion in catastrophe claims, compared with the $900 million forecast for 2024 made a year ago. The reinsurance treaty was renewed in January 2025, and catastrophe retention in Canada increased from $250 million to $350 million.
Distribution income
The company's management report discusses distribution income, which totalled $524 million in 2024, up 12% on the previous year.
“I think our intention here was to provide the bit more transparency as how the impact of having a a very sizable distribution activity impact a P&C balance sheet,” said Louis Marcotte, Executive Vice President Finance and Chief Financial Officer. During the analysts' conference, he predicted a 10% increase in income from this portfolio in 2025.
BrokerLink accounts for 44% of distribution revenues. The company points out that 53% of the premium volume of BrokerLink member firms is written with other insurers.
Another 40% comes from the Distribution Financial Strategies (DFS) portfolio, which encompasses its Canadian broker associates and agencies, mainly in Québec.
The remaining 16% comes from the platform of five specialized brokers acting as managing general agents in Canada and the U.S., as well as the business activities of On Side Restoration.
The company has $2.9 billion in surplus capital, added Marcotte, part of which will be used for mergers and acquisitions in 2025. Through BrokerLink, its exclusive brokerage subsidiary, several acquisitions were made in 2024, adding $491 million to the company's premium volume, which stood at $4.3 billion on Dec. 31. BrokerLink is still targeting $5 billion in premiums by the end of 2025.
Investments
Intact reported net investment income of $1.5 billion in 2024, an increase of $213 million or 16% over the $1.3 billion reported in 2023.
Investment surpluses were $398 million for the fourth quarter of 2024, up 6% from the $376 million reported for the same period in 2023.
By 2025, the company expects net operating investment income to reach $1.6 billion, and this figure already reflects the moderate decline in variable interest rates over the next 12 months.
Discussion with analysts
During the conference call with financial analysts on Feb. 12, a number of questions were asked about the inflationary impact of the new U.S. administration's potential tariff measures on the Canadian economy and the insurer's claims expenses.
According to Patrick Barbeau, Executive Vice President and Chief Operating Officer, there could be an impact if Canada imposes its own tariffs on U.S. imports. Approximately 60% of the value of coverage offered relates to the vehicle itself, and if labor costs are excluded, physical damage accounts for 40% of claims costs.
The impact of a trade war would affect vehicles imported into Canada, as well as the parts used to repair damaged vehicles. Some 38% of vehicles insured by Intact are assembled in the United States, and just under a third of the parts used to repair them are imported from there, says Barbeau.
“We're obviously, concerned about tariffs for the country itself because it's no good for anyone, but from an impact financial point of view in our performance, we're in a really solid position,” adds Charles Brindamour.
On the property side, both personal and commercial, Barbeau notes that about one-third of claims expenses are for the physical assets themselves. Of this portion, about a quarter is for materials or products imported from the United States.
Brindamour points out that the insurer's suppliers have been made aware of the need to make their supply chain less dependent on products manufactured in the USA.
Outlook for 2025
In its management report, the company states that industry profitability in personal auto insurance “was challenged in 2023 and continues to be in 2024, especially in Alberta.”
For the industry, premium growth in this segment is expected to be 10% to 13% in 2025. Similar growth is expected in 2025 in home insurance, again for the industry as a whole. In commercial lines, Intact forecasts premium growth of around 5% for the industry as a whole.
For its UK and International unit, the company expects premium growth of 5% in 2025, similar to that seen in 2024.
In U.S. commercial lines, Intact expects premium growth to be between 5% and 9% over the next 12 months.
Charles Brindamour highlighted the career of Louis Marcotte, who stepped down after 11 years as the company's Executive Vice President Finance and CFO. During this period, market capitalization increased fivefold, and annual total shareholder return was 16%, noted Brindamour.
Louis Marcotte remains Vice Chair and his main mandate in this role will be to support the development of Intact’s European operations within Global Specialty Lines. His successor Ken Anderson was announced on Nov. 20. and began in his new position on Feb. 13, 2025. He was, prior to his new appointment, the Executive Vice President and Chief Financial Officer for Intact’s RSA UK & Ireland business. Anderson has been with Intact for 17 years.
