The members of BrokerLink, the brokerage distribution network owned by Intact Financial Corporation, have achieved a sales volume of $2.3 billion.
Intact CEO Charles Brindamour wants to see this figure double within five years. He shared this with financial analysts in a conference call following the release of Intact Financial Corporation's results for second quarter 2021. The $2.3 billion figure represents a 25 per cent increase in volume over 2019.
BrokerLink will double in size through robust merger and acquisition efforts, Intact's CEO adds. “There's a lot going on and the business is firing on all cylinders. The organic growth of BrokerLink is really strong and clearly commercial lines hard market is helpful and really conducive to strong performance in distribution," Brindamour says.
Intact's distribution investments also had a good quarter. Earnings before interest, taxes, depreciation and amortization (EBITDA) for this specific block of business were up 51 per cent in the second quarter of 2021 compared with the same period in 2020. However, Intact’s CFO Louis Marcotte pointed out that the second quarter of 2020, which marks the start of the COVID-19 pandemic, was shrouded in uncertainty.
Regarding Intact's distribution performance, two drivers powered its growth. The first is the variable commissions that BrokerLink firms seek out. In the insurance business, this generated “an extra expense ratio or a higher expense ratio from commissions, and this comes back in the distribution income,” Marcotte explains.
Intact's distribution network also achieved organic growth. The solid growth trend that took shape in the second half of last year continued in the first half of this year, the CFO says.
Disaster recovery distribution
Intact also includes its restoration company On Side in its distribution business. With fairly mild weather in the second quarter of 2021 in Canada, On Side's contribution was probably a bit quieter than we wanted, Marcotte says.
Even so, On Side has potential, Intact’s CFO adds, particularly with the RSA acquisition.