Intact Financial Corporation reported net earnings of $240 million for Q4 2019, amounting to a 2% decline in net earnings compared with the $244 million in net earnings reported in the same quarter of 2018. 

Yet the insurer increased its earnings by $47 million for the year overall. It reported net earnings of $754 million in 2019, up from $707 million in 2018, for growth of 6.6%. Premiums underwritten also grew. 

Premiums advanced 12% in Q4 and 9% for 2019 overall. Direct premiums written totaled $11.05 billion in 2019, versus $10.09 billion in 2018.    

The combined ratio was 91.5% in the fourth quarter of 2019 despite the impact of 4.3 points of catastrophes losses. The ratio was 91.7% in Q4 2018. For 2019 as a whole, Intact had a combined ratio of 95.4%, versus 95.1% for 2018.

“We delivered strong results in the fourth quarter with double-digit topline growth and a low-90s combined ratio,” says Intact CEO Charles Brindamour

Rate hikes

Personal auto premiums in Canada rose 15% in the last quarter of 2019, notably due to the rate hikes and growth in the number of units. The combined ratio of 96.5% in Q4 2019 marks a 0.8 point improvement from 97.3% in the same quarter of 2018.

In personal property insurance in Canada, rate hikes and growth of units propelled premiums 9% upward in Q4 2019. Weather-related losses early in the year affected the combined ratio of the quarter and the year. The combined ratio was 82% for Q4 2019, up from 78.5% in the same quarter of 2018 despite the 8.5% increase in catastrophe losses. For 2019, the combined ratio of 92.5% represents a 4.2% decline from the previous year.

In business insurance in Canada, premiums grew by 12% in Q4 2019. The combined ratio of 93.5% for this quarter equals a 1.9% decrease compared with the corresponding quarter of 2018, when it was 91.6%. This variation is notably due to the 7.5% increase in catastrophe losses. For fiscal 2019, the combined ratio of 96% deteriorated by 1.4 points compared with the previous fiscal year.

Canada: overall combined ratio downturn

For all sectors combined, premiums in Canada grew by 13% in the last quarter, reflecting continued rate increases in all sectors. The Canadian combined ratio ended the fourth quarter at 92% versus 90.8% in Q4 2018. This deterioration is due to elevated catastrophes losses.

The combined ratio for 2019 was 95.9%, up from 95.2% in 2018.

Net underwriting earnings dipped in 2019 compared with 2018. They were $184 million in Q4 and $363 million for 2019. In 2018, earnings stood at $196 million in Q4 and $400 million for the year.

“We bolstered our leadership position in Canada with the acquisition of The Guarantee Company of North America and Frank Cowan Company, and pushed deeper in the claims supply chain with On Side Restoration,” Intact CEO Charles Brindamour stated.

Progress in the US

In the United States, sales advanced 5% in Q4. The combined ratio improved by 7.9 points in the fourth quarter of 2019, to reach 88.8%, versus 96.7% in the same quarter of 2018. This progress was spurred by profitability actions across the whole Intact portfolio, including the exit of the Healthcare business unit.

The combined ratio for 2019 was 93.2%, versus 94.8% in 2018.

Net earnings from underwriting are $44 million in the fourth quarter of 2019, compared with $13 million per Q4 2018. For all of 2019 earnings were $97 million, compared with $71 million in 2018.