Catastrophic losses lower Intact Financial’s Q2 profit
Intact Financial Corporation reported net operating income for the quarter ended June 30, 2011 of $95 million, down $24 million from the same quarter of last year. On a per share basis, net operating income decreased 16% to $0.87.The decrease reflects after-tax losses of $92 million ($0.84 per share) due to the Slave Lake wildfires and the numerous rain and wind storms that prevailed during the spring months.
The very strong performance of the auto insurance portfolio partly offset those losses and the combined ratio for the quarter was 97.0%. Net gains on invested assets for the quarter were up $10 million from the second quarter of last year to $44 million. Direct premiums written increased 3% over the same quarter a year ago to reach $1,354 million. Net income was $123 million, or $1.12 per share, compared to$141 million, or $1.22 per share, for the same period last year.
Net operating income for the first six months was $197 million compared to $232 million last year while net income remains more or less constant at $280 million. Net operating income per share was $1.78 down 10% while net income per share increased by 6% to $2.54. The combined ratio increased by 2.3 percentage points over last year to 95.8% during the first six months of the year. Direct premiums written for the first six months of the year were $2,297 million, up 3% year-over-year.
“The catastrophic losses we incurred during the spring months, the largest since the 1998 Ice Storm, overshadow one of our best performances in recent years. As our strategic initiatives continue to prove quite sustainable, the strength of our results demonstrates our ability to weather the impact of both natural catastrophes and severe climatic events,” said Charles Brindamour, President and CEO of Intact Financial Corporation.
“The performance of our auto insurance portfolio, which has been solid over the last few months, continues to improve, most notably in Ontario, where we have taken a prudent approach to growth and introduced initiatives to reduce fraudulent activities. We continue to be confident that the initiatives adopted by the Ontario government to curb the cost inflation of medical claims will prove successful,” Brindamour said in a statement.
“Our financial position remains strong and we are well positioned to take advantage of improving market conditions. Furthermore, the upcoming acquisition of AXA Canada, which is expected to close in the fall, should enhance our profitability advantage and the stability of our earnings.”
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