Intact Financial announces Q4 profit; expects industry premium increases
Intact Financial Corp. announced that it earned a fourth-quarter profit of $97.5 million, up from $96.7 for the same quarter last year. Intact says the growth is due to investment gains.
Intact reported that the combined ratio reached 98.0%, up 3.4 percentage points. Direct premiums written grew by 4.8% over the same quarter a year ago to reach $1,060 million. Net income for the quarter on a per share basis increased to $0.87 per share compared to $0.81 last year.
Net operating income for the year was strong at $399.0 million, or $3.47 per share, up 47.7% per share, over the previous year with an operating return on equity of 13.2%. Net income increased by $293.1 million from the previous year to $419.8 as a result of much improved operating results and significant investment gains for a return on equity of 13.9%. The book value per share increased by 10% to $27.37, from a year earlier. The combined ratio also improved by 3.3 percentage points over last year to 95.4%. Direct premiums written for the year were $4,498 million, up 5.2%.
Charles Brindamour, President and CEO of Intact Financial Corp., said “The improvement in home insurance and commercial property has been most remarkable. Auto insurance results have been robust considering the impact of the continued increase in medical claims costs in Ontario on the industry performance.
Brindamour added: “Industry premiums are likely to increase in 2011 at a pace similar to last year with percentage growth in the mid-single digits in personal auto and upper single digits in personal property. These increases will be driven by rate inadequacies in auto insurance in Ontario and the impact of water-related losses and more frequent and severe storms. Commercial lines premiums are expected to grow at a low single digit rate, with no acceleration from the pace of last year.”
Intact also announced that it has adopted a shareholders rights plan which is intended to “ensure the fair treatment of Intact’s shareholders in any transaction that would result in a change of control of the company.” Intact said the rights plan provides the Board of Directors and the shareholders with adequate time to evaluate any unsolicited take-over bid and, if appropriate, to seek out alternatives to maximize shareholder value.
