Intact Financial Corporation reports second quarter results
Intact Financial Corporation reported net operating income for the quarter ended June 30, 2010 of $118.6 million, up $25.7 million from the same quarter of last year. On a per share basis, net operating income increased 33.8% to $1.03.The increase was driven by an improved underwriting performance in home and commercial P&C insurance. Overall, the combined ratio improved by 2.0 percentage points during the quarter to 93.7%. Direct premiums written increased 5.4% over the same quarter a year ago to reach $1,318 million. Net income for the quarter was $120.2 million, or $1.04 per share, compared to $74.2 million, or $0.62 per share, for the same period last year on improved operating and investment performance.
Net operating income for the first six months of the year increased by $69.0 million over the same period last year to $231.0 million. Net income was up $202.1 million from the previous year to $240.0 million as a result of higher operating results and a significant improvement in investment gains. The combined ratio also improved by 3.9 percentage points over last year to 93.5% during the first six months of the year. Direct premiums written for the first six months of the year were $2,232 million, up 5.3% year-over-year. Earnings per share and net operating income per share were $2.05 and $1.97 respectively.
“This is the third consecutive quarter of solid underwriting performance across most of our lines of business. Today’s results reflect the continuation of more favourable industry conditions and the positive impact of the strategic initiatives we launched over the last two years,” said Charles Brindamour, President and CEO of Intact Financial Corporation, in a press release.
“Home and commercial insurance results continued to improve significantly, reflecting the effectiveness of our action plans, while the performance of our auto insurance business remains solid. However, as anticipated, the severe summer storms and the increasing cost of medical claims in Ontario, pending the introduction of new regulatory measures this September, continued to impact upon our performance. Overall, our top-line growth continues to gain momentum as the pricing environment is firming up gradually in a number of our markets.”
“Our financial position remains strong with more than $766 million in excess capital and as such we are well positioned to take advantage of improving market conditions.”
Personal property premiums continue to increase across the industry to reflect the impact of more frequent or severe storms, as well as water-related losses which are the leading cause of home insurance claims. In personal auto, conditions remain stable across the country, except in Ontario where a new auto insurance regime aimed at better controlling medical cost inflation will be implemented in September. Pricing conditions in commercial insurance continue to remain soft; however, we have observed over the last nine months that pricing has begun to firm up in segments where we operate. The Company expects that conditions will gradually improve across the country over time.
The unpredictability of weather patterns and the increasing cost of medical claims in Ontario, pending the implementation of auto insurance reforms in the province this September, may impact the industry’s short-term performance.
