CIBCHave a $210.00 target. GLTA
EQUITY RESEARCH
May 10, 2022 Flash Research
INTACT FINANCIAL CORP
Q1 First Look: Another Strong Set Of Results
Our take: Positive. EPS beat consensus, with no evidence of margin
pressure from auto claims severity and strong organic premium growth (8%
Y/Y).
Overview of results: Operating EPS of $2.70 was significantly better than
our estimate of $2.06 and consensus of $2.38, with solid margins across all
business lines. Gross premiums written came in at $4,678MM, up 85% Y/Y,
above our forecast of $4,598MM, and better than consensus of $4,479MM.
BVPS ended at $82.20, up 32% Y/Y and flat Q/Q. This compares to our
forecast of $82.86 and consensus of $81.67.
Sources of variance: The earnings beat relative to our estimate mostly
came from higher underwriting income (+$0.51/share), higher distribution
income (+$0.11/share), and higher investment income (+0.09/share).
Canada Personal Auto posts a largely in-line quarter. Combined ratio
(CR) of 93.0% versus 93.4% in Q1 last year and roughly in line with
consensus of 92.7%. Prior-year development was favourable (3.7%) and
Intact stated that claims severity remains under control.
Another strong quarter for Personal Property. CR was 87.6%, up from
77.4% in Q1 last year and above consensus of 86.2%. Anything below 90%
should be considered a good result. Organic premium growth was 5%.
Canada Commercial reports a strong quarter. CR was 88.5%, down from
90.1% a year ago, and better than consensus of 91.9%. Organic premium
growth was very strong at 13%.
U.S. segment posts very strong results. CR was 86.8%, down from 96.3%
in Q1/21 and better than consensus of 91.5%. Organic growth was 19%.
U.K. & International better than our forecast. UK&I reported a CR of
98.9%, better than our assumption of 100.9% and consensus of 100.6%.
RSA integration well on track. The company remains on track to realize
>$250MM pre-tax annual run-rate synergies in 2024. Thus far, the firm has
achieved $125MM in run-rate synergies.
Distribution income was very strong. The company reported distribution
income of $92MM, up 48% Y/Y from $62MM last year and well above our
estimate of $68MM and the consensus estimate of $76MM.
Dividend and interest income came in strong. The company reported
dividend and interest income of $205MM, up from $141MM a year ago.
Results were comparable to consensus of $202MM.
Conference Call: Scheduled for Wednesday, May 11 at 11:00 a.m. ET (1-
888-664-6392