Our take: Intact Financial reported Q1/23 operating EPS of $3.06, ahead of our $2.89 forecast and $2.95 consensus (range: $2.66 to $3.29). IFC transitioned to IFRS 17 in Q1/23, which introduced new revenue and expense recognition and allocation criteria and made results less comparable to prior periods. On a segmented basis, underwriting income was better-than-forecast in Personal Property and UK&I Commercial, while results were in line at Personal Auto, Commercial Lines U.S. and UK&I Personal, but lower- than-forecast at Commercial Lines Canada.
Key metrics from the Q1/23 results that we believe investors are focused on include:
• On segmented basis, combined ratios were:
Personal Auto: At 97.1%, it was right in line with our 96.9% forecast and slightly worse than 96.5% consensus. By comparison, it was worse Y/Y (vs. 93.7% in Q1/22);
Personal Property: At 84.4%, it was better than our 86.7% forecast and consensus at 87.1%. By comparison, it was better Y/Y (vs. 88.3% in Q1/22);
Commercial Lines (Canada): At 90.8%, it was worse than our 87.6% forecast, but slightly better than consensus at 91.3%. By comparison, it was worse Y/Y (vs. 89.9% in Q1/22);
U.S. Commercial P&C: At 89.1%, it was slightly worse than our 88.1% forecast, but largely in line with consensus at 88.7%. By comparison, it was worse Y/Y (vs. 86.8% in Q1/22);
UK&I Personal P&C: At 107.3%, it was worse than our 105.3% forecast and much worse than consensus at 99.4%. By comparison, it was also much better Y/Y (vs. 110.5% in Q1/22); and
UK&I Commercial P&C: At 88.2%, it was better than our 89.6% forecast, but worse than consensus at 90.9%. By comparison, it was also better Y/Y (vs. 90.3% in Q1/22).
• Book value per share (including AOCI) was $77.72, slightly below our $78.88 forecast and below $78.60 consensus.
Conference call today (Thursday) at 11am ET; dial in: 1-888-664-6392 or (416) 764-8659. A live audio webcast is also available on Intact’s investor relations website.