In a third-quarter earnings preview titled Sometimes the best offence is a good defence, Desjardins Securities analyst Doug Young said he expects market conditions for Canadian property and casualty (P&C) insurance companies to “remain favourable for the most part.”

“Both IFC and DFY are more defensive stocks that have outperformed the banks/lifecos so far in 2022, a trend which we believe should continue in a tough macro environment,” he said. “Also, market conditions remain favourable for most of their respective businesses, and both companies are well-positioned to grow organically and inorganically in our view. Inflation remains the biggest potential headwind, specifically around how cost pressures are impacting personal auto results.”

Keeping “buy” ratings for both companies, Mr. Young raised his Definity Financial Corp. target to $42 from $39 and Intact Financial Corp.  target to $220 from $210. The averages on the Street are $41.14 and $216.21, respectively.