Intact Financial Corp. (IFC-T), Canada’s biggest property and casualty insurer, rose as it handily beat second-quarter profit estimates on Tuesday as premiums grew 29 per cent, driven in part by the company’s acquisition of British insurance group RSA.
Intact posted operating income of $515-million, or $3.26 a share, up from $350-million, or $2.35 a share, a year earlier. Analysts had expected $2.44 a share, according to Refinitiv data.
Intact’s purchase of RSA’s Canada, UK and international operations, which closed on June 1, also helped boost net investment 9 per cent year-on-year to $154 million, and book value per share by the 44 per cent, the Canadian insurer said.
With the added scale offered by RSA, Intact remains “focused on growing net operating income per share by 10 per cent annually over time and outperforming the industry (return on equity) by 500 (basis points) every year,” Chief Executive Charles Brindamour said in a statement.
Industry profitability has improved over the past year, helped by lower catastrophe-related losses and lower auto claims, the company said. Hard market conditions, one of the characteristics of which is higher premiums, are also expected to continue in the United States and Canada and in the U.K. commercial market, it said.
RSA contributed $734-million, or 17 per cent, of Intact’s total premiums, and $57-million, or 12 per cent of underwriting income, in June, the insurer said.
Intact also recorded a $200-million gain in non-operating income on the difference between RSA’s purchase price and the fair value of its assets, offset by $108-million in expenses related to the deal.