Intact Financial Corp T.IFC

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How do property and casualty insurance companies mitigate their risk from natural disasters? Can I get your thoughts on IFC and which property and casualty insurance company do you like best in Canada?

Companies typically re-insure, meaning risk can be shared across multiple parties. But it also involves a thorough analysis of risk and pricing. It involves factors such as: Identifying catastrophe risk appetite;  Measuring catastrophe exposure ; Pricing for catastrophe exposure; Controlling catastrophe exposure; Evaluating ability to pay catastrophe losses.

Numbers come into play: i.e. if you insure 1 million homes they are not all going to have issues. Like a portfolio, geographic and customer diversity is important. P&C companies have experts, or access to experts, who can model such events based on history and other factors. But, bad years will certainly occur, and the key is to have enough reserves/cash so that a bad event does not wipe out a whole business. Size is an advantage. IFC is our favourite in the sector. It has shown fairly consistent growth over the past two decades and has created great shareholder value. It has never lost money, is priced reasonably well and also has a decent dividend growth record. (5iResearch)