TORONTO – Intact Financial Corp. ended last year with its best quarter ever as its rate increases offset rising costs, while the insurer says it should be fairly buffered from potential tariff impacts.
“In the context of economic and climate uncertainties, we’ve proven that our organization is very resilient,” said chief executive Charles Brindamour on an earnings call Wednesday.
The insurer reported net operating income of $4.93 per share in the quarter, up 23 per cent from last year.
The results, along with a 16.5 per cent return on equity and generation of $2.6 billion in capital for the year, came despite $1.5 billion in catastrophe losses in 2024.
Intact offset those losses in part through rising rates.
The company says its Canadian personal auto division saw total premiums up 12 per cent in the quarter from a year earlier thanks to double-digit rate increases, along with unit growth rates.
In the Canadian personal property line, total premiums were up nine per cent, mostly from higher rates in a market that’s seeing higher demand and tight supply.
The rising rates in auto come after sharp increases in costs have left the industry struggling at times with profitability that companies are still working through, said Guillaume Lamy, senior vice-president of personal lines.
“We still see the industry as unprofitable … we still think that there’s a lot of catch-up to do from an industry perspective.”
Inflation has stabilized, though, so Intact’s rate increases should gradually normalize to the mid-to-high single digits this year, he said.
“With our rates normalizing in 2025, we also expect retention to be further strengthened and our competitive position to improve,” said Lamy.
The company said vehicle parts inflation has stabilized, but it’s still seeing cost inflation pressure from higher litigation, especially in Alberta and Atlantic Canada, while Ontario has seen more cost normalization after a series of government reforms.
Alberta has also put in policy changes but it’s still a difficult market, said Lamy.
“The recent trends caused by the increased litigation and injury have eroded profitability,” he said.
The potential for the U.S. to impose tariffs, and Canadian retaliation, could create cost pressures on the auto sector, but Intact should be somewhat insulated, said chief operating officer Patrick Barbeau.
Injuries and liabilities take up about half of claims costs and labour another 10 per cent, neither of which should see much inflation from tariffs. On the actual parts for repairs, less than a third cross the U.S.-Canada border, he said.
“So that’s why overall we feel that we can manage between, you know, our close involvement with the supply chain, the capability to price the product, we feel we can manage within the guidance,” said Barbeau.
The property side is even less exposed, with two thirds of costs going to labour, liability and temporary relocations, leaving only one third as materials. Of that third on materials, only about a quarter comes from the U.S., he said.
The company has been working to further improve its Canadian supplies, said chief executive Charles Brindamour.
“Our teams … for the past month have been very active to make sure that we optimize the supply chain here and work with our suppliers and intermediaries to make sure that we have as much Canadian content as possible,” he said.
The efforts and how the company was already set up will help limit the effects, even if there’s still concern, said Brindamour.
“We’re obviously concerned about tariffs for the country itself, because it’s it’s no good for anyone, but from an Intact Financial point of view and our performance, we’re in a really solid position.”
This report by The Canadian Press was first published Feb. 12, 2025.
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