Intact Financial Corporation Reports Strong Q4 2023 Financial Results with Increased Dividend and Premium Growth

Canadian insurer Intact Financial Corporation has announced impressive financial results for the fourth quarter of 2023, showcasing a remarkable rise in net operating income per share and a robust combined ratio. The company's quarterly dividend has also witnessed a substantial 10% increase. The positive outlook for 2024 is bolstered by strategic milestones, including acquisitions, contributing to the company's growth.

Key Takeaways

• Net operating income per share surges by 45% to reach $4.22.
• The combined ratio stands solid at 90.1%.
• Organic growth shows an impressive 8% rise, with the rate actions playing a crucial role.
• Intact Financial raises its quarterly dividend by 10%.
• Premium growth observed across various regions, with a remarkable 26% surge in the UK & Ireland business.
• A mid-teens return on equity (ROE) is anticipated for 2024.

Company Outlook

Intact Financial expects a mid to upper single-digit growth trajectory in 2024. The company's strategic positioning and flexible product offerings are anticipated to provide significant support for sustained growth. Book value growth is expected to align with operating earnings, enabling the funding of further expansion.

Bearish Highlights

• The UK home business exit leads to losses of $158 million.
• The UK & Ireland business records a concerning combined ratio of 104.6%.
• Annual CAT guidance elevated from $700 million to $900 million.

Bullish Highlights

• The RSA acquisition surpasses expectations, with net operating income per share accretion and internal rate of return (IRR) both exceeding 20%.
• U.S. lines showcase profitability, recording a combined ratio of 86.4%.
• The company's financial position remains robust, boasting a total capital margin of $2.7 billion at year-end.

Misses

• The combined ratio for the UK & Ireland business exceeds 100%.
• Increased CAT guidance suggests a higher expectation of losses due to natural catastrophes.

Q&A Highlights

• Intact Financial boasts a diverse commercial business throughout the country, without any significant regional concentration.
• Electric vehicles (EVs) exhibit low single-digit penetration within the company's portfolio, with no substantial impact on profitability.

In conclusion, Intact Financial Corporation has delivered strong financial performance in the fourth quarter of 2023, showcasing significant growth in premiums and effective management of underwriting performance. Despite the challenges faced, the company remains confident in its growth trajectory and profitability prospects for the upcoming year.

Analyst comment

Positive news. The market is expected to continue growing due to Intact Financial Corporation’s strong financial results, increased dividends, and strategic milestones. The company anticipates mid to upper single-digit growth in 2024, supported by strategic positioning and flexible product offerings. The acquisition of RSA exceeded expectations, and the company’s financial position remains robust. However, there are some bearish highlights, such as line losses in the UK home business and increased CAT guidance for natural catastrophes. Overall, the market is likely to respond positively to the company’s strong performance and growth prospects.