Intact Financial Corp. reported its first underwriting loss in a decade on Wednesday, after a series of floods, hail and other disasters reduced profit.
Canada’s largest property and casualty insurer reported third quarter net income of $47-million compared to $92-million for the same period last year, a decrease of 49 per cent.
Intact said this decline factors in an “unprecedented” after tax catastrophe loss of $201-million. That figure is net of reinsurance, which insurance companies buy to spread risk to another company.
These losses were related to the devastating flooding in Southern Alberta and Ontario and the disaster caused by a train derailment at Lac-Mégantic, Que.
Intact also said that the P&C insurance industry along with other parties, will need to make changes to accommodate the new reality of natural disasters, which a have increased in severity in recent years.
“As severe weather events become more extreme and frequent, we will continue to pursue our efforts to ensure that the protection we offer reflects our country’s new climate reality and that governments, consumers, businesses and all stakeholders pursue their efforts to better adapt to climate change,” said Charles Brindamour, Intact’s chief executive officer.
Intact said it expects insurance premiums “will grow at a low single digit rate” across the industry.
Since many of these losses had already been accounted for, one analyst said the company’s stock could rise on the strength of Intact’s other results.
“The impact of catastrophes was in line with the September 30 press release and, while large, will therefore not be a surprise for investors,” said Andre-Philippe Hardy, analyst at RBC Dominion Securities.
Mr. Hardy pointed to strong claims development, the increase in direct premiums written and net investment income as sources of strength.