Battered by weather catastrophes, Intact Financial Corp. posted a net profit of $103-million, or an adjusted $0.81 per share in the second quarter, down 20 per cent from the same time last year.
Toronto-based Intact attributed the drop to an after-tax loss of $105-million that resulted from storms and flooding in southern Alberta.
The results should come as no surprise to investors, after the warning Canada's largest provider of property and casualty insurance issued just weeks ago. In addition to the severe weather in and around Calgary in June, the insurer was also contending with storms in the greater Toronto area in July and losses related to the Lac-Mégantic derailment.
"Our operating performance remained sound this quarter, despite providing approximately $300-million to help our customers in Alberta recover from one of the worst catastrophes in Canadian history," chief executive officer Charles Brindamour said in a statement.
The company projects a further loss of $134-million after tax in its third quarter as claims continue to be processed.
Analysts were expected to be watching the company's automotive insurance business after the insurance arm of Toronto-Dominion Bank raised its reserves by $292-million on the back of increased bodily injury automobile claims in Ontario, litigation and fraud.
Intact said that although actions taken by the provincial Ontario government could reduce premium growth in the auto category, the insurer expects "premium reductions to be commensurate with additional cost reduction measures and, as such, we do not foresee material margin deterioration."
Intact insures 3.6 million cars and 477,000 commercial vehicles across the country, and does less than one-quarter of its business in Ontario.
The underwriting income earned in Intact's personal auto line of business was up in the quarter to $106-million from the $82-million reported this time in 2012.
Despite the weather, Intact's shares have been solid performers over the last five years, rising about 42 per cent. But 2013 has been more challenging for Intact, with the stock down nearly 9 per cent year-to-date as pressures in Ontario's auto market rise.