Intact Financial Corp. Wednesday reported lower earnings for the second quarter as the P&C insurer took a charge for a loss on derivatives.

Net income for the quarter ended June 30 was $74.2 million, or 62¢ a share, down from $112 million, or 91¢ share, for the same period last year.

“The decline reflects a non-cash $36.6 million loss on embedded derivatives that was recognized as the result of a significant increase in the value of the company’s perpetual preferred shares portfolio,” the company said.

Net operating income for the quarter was $92.9 million, or 77¢ a share, down 13.5% on a per share basis from the same quarter of last year as the strength of the company’s underwriting performance was offset by lower investment income.

Direct written premiums climbed 2.8% to $1,250.6 million, while the combined ratio remained relatively unchanged at 95.7%.

“Our operating performance remained sound this quarter as a result of a decrease in the number of severe storms and the positive impact of our home insurance plan. Auto insurance also performed well. Overall, our underwriting income increased by more than 15% in the first six months of the year as improved personal insurance results were partly offset by lower commercial underwriting income,” said Charles Brindamour, president & CEO.

“The growth of our direct written premiums is beginning to show positive momentum as industry conditions are pointing to a firmer pricing environment in all lines of business over the next 12 months,” he said.

“Our excess capital position, which reached nearly $470 million, continued to improve during the quarter. The recent rebound in equity markets also led to a substantial improvement in the value of our investment portfolio,” Brindamour added.


Toronto-based Intact Financial is a provider of property and casualty insurance with over $4 billion in premiums. Its 7,000 employees offer home, auto and business insurance under the Intact Insurance, Novex Group Insurance, belairdirect and Grey Power brands.

IE