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Introduction & Market Context
Intact Financial Corporation (TSX:IFC) presented its first-quarter 2025 results on May 7, 2025, showcasing solid performance across key metrics despite challenging conditions in some markets. The Canadian insurance leader reported its stock trading near $306, down slightly by 1.03% on the day of the presentation, but still close to its 52-week high of $309.58.
Following a strong Q4 2024 that exceeded analyst expectations, Intact has maintained its momentum into the new year with consistent growth in operating income and strategic expansion across its business segments.
Quarterly Performance Highlights
Intact reported net operating income per share (NOIPS) of $4.01 in Q1 2025, representing a 10% increase year-over-year, while earnings per share (EPS) came in at $3.69. The company achieved 3% growth in operating direct premiums written (DPW), primarily driven by rate actions and unit growth in Personal lines.
As shown in the following key performance metrics:
The company maintained a combined ratio of 91.3%, comparable to the previous year despite facing higher catastrophe losses. Book value per share grew impressively to $96.16, marking a 13% increase from Q1 2024, while operating return on equity (OROE) remained strong at 16.5% over the trailing 12 months.
"We’re starting 2025 on strong footing," said Charles Brindamour, Chief Executive Officer. The company’s performance was driven by solid underwriting results, higher investment income, and growing distribution revenue.
Segment Analysis
Intact’s Canadian operations showed particularly strong results in the Personal lines business. Personal Auto saw 11% operating DPW growth, driven by rate actions and 2% unit growth, while maintaining a 97.5% combined ratio despite a 4-point impact from severe winter conditions. Personal Property achieved 9% operating DPW growth with a solid 88.9% combined ratio.
The following chart illustrates the Canadian segment performance:
In contrast, the UK & Ireland and US segments faced some challenges. UK & Ireland saw a 4% decline in operating DPW (in constant currency) as the company continued remediation actions in the DLG portfolio. The US segment experienced a 3% decline in operating DPW, reflecting a 5-point negative impact from the non-renewal of one large account.
The international segments’ performance is detailed below:
Despite these challenges, the US maintained a strong combined ratio of 86.8%, while UK & Ireland posted a 97.6% combined ratio that included elevated weather-related catastrophe losses and large losses in Specialty lines.
Detailed Financial Analysis
Intact’s combined ratio of 91.3% for Q1 2025 remained stable compared to 91.2% in Q1 2024, despite a significant increase in catastrophe losses from 1.9% to 4.4%. This stability was achieved through improvements in both the underlying current year loss ratio and expense ratio.
The following breakdown illustrates the components of the combined ratio:
Net operating income attributable to common shareholders reached $717 million, representing an 11% increase year-over-year. This growth was driven by solid underwriting performance, higher investment income, and increased distribution revenue.
The company’s financial results across key income streams are shown below:
Distribution income showed particularly strong growth of 17%, reaching $117 million due to organic growth, increased margins in BrokerLink, and M&A activities.
Strategic Initiatives
Intact continued to make progress on its strategic roadmap across all four pillars. In Canada, the company expanded its leadership position with BrokerLink making its first acquisition in British Columbia. In the UK & Ireland, Intact announced plans to rebrand RSA Insurance (OTC:RSNAY) to Intact Insurance by the end of 2025.
The following chart outlines the company’s strategic progress:
In the Specialty Lines segment, the company boosted its global Crime capabilities and revamped its BondClick platform. Intact also continued to transform its competitive advantages through the implementation of new proprietary models and the expansion of Jiffy services.
Financial Position
Intact maintained a strong financial position in Q1 2025, with a total capital margin of $3.1 billion, up $0.2 billion from the previous quarter. The adjusted debt-to-total capital ratio stood at 19.1%, below the company’s target, indicating financial flexibility for future investments or acquisitions.
The company’s financial strength is illustrated in the following metrics:
Book value per share increased by 13% year-over-year and 4% from Q4 2024, reaching $96.16. The company’s financial strength is further evidenced by strong ratings from major credit agencies, positioning Intact well for continued growth and stability.
Forward-Looking Statements
Looking ahead, Intact provided guidance for its various segments. For Canadian operations, the company expects low double-digit industry premium growth for Personal Auto and Personal Property, with mid-single-digit growth for Commercial Lines. The Personal Auto combined ratio is expected to remain below 95%, while Personal Property should maintain a sub-95% ratio even with severe weather. Commercial Lines is projected to achieve a low-90s or better combined ratio.
For international operations, UK & Ireland is expected to evolve toward a 90% combined ratio by 2026, while the US is positioned to maintain a low 90s or better combined ratio. These projections reflect the company’s strategic focus on improving profitability across all segments while managing catastrophe risks effectively.
As Intact continues to execute its strategic roadmap, the company appears well-positioned to maintain its industry leadership and deliver consistent shareholder value through both organic growth and strategic acquisitions.
Full presentation:
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