How Intact and BrokerLink performed in 2024 Q1
Intact Financial Corporation (IFC) subsidiary BrokerLink “remains well on track to achieve its ambition of $5 billion in annual premiums by 2025,” IFC CEO Charles Brindamour said during the insurer’s 2024 Q1 earnings calls Wednesday.
In 2023, BrokerLink surpassed $3.5 billion in direct premiums written (DPW). BrokerLink president Joe D’Annunzio told Canadian Underwriter last month the brokerage aims to increase its DPW to $5 billion by the end of 2025.
During the earnings call, Brindamour said the insurer has made meaningful progress on strategic initiatives over the past few months across all of its business units.
“In Canada, BrokerLink continues to consolidate the market and successfully closed four acquisitions this quarter, representing roughly 190 million of premium,” says Brindamour. “The business remains well on track to achieve its ambition of 5 billion in annual premiums by 2025.
“Our distribution business remains an important and growing earnings driver.”
In March, BrokerLink acquired Owen Sound, Ont.-based Hanbidge & Bowman Ltd. Insurance Professionals. Last month, the brokerage announced the acquisition of two other Ontario brokerages: M. Edward Powell Insurance Brokers Ltd. in Oakville and Russ Bastow Insurance Broker Ltd. in Ajax. It also acquired the personal and small-to-medium enterprise commercial insurance book of business from Ottawa-based Halpenny Insurance Brokers Ltd.
First quarter results
Looking at the company’s 2024 Q1 results, Brindamour said the overall undiscounted combined ratio for all regions stood at 91.2%, down from 91.9% in 2023 Q1, “which reflected solid underlying performance across all geographies.” Intact’s Canadian P&C segment in particular fared slightly better at 90.7% undiscounted combined ratio in 2024 Q1, down from 91.7% in 2023 Q1.
In Canadian personal auto, the undiscounted combined ratio deteriorated 1.5 points to 98.6% in 2024 Q1 from 97.1% one year ago. This included a “two-point impact from [winter] seasonality and two points of one-offs from pools and [higher] employee compensation, driven by strong outperformance in 2023,” Brindamour said.
Inflation has also moderated significantly since peaking in late 2022 and has stabilized in the mid-single digit range for the past couple of quarters, Brindamour said during the call. “At the same time, earn rates and insured values remain at high single digits during the quarter. As a result, we’re confident that our strong rate actions will support our sub-95 guidance in the next 12 months, and we’re happy to grow at this profitability level.”
The undiscounted combined ratio for personal property lines in Canada was strong at 82.5% in the latest quarter, with no Cat losses reported, Brindamour said. That was two percentage points better than a year ago. “We expect weather-related volatility, though, and inflation to sustain hard market conditions over the next 12 months.”
In commercial lines, the combined ratio (undiscounted) improved 3.5 points from 90.8% year ago to 87.3% in the latest quarter. Brindamour attributed the strong combined ratio to “profitability actions over time, and favourable prior-year development in the quarter.
“With the market remaining hard across most lines, we expect premium growth in ’24 to be in the mid- to high-single digits for the industry,” he said. “As a result, the business remains well-placed to delivered sustainable low-90s or better [combined ratio] performance going forward.”
Overall, operating DPW in Canada increased 9% to $3.252 billion in the first quarter of 2024, up from $2.996 billion in the same quarter last year, Intact said in its Management’s Discussion and Analysis (MD&A) document.
Canadian personal auto DPW was up 11% to $1.3 billion in 2024 Q1 from $1.169 billion in 2023 Q1.
Personal property DPW increased 9% to $828 million from $760 million.
Commercial lines’ DPW increased 5% to $1.124 billion, up from $1.067 billion in 2023 Q1.
Feature image by iStock.com/piggu
