- Premium growth up nearly 50% for a second consecutive quarter
Net operating income per share of
$1.34, up 47%, leading to an operating ROE of 16.2%
- Combined ratio of 92.3% as the mild winter contributed to exceptional underwriting results
- Book value per share increased 13% from a year ago
- AXA Canada integration remains on track
"This was a particularly strong quarter as we continued to reap the
benefits from our robust auto and home initiatives and our results were
helped by the mild winter weather conditions with a significant
decrease in claims frequencies across all of our businesses," said
The Board of Directors declared a quarterly dividend of
Industry premiums are likely to increase in the next 12 months at a pace
similar to last year. It is expected that growth in personal auto will
be in the mid-single digit range, driven by
At an industry level, while the combined ratio might improve modestly as
a result of the better pricing environment, the
The company is well-positioned to continue outperforming the P&C insurance industry in the current environment due to its pricing and underwriting discipline, claims management capabilities, prudent investment and capital management practices and solid financial position. Given these attributes, the company strongly believes that it will outperform the industry's ROE by more than 500 basis points in the next 12 months.
In millions of dollars,
except as otherwise noted
|Direct premiums written (excluding pools)||1,403||943||49%|
|Net operating income||179||102||75%|
Earnings per share
Basic and diluted (dollars)
Adjusted earnings per share
Basic and diluted (dollars)
|Net operating income per share (dollars)||1.34||0.91||47%|
|ROE for the last 12 months 2||13.6%||17.8%||(4.2) pts|
|Adjusted ROE for the last 12 months 2||17.6%||18.1%||(0.5) pts|
|Operating ROE for the last 12 months 2||16.2%||14.8%||1.4 pts|
|Combined ratio (excluding MYA)||92.3%||94.6%||(2.3) pts|
|Book value per share (dollars)||30.40||26.91||13%|
1 Underwriting income is defined as underwriting income excluding market yield adjustment (MYA). The MYA is the impact on claims liabilities due to movement in discount rates.
2 For ROE, Adjusted ROE and Operating ROE in Q1-2012, the average equity
calculation has been adjusted on a pro rata basis to account for the
Net operating income for the quarter was
$179 million, up $77 millionfrom the same quarter in 2011. The 75% increase is attributable to the growth of our business, improved underwriting results and higher investment income. The operating ROE for the last twelve months improved by 1.4 percentage points to 16.2%.
Direct premiums written increased 49% in the first quarter to
$1.4 billion, as a result of the addition of AXA Canada and organic growth throughout the organization.
Underwriting income in the quarter increased by
$65 million to $123 millioncompared to the same period a year ago. The combined ratio improved 2.3 percentage points to 92.3% driven by improved results across the majority of our businesses. The underlying performance of our portfolio, which excludes catastrophes and prior year claims development, improved 3.6 percentage points year-over-year.
Personal auto underwriting income improved to
$36 millionup from $12 millionrecorded in the first quarter of 2011. The combined ratio improved 2.5 percentage points to 95.2% primarily as a result of a decline in the frequency of claims due to the mild winter weather.
Personal property underwriting income increased to
$59 millionfrom $20 millionrecorded in the corresponding period last year. The exceptional combined ratio of 83.5% improved 8.8 percentage points from the first quarter of 2011 as a result of benefits from our home improvement action plan and mild winter conditions.
Commercial auto underwriting income results reached
$19 millionfrom the $6 millionrecorded in the first quarter of 2011. The 85.2% combined ratio improved 6.5 percentage points from last year's 91.7% due to higher favourable prior year claims development and improved current year results.
Commercial P&C underwriting income amounted to
$9 millionfrom $20 millionrecorded in the first three months of 2011. The combined ratio in commercial P&C insurance increased by 7.7 percentage points to 97.6%, due to an unusually high number of large claims losses and an increase in ceded reinsurance premiums.
Net investment income of
$100 millionwas up 37% compared to the same period of last year as a result of an increase in assets. The market-based yield for the quarter was 3.7%, down 30 basis points from last year due to the low yield environment.
Net investment gains, excluding fair-value-through-profit-or-loss bonds,
The company's financial position remained solid with a minimum capital
test of 205% and
AXA Canada Acquisition
The integration of AXA Canada activities is on track and it is
anticipated to be completed by mid-2013. The company remains confident
that it will progressively reach its
Integration expenses amounted to
Although we still require time to determine the true customer retention level from the acquired book of business, the retention to date has been strong. To ensure the company continues to offer an outstanding customer experience and top-notch service to brokers, most of AXA Canada's products and services were integrated into Intact's offering and nearly all of its front-line employees joined Intact.
The average estimate of earnings per share and net operating income per
share for the quarter among the analysts who follow the company was
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Forward Looking Statements
This document may contain forward looking statements that involve risks and uncertainties. The company's actual results could differ materially from these forward looking statements as a result of various factors, including those discussed in the company's most recently filed Annual Information Form and annual Management's Discussion & Analysis. Please read the cautionary note at the end of the MD&A.Return to all Press Releases