Canadian property and casualty insurance provider Intact Financial Corp. (IFC.TO) reported Wednesday a loss in its third quarter, compared to prior year's profit, reflecting lower underwriting results mainly due to the impact of unusual number of summer storms on property results. Net operating income for the quarter fell 79.7% from last year. The company also said its Board of Directors declared a quarterly dividend.
Intact, formerly known as ING Canada Inc, reported third-quarter net loss of C$8 million or C$0.07 per share, compared to net income of C$57.3 million or C$0.47 per share a year ago. The company attributed the loss mainly to lower underwriting results, the impact of market yield effect and a non-cash accounting loss related to the increase in value of its preferred shares portfolio.
Net operating income for the quarter fell to C$21.6 million or C$0.18 per share from C$106.4 million or C$0.88 per share in the corresponding quarter last year, reflects the impact of the high number of severe weather events, mainly affecting property results.
In the quarter, underwriting loss was C$53.2 million, compared to prior year's underlying income of C$61.9 million.
Intact, the largest provider of automobile, home and business insurance in Canada, reported that total revenues for the quarter were C$1.116 billion, compared to C$1.046 billion in the year ago quarter. Direct premiums written, excluding pools, rose 4% to C$1.14 billion from last year's C$1.10 billion, helped by gains in all lines of business, reflecting increases in both premiums and the number of risks insured.
Net premiums written was C$1.097 billion, compared to C$1.096 billion a year earlier, and net premiums earned dropped to C$1.019 billion from C$1.032 billion last year.
Commenting on the results, Charles Brindamour, president and chief executive officer, stated, "While the pace of growth of our direct written premiums has been most encouraging, the high costs of property damage associated with the unusual number of summer storms resulted in one of our worst underwriting results since the 1998 ice storm. Despite the disappointing impact of these events, our underlying home insurance results continued to improve and our auto insurance business performed well both during the quarter and throughout 2009."
In its preceding second quarter, Intact's net income declined to C$74.2 million or C$0.62 per share from C$112 million or C$0.91 per share last year. Net operating income decreased to C$92.9 million or C$0.77 per share from C$109.5 million or C$0.89 per share in the previous year. Intact's net premiums earned were C$1.011 billion, higher than C$996.1 million in the year-ago period. Direct premiums written advanced to C$1.248 billion from C$1.218 billion in the prior year.
Intact's former parent Dutch insurance firm ING Groep NV (ING) Wednesday reported turn around to profit for the third quarter compared to prior year's loss, reflecting strong banking segment performance, less severe negative market impacts, and cost savings initiatives amid stabilizing financial market conditions. Third-quarter net income was 499 million euros or 0.25 euros per share, compared to net loss of 478 million euros or 0.22 euros per share last year. On an underlying basis, third-quarter net income was 778 million euros, compared to underlying net loss of 568 million euros in the same period last year. The company's total underlying income declined 13.5% to 12.12 billion euros and gross premium income fell 16% to 7.63 billion euros.
For the first nine months of fiscal 2009, Intact's net income fell 84.4% to C$30 million or C$0.25 per share from C$192.3 million or C$1.57 per share last year. Net operating income declined 35.8% to C$183.5 million or C$1.53 per share from C$285.8 million or C$2.33 per share a year ago. Total revenues were C$3.12 billion, down from C$3.18 billion last year.
Further, Intact said its Board of Directors declared a quarterly dividend of C$0.32 per share on its outstanding common shares. The dividend will be payable on December 31, 2009 to shareholders of record on December 14, 2009.
Looking ahead, the company said in a statement, "Home insurance premiums are increasing across the industry as a result of water-related damage, which is now the leading cause of home insurance claims. Personal auto insurance premiums are also increasing, reflecting medical cost inflation in Ontario. In commercial lines, there are more concrete signs of firming market conditions."
IFC.TO closed Tuesday's regular trading session at C$35.43, up C$0.75, on a volume of 636,800 shares.
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