Intact Financial Q2 operating income misses estimates on elevated catastrophe, large losses

Overview

• Canada property and casualty insurer's Q2 operating DPW grew 4%, led by Personal lines

• Net operating income per share fell 39% yr/yr, impacted by elevated catastrophe and large losses

• Company completed C$181 mln in share buybacks during the quarter

Outlook

• Intact Financial expects Canadian personal lines industry premium growth in high-single to low-double digits

• Company sees commercial and specialty lines industry premium growth in low to mid-single digits

• Intact Financial aims to exceed industry ROE by 500 bps and grow NOIPS by 10% annually over time

Result Drivers

• CATASTROPHE AND LARGE LOSSES - Co said elevated catastrophe and large losses above expectations weighed on underwriting income and increased the combined ratio

• PERSONAL LINES GROWTH - Operating DPW growth was mostly attributable to continued strength and hard market conditions in Personal lines

• INVESTMENT AND DISTRIBUTION INCOME - Investment and distribution income contributed to results, partly offsetting lower underwriting income

Company press release: ID:nCNWvKDSZa

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 10 "strong buy" or "buy", 5 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the property casualty insurance peer group is "hold."

• Wall Street's median 12-month price target for Intact Financial Corp is C$320.00, about 7.3% above its July 27 closing price of C$298.13

• The stock recently traded at 16 times the next 12-month earnings vs. a P/E of 14 three months ago

Reuters Recommended Reads

• July 28 - Hanover Insurance Q2 net income rises on lower catastrophe losses

• July 27 - Cincinnati Financial Q2 adjusted EPS misses estimates on higher catastrophe losses

• July 28 - Arch Capital Q2 net income falls as premiums decline

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)