By Jeff Sanford
Toronto, Ontario — July 30, 2015 — Insurance company Intact has just released its second quarter numbers. The company is reporting growth in its auto insurance sector.
Overall, however, net income for the second quarter of 2015 was $199 million, a 7 percent decrease from $215 million in the same quarter of 2014. Net income declined “as improved net operating income was offset by lower capital market returns and a higher effective tax rate than a year ago,” according to a statement from Intact. Looking at the numbers on a six month basis, over the first half of 2015, net income was up slightly to $377 million compared to $375 million in 2014.
Overall, underwriting income–which strips out market-based adjustments and marks actual claims–for the second quarter of 2015 was $158 million (a 23 percent increase over 2014 Q2).
“The improvement was primarily attributable to firming market conditions in commercial p&c and personal property, rate actions and higher favourable prior year claims development, offset by the lingering impact of a severe winter in Atlantic Canada on our property lines of business and higher claims severity in commercial auto,” the insurer explains.
2015 Q2 underwriting income in personal auto was $85 million compared to $72 million for the same period a year ago. The combined ratio improved to 90.3 percent, up 1.2 points over 2014. The results suggest an unusually low level of favourable prior year claims.
Commercial auto revenues were substantially reduced. Intact brought in just $9 million in this quarter in this segment. This is down from $32 million in Q2 2014. The combined ratio deteriorated 14.9 points to 94.4 percent. The decline was blamed on severe claims and unfavourable prior year claims.
