Intact Financial Corporation (TSE: IFC), Canada’s largest provider of property and casualty (P&C) insurance, posted strong fourth-quarter results.
Q4 Earnings
Net operating income per share increased by 19% to C$3.78 in Q4 2021, driven by strong underwriting and distribution, and a significant increase in RSA.
EPS was C$3.85 in the quarter, up 51% from C$2.55 a year earlier, reflecting strong operating results and investment gains.
The insurance company also reported operating direct premiums written growth of 75% in the fourth quarter of 2021, primarily driven by RSA, complemented by healthy organic growth in commercial lines.
The combined operating ratio came in at 87.8% in Q4 2021 as strong underlying performance offset high catastrophe losses.
Intact increased its quarterly dividend by 10% to C$1 per common share and launched a share buyback program.
CEO Commentary
Intact CEO Charles Brindamour said, “We had a milestone year, successfully closing our largest acquisition to date, and delivering strong results for both the fourth quarter and full year. We achieved mid-teens organic growth in net operating income per share, while RSA delivered 12% accretion in the seven months since the transaction closed. The acquisition has clearly enhanced our leadership position in Canada, and we are focused on achieving outperformance in the UK&I. The RSA integration remains on track thanks to our people, who have shown extraordinary commitment in supporting our customers amid a new wave of the COVID-19 pandemic. With momentum across all segments, we are pleased to increase dividends to common shareholders for the seventeenth consecutive year.”
Wall Street’s Take
On February 8, National Bank analyst Jaeme Gloyn kept a Buy rating on IFC and raised its price target C$219 (from C$215). This implies 18.2% upside potential.
The rest of the Street is bullish on IFC with a Strong Buy consensus rating based on 12 Buys. The average Intact Financial Corporation price target of C$201.50 implies 8.8% upside potential to current levels.
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