Newspaper article The Canadian Press

Intact Hikes Dividend 10 per Cent Following Big Jump in Fourth-Quarter Profit

Newspaper article The Canadian Press

Intact Hikes Dividend 10 per Cent Following Big Jump in Fourth-Quarter Profit

Article excerpt

Intact hikes dividend following strong Q4

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TORONTO - Intact Financial Corp. (TSX:IFC) remains convinced of the benefits of auto insurance reforms in Ontario, but Canada's largest provider of property and casualty insurance is "prudently" adding to reserves amid uncertainty over bodily injury claims, CEO Charles Brindamour said Wednesday.

Brindamour was commenting during a conference call with analysts on the company's booking of a combined ratio of 103 per cent on its personal auto business in what was otherwise a stellar fourth-quarter earnings report.

Brindamour conceded that the sector's combined ratio -- which compares the amount received in premiums to the amount paid out in claims -- was "sure to raise some questions."

"For a number of quarters now, we've indicated that though we saw strong field results in Ontario, we maintain our prudent reserving approach given the level of uncertainty in the environment," he said, noting a court decision last fall that further expanded the definition of catastrophic impairment in accident benefits.

"Despite this adjustment, our Q4 accident-benefit loss ration in Ontario was slightly improved versus Q4 of 2011," he said

Meanwhile in Alberta, a system Brindamour described as "quite stable since its own reforms in 2004," there had been an increased level of activity on bodily injury files in litigation in recent months as certain types of injuries became exluded from the minor injury cap.

"So given these observations for Alberta, we prudently moved to stay ahead of this potential trend by increasing reserces for all accident years since the 2004 reforms, further contributing to the unfavourble development experience in the quarter," he said.

Auto insurance premiums have come under pressure in Ontario recently, with NDP Leader Andrea Horwath demanding a 15 per cent cut to compensate for dramatically reduced payouts as a result of changes to the province's auto insurance regulations in 2010, under the McGuinty Liberal government.

Horwath said if the industry won't cut premiums voluntarily, the government should mandate it through the provincial regulator, the Financial Services Commission. She made the pitch as Kathleen Wynne takes over leadership of a minority government after Dalton McGuinty stepped aside as Ontario premier. …

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