Newspaper article The Canadian Press

Intact Expects to Raise Rates for Some Types of Insurance in Wake of Harsh 2013

Newspaper article The Canadian Press

Intact Expects to Raise Rates for Some Types of Insurance in Wake of Harsh 2013

Article excerpt

Intact: insurance rates will rise this year

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TORONTO - Intact Financial Corp. (TSX:IFC) says insurers will raise rates and take other measures this year to compensate for major ice storms and other catastrophic weather-related events of the past year.

Canada's largest property and casualty insurer, which offers Grey Power insurance for mature drivers, Intact home and auto coverage and commercial insurance, said it expects to push through rate increases for some its products -- including homeowner insurance.

Chief executive Charles Brindamour told analysts that he was pleased Intact's operating return on equity, or ROE, beat the industry average despite paying out half a billion dollars following catastrophic events -- such as the ice storms in Ontario and Quebec in December.

But he said the insurance industry generally, and Intact in particular, will be pushing through various rate, cost and business initiatives to restore their ROE, a measure of profitability.

"Overall, we expect the industry's ROE to trend back towards its long-term average of 10 per cent this year," Brindamour said in a conference call to discuss Intact's fourth-quarter and 2013 results.

He said Intact expects to do better than the industry average "and we intend to continuously improve and insulate our business from natural occurrences, to return to our historical levels of profitability."

Intact's confidence is reflected in the company's decision to announce a dividend increase for the ninth year in a row, with the payouts increasing by nine per cent to 48 cents per share starting in March.

Its customers' rates will be affected to varying degrees depending on a number of factors, such as the type of insurance and location.

For example, Intact's insurance for tenants won't change much but coverage for homeowners and some businesses will be more expensive, while rates for auto insurance in Ontario will fall this year.

Intact executives said the company started pushing through rate increases sooner than competitors but expects them to follow suit, with the pace of change perhaps quickened by the December storms.

Patrick Barbeau, who is Intact's senior vice-president for personal insurance products, said he expects personal property rate increases will be about 10 per cent or higher. …

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