DBRS Confirms Intact Financial Corporation’s Ratings with Stable Trends

DBRS Limited (DBRS) has today confirmed Intact Financial Corporation’s (Intact or the Company) Issuer Rating at A (low), Senior Unsecured Debt at A (low) and Non-Cumulative Preferred Shares at Pfd-2 (low). The trends are Stable.

The Company’s operating subsidiaries are among the strongest performers in the Canadian property and casualty insurance industry in terms of both historical underwriting results and profitability. The Company’s overall underwriting performance hinges on scale and analysis which allows it to identify and price risks by mining its extensive database. Scale also enhances the ability of the Company to keep claims costs lower than those of its peer group and to more efficiently service its multi-channel distribution networks. An efficient capital structure keeps the Company’s overall financial leverage within bounds.

DBRS calculates Intact’s return on equity (from core earnings) for the first nine month of 2013 to be 10.4%, lower than historical averages, as catastrophic losses from floods and hailstorms impacted income in the second and third quarters. Although Intact’s combined ratio was greater than 100% in the third quarter, it is still better than 100% for the year to date, representing positive underwriting results overall.

Notes:
All figures are in Canadian dollars unless otherwise noted.

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link to the right under Related Research or by contacting us at info@dbrs.com.

This rating is endorsed by DBRS Ratings Limited for use in the European Union.

The applicable methodologies are Rating Canadian Property and Casualty Insurance Companies (November 2013) and Rating Holding Companies and Their Subsidiaries (September 2012), which can be found on our website under Methodologies