3 Min Read
(Reuters) - Intact Financial Corp (IFC.TO) said fourth-quarter profit more than doubled, driven by rising investment gains and the impact of acquisitions, and the company's CEO indicated the company was in the market for more M&A.
Intact, Canada's largest property and casualty insurer, also raised its quarterly dividend by 10 percent.
Profits were helped by the insurer's C$530 million acquisition of recreational vehicle insurer Jevco, which closed in September and helped boost direct premiums written by 7 percent to C$1.7 billion during the fourth quarter.
"I do think that this is an environment that will present (acquisition) opportunities within a reasonable period of time, and on that basis there's no buyback activity at this stage," Intact Chief Executive Charles Brindamour said on a conference call, responding to a question about the company's capital allocation plans.
He said the company had close to C$600 million in excess capital.
Intact, which was formerly the Canadian insurance arm of ING Groep, had already been busy on the acquisitions front, buying the Canadian operations of French insurer AXA in 2011 for C$2.6 billion.
Unlike Canada's life insurance industry, which is dominated by four players, the country's' property and casualty sector is fragmented. Acquisition targets have emerged as foreign-based players have sold off their Canadian subsidiaries to boost capital levels.
Intact earned C$181 million, or C$1.32 per share, in the quarter ended Dec 31., up from C$84 million, or 62 Canadian cents per share, a year earlier.
Operating income was C$1.42 a share, exceeding analysts' expectations of a profit of C$1.34 a share, according to Thomson Reuters I/B/E/S.
However, the strong result appeared to be already priced into the shares, as they eased 0.7 percent to C$65.23 by early afternoon.
The stock has been a steady riser over the past two years, gaining 15.1 percent in 2011 and 10.7 percent in 2012.
Net investment gains were C$30 million in the fourth quarter, compared with a loss of C$7 million a year earlier.
The dividend hike amounted to 4 Canadian cents, bringing the quarterly payout to 44 Canadian cents a share.
Toronto-based Intact sell insurance under its own banner, as well as under the Belairdirect Grey Power and Jevco brands.
Additional reporting by Ankur Banerjee in Bangalore; editing by Andrew Hay