UPDATE 1-Intact Financial expects train crash, floods to hurt results

Mon Jul 22, 2013 10:47am EDT
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By Euan Rocha

TORONTO, July 22 (Reuters) - Property and casualty insurer Intact Financial said it expected quarterly results would be hurt by losses from a train derailment and fiery explosion in a Quebec town and storm and flood damage in Canada's oil capital, Calgary, and Toronto, the country's largest city.

The Toronto-based insurer also hinted on Monday that it may seek to raise premiums, or alter coverage offered to its clients following damage caused by the flooding and torrential rain in June and early July.

"The scope of the damage and destruction that we have witnessed in recent weeks is a stark reminder that we must adapt the protection offered to Canadians to ensure it remains sustainable in light of the greater prevalence and severity of weather events," Chief Executive Charles Brindamour said in a statement.

The floods in the Western Canadian province of Alberta last month shut down Calgary, displaced more than 100,000 and left the core of the oil city without power for days. Separately, a severe rainstorm in Toronto in early July caused flooding, power cuts and transit chaos across the city, Canada's largest.

The company estimates that the cost of helping its Alberta customers restore their homes, autos and businesses following the devastating storms and flooding will amount to more than C$300 million ($289.2 million).

This will result in an after-tax impact of C$105 million, or 79 Canadian cents a share, after adjusting for recoveries from reinsurance. These costs will be booked in the company's second quarter financial results, which will be released on July 31.

In total, the insurer is set to record after-tax catastrophe losses of C$123 million, or 92 Canadian cents per share, net of reinsurance, in its second quarter results.   Continued...