TORONTO (Reuters) - Intact Financial Corp (IFC.TO), Canada’s largest property and casualty insurer, reported a larger-than-expected drop in fourth-quarter profit as a winter ice storm hurt underwriting results.
Shares of Intact, which also raised its quarterly dividend by 9 percent, fell 1.1 percent on the results.
Toronto-based Intact said net income fell to C$107 million ($97 million), or 77 Canadian cents per share, in the quarter ended December 31, from C$177 million, or C$1.29 per share, a year earlier.
On an operating basis, Intact earned C$1.05 per share, which fell short of analysts’ estimates for C$1.26 a share.
Underwriting profit fell by more than half to C$67 million, due largely to a major ice storm that blanketed central and Atlantic Canada in December, causing widespread damage, power failures and disruptions to travel and business.
Weather-related catastrophe losses for the quarter amounted to C$55 million, capping off a tough year that saw Canadian insurers pay out a total of C$3.2 billion for weather-related losses, due mainly to June floods that shut down the oil industry hub of Calgary, Alberta.
For the year, Intact said catastrophe losses amounted to C$530 million before taxes.
The company said it expects industry premiums will grow at a low single-digit rate, and that mandated auto premiums reductions in the province of Ontario “will be largely commensurate with additional cost reduction measures and, as such, (Intact) does not foresee material deterioration in profitability.”
In last year’s Ontario budget, the provincial Liberal government pledged to cut auto insurance rates by 15 percent over two years.
The company’s combined ratio was 96.3 percent, compared with 92.1 percent a year earlier. A ratio below 100 percent means the company is taking in more from premiums than it is paying out in claims and expenses.
Intact raised its dividend by 9 percent to 48 Canadian cents per share.
Its shares, which touched an all-time high of C$69.95 in January, were down 77 Canadian cents at C$66.74 on the Toronto Stock Exchange.
Editing by Bernadette Baum