(Reuters) - Intact Financial Corp (IFC.TO), Canada’s largest property and casualty insurer, reported quarterly operating profit that was worse than analysts expected, hit by a weak performance from its auto insurance business.
The company’s net operating income fell to C$212 million ($161.20 million), or C$1.58 per share, in the fourth quarter ended Dec. 31, from C$265 million, or C$1.97 per share, a year ago. Analysts on average had expected net operating income per share of C$1.75 per share, according to Thomson Reuters I/B/E/S data.
“Intact reported a significant miss against expectations on the back of ongoing weakness in the auto lines (both personal and commercial),” said Barclays’ analyst John Aiken.
Intact said its personal auto business made an underwriting loss of C$9 million, compared with income of C$28 million the year before. The performance was impacted by more weather-related claims. Its commercial auto business made an underwriting loss of C$3 million.
The company also said it would increase its quarterly dividend by 6 Canadian cents to 64 cents per share.
“Although we anticipate pressure on Intact’s valuation today, we would not expect it to be long lived as IFC’s underlying operations appear to be strong and a 10 percent hike in the dividend illustrates faith in its operations and outlook,” said Aiken.
Overall underwriting income decreased 30.8 percent to C$153 million in the quarter.
The company’s combined ratio rose to 92.5 percent from 88.6 percent a year earlier, hurt by the weak results in its auto insurance business. A ratio below 100 percent means an insurer earns more in premiums than it pays out in claims.
($1 = 1.3151 Canadian dollars)
Reporting by Matt Scuffham in Toronto and Vishaka George in Bengaluru; Editing by Saumyadeb Chakrabarty and Bill Trott