August 4, 2011 / 4:28 PM / 7 years ago

Intact Financial profit falls, but tops estimates

* Q2 op EPS C$0.87 vs est C$0.73

* Profit hurt by wildfires, storms

* Shares steady despite market dive.

TORONTO, Aug 4 (Reuters) - Intact Financial (IFC.TO) said on Thursday its second-quarter profit fell 13 percent due to claims related to wildfires in Western Canada, but the result topped analysts’ expectations and helped support the insurer’s share prices in an otherwise weak day for the markets.

Toronto-based Intact, which agreed in May to buy the Canadian arm of AXA Group (AXAF.PA) for C$2.6 billion, said net income was C$123 million ($126 million), or C$1.12, down from C$141 million, or C$1.22 a share, in the quarter ended June 30.

On an operating basis, Intact earned 87 Canadian cents per share, handily beating analyst estimates of a profit of 73 Canadian cents.

The company’s shares were down 17 Canadian cents at C$54.98 on the Toronto Stock Exchange at midday, versus a 3.2 percent drop for the benchmark S&P/TSX composite index .GSPTSE.

“The earnings beat was driven by stronger-than-expected underwriting income,” Scotia Capital analyst Phil Hardie said in a note.

Profit was hit by C$92 million in losses due to a series of wildfires in Alberta as well as unusually severe rain and wind storms in Central Canada, Intact said.

The company said the catastrophic losses were partly offset by a strong performance by its auto insurance portfolio.

Intact, the former Canadian insurance arm of Dutch financial group ING, sells insurance under the Belair Direct and Grey Power banners.

Direct premiums written rose 3 percent to C$1.35 billion in the quarter, while underwriting income fell by 50 percent to C$33 million, due to the impact of the wildfires and storms.

The company said in May the purchase of AXA Canada, the country’s sixth largest home, auto and business insurer, will increase Intact’s direct premiums in Canada by C$2 billion to more than C$6.5 billion.

The deal is expected to close this fall.

$1=$0.98 Canadian Reporting by Cameron French; editing by Rob Wilson

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