November 3, 2010 / 10:47 AM / in 8 years

UPDATE 2-Intact Financial stock surges on strong profit

* Operating EPS C$0.78 vs estimated C$0.58

* Underwriting performance helps results

* Shares up 4.7 percent at C$47.81 (Adds details, analyst comment, share reaction)

By Cameron French

TORONTO, Nov 3 (Reuters) - Intact Financial Corp (IFC.TO), a Canadian home and auto insurer, posted a better-than-expected quarterly profit on Wednesday on the back of stronger underwriting results, driving its shares up more than 4 percent.

The Toronto-based company earned C$82.3 million ($81.5 million), or 72 Canadian cents a share, in the third quarter. That compared with a net loss of C$8 million, or 7 Canadian cents a share, in the year-before quarter.

On an operating basis, Intact earned C$89.0 million, or 78 Canadian cents a share, up from C$21.6 million, or 18 Canadian cents a share, a year earlier.

Analysts, who focus on Intact’s operating results, had expected a profit of 58 Canadian cents a share, according to polling by Thomson Reuters I/B/E/S/.

“Earned premiums were 2 percent below our forecast but underwriting profitability was much better than expected,” RBC Capital Markets analyst Andre-Philippe Hardy said in a research note.

Underwriting income at the company, which has a market cap of C$5.2 billion, was C$36.7 million, compared with a loss of C$53.2 million last year.

Direct premiums written rose 5 percent to C$1.21 billion.

The company said personal property premiums continue to rise across the industry to reflect the increase in frequency and severity of storms, as well as water-related losses. It also said that pricing in commercial insurance remains soft, but has been firming up in segments where Intact operates.

“Our financial position remains strong with C$800 million in excess capital and we are well positioned to take advantage of the opportunities that will result from improving market conditions,” Chief Executive Charles Brindamour said in a statement.

Intact’s shares, which are up 28 percent year-to-date, climbed C$2.16, or 4.7 percent, to C$47.81 on Wednesday morning on the Toronto Stock Exchange. The stock was last at these levels in July.

$1=$1.01 Canadian Reporting by Cameron French, additional reporting by Isheeta Sanghi in Bangalore; editing by Peter Galloway

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