Intact Financial

Intact Financial Corporation

240px
Type	Public
Traded as	TSX: IFC
Industry	Insurance
Founded	1809
Headquarters	Toronto, Canada
Key people	Claude Dussault,CHAIR Charles Brindamour,PRES Jean-Francois Blais,PRES Ins. Mark A.Tullis,CFO Louis Gagnon,PRES,COO Marc Pontbriand,PRES(DTCD) Francoise Guenette, Sr.VP-Corp/Legal Serv. Claude Desilets,CRO Marc Provost,Sr.VP-Inv Mgmt Lucie Martel,Sr.VP-HR
Products	property, liability insurance auto insurance, brokerage
Revenue	C$7.437 bil (2013)4%
Operating income	C$675.0 mil (2013)47%
Net income	C$ 431.0 mil (2013)24%
Total assets	C$19.774 bil (Dec13)
Total equity	C$4.954 bil (Dec13)
Number of employees	11,000
Website	www.intactfc.com

Intact Financial Corporation is a Canadian insurance company; formerly the ING Group subsidiary ING Canada. It is Canada's leading provider of property and casualty insurance (home, auto and business, 17% of the Canadian market). It also serves the private, public and commercial (trucks, snowmobiles) vehicle market, covers theft and vandalism, and provides other forms of business insurance.

Distribution is conducted through Intact Insurance, belairdirect, Grey Power and BrokerLink, each specializing in a different type of insurance-related service and product. The company operates under different subsidiaries; they include Trafalgar Insurance Company of Canada, Equisure Financial Network Inc. and Novex Insurance Company. Intact is considering using the $1 billion in excess capital it has (November 2010) towards expanding its presence in Canada through acquisitions (mid-2011 it acquired AXA Insurance's Canadian operations for $2.6 billion). Intact's investment portfolio with roughly $8.7 billion in invested assets, is managed internally by Intact Investment Management Inc.

The company has ranked well in a number of customer satisfaction surveys; In 2010 home and auto insurance subsidiary Grey Power, now GP Car and Home ranked first in the annual JD Power and Associates customer satisfaction study which measured customer satisfaction among private auto insurance companies. It was also the only company in the study to receive five out of five power circles in each category. Though most business comes from Ontario, Quebec, Alberta and Nova Scotia, Intact is present in all Canadian provinces and territories except Saskatchewan. The company also provides insurance brokerage services through its BrokerLink division.

Direct premiums written grew each year between 2005 and 2013 (the amount of money customers paid for policies written during the year). They totaled $7.305 billion in 2013 which is 6.6% higher than in 2012 ($6.868 billion). Change in direct premiums by year: 2013 6.6%, 2012 35%, 2011 13%. 2012 was a big year for acquisitions: only 2-5% of the growth in premiums in the final quarter (+34%) was from organic growth; the rest was attributable to the acquisitions of Jevco and AXA Canada; AXA Canada was responsible for 49% of the premium growth in the last quarter of 2012. Growth in underwriting profit in 2012 was impacted by results from the personal property insurance business ($94 million in 2012 up from a loss of $40 million) and increase in the company's personal property claims ratio from 103.5% to 93.5% (the claims ratio is claims payable as a percentage of income) and auto (86.5% to 81.5%). In 2011 net income fell 7% on the year to $465 million due to AXA Canada integration costs in the amount of $42 million. Integration synergies with AXA Canada will increase to about $100 million by 2013. Fixed income securities dominate investment assets (74% at the end of 2012 up from 61.1% end of 2010, net of hedging).

History

Started out as the Halifax Fire Insurance Association in 1809. In the 1950s, Dutch insurer Nationale-Nederlander (NN) established itself in Canada by acquiring the Halifax Insurance Company; Dutch immigration to Canada attracted Nationale-Nederlander to the country. Nationale-Nederlander made its first major move in the 2000s when it took over Quebec insurers Groupe Commerce and Belair which was then followed by Western Union of Alberta. In 2003 Nationale-Nederlander's Canadian businesses were consolidated and renamed ING Canada. In 2004 it completed the takeover of Allianz Canada and went public on the Toronto Stock Exchange (70% of shares were owned by ING Group). On February 23, 2009 the company became independent of ING Group and immediately became known as Intact Insurance Company. Three months later, on May 13, 2009 shareholders approved a name change to Intact Financial Corporation (IFC). ING Group sold all of its 70% share of the company to institutional investors for $2.2 billion.

In May 2011 Intact Financial purchased AXA Canada for $2.6 billion. The deal, paid for in part by a loan facility, raises the fraction of business coming from property and casualty insurance (largest in Canada). Although the addition of AXA Canada improves business stability (less reliant on Ontario's auto insurance market) Moody's plans to lower its credit rating one notch down from Aa3 because of "less financial flexibility". To help repay the loan it received to finance the AXA acquisition, in January 2012 it sold AXA Canada's life insurance division to Quebec City-based SSQ Financial Group for $300 million.

On September 5, 2012 Intact Financial completed the $530 million takeover of Jevco, a property and casualty insurance company with annual direct premiums of $350 million. Jevco was formerly a part of Westaim Corp (2010-2012) and Kingsway Financial Corp (2010).

Business and business segments

Intact Financial Corporation is the largest provider of property and casualty insurance in Canada with close to $8.0 billion in premiums. Supported by over 12,000 employees, the Company insures more than five million individuals and businesses through its insurance subsidiaries and is the largest private sector provider of P&C insurance in British Columbia, Alberta, Ontario, Québec, Newfoundland and Labrador and Nova Scotia. The Company distributes insurance under the Intact Insurance brand through a wide network of brokers, including its wholly owned subsidiary, BrokerLink, and directly to consumers through belairdirect. In 2012 45% of direct premiums were related to personal auto insurance, about twice as much as personal property (23%) and commercial P&C (24%). In 2009, 49.7% of direct premiums were related to personal auto insurance, more than twice as much as the second most important source, personal property (23.8%). Commercial property and casualty was 19.0% while commercial auto was 7.5%.

Intact's multi-channel distribution operates under four distinct brands:

• Intact Insurance

Canada's largest home, auto and business insurance company distributes through a network of more than 1,800 insurance brokers from coast-to-coast.

• Jevco

JEVCO Insurance Company, provides specialised insurance products to individuals, such as recreational vehicles (motorcycles, snowmobiles and all-terrain vehicles), and non-standard auto insurance as well as niche products in business insurance. It operates mainly in Quebec, Ontario and Alberta. Jevco was acquired by Intact Financial in 2012.

• Novex Insurance

Novex Insurance Company is a fully integrated division of Intact Insurance focusing on Intact Financial employees and other designated group clients.

• Axa Canada Insurance

Axa Canada was acquired by Intact Financial in May 2011 and integrated into the insurance offerings of Intact Insurance.

• BrokerLink

Established in 1991, the BrokerLink companies, which include Canada Brokerlink Inc., Canada Brokerlink (Ontario) Inc. and Macdonald Chisholm Trask Insurance, together constitute one of the largest Canadian property and casualty insurance brokerage operations with over 115 offices supported by more than 1,400 employees across Ontario, Alberta and Atlantic Canada. The BrokerLink companies are subsidiaries of Intact Financial Corporation (TSX: IFC).

• belairdirect

Belairdirect is a direct-to-consumer P&C insurance company that until 2015 only operated in Ontario and Quebec. It benefits from having a high brand awareness and online presence. Leveraging the internet has helped it to grow at a rate of about 10% per year. In June 2015, Belairdirect merged with Grey Power and was able to start offering insurance in Alberta and the Maritime provinces. In November 2015 belairdirect began integrating all Alberta policies offered by Canada Direct Insurance into the belairdirect brand.

• Grey Power

Provided car and home insurance to people with 25+ years of driving experience, Grey Power distributes directly to consumers in Alberta, Ontario and the Maritimes provinces through call centres and the Internet. It re-branded as GP Car and Home in April 2011 and re-branded as Grey Power in 2012. In 2015 Intact Financial closed it's Grey Power brand and began a one year rolling merger to re-issue all eligible policies under the belairdirect brand name.

• Canadian Direct Insurance

Founded in 1996, Canadian Direct Insurance is a property and casualty insurance company that provides personal insurance solutions throughout British Columbia and Alberta. Its pioneering telephone and internet distribution model was the first of its kind in BC – enabling it to pass on cost-savings, and giving it the ability to provide sales, service and claims functions direct to customers. It was acquired by Intact Financial in May 2015. Operations in Alberta began to be integrated with belairdirect in November 2015. Operations in British Columbia remain unchanged.

Leadership

Charles Brindamour is the Chief Executive Officer.

Corporate Social Responsibility

The Intact Foundation supports environment initiatives, community efforts and encourages employee involvement. Since 2004, over $14 million has been donated to charities and organizations in Canada.