TD Securities has increased its price target for Intact Financial (IFCZF, Financial), raising it from C$328 to C$349. The firm's analyst, Mario Mendonca, maintains a Buy rating on the shares, indicating continued confidence in the company's performance and potential growth.
IFCZF Key Business Developments
Release Date: February 12, 2025
- Net Operating Income Per Share (NOIPS): $4.93 in Q4 2024, up 23% from last year.
- Combined Ratio: 86.5% in Q4, 4 points better than last year.
- Operating Return on Equity (ROE): 16.5% for 2024.
- Total Capital Margin: $2.9 billion at year-end.
- Catastrophe Losses: $1.5 billion for the year.
- Dividend Increase: 10% increase, marking the 20th consecutive year.
- Personal Auto Premium Growth: 12% in Q4.
- Personal Property Premium Growth: 9% in Q4.
- Commercial Lines Premium Growth: 4% in Q4.
- UK&I Combined Ratio: 92.7% for Q4 and 92.8% for the year.
- US Combined Ratio: 86.1% for Q4 and 87.5% for the year.
- Distribution Income Growth: 13% in Q4 and 12% for the year.
- Book Value Per Share Growth: 2% in Q4 and 13% year over year.
- Adjusted Debt-to-Total Capital: 19.4% at year-end.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Intact Financial Corp (IFCZF, Financial) reported its best quarter on record with a net operating income per share of $4.93, up 23% from the previous year.
- The company achieved a strong combined ratio of 86.5%, which is 4 points better than last year, indicating strong underlying performance across all lines of business.
- Intact Financial Corp (IFCZF) increased its dividend for the 20th consecutive year, with a 10-year compounded annual growth rate of 10%.
- The company has a robust capital margin of $2.9 billion, positioning it well for future growth opportunities.
- Intact Financial Corp (IFCZF) is advancing its AI capabilities, with over 500 models to optimize underwriting performance and customer experience, contributing to $150 million in run rate underwriting profit.
Negative Points
- The company incurred $1.5 billion in catastrophe losses for the year, reflecting ongoing challenges with severe weather events.
- In the US, premium growth was flat in the quarter due to corrective actions in underperforming segments, indicating potential challenges in maintaining growth.
- The integration of Direct Line in the UK&I created a 4-point drag on growth in Q4, highlighting challenges in integrating acquisitions.
- The Alberta auto insurance market remains challenging due to increased litigation on injury claims, impacting profitability despite recent regulatory changes.
- Intact Financial Corp (IFCZF) increased its retention of catastrophe treaty in Canada from $250 million to $350 million, indicating higher exposure to potential losses.
