Canadian property insurer Intact to take hit from recent disasters
Intact Financial Corp. CEO Charles Brindamour speaks during the company's annual general meeting in Montreal, Wednesday, May 2, 2012. (THE CANADIAN PRESS / HO)
Published Monday, July 22, 2013 9:22AM EDT
TORONTO -- Intact Financial Corp. (TSX:IFC) will record about $270 million in expenses over two quarters as a result of several recent catastrophes including floods in Alberta and Toronto and the deadly Lac-Megantic train derailment in Quebec.
The Toronto-based company, one of Canada's largest property and casualty insurers, estimates it will record about $123 million or 92 cents per share in after-tax catastrophe losses in its second quarter.
That will be mainly due to about $300 million of costs for Intact customers in Alberta following storms and flooding that swept through several communities.
The financial blow to Intact will be softened by reinsurance -- essentially insurance for insurance companies.
The Alberta disaster, alone, will result in $105 million or 79 cents per share net of reinsurance in the second quarter ended June 30.
In the third quarter, which began July 1, Intact estimates it will record an additional $134 million or $1.01 million in after-tax catastrophe losses.
That will includes a $25 million cost associated with the Lac-Megantic train derailment that killed an estimated 47 people and devastated the Quebec city.
The severe rain storm that impacted thousands of Intact customers in the Greater Toronto Area in early July resulted in an estimated $170 million of insurable damages, the company said.
"The devastation brought on by recent flooding and torrential rain is unprecedented," Charles Brindamour, Intact's chief executive officer, said in a statement.
"The scope of the damage and destruction that we have witnessed in recent weeks is a stark reminder that we must adapt the protection offered to Canadians to ensure it remains sustainable in light of the greater prevalence and severity of weather events."