Intact Financial (TSE:IFC) reported what management called “another very strong quarter,” highlighting double-digit growth in net operating income per share, continued combined ratio improvement, and a higher dividend as the insurer closed out 2025 with what it described as a structurally higher return profile.
Quarter and full-year performance
CEO Charles Brindamour said net operating income per share increased 12% in the fourth quarter to CAD 5.50, while full-year net operating income per share rose 33% to CAD 19.21. Brindamour noted the company’s compounded annual net operating income per share growth was 18% over the last three years and 12% over the past decade, above its stated 10% growth objective.
Operating return on equity was 19.5% over the past 12 months, which Anderson said helped drive a 16% increase in book value per share to CAD 107.35. Brindamour said the company believes its ROE has “structurally shifted in the upper teens,” and management estimated ROE outperformance of 750 basis points at the end of the third quarter of 2025 versus its 500-basis-point objective.
Line-of-business trends: Canada, U.K. & Ireland, and U.S.
In Canadian personal auto, premiums grew 9% in the quarter, including a 2% increase in units. Brindamour said industry profitability remained challenged, with an industry combined ratio above 100% for the first nine months ended September, and management expects hard market conditions to persist. Intact’s personal auto combined ratio was 94.2% in Q4, and 93.3% for the full year, meeting its sub-95% guidance.
In personal property, premiums grew 6%, supported by 2% unit growth but offset by a nearly three-point drag from a one-time item in the affinity and travel business. Management said it expects a similar one-time but unrelated impact on Q1 growth, with growth expected to return to the upper single-digit range in Q2. The personal property combined ratio was 76.4% in Q4, and management said it remains positioned to deliver a sub-95% combined ratio even with severe weather.
In Canadian Commercial lines, premiums grew 1%. Brindamour cited elevated competition in large accounts and an average reduction in account size as a headwind, while emphasizing continued traction in SME and mid-market initiatives. Management said completed quotes in commercial P&C were up 24% and new business was up 8% year-over-year. The combined ratio in the segment was 77.1% in Q4, and management said it remains positioned to deliver a low-90s or better combined ratio going forward.
In the U.K. and Ireland, premiums were down 2% year-over-year, which Brindamour said represented improvement from the prior two quarters as expected. Management said it expects top-line growth to continue improving in 2026 as it unites the Commercial lines business under the Intact brand and as remediation of the Direct Line book tapers off. The combined ratio was 93.5% in Q4, and management said the business is on track to move toward 90% over the next 12 months.
In the U.S., premiums increased 5%, driven by growth initiatives as new business rose 11%. The U.S. combined ratio improved by more than 3 points year-over-year to 82.8%. Brindamour said Intact’s strategy is to grow faster in its most profitable lines and customer profiles, noting that in 2025, sub-90% combined ratio business lines grew seven points faster than those above 90%, resulting in the 10th consecutive quarter with a sub-90% combined ratio in the U.S.
Catastrophes, reserves, expenses, and investments
Catastrophe losses totaled CAD 69 million in Q4 and CAD 844 million for the full year. Looking ahead, Anderson said the company is maintaining its annual catastrophe loss expectation at CAD 1.2 billion for 2026, with 75% allocated to Canada (and 70% of that in Personal lines), reflecting longer-term trends, revised catastrophe thresholds, and premium growth.
Favorable prior year development was 5.5% in the quarter. Anderson reiterated guidance of 2%–4% over the longer term, while saying results have hovered around the upper end recently and management expects to be around the 4%–5% range in the near term. Brindamour emphasized that the company evaluates performance by looking at the combined outcome of current accident year loss ratio and prior year development, given the link between reserving prudence and subsequent development.
The consolidated expense ratio was 34.4% in Q4, up 0.8 points year-over-year, driven by higher variable broker commissions and higher incentive compensation tied to profitability in North America. Full-year expense ratio of 34% aligned with guidance of 33%–34%. In Q&A, management said variable compensation, mix shifts, direct-channel growth, and technology investment—particularly in the U.K.—have influenced the general expense ratio, while noting internal productivity targets aimed at improvement over the next three years.
Operating net investment income increased 4% to CAD 415 million in Q4. For 2026, management expects investment income to be more than CAD 1.6 billion, with growth in invested assets expected to offset reinvestment yields that are slightly below the current book yield.
Capital position, buybacks, M&A, and dividend increase
Anderson said the balance sheet finished 2025 in its strongest position yet, with total capital margin up CAD 800 million to CAD 3.7 billion and the adjusted debt-to-total capital ratio improving nearly three points to 16.5%. The company plans to renew its normal course issuer bid on Feb. 17, allowing it to repurchase up to 3% of shares outstanding. Management said it bought back CAD 200 million of shares in the last six months and expects to use buybacks opportunistically when shares are viewed as significantly undervalued, while also retaining “dry powder” given what it described as an attractive near-term M&A opportunity set.
On deployable capital, Anderson said that after retaining capital to cover volatility, excess capital is deployable, and combined with the company’s under-levered position, Intact could execute transactions in the CAD 4 billion to CAD 5 billion range before needing to raise equity.
Brindamour also announced an 11% dividend increase to CAD 1.47 per quarter, marking the company’s 21st annual dividend increase.
AI initiatives and views on disruption
Management pointed to data and AI as a key driver of risk selection and margin expansion. Brindamour said teams have deployed AI models generating more than CAD 200 million of recurring benefits primarily in pricing and risk selection, and the company remains on track to exceed its ambition of at least CAD 500 million by 2030. For 2026, he said investments will focus on advancing risk selection, improving customer journeys to drive organic growth, accelerating software development, and improving operational efficiency, noting software engineering output has risen close to 20% per dollar of investment in under 24 months.
In response to questions on AI-driven disruption, Brindamour said large language models could affect traffic capture and shopping in digital channels and could change the “nature of advice,” while arguing that the manufacturer’s brand and value proposition—particularly around “getting people back on track”—remains central. He said Intact is focused on ensuring its brands show up prominently in search, including in emerging LLM-driven distribution channels.
About Intact Financial (TSE:IFC)
Intact Financial Corp is a property and casualty insurance company that provides written premiums in Canada. The company distributes insurance under the Intact Insurance brand through a network of brokers and a wholly-owned subsidiary, BrokerLink, and directly to consumers through Belairdirect. Most of the company’s direct premiums are written in the personal automotive space. Intact directly manages its investments through subsidiary Intact Investment Management. The vast majority of these invested assets are fixed-income securities.
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