UPDATE 1-Canadian insurer Intact Financial beats profit estimates, helped by RSA acquisition

·2 min read

(Adds details of earnings)

By Nichola Saminather

TORONTO, July 27 (Reuters) - Intact Financial Corp, Canada's biggest property and casualty insurer, handily beat second-quarter profit estimates on Tuesday as premiums grew 29%, driven in part by the company's acquisition of British insurance group RSA.

Intact posted operating income of C$515 million ($409 million), or C$3.26 a share, up from C$350 million, or C$2.35 a share, a year earlier. Analysts had expected C$2.44 a share, according to Refinitiv data.

Intact's purchase of RSA's Canada, UK and international operations, which closed on June 1, also helped boost net investment 9% year-on-year to C$154 million, and book value per share by the 44%, the Canadian insurer said.

With the added scale offered by RSA, Intact remains "focused on growing net operating income per share by 10% annually over time and outperforming the industry (return on equity) by 500 (basis points) every year," Chief Executive Charles Brindamour said in a statement.

Industry profitability has improved over the past year, helped by lower catastrophe-related losses and lower auto claims, the company said. Hard market conditions, one of the characteristics of which is higher premiums, are also expected to continue in the United States and Canada and in the U.K. commercial market, it said.

RSA contributed C$734 million, or 17%, of Intact's total premiums, and C$57 million, or 12% of underwriting income, in June, the insurer said.

Intact also recorded a C$200 million gain in non-operating income on the difference between RSA's purchase price and the fair value of its assets, offset by C$108 million in expenses related to the deal.

The company posted net income of C$573 million, or C$3.59 a share, versus C$263 million, or C$1.74, a year earlier.

Intact shares are up 12.5% this year, compared with a 15.8% gain in the Toronto stock benchmark. ($1 = 1.2600 Canadian dollars) (Reporting By Nichola Saminather; Editing by Dan Grebler and Richard Pullin)

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