Intact Financial takes charges for AXA acquisition but operating income rises

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The corporate logo of Intact Financial Corporation (TSX: IFC) is shown. THE CANADIAN PRESS/HO

TORONTO - Property and casualty insurance provider Intact Financial Corp. (TSX:IFC) reported Wednesday a drop in fourth-quarter profit to $84 million from a year-earlier $107 million on charges related to its AXA Canada acquisition, but operating income and premiums moved strongly higher.

Intact said its results were robust enough to support an eight per cent increase in its quarterly dividend to 40 cents per share payable on March 30 to shareholders of record on March 15.

The Toronto-based insurer said its net income for the period amounted to 62 cents per share, compared to 95 cents per share in the same period last year. Included in the results were $42 million in integration costs and a $41-million provision taken for contingent consideration to be paid for the acquisition of AXA.

However, a strong performance across all lines of its business drove net operating income higher by $72 million to $152 million or $1.14 per share and premiums written were up 49 per cent to $1.6 billion, thanks to the contribution from AXA and a "rebound" in organic growth.

"Our excellent fourth-quarter results rounded off a strong year for our company as we recorded our best underwriting performance in the past five years," chief executive Charles Brindamour said in a statement.

"Despite another challenging year for the industry, we demonstrated our strength and resilience and executed on our growth strategy."

Intact said it expects industry-wide premiums to increase over the next 12 months at a pace similar to last year.

Net operating income for the full year rose 14 per cent to $460 million and total direct premiums written were up 13 per cent to $5.1 billion.