Intact Financial Q1 2026 Earnings Report

Intact Financial EPS Results

• Actual EPS: C$4.61
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Intact Financial Revenue Results

• Actual Revenue: $5.83 billion
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Intact Financial Announcement Details

• Quarter: Q1 2026
• Date: 5/5/2026
• Time: After Market Closes
• Conference Call Date: Wednesday, May 6, 2026
• Conference Call Time: 11:00AM ET

Intact Financial (TSE:IFC) 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. Its asset mix is designed to generate interest and dividend income.

Intact Financial Q1 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Record quarter: Net operating income per share rose 8% to CAD 4.33 (highest-ever Q1), NOIB has 5-year CAGR of 14%, and operating ROE was 19.4% (third straight quarter above 19%), with 2025 ROE outperformance of ~740 bps.
• Positive Sentiment: Underwriting momentum: Consolidated combined ratio was 91.3% with particularly strong results in Canada personal auto (94.4% and a 2.2-point improvement in underlying loss ratio) and the U.S. (83.4%), supporting the company's sub-95% annual guidance.
• Negative Sentiment: UKI underperformance: UKI posted a combined ratio of 103.2% driven by ~8 points of elevated catastrophes and large losses, though management expects to drive the business toward a ~90% combined ratio via pricing, risk selection, tech and expense actions.
• Positive Sentiment: Strong capital flexibility: Capital margin rose to CAD 4 billion with adjusted debt-to-capital ~16.4%, the ability to execute ~CAD 6 billion transactions without equity, and accelerated share buybacks (~CAD 217m YTD, moving to a ~CAD 200m/quarter run rate) while keeping M&A as the priority for deployment.
• Positive Sentiment: Strategic execution and AI gains: Realized annual recurring benefits from data/AI reached CAD 220 million (up from CAD 150m) toward a CAD 500m target, and the firm is expanding global specialty offerings (new construction liability, trade credit, marine, UK surety) to broaden profitable growth.

Presentation

[Operator]

Ladies and gentlemen, welcome to the Intact Financial Corporation Q1 2026 results conference call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. Also note that this call is being recorded on May 6th, 2026. Now I would like to turn the conference over to Geoff Kwan, Chief Investor Relations Officer. Please go ahead.

[Geoff Kwan, Chief Investor Relations Officer at Intact Financial]

Thank you, Sylvie. Hello, everyone, thank you for joining the call to discuss our first quarter financial results. A link to our live webcast and materials for this call have been posted on our website at intactfc.com under the Investors tab. Before we start, please refer to slide two for a disclaimer regarding the use of forward-looking statements, which form part of this morning's remarks. Slide three for a note on the use of non-GAAP financial measures and other terms used in this presentation. To discuss our results today, I have with me our CEO, Charles Brindamour, our CFO, Ken Anderson, and Patrick Barbeau, Chief Operating Officer. We will begin with prepared remarks followed by Q&A. With that, I will turn the call over to Charles.

[Charles Brindamour, CEO at Intact Financial]

Good morning, and thanks for joining us. Last night, we announced another very strong quarter. Net operating income per share increased 8% to CAD 4.33, our highest ever in Q1.NOIPS has grown at a compounded rate of 14% in the past five years and 12% over 10 years. Just as important, our operating ROE came in at 19.4%, the third consecutive quarter above 19% despite a very strong balance sheet. For 2025, we estimate that our ROE out performance reached 740 basis points, well above our 500 basis points objective and higher than our 670 basis points track record in the last decade. Our capital generation engine continues to strengthen our balance sheet, giving us a lot of optionality on capital deployment.

[Charles Brindamour, CEO at Intact Financial]

Our top-line growth in Q1 was 4% and 5% when you exclude the non-recurring items in personal property. I'm encouraged to see continued strength in personal lines as well as sequential improvements in commercial and specialty lines in both the U.K. and in Canada. The combined ratio for Q1 of 91.3 was in line with last year. This was an excellent result, reflecting our continued disciplined underwriting. Looking ahead in 2026, I expect the platform overall to continue to deliver top and bottom-line industry out performance. Let me now provide some color on the results and outlook by line of business, starting with Canada. In personal auto, premiums grew 9% in the quarter. With the industry remaining unprofitable in 2025, we expect industry premium growth to remain in the high single-digits throughout the year.

[Charles Brindamour, CEO at Intact Financial]

Over the next 12 months, when it comes to the industry, reforms will take place in both Ontario and Alberta. We view those as positive for drivers and for the vibrancy of the automobile insurance market in these provinces. In Alberta, in particular, these reforms will go a long way to stabilize what's today a loss-making market with severe capacity shortages. Overall, in personal auto in Canada, our underlying loss ratio improved 2.2 points year-over-year. The overall combined ratio of 94.4 was a strong result for a first quarter and will remain very well-positioned to sustain our sub-95 annual guidance. In personal property, premium growth was 3%, driven by a 2% increase in units. As I mentioned on our call last quarter, Q1 premium growth was impacted by five points from one-time items in our affinity and travel business.

[Charles Brindamour, CEO at Intact Financial]

Adjusting for this, growth is running in the upper single-digit range, a level we expect to return to in Q2. The combined ratio of 84.4 was strong, reflecting our robust underlying performance and lower catastrophe losses. Personal property is really set up to operate at a sub-95 combined even with severe weather. In commercial lines, premium growth was 2%, a one-point improvement sequentially, driven by further momentum in our growth initiatives despite close to two points drag due to mix as competition is more intense for large accounts. This mixed drag is intentional. It results from discipline across all segments, the deployment of machine learning models in pricing, and picking the right verticals to grow in in specialty lines. Given these are geared to drive combined ratio improvement, a drag in mix doesn't translate in a drag in absolute earnings growth.

[Charles Brindamour, CEO at Intact Financial]

Talking about growth, we still expect the industry premium growth in the low to mid-single-digit range over the next 12 months. On the combined ratio front in commercial in Canada, it's very strong at 86.2% despite more large losses year-over-year. Looking ahead, our business remains very well positioned to deliver a sustainable low nineties or better performance, and we expect to continue to outperform the industry both from a top and bottom line point of view. Moving now to our UKI business. Premiums increased 2% in the quarter, a four-point improvement sequentially as expected. While our top line growth may vary quarter-to-quarter, we expect it to gradually improve in 2026 as we leverage growth opportunities and focus on service to our brokers and customers. We still expect industry premium growth in the low to mid-single-digit range over the next 12 months.

[Charles Brindamour, CEO at Intact Financial]

The combined ratio of 103.2 was disappointing and included 8 points of elevated cats and large losses. As we continue to enhance our pricing and risk selection models, our technology capabilities, and the expense base in the coming months, we're confident that this business is on track to evolve towards a 90% combined ratio. In the U.S., premiums increased 4% year-over-year, we continue to grow faster in our most profitable lines. Our broader product offering, combined with continued momentum in expanding and strengthening broker relationships, is delivering positive results. From an industry perspective, we expect premium growth to continue in the mid-single-digit over the next 12 months. The combined ratio of 83.4% in the quarter improved 3 points year-over-year, reflecting continued underwriting discipline and lower catastrophe losses.

[Charles Brindamour, CEO at Intact Financial]

Our focus on profitable growth helped us deliver the 11th successive quarter in a row with a sub 90% combined ratio. Our team also continued to execute on our strategic priorities in the first quarter. Let me highlight a few of these achievements. First, we're a global leader in leveraging data and AI within the P&C industry. We're now realizing CAD 220 million in annual recurring benefits, up from CAD 150 million we announced at the Investors Day last year. We're well on our way to exceeding our CAD 500 million target. In global specialty lines, we continue to expand our product offering as we began writing in both the U.S. construction liability through Shepherd and MGA, we have a minority stake in, as well as European trade credit via Cartan Trade and MGA, where we have a controlling stake.

[Charles Brindamour, CEO at Intact Financial]

We've also expanded our marine offer globally and recently launched a surety business in the U.K. Tremendous momentum in global specialty lines. In our U.K. commercial lines business, our U.K. rebrand continues to gain traction. Broker advocacy continues to improve quarter-over-quarter, and brokers are increasingly recognizing the product and service improvements we've made since the launch. With best or better than industry scores improving on a sequential basis by 17 points on consistency of service, seven points on ease of contact, and 10 points on quality of cover. I'm pleased with the progress we're making in the U.K. Overall, our track record of delivering for shareholders through the cycle is really solid. Our net operating income per share has grown at a compounded rate of 14% over the last five years and 12% over the last 10 and 15 years.

[Charles Brindamour, CEO at Intact Financial]

Our ROE out performance has been almost 700 basis points on a five, 10, and 15 year basis. Our book value per share grew at a compounded rate of 13% over the last five years and 10% in the last 10 and 15 years. That consistency of delivery shows that external factors, including industry pricing cycles, did not inhibit our ability to deliver both ROE out performance and double-digit earnings growth annually over time. Remaining focused on profitable growth, protecting underwriting margins, and allocating capital with discipline wins the day. If I look prospectively, there are a number of very specific reasons why our track record can be maintained despite investor concerns about broader industry pricing cycles. First, the vast majority of our business operates where market conditions are constructive, north of 80%.

[Charles Brindamour, CEO at Intact Financial]

Second, across all segments, we leverage our pricing and risk selection advantage to navigate even the toughest markets. These tools are available in the field to help underwriters grow in the right segments with the right accounts. Third, our sandbox is 10x bigger than a decade ago and offers tremendous growth optionality. Our footprint today is not only much larger, but it's diversified across geographies and specialty verticals. Our game plan obviously targets most profitable segments, regions, and customers. Finally, beyond a diversified footprint and advantage in risk selection, we've built an ROE advantage by leveraging claims, supply chain, distribution, and asset management. This allows us to ensure the ROE is solid in all phases of the so-called industry pricing cycle.

[Charles Brindamour, CEO at Intact Financial]

Ultimately, the sum of these attributes has not only allowed us to shift the ROE in an opportune zone, it's also resulted in a lower ROE volatility versus our peers. In fact, since 2011, the standard deviation of our ROE was half that of our peers. We've demonstrated in past decades that the Intact machine is built to create value in good and in bad times. I'd say we're even better positioned today. That's why we've decided to accelerate buying back our own shares. While our priority remains capital deployment through acquisitions, the big disconnect between our share price and the underlying performance and earnings power of the firm is too good an opportunity to pass up. Finally, I wanna thank our employees for their efforts in delivering yet another record quarter and for positioning us to deliver exceptional returns to shareholders in the years ahead.

[Charles Brindamour, CEO at Intact Financial]

It's your contributions day in, day out that allows us to build such an outstanding machine. I've no doubt we'll continue to deliver at least 10% annual net operating income per share growth over time, and at least 500 basis points of ROE out performance every year. With that, I'll turn the call over to our CFO, Ken Anderson.

[Ken Anderson, CFO at Intact Financial]

Thanks, Charles. Good morning, everyone. Our record performance in 2025 has carried into the first quarter of 2026 with an excellent start to the year. A strong combined ratio of 91.3% and higher investment income helped drive an 8% year-over-year increase in net operating income per share to CAD 4.33, our highest ever for a first quarter. Operating ROE remained above 19% for the third consecutive quarter and drove a 13% year-over-year increase in our book value per share to CAD 108.78. Let me add some color on first quarter results. The underlying current accident year loss ratio of 61.5% was solid overall and up marginally from last year. Underlying performance in our Canadian personal lines business was again very strong, improving by nearly two points year-over-year.

[Ken Anderson, CFO at Intact Financial]

This was offset by higher large losses in Canada commercial lines and in UKI. Favorable prior year development was excellent at 7.1%. Favorable development is typically higher in the first quarter. This quarter was in line with Q1 of last year. Our near-term expectation remains for PYD to hover around the upper end of our 2%-4% long-term guidance range. Since our IPO in 2004, we've had favorable PYD every single year. Our five and 10 year annual average has been 4.8% and 3.5% respectively, evidence of our disciplined, prudent reserving philosophy. This is also why we focus on the combined picture of both the current accident year performance and prior year development.

[Ken Anderson, CFO at Intact Financial]

Catastrophe losses in the quarter were benign at CAD 141 million, driven primarily by winter storms and large property losses in the U.K. and I. At the consolidated level, we continue to expect approximately CAD 1.2 billion of annual catastrophe losses, with about one third anticipated in each of Q2 and Q3. Moving to expenses. The consolidated expense ratio was 34.5%, up onepoint year-over-year but flat sequentially and in line with first quarter expectations. The year-over-year increase was partly due to growth in business lines in the U.S. that have higher commissions but lower loss ratios, which results in a positive impact on the U.S. combined ratio. In Canada and the U.K., higher expenses reflect continued investments in marketing, technology, and growth initiatives to drive top line and customer service levels.

[Ken Anderson, CFO at Intact Financial]

We expect the UKI expense ratio to improve by approximately two points in the second half of the year and for the IFC consolidated full-year expense ratio to be in line with our annual guidance of 33%-34%. Operating net investment income of CAD 457 million increased 10% year-over-year, reflecting an increase in special dividends and higher assets under management. In today's interest rate environment, we now expect approximately CAD 1.7 billion of investment income for the full-year compared to our prior CAD 1.6 billion guidance. Distribution income was in line with expectations, so down 2% from last year's very strong first quarter.

[Ken Anderson, CFO at Intact Financial]

Over both the past five and 10 years, distribution income has grown at a compounded annual rate in the mid-teens. While quarterly results may vary, we continue to expect distribution income growth of at least 10% annually. Moving to our balance sheet. We continue to operate with significant financial flexibility. Total capital margin increased CAD 300 million to end the quarter at CAD 4 billion, well in excess of what we need to manage volatility. Our adjusted debt to total capital ratio improved to 16.4%. Our balance sheet strength, low leverage ratio, and strong capital generation means we are ready to capitalize on M&A opportunities. The landscape for M&A continues to improve. It also means we can take opportunities to buy our own shares when they are meaningfully undervalued. In 2025, we bought back approximately CAD 200 million of our shares.

[Ken Anderson, CFO at Intact Financial]

In 2026, we repurchased CAD 150 million in the first quarter and have accelerated that to a CAD 200 million run rate in the second quarter, deploying CAD 217 million in total year-to-date. To be clear, the M&A landscape is evolving favorably and remains our preferred choice for capital deployment. We have ample capacity to do both, and we will continue to deploy capital in share buybacks when our shares are well below our view of fair value. Lastly, our track record of delivering on our financial objectives positions us as a leader within our industry, having one of the highest ROEs and also one of the most stable ROEs. This is a testament to the resilient global platform we have built and the outstanding work of our teams to successfully execute on our strategy.

[Ken Anderson, CFO at Intact Financial]

As Charles has set out, our track record shows that we can deliver consistent earnings growth across cycles. Our continued investment in our competitive advantages means they are getting stronger. This positions us to continue to deliver on our financial objectives to compound net operating income per share by 10% annually over time, and to exceed industry ROE by at least 500 basis points every year. With that, I'll turn it back to Geoff.

[Geoff Kwan, Chief Investor Relations Officer at Intact Financial]

Thank you, Ken. In order to give everyone a chance to participate in the Q&A, we would ask that you limit yourself to two questions per person. You can certainly re-queue for follow-ups, we'll do our best to accommodate if there's time at the end. Sylvie, we're ready to take questions now.

[Operator]

Thank you, sir. Ladies and gentlemen, if you do have any questions at this time, please press star followed by one on your touch-tone phone. You will then hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by two. If you're using a speakerphone, you will need to lift the handset first before pressing any keys. Please go ahead and press star one now if you have any questions. First, we will hear from Jaeme Gloyn at National Bank Capital Markets. Please go ahead.

[Jaeme Gloyn, Analyst at National Bank Capital Markets]

Yeah, good morning.

[Ken Anderson, CFO at Intact Financial]

Good morning.

[Jaeme Gloyn, Analyst at National Bank Capital Markets]

First question, just on the Canadian commercial alliance front. You talked about growth initiatives having some success. Can you talk about what's been working, what's not working, and should we expect to see a little bit more acceleration in the success of those initiatives?

[Charles Brindamour, CEO at Intact Financial]

I do expect it to be the case. What's working, technology deployment to brokers, working really well. We're quoting more of the submissions than we used to. That's driving, you know, very good new business generation actually, very good growth there. Retention is really good, so I'm very pleased with the progress I'm seeing in the Canadian landscape. Making excellent progress in specialty lines as well in Canada. I think, you know, if you just look at the top line, the drag coming from mix, which I've addressed in my remarks, is the thing that is driven by the fact that, you know, we have more success at the smaller end of commercial lines. We're deploying many initiatives to optimize pricing. For us, it's good.

[Charles Brindamour, CEO at Intact Financial]

It's intentional, and we think that, it's good for earnings growth as well. I don't know, Patrick, if you want to add color in terms of the actions that are working well. You know, high level, that's kind of it.

[Patrick Barbeau, COO at Intact Financial]

The only other thing is we're leveraging more than before the cross-selling between also our commercial lines and specialty lines, so that's also producing a bit of an upside. Technology, pricing sophistication, and completing more quotes are the key elements.

[Charles Brindamour, CEO at Intact Financial]

Yeah. Other questions or-

[Jaeme Gloyn, Analyst at National Bank Capital Markets]

Yes, I was just gonna confirm that. It sounds like it's more, I'll call them, non-price actions that's driving the growth there and as opposed to just purely getting rate on some different lines.

[Charles Brindamour, CEO at Intact Financial]

Correct. This is where the mix comes in when competition is uneven. The math on mix, we think, is excellent, actually. We're very comfortable that this is contributing to earnings growth.

[Jaeme Gloyn, Analyst at National Bank Capital Markets]

Okay. Sticking with commercial lines. You talked about large losses being a drag in Canada and the U.K. Can you quantify the impact of large losses on the current accident year loss ratios?

[Charles Brindamour, CEO at Intact Financial]

Yeah.Ken?

[Ken Anderson, CFO at Intact Financial]

Yeah. Jaeme, in the first quarter, you know, we talked about cats being benign, but we did have elevated large losses which show up in the current accident year. An impact of about two points on IFC overall. In Canada, you know, most of the impact was in commercial lines, probably impacted by about five points there, with a bit of a higher frequency on fire losses contributing most to that. In the UKI, it was about four points of impact there. A combination, I would say, of storms and a few individual large claims. All in, when you look at the lower cat losses in the quarter are balanced out by a bit of the higher large loss activity.

[Ken Anderson, CFO at Intact Financial]

Net net, at an IFC level, those two things neutralize.

[Charles Brindamour, CEO at Intact Financial]

Yeah. That's a good point. We don't think there's a pattern there. We've looked at every one of those large losses and so on, and this happens. It's lumpy, and we think that you probably have a two-point drag there. That's the business we're in, just like cats. Back to you.

[Jaeme Gloyn, Analyst at National Bank Capital Markets]

Yeah. If I, if I think about that, the two-point drag, on an overall IFC basis, current accident year, you know, improved year-over-year from, first quarter of 2025.

[Ken Anderson, CFO at Intact Financial]

That's exactly right, Jaeme. We talk about looking at PYD and the current accident year. If you normalize for those large losses, we are indeed improved by one point year-over-year.

[Jaeme Gloyn, Analyst at National Bank Capital Markets]

Great. Thank you very much.

[Charles Brindamour, CEO at Intact Financial]

Thank you.

[Operator]

Next question will be from John Aiken at Jefferies. Please go ahead.

[John Aiken, Director of Research at Jefferies]

John, Good morning. Charles, in your commentary, you're very transparent about a desire to pursue M&A. Can you discuss what your wish list is? We're seeing a little bit of stabilization in UKI. Does that make Europe a little bit more attractive moving forward?

[Charles Brindamour, CEO at Intact Financial]

I'll go name by name, John. Just kidding. I think, you know, as a principle, when I look at the environment in which we operate, and I look at our track record for not only very strong strategic fit, but very strong financial outcomes as we've done in the past, we're looking for complexity right now. This is where the best opportunities exist. That means, you know, time matters here, but that's the lens we're taking in this environment. I think in terms of opportunities, you know, we would love to grow our Canadian franchise by 50%, and there are no constraints of any substance that would prevent us from doing that. If you look at the Canadian franchise performance, three points top line outperformance, eight points bottom line outperformance. If you do a transaction here, this is massive value creation.

[Charles Brindamour, CEO at Intact Financial]

Second, I was really pleased to see the industry's performance compared to our performance in the U.S., where in Q4, you've also seen now that we're starting to outperform from a top-line point of view while outperforming by 70 points from a combined ratio point of view in the U.S. Same thing. You know, there's a lot of room to grow in the U.S. We would love to increase our footprint in the specialty line space in the U.S. and replicate that advantage on a much bigger base. This is right at the top of what we're keen on and actively working on to a certain extent. I think, John, we like the progress we're making in the U.K. We like our performance also in the London market and in Europe. We're open to opportunities there, no doubt.

[Charles Brindamour, CEO at Intact Financial]

To be transparent with you, the transformation we're leading in the U.K., massive investments in technology. We're integrating two business because remember, we exited PL. We doubled down on the SME and mid-market space in the U.K., a space we love because performance is really good. There's lots going on operationally in the U.K. and if you want to kill it from an M&A point of view, you need to be ready from an operational point of view. I'd put capital in the U.K. if an opportunity came up, but I'm also very conscious that value creation goes through operations, and we still have some work to do in the U.K. That's why, you know, we think the trajectory of the combined ratio there is towards 90%. We're not yet there. 2026 is a big year.

[Charles Brindamour, CEO at Intact Financial]

I don't wanna disrupt the team too much on that journey.

[John Aiken, Director of Research at Jefferies]

No, Charles.

[Charles Brindamour, CEO at Intact Financial]

Lastly, Yeah, John, lastly, I don't want to skip over distribution because we don't talk about it so much in terms of M&A because it's multiple smaller transactions, but it's created, you know, a very good machine of earnings, and stable earnings over time. It's helpful strategically to the insurance operations and, we're deploying capital in that space as well.

[John Aiken, Director of Research at Jefferies]

Thanks, Charles. That actually was gonna be my follow on. Is the pipeline still fairly robust on the distribution side?

[Charles Brindamour, CEO at Intact Financial]

It is. Yeah, it is. Whether it's through BrokerLink or the brokers which we support and invest in to consolidate, the pipeline is actually very good. To be clear, BrokerLink, very active. We've done, you know, a large percentage of transactions in Canada last year. We're also looking at MGAs to support our specialty lines business. We've taken a majority position in Cartan Trade in the last quarter, which is our trade credit business in Europe and investing in MGAs as well when it makes sense from a global specialty lines point of view.

[John Aiken, Director of Research at Jefferies]

That's great, Charles. Thank you. I'll reach you.

[Charles Brindamour, CEO at Intact Financial]

Thank you, John.

[Operator]

Next question is from Doug Young at Desjardins. Please go ahead.

[Doug Young, Analyst at Desjardins]

Hi, good morning.

[Charles Brindamour, CEO at Intact Financial]

Morning, Doug.

[Doug Young, Analyst at Desjardins]

Start with personal property. Morning. It sounds like in the personal property, you know, you quantified and you lost, I think in affinity or travel account. I guess, can you confirm, was this like property business or travel business? I assume this was due to pricing, but maybe you can elaborate. Are you starting to see like competition in the affinity market heat up? Is that what you're seeing? Just hoping to get a little color on that.

[Charles Brindamour, CEO at Intact Financial]

Patrick?

[Patrick Barbeau, COO at Intact Financial]

Yeah. It's really a one account, as you say, Doug, that triggered a four-point drag during the quarter. We knew about it at the end. You know, in the last call, we said it would impact Q1. Travel is a fairly small part of our overall personal property, and you shouldn't expect necessarily that being a drag going forward. In fact, if you exclude that one account, we're still growing that line of business in the upper single-digit +2 points of units, and that's the trajectory you should see us going back to starting in Q2.

[Charles Brindamour, CEO at Intact Financial]

Yeah. Just to put things in perspective, Doug, the difference with the rest of the book there is that you have those relationships with, you know, a small number of large accounts, and they renew every so often. Sometimes it's a question of, you know, product offering. It's a question of technology support. It's a question that somebody else might be, you know, competing for the account. Once in a while, you lose some, and sometimes you gain some. We view this very much as a one-off.

[Doug Young, Analyst at Desjardins]

This was travel. This wasn't property related. This was travel related.

[Charles Brindamour, CEO at Intact Financial]

Correct. Correct.

[Doug Young, Analyst at Desjardins]

Okay. That's what I was hoping to hear. Okay, Charles, just, you know, over 19% operating ROE again this quarter. You know, you obviously talked a lot about your advantage on that side. You know, is this a? Maybe help me think about it. Is this a reasonable through the cycle ROE for Intact now? I know you talked about before I know what the range was, and you kinda upped that range to upper teens. You know, is this a reasonable through the cycle level? What, you know, what are the puts and takes that change the ROE from here?

[Charles Brindamour, CEO at Intact Financial]

Yeah. I think, Doug, the standard deviation of our ROE is 3.5%, you know, give or take. We think structurally, we're in the upper teens. You know, is it 19? Is it 18? You know, I'm not sure. It's a business that, you know, has some degree of volatility. I think with the standard deviation in mind, yeah, I would say it's reasonable. Right now, the 19 has a bit of upside because there's been less cats in the last year, but there's way more capital, and I think those two offset each other in our minds. 19 is 19 right now. If you look at our track record, Doug, our ROE hasn't swung that much through cycle.

[Charles Brindamour, CEO at Intact Financial]

I mean, the issues have been sometimes cost pressure in automobile insurance, where we had much less options than we have today in the past 10, 15, and 20 years. We're less exposed to those sort of cost fluctuation. We're in control of the rest, really. You just need to be comfortable seeing mix change, bit of pressure on units, and we're completely comfortable when that happens 'cause we're managing for earnings growth.

[Doug Young, Analyst at Desjardins]

All right. Perfect. I appreciate the color. Thank you.

[Operator]

Next question will be from Tom MacKinnon at BMO Capital Markets. Please go ahead.

[Tom MacKinnon, Analyst at BMO Capital Markets]

Yeah. Thanks.

[Charles Brindamour, CEO at Intact Financial]

Morning, Tom.

[Tom MacKinnon, Analyst at BMO Capital Markets]

Good morning. Question on personal auto. We certainly seen a deceleration in the level of rate hike approvals in Ontario. Your thoughts about that, and you're continue to hold to the sub 95 annual guidance. If, if in answering that question, you can talk a little bit about the impact of some of the reforms in Ontario. I think you said they were positive. Some of your thoughts there. Thanks.

[Charles Brindamour, CEO at Intact Financial]

Thanks, Tom. I'll ask Patrick to share his perspective.

[Patrick Barbeau, COO at Intact Financial]

Yes, Tom. Q1 combined ratio 94.4 in a quarter that is usually seasonality adverse, very much within the sub 95 guidance. Our current year loss ratio has improved two points year-over-year, given you know, our strong underwriting discipline and pricing sophistication. We're growing and outperforming from both a top line and bottom line perspective, including unit growth. We think rates have are enough to cover inflation.

[Charles Brindamour, CEO at Intact Financial]

The no change in guidance really.

[Patrick Barbeau, COO at Intact Financial]

No change in guidance.

[Charles Brindamour, CEO at Intact Financial]

We feel pretty good about that. On Ontario per se, the government is introducing options for drivers and that's good. Patrick, color maybe on Ontario.

[Patrick Barbeau, COO at Intact Financial]

Yeah. The Ontario reform will start to apply on July this summer. It provide more optionality for consumers. We see these options that are as neutral from a bottom line perspective. They're properly priced. The optionality is a small portion of the premium in Ontario, roughly 4%, and we think that the take-up rates will be fairly high. We think it's actually also almost neutral from a top line perspective, so it shouldn't change much the outlook in Ontario, that reform in particular.

[Charles Brindamour, CEO at Intact Financial]

I think, Tom, to your question on the approvals in Ontario, you know, if you look at the past 24 months, the industry has taken more rates than we have. Why? Because we've acted early on what was inflation, the industry caught up. You'll remember a few years back, units were shrinking. Now we're outperforming from a growth point of view. This is the playbook sort of playing out. The trajectory of rate, I think, is a function of inflation in the Ontario marketplace. There's a regulator that's principle-based, that has created a very dynamic marketplace, we'll see where rate trajectory goes, it's a function of inflation. We feel very good about the Ontario marketplace.

[Tom MacKinnon, Analyst at BMO Capital Markets]

As a follow-up, Charles, I mean, the market seems to be fixated on the accident year ex cat ratio. You always have such good favorable reserve development, and you're way above your guide, and the Street just kind of chucks it away.

[Charles Brindamour, CEO at Intact Financial]

Yeah

[Tom MacKinnon, Analyst at BMO Capital Markets]

What do you say to that practice? Most of this stuff, even seasonality would suggest that it comes back pretty quickly. Yeah.

[Charles Brindamour, CEO at Intact Financial]

Yeah. What I say, Tom.

[Tom MacKinnon, Analyst at BMO Capital Markets]

Comment, yeah.

[Charles Brindamour, CEO at Intact Financial]

Tom, honestly, I mean, you know, you're an actuary, so you understand these things. The favorable development you see is a function of what you've booked in your current accidents year. When there's no change in practice, which is the case for us, we like to look at current and PYD together as the underlying performance. If you have a track record of favorable PYD like we have, you know, which is in the four-ish zone over a long period of time, it assumes to a certain extent that there's a caution of that nature embedded in your current accidents year. Our practice on current accidents year hasn't changed, and it turns out that, you know, we've been cautious. It shows up in PYD.

[Charles Brindamour, CEO at Intact Financial]

We look at it combined because I think if you strip the PYD, you don't really have a perfect view of the underlying performance of the organization when there's a certain pattern of being cautious. 'Cause keep in mind, we're pricing for a product we deliver over time. We encourage people to have a degree of caution, both in pricing and in reserving, and that's how it materializes. For me, I look at these things together unless a pattern changes, which is not the case right now.

[Tom MacKinnon, Analyst at BMO Capital Markets]

Thanks for that.

[Operator]

Next question will be from Bart Dziarski at RBC Capital Markets.

[Bart Dziarski, Analyst at RBC Capital Markets]

Great. Thanks, good morning, everyone. Wanted to ask around the Canada personal property. We saw strong volume growth, 2%. It's been accelerating now for five quarters. Could you just unpack what's driving that volume growth, and do you expect that to continue?

[Charles Brindamour, CEO at Intact Financial]

Patrick.

[Patrick Barbeau, COO at Intact Financial]

Yeah. Strong unit growth. You know, there's good rates. There's hard market conditions, and we're successful on a new business perspective. We are competitive in the market. We have our digital and direct distribution in particular is showing good growth from a new business perspective, and we also have very good retention. The industry continues to price for both inflation and climate trends. Market conditions are good for us and we maintain our positive outlook.

[Bart Dziarski, Analyst at RBC Capital Markets]

Great. Thanks. On the distribution income. I know it's in line with your expectations, and there was a tough comp year-over-year. At the same time, you guys have been busy acquiring kinda brokers throughout the year. Why wouldn't that have shown up in stronger growth? Maybe as we look forward, when do you expect to get back to that kinda 10% CAGR outlook? Thanks.

[Ken Anderson, CFO at Intact Financial]

Bart, sure. Yeah. I mean, just looking back, you know, over the last five and 10 years, you know, that distribution income has compounded in the mid-teens. You know, provides a lot of stability and also contributes a bit to that ROE stability that Charles spoke about earlier.

[Ken Anderson, CFO at Intact Financial]

Yes, the first quarter, it was in line with our expectations, to be clear, albeit at -2. Last year, as I said, had very strong results. We have been investing in service levels, you know, in BrokerLink and across the distribution, investments that we own. You know, that will start to reap some benefits in the second half of the year. When it comes to investment income, Bart, our full-year expectation for 10% growth still holds for 2026, sitting here today. A bit of lumpiness in the first quarter, a tough comp, as you said, but sitting here today on track to deliver 10% growth, which, you know, reflects that investment in distribution that you've referenced.

[Bart Dziarski, Analyst at RBC Capital Markets]

Great. Thanks for that.

[Operator]

Next question will be from Paul Holden at CIBC. Please go ahead.

[Paul Holden, Director at CIBC]

Thanks. Good morning. Just want to follow up on a couple discussions that have already taken place. I guess the first one is UKI. As you pointed out, you know, disappointing results for the quarter. You've been very clear for I don't know how many years now you're driving down towards the low 90s by, you know, improving underwriting processes, technology, risk selection, et cetera. Just I guess the question I want to ask. Like, is there anything that happened this quarter where you're now changing an approach? Maybe there's certain risks you decided you no longer like or there's room for more improvement, I guess is what I'm getting at as a result of this quarter. Or you're fully just taking it as, well, it's part of the business and it's going to happen from time to time.

[Charles Brindamour, CEO at Intact Financial]

It's a 100% part of the business, and it's going to happen from time to time. There's no doubt in my mind. We've done so much repositioning in the past, five years. We're comfortable where we're operating. The indicators of profitability that we manage, which are prospective in nature are, you know, suggesting we're at the right place. We've looked at these large losses to figure out whether there was a pattern we were uncomfortable with. Some of it are from segments we've exited, actually, just to be clear, Paul, and therefore, this has not triggered a change in direction in the U.K. and I.

[Paul Holden, Director at CIBC]

All right. Thank you. Then next question, I wanna follow up on sort of the personal auto pricing discussion and rates increasing sort of now in line with claims inflation. Maybe you can remind us where claims inflation currently is. I guess I'm curious, I would suspect it's probably trending lower, but maybe I'm wrong. Maybe it's stable in mid-single-digits. An update there would be helpful. Thank you.

[Charles Brindamour, CEO at Intact Financial]

Yeah. Patrick, why don't you cover inflation?

[Patrick Barbeau, COO at Intact Financial]

Yeah. It is sustained, Paul, in the mid-single-digits. In fact, we see that level in both physical damage and in the injury/liability part of the product. In physical damage, it is driven by technology in cars. We see cost of parts going up because of the technology. We also see the length and the complexity of the repairs taking a bit longer, and that's driving this inflation and making it sustain the physical damage part. It also puts more total loss. You know, as these costs go up, we reach the threshold of total losses faster. From an injury liability perspective, it is mainly driven by the situation in Alberta with the tort system. We've seen it over the past couple of years. There's reform coming that will be implemented in January that should address a portion of that.

[Patrick Barbeau, COO at Intact Financial]

When you combine all of this, it's been stable at the mid-single-digit for, I would say, six, seven quarters in a row now.

[Charles Brindamour, CEO at Intact Financial]

Yeah. That's the coast-to-coast picture. Alberta, I think is the issue. You're in double-digit range there. I think, you know, you look at those reforms, I think the government has done an awesome job to go to the heart of the issue, to go from cash to care and to really improve the system. We're really looking forward to the improvement in the system in 2027. This will help create more vibrancy in Alberta 'cause it's a tough market right now.

[Paul Holden, Director at CIBC]

Sorry, just real quick follow-up then. If Alberta is double-digits and coast to coast is mid-single-digits, does that mean Canada ex Alberta might be more low single-digits?

[Charles Brindamour, CEO at Intact Financial]

It's less than mid-single-digit. Yeah.

[Patrick Barbeau, COO at Intact Financial]

Yeah, a bit less. The double-digit quote Charles quoted is on the BI piece, not on the physical damage.

[Paul Holden, Director at CIBC]

Great. That makes sense. Okay. All right. Thank you. Thanks for the time.

[Charles Brindamour, CEO at Intact Financial]

Thank you.

[Operator]

Next question is from Brian Meredith at UBS. Please go ahead.

[Brian Meredith, Managing Director at UBS]

Yes, thanks. Charles, just sticking with personal auto. I noticed that policy in force actually declined in the first quarter, fourth quarter. Is that Alberta-related, or is there something else going on?

[Charles Brindamour, CEO at Intact Financial]

It is Alberta-related. Yeah.

[Patrick Barbeau, COO at Intact Financial]

You mean it's still up, but going up slightly at a slightly lower pace than where we were, let's say in Q3. It is because we've taken some defensive measures in Alberta until the reforms are effective.

[Brian Meredith, Managing Director at UBS]

You'd be arguably gaining some market share, ex Alberta?

[Patrick Barbeau, COO at Intact Financial]

Yes. Definitely.

[Charles Brindamour, CEO at Intact Financial]

Yeah. Yeah. To be clear, Brian, in terms of market share and personal automobile right now, we are outperforming the market in terms of growth for the full-year 2025 by 4.3% in terms of top line. We are gaining market share, for sure in premium terms. I do think the improvements in the Alberta marketplace will help the trajectory.

[Brian Meredith, Managing Director at UBS]

Of the growth. Excellent. That's great. One other just curious, the large losses that you saw in the commercial line space, was that in kind of the large or global specialty businesses or that your kind of traditional SME type business where you're seeing that?

[Charles Brindamour, CEO at Intact Financial]

It was more in the large specialty space.

[Charles Brindamour, CEO at Intact Financial]

Yeah.

[Charles Brindamour, CEO at Intact Financial]

You know, one-off sort of, hits quite frankly. Rail and some segments we've exited before, but at the large end of things.

[Brian Meredith, Managing Director at UBS]

Great. Very helpful. Thank you.

[Charles Brindamour, CEO at Intact Financial]

Okay. Thanks, Brian.

[Operator]

Thank you.Ladies and gentlemen, a reminder to press star one if you have additional questions. At this time, Geoff Kwan, we have a follow-up from Jaeme Gloyn. Please go ahead.

[Jaeme Gloyn, Analyst at National Bank Capital Markets]

Yeah, thanks. Just wanted to quickly follow up on the share buyback and capital deployment on that front, a little bit. It, you know, you spoke about it accelerating to a CAD 200 million run rate. Is that about the level you're comfortable with, to obviously retain some dry powder for M&A? Is that something you could see accelerate in this, you know, current backdrop for where the share price is trading?

[Ken Anderson, CFO at Intact Financial]

Yeah. Look, Jaeme, firstly, you know, the financial position is very strong. As I said, you know, we ended the quarter with CAD 4 billion of capital margin, debt to capital sub 17%. You know, the capital generation forecast looks really good. You know, I would say ample capacity to pursue large scale M&A. Today, we could execute on a CAD 6 billion transaction without needing to issue equity. That's the backdrop where we are saying that we have the capacity to do both. We can pursue the M&A opportunities, but when the shares are meaningfully, significantly undervalued, we're in a position to support them. With the capital generation outlook, moving to a CAD 200 million a quarter run rate makes a lot of sense.

[Ken Anderson, CFO at Intact Financial]

You know, you can expect us to continue to be in that zone.

[Charles Brindamour, CEO at Intact Financial]

Yeah.

[Ken Anderson, CFO at Intact Financial]

If the shares are in the same zone as they are today.

[Charles Brindamour, CEO at Intact Financial]

I think, you know, what you look when you do that, there's the M&A environment, CAD 200 million, we're protecting the dry powder. Obviously, it's a drag on the ROE. You know, it's the delta between the intrinsic, our view of intrinsic value and the share itself. You also need to look, at least we do in terms of book value per share dilution that buyback at a high level can create. We put all that in the mix. We think CAD 200 million is the right pace. It might go up, it might go down, it's a good way to think about the midpoint.

[Jaeme Gloyn, Analyst at National Bank Capital Markets]

Thank you.

[Ken Anderson, CFO at Intact Financial]

Thank you.

[Operator]

At this time, Mr. Gloyn, Geoff Kwan, I apologize. We have no further questions. Please proceed.

[Geoff Kwan, Chief Investor Relations Officer at Intact Financial]

Thank you everyone for joining us today. Following the call, a telephone replay will be available for one week, and the webcast will be archived on our website for one year. A transcript will also be available on our website in the financial report section. Of note, our 2026 second quarter results are scheduled to be released after market close on Tuesday, July the 28th, 2026, with an earnings call starting at 11:00 A.M. Eastern time the following day. Thank you again, and this concludes our call.

[Operator]

Thank you, sir. Ladies and gentlemen, this does indeed conclude the conference call for today. Once again, thank you for attending. At this time, we ask that you please disconnect your lines.

Participants

Executives

• Charles Brindamour, CEO
• Geoff Kwan, Chief Investor Relations Officer
• Ken Anderson, CFO
• Patrick Barbeau, COO

Analysts

• Bart Dziarski, Analyst at RBC Capital Markets
• Brian Meredith, Managing Director at UBS
• Doug Young, Analyst at Desjardins
• Jaeme Gloyn, Analyst at National Bank Capital Markets
• John Aiken, Director of Research at Jefferies
• Paul Holden, Director at CIBC
• Tom MacKinnon, Analyst at BMO Capital Markets