Intact Financial Q2 2026 Earnings Report

Intact Financial EPS Results

• Actual EPS: C$4.33
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Intact Financial Revenue Results

• Actual Revenue: $5.94 billion
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Intact Financial Announcement Details

• Quarter: Q2 2026
• Date: 7/28/2026
• Time: After Market Closes
• Conference Call Date: Wednesday, July 29, 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 Q2 2026 Earnings Call Transcript

Key Takeaways

• Neutral Sentiment: Q2 results were resilient despite elevated losses: net operating income per share was CAD 3.17, operating ROE was 17%, and the combined ratio was 94.9%, including roughly four points from excess catastrophes and large losses. Management characterized the higher loss activity as an anomaly without a systemic cause.
• Positive Sentiment: Canadian and U.S. operations continued to perform well. Personal auto premiums grew 9% with an 88.8% combined ratio, commercial lines posted an 85.7% combined ratio, and U.S. operations delivered an 85% combined ratio—their 12th consecutive quarter below 90%.
• Positive Sentiment: Intact accelerated its expectations for technology and AI benefits, now targeting CAD 500 million of recurring benefits by 2028, approximately two years earlier than previously expected. Its claims infrastructure and in-house restoration business also helped close 47% of nearly 9,000 June catastrophe claims.
• Negative Sentiment: The U.K. & I segment remained a material weak spot, with a 112% combined ratio and a 1% decline in premiums, including 15 points from excess catastrophes and large losses. Management expects a gradual improvement toward 90% over 24–36 months as it addresses pricing, risk selection, technology, product consolidation, and expenses.
• Positive Sentiment: The company reported substantial capital flexibility, including CAD 3.8 billion of capital margin, a 16.2% debt-to-capital ratio, and capacity to deploy roughly CAD 6 billion on acquisitions without issuing new shares. M&A remains the preferred use of capital, while Intact also completed approximately CAD 350 million of share buybacks year to date.

Presentation

[Operator]

Good morning, ladies and gentlemen, welcome to the Intact Financial Corporation Q2 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 July 29th, 2026. I would like to turn the conference over to Geoff Kwan, Chief Investor Relations Officer. Please go ahead, sir.

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

Thank you, Sylvie. Hello everyone, thank you for joining the call to discuss our second 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, and 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, Patrick Barbeau, our chief, Achraf Louitri, our Senior Vice President, Personal Lines. 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 Corporation]

Thanks, Geoff. Welcome, Achraf. It's your first earnings call. Good morning, everyone, thanks for joining us. Last night, we released our second quarter results. We generated net operating income per share of CAD 3.17, driven by a combined ratio of 94.9, which included approximately four points of excess catastrophes and large losses. Our top line grew 4% in the quarter, driven by continued strength in personal lines. Our ROE was in the upper teens at 17%. Our book value per share grew 13% year-over-year to CAD 111.73. Our balance sheet is very strong with CAD 3.7 billion of excess capital, that positions us well in an attractive M&A environment. This quarter was marked by a higher level of large losses than we've experienced historically then we expected. Given that, we conducted a detailed and thorough review.

[Charles Brindamour, CEO at Intact Financial Corporation]

We did not find any common driver or systemic pattern. We view what happened in Q2 as an anomaly, we're confident that the underlying performance and the fundamentals of our business very strong. Let me now provide some color on each of our segments, beginning with Canada. In personal auto, premiums grew 9% in the quarter, including 1% of unit growth. This reflects sustained hard market conditions, supported by our investments in marketing and in the digital channel. With the industry remaining unprofitable still at the end of Q1 2026, we expect industry premium growth to remain in the high single digits over the next 12 months. Our combined ratio in personal auto improved 1.5 points year-over-year to 88.8%, a strong result in a seasonally favorable quarter. This performance was driven by an improvement in the current accident year of more than two points.

[Charles Brindamour, CEO at Intact Financial Corporation]

On the reform front, we're encouraged by the developments in both Ontario and Alberta. In Ontario, while early, customers are choosing the optional protection, which should help support growth. In Alberta, we like the direction being set for 2027. We'll provide an update later this fall as the reform package is finalized. In both cases, we think these reforms are excellent for consumers and support a healthy and competitive automobile industry. They should also contribute to bring the industry closer to a more sustainable performance level. In personal property, premiums grew 7%, including a 1% increase in units. We see continued strength in this segment. We expect industry premium growth to be in the upper single to low-double-digit range over the next 12 months. A combined ratio of 103 included 22 points of cat losses in the quarter.

[Charles Brindamour, CEO at Intact Financial Corporation]

This is a reminder of the impact on industry profitability from severe weather events. We believe this will contribute to sustaining hard market conditions. Despite the elevated level of catastrophes in Q2, our year-to-date combined ratio of 93.9% shows our personal property business is positioned to deliver a sub 95 performance even with severe weather. We view this segment as very attractive and a solid source of growth. Our track record of close to 90% combined ratio over five and 10 years is quite strong and gives us confidence in our growth strategy in that segment. In commercial lines, premium growth was 1% in the quarter. We see continued traction for our growth initiatives, which drove roughly three points of growth. This was partially offset by two points of mix shift towards smaller account sizes as we remain selective in the competitive large account space.

[Charles Brindamour, CEO at Intact Financial Corporation]

I'm encouraged not only by the strength of the SME portfolio, but also by sequential improvements in production stats in the mid-market space. We expect industry growth in the low to mid-single digits over the next 12 months. The combined ratio was strong at 85.7% in commercial. This result reflects our continued discipline in applying pricing sophistication and advanced risk selection techniques to retain higher quality accounts. We continue to expect a combined ratio in the low 90s or better. Moving now to our U.K. and I segment. Our top line decreased by 1% in the quarter. While growth was solid in specialty lines, our domestic U.K. commercial lines business saw pressure driven by the consolidation of products following the NIG acquisition into one Intact value proposition.

[Charles Brindamour, CEO at Intact Financial Corporation]

We continue to expect top line to improve in 2026 as we complete this exercise. We expect the industry premium growth in the low to mid-single digit range over the next 12 months. The combined ratio of 112% included 15 points of excess cat and large losses. We're committed and confident in bringing the combined ratio towards 90%. We're making good progress and expect further improvements as we continue to roll out our pricing sophistication tools, but also improve the expense ratio over time. In the U.S., premiums increased by 4%, driven by solid new business and strong growth in some of our most profitable verticals. Our top-line growth is benefiting from a wider product line-up and continued gains in expanding and deepening broker relationships. At the industry level, we expect premium growth to be in the mid-single digit over the next 12 months.

[Charles Brindamour, CEO at Intact Financial Corporation]

The combined ratio of 85% in the U.S. this quarter improved nearly three points year-over-year, reflecting the benefits of our strategy of focusing on profitable growth. This marks our 12th consecutive quarter with a combined ratio below 90%. As we look ahead across all of our lines of business, we're operating in an environment that plays to our strengths, where pricing sophistication and risk selection are paramount. We significantly expanded our ROE outperformance in 2025 to 740 basis points as we continue to execute on our strategic roadmap. That includes investments in data and AI, as well as leveraging our scale to build an extensive supply chain network that allows us to internalize over 95% of our claims globally. On the AI front, for instance, this includes realizing recurring benefit from investments faster than expected.

[Charles Brindamour, CEO at Intact Financial Corporation]

Indeed, while our initiatives generate north of CAD 220 million recurring benefits to date, we now expect to achieve CAD 500 million in benefits in 2028, roughly two years earlier than we previously announced. On the claims side, the recent catastrophes in Canada illustrated our competitive advantage. In June, there were five catastrophes. Our advanced claims and analytics capabilities and in-house restoration business

[Charles Brindamour, CEO at Intact Financial Corporation]

On Side were instrumental in helping us close 47% of the almost 9,000 claims from June cat. An impressive result. It demonstrates how we're able to get our customers back on track faster while building a loss ratio advantage. We also remain focused on helping build more resilient communities. Initiatives like the Keep It Intact prevention ecosystems are driving proactive risk mitigation. Since the launch of the initiative last year, our customers have recorded over 140,000 prevention actions in our apps, which help them better protect their homes.

[Charles Brindamour, CEO at Intact Financial Corporation]

These actions also enhanced the resilience of our personal property portfolio. On top of that, Jiffy, Canada's number one home maintenance hub and only owned by Intact, is well-positioned to benefit from increased prevention activity by homeowners. Jiffy's revenues increased 24% year-over-year. In closing, although Q2 was a difficult quarter for many of our customers, our teams continued to do outstanding work getting impacted customers back on track as fast as possible. I want to thank all our employees for their dedication to living our values and delivering for our customers. Our track record demonstrates that external factors, such as natural disasters and industry pricing cycles didn't impact our ability to consistently deliver on our two financial objectives.

[Charles Brindamour, CEO at Intact Financial Corporation]

With our Net Operating Income Per Share growing at a compounded growth rate of 16% over the last three years and 12% over the last 10 years, we've exceeded our goal of at least 10% growth annually over time, in both near and long term. Our average ROE outperformance has been 600 basis points over the last three years and almost 700 basis points over the last 10 years, well above our objective of at least 500 basis points outperformance. Given the environment in which we operate, our focus on outperformance, and our commitment to profitable growth, there's no doubt in my mind that we'll exceed our financial objectives in the next decade, as we have in the last decade. Thank you. Now I'll turn the call over to our CFO, Ken Anderson.

[Ken Anderson, CFO at Intact Financial Corporation]

Thanks, Charles, and good morning, everyone. While the second quarter was active from a catastrophe and large loss perspective, our results demonstrate the resilience of our platform. Net operating income per share for the second quarter was CAD 3.17, while operating ROE was strong at 17%, driving a 13% year-over-year increase in our book value per share to CAD 111.73. Let me add some color on second quarter results. The underlying current accident year loss ratio of 59.1% included three points of excess large losses. The large losses primarily occurred in our UK & I segment, with several large property fires occurring across different segments of commercial and specialty lines. Canadian commercial and personal property also experienced increased frequency of large losses, primarily driven by property fires. Importantly, we view these losses as discrete in nature. Our underlying performance remains strong.

[Ken Anderson, CFO at Intact Financial Corporation]

Catastrophe losses in the quarter were CAD 416 million, driven mostly by storms related to water damage in Alberta, Ontario, and Quebec, as well as property-related fires in the UK & I. On a year-to-date basis, cat losses remain consistent with our expectations, and our annual cat guidance remains unchanged at CAD 1.2 billion. Quarterly cat activity can create variability, but we manage the business with this in mind, and our overall view of long-term climate trends remains unchanged. Our prudent current year reserving practices over time means prior year development remains strong, and we posted favorable PYD of 6.1 points in the second quarter. As always, any assessment of underwriting performance should combine the current accident year and prior year development. Our PYD track record is consistently strong, averaging 4.8%, 3.5%, and 4.1% over the last five, 10, and 15 years.

[Ken Anderson, CFO at Intact Financial Corporation]

Of note, the introduction of IFRS 17 in 2022 increased PYD by roughly one to two points with an offset corresponding increase in the current accident year loss ratio. Given our strong long-term track record, the impact of IFRS 17, and the stability of our PYD, we believe recent PYD experience provides the most relevant reference point in assessing near-term PYD levels. Moving to expenses, the consolidated expense ratio was 34.9% for the quarter, an increase of roughly half a point, mainly coming from a non-recurring premium tax item. We expect our 2026 consolidated expense ratio to be in line with our annual guidance of 33%-34%. Operating net investment income increased to CAD 405 million in the quarter, driven by growth in our investment portfolio from strong capital generation. Our expectation for CAD 1.7 billion of investment income in 2026 is unchanged.

[Ken Anderson, CFO at Intact Financial Corporation]

Distribution income increased 4% to CAD 172 million, supported by robust organic and inorganic growth, somewhat tempered by our investments to support service levels ahead of the Ontario auto reform. This represents a targeted near-term expense with no change to our expectation for distribution income growth of at least 10% annually over time. The operating effective tax rate of 22.9% was in line with our guidance of 22%-23%. Non-operating gains increased by CAD 274 million year-over-year, supported by favorable capital market movements as well as lower acquisition and integration costs as these expenses continue to decline. Moving to our balance sheet, we continue to operate with significant financial flexibility, with CAD 3.8 billion of total capital margin well in excess of what is required to manage volatility. Our adjusted debt to capital ratio improved again to 16.2%.

[Ken Anderson, CFO at Intact Financial Corporation]

Overall, our balance sheet strength, low leverage, and strong capital generation provide significant financial flexibility to capitalize on attractive M&A opportunities. That landscape continues to improve. Share buybacks also remain an important tool when our shares are undervalued. We completed over CAD 180 million in share buybacks in the second quarter, bringing the year-to-date total to approximately CAD 350 million. We continue to view our shares as undervalued. We calibrate the pace of buybacks based on excess capital levels, the outlook for inorganic growth opportunities, and our view of the size of the discount to fair value. With our strong track record of delivering significant value, M&A remains our preferred choice for capital deployment. We are well-positioned to continue to deliver on our financial objectives. Over the last decade, we've exceeded our 500 basis point ROE outperformance target by delivering an average of 670 basis points of annual outperformance.

[Ken Anderson, CFO at Intact Financial Corporation]

We've also surpassed our 10% NOIPS growth objective by delivering compounded annual growth of 12% over the same period. Our discipline and focus has shifted operating ROE into an upper teen zone while we maintain one of the lowest levels of ROE volatility amongst our global peers. These results reflect the durability of our competitive advantages and the strength of our platform. We are positioned to continue creating significant value over time. With that, I'll turn it back to Geoff.

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

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 some questions now.

[Operator]

Thank you, sir. Ladies and gentlemen, if you would like to ask a question, please press star followed by one on your touchtone phone. You will hear a prompt acknowledging your request. If you would like to withdraw from the question queue, simply 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 John Aiken at Jefferies. Please go ahead, John.

[John Aiken, Analyst at Jefferies]

Good morning. Charles, you describe it as an attractive M&A environment and Ken saying your preferred choice of capital deployment is M&A. I guess two-part question for you. What is making this so attractive an environment? Secondarily, what's holding you back from pulling the trigger on M&A outside of distribution?

[Charles Brindamour, CEO at Intact Financial Corporation]

Thanks, John. Yes, I think it's a favorable M&A environment. There are, in my mind, 3 vectors that you ought to pay attention to when you qualify the M&A environment. From our perspective, the first vector is strategic fit. So in our case, very keen on North American global specialty lines. Second vector is the economics. Does the target on its own generate an internal rate of return in excess of 15%, first and foremost? Second, does it increase your earnings power per share once integrated? Third, actionability. I would say sitting here today, John, I think there are more options that tick all those boxes today than a year ago, and that's why I think it is a favorable M&A environment.

[Charles Brindamour, CEO at Intact Financial Corporation]

One point I would add is you need operational readiness when you tackle these things because it's in the integration that the value gets created. I would say from a GSL and North American point of view, the operational readiness is definitely there. Lastly, I think the balance sheet is very supportive of strong economics, acquisitions need to stand on their own. What's holding us back? First, you want to see options that hit those three vectors. Then it's discipline, prudence, and making sure you pace yourself. We like the environment in which we operate.

[John Aiken, Analyst at Jefferies]

You're thorough. Thanks, Charles. I'll re-queue.

[Operator]

Question will be from Alex Scott at Barclays. Please go ahead, Alex.

[Alex Scott, Analyst at Barclays]

Hey, thanks for taking the question. I was wondering if you could provide a little more insight into some of the remediation efforts in the U.K. commercial and progress towards the 90% combined ratio. Can you help us think about, I don't know, how many underwriting cycles it might take to get there? What you'd expect from top-line growth as you're doing that? Any kind of bigger pruning that you got to do? If you can help us out on how to model some of that kind of stuff and how to think about it'd be great.

[Charles Brindamour, CEO at Intact Financial Corporation]

Yeah. Thanks for your question. Alex, we're not banking on underwriting cycles to improve the performance in the U.K. We're aiming to get towards 90% in the midterms. There are a number of levers that we are pulling. Pricing and risk selection would be at the top of the list. Deploying science and deploying tools and governance, we're making really good progress there. Second, we're re-platforming from a technology point of view, that environment. That is a multi-year process. It impacts the speed of the transition, but we want to build a great P&C business, and that requires a modernization effort, which is reflected in the performance. Third, we're focused on making sure that the service for brokers in the U.K. commercial line space is second to none. Making excellent progress there. We're seeing broker advocacy being up meaningfully.

[Charles Brindamour, CEO at Intact Financial Corporation]

Fourth, we're bringing the various products that were on the shelves in the U.K. into what we think is a top market product, now branded Intact Insurance. I would say, lastly, it's about improving the expense base, as well. My perspective is this is a midterm effort, think two, 24-36 months, but I'm pleased with the progress we're making. It's heavy lifting, Alex. I'll be very clear. It's heavy lifting, and when you do such transformation, there are bumps in the roads from time to time, but I'm very confident with the trajectory we're on.

[Alex Scott, Analyst at Barclays]

Got it. That's helpful. As a follow-up, if I could ask about the U.S. market. I think there's probably a bit more competition there, particularly in some of the products you're in in the U.S. How are you approaching that market? What are the ways you're trying to achieve profitable growth there?

[Charles Brindamour, CEO at Intact Financial Corporation]

Thanks, Alex. I'll first say, I love the U.S. market. Our platform is really strong, if you look at industry results to date, we're outperforming from a combined ratio our specialty lines peers by close to eight points. We're outperforming from a top-line point of view by about a bit less than a point at this stage. Our approach in. First, our U.S. business is specialty lines only. It's 12 verticals. The first order of business is you double down on the lines of business that are very profitable. If I'm to frame this for you, Alex, about two-thirds of our portfolio operates in the 70s to low 80s combined ratio, and that's the book that we're growing north of 5%. The remainder of the portfolio operates in the mid 90s, and that was largely flat this quarter.

[Charles Brindamour, CEO at Intact Financial Corporation]

You don't need to be a rocket scientist here to see that because you have optionality across 12 verticals, the growth is coming from the low combined ratio verticals. It is about distribution management. It is about going deeper in the relationships that we have. It's about distributing our 12 verticals to the brokers where we have relationships, and it is about expanding the number of brokers we operate with in the U.S. One thing we do on the distribution side is we're also buying MGAs in extensions of segments in which we operate. Lastly, we're bringing global capabilities to our offer in the U.S. market. Now following the RSA acquisition, as you know, we have not only strong cross-border capabilities with Canada, a major trading partner of the U.S., but also global capabilities with our global network.

[Charles Brindamour, CEO at Intact Financial Corporation]

I would say these are the levers we are pulling. Now, when a vertical goes off the rail for some reason or another, we put the brakes and put remediation in place. With 12 verticals, you can expect you always have one or two that needs more work, and in aggregate, that's our approach in the U.S. We really like what we see. We like the outperformance, we like the optionality, and if I could deploy capital there, in the near term, we would have no hesitation to do so.

[Alex Scott, Analyst at Barclays]

Very helpful. Thank you.

[Operator]

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

[Tom MacKinnon, Analyst at BMO Capital Markets]

Thanks very much. Good morning. Just digging a little bit deeper in the U.K. & I, if you take the 112 and subtract 15 points from the higher-than-expected CATs and large losses, you're at a 97. Last year, you were running this thing in the 93, 94, 95-ish range. The year prior to that was even a little bit better now. Maybe you can talk about what's happening in this commercial alliance marketplace in 2026. Is it a tougher rate cycle you're trying to navigate here? I get some of the decommissioning efforts you speak to, but that's kind of a little bit more expense ratio stuff. Perhaps you can delve a little bit more into what's happened with this line just over the last six months and are those losses, is that higher combined we're seeing there, is that just the normal course?

[Tom MacKinnon, Analyst at BMO Capital Markets]

Maybe when would you be able to hit that 90% target? Thanks.

[Charles Brindamour, CEO at Intact Financial Corporation]

Thanks, Tom. Good observation. That segment run rate 93, 94-ish, as we've seen in the past couple of years. I'll let Ken share a bit of perspective on trajectory, Patrick and I will pick up the market observation question. Ken?

[Ken Anderson, CFO at Intact Financial Corporation]

Thanks, Tom. I guess maybe the first thing, I wouldn't use one quarter to sort of anchor on the overall run rate performance. Beyond the cats and large losses, you'll have a bit of volatility in other things. I think, for example, in the second quarter and the first half of the year, indeed, the expense ratio is a little higher. I would go back to the 2024 and 2025 combined ratio, which overall for those two years was about a 94. That's our view of the most relevant reference point to start from. Clearly, as Charles has laid out, the focus is to drive performance towards the 90%, pricing sophistication. Firstly, the expense improvements from modernizing technology over time, top-line benefits from the improved broker service proposition and the specialty product expansion, which will also improve the expense base, and the expense ratio.

[Ken Anderson, CFO at Intact Financial Corporation]

Those are really the elements that over time will drive towards 90%. The team in the U.K. are very focused on what they can control, and are executing on it. Market conditions can slow down or speed up that timeline, but I wouldn't anchor on a specific quarterly roadmap here. We certainly should see progress, and visible progress year-over-year.

[Charles Brindamour, CEO at Intact Financial Corporation]

Patrick, do you want to provide a bit of color on the marketplace to Tom's question?

[Patrick Barbeau, EVP and COO at Intact Financial Corporation]

Yeah, I don't think we're seeing from a rates perspective, a ton of difference compared to the observations we communicated in the past couple of quarters. Like we've seen more competition in the larger size of accounts. From a top-line perspective, we're having good momentum from a specialty lines perspective, and it's really an offset in the regular commercial that's really driven by the significant transformation we're doing in the field with the systems and some of the other points that Charles mentioned earlier. Overall, by the way, on top line, the remaining remediation we're applying on the books, plus the drag from the consolidation of the NIG and RSA offer is a drag of about three points on the overall U.K. & I Q2 top line. We expect that we'll see sequential improvement going forward.

[Patrick Barbeau, EVP and COO at Intact Financial Corporation]

There's mix in that as well, given pricing sophistication and the fact that we are prudent in the large accounts. I wouldn't see the 97 once you remove 15 points of excess cats and large losses as a new starting point or deterioration from prior years. It can be bumpy from one quarter to the next.

[Charles Brindamour, CEO at Intact Financial Corporation]

Yeah, I think the specialty line's growing really well. It's the U.K. CL franchise that is shrinking a bit. The connection between the market and the transformation, I view it as follows, Tom. When you integrate products, that creates dislocation, okay? From a price point of view. Second, we're deploying science on top of that change. The amount of dislocation that is taking place on the portfolio is meaningful. In a competitive environment, the more competitive environment, the bigger the hit when you've got that dislocation. I think that's the three points that Patrick is talking about. We're focused on the mid-to-long term, and we think bringing science and integrating products is more important than status quo, just to avoid dislocation. I think, bump in the road here and there, trajectory, I'm comfortable with.

[Tom MacKinnon, Analyst at BMO Capital Markets]

Okay, then one quick one on the, you're down year-over-year in terms of top-line in the U.K. constant currency. You had some momentum maybe in the first quarter, now you're talking about the Rebranding Initiative as contributing to that slowdown. I thought the Rebranding Initiative is actually going to be helpful in terms of a better service proposition to the brokers. Was this expected, and how long would this slowdown in top-line as a result of the Rebranding Initiative play out?

[Charles Brindamour, CEO at Intact Financial Corporation]

Yeah, I don't think it's the rebranding initiative, it's the migration towards one product that creates a bit of dislocation to which you add the pricing sophistication initiatives that we're deploying in the field in a marketplace that is competitive, I think, in the upper mid space in particular. Timeline, I think the heavy lifting in my mind has probably a 12-month horizon in terms of the amount of dislocation we will likely see. Near term, in my mind. Think 24, 36 months. Over to you.

[Ken Anderson, CFO at Intact Financial Corporation]

I'd maybe add, Tom, if you look at the growth in 2025, you were in the -3, -4, -5 zone. We certainly made a move in the early part of 2026 into more of a flat growth position. Progress there, and looking ahead, you should see improvement over time.

[Tom MacKinnon, Analyst at BMO Capital Markets]

Okay, thanks.

[Operator]

Next question will be from Jaeme Gloyn at National Bank Financial Markets. Please go ahead, Jaeme.

[Jaeme Gloyn, Analyst at National Bank Financial Markets]

Yeah, thanks. Just a first quick follow-up on the M&A and the balance sheet today. I think you've previously talked about being able to deploy about CAD 6 billion or complete a CAD 6 billion acquisition without other sources of equity capital. Can you just refresh us on where that sits today?

[Charles Brindamour, CEO at Intact Financial Corporation]

Yeah. Thanks, Jaeme. I'll ask Ken to share his perspective on the balance sheet.

[Ken Anderson, CFO at Intact Financial Corporation]

As I said earlier, financial position very strong and continues to improve and provides a lot of flexibility. The capital margin, CAD 3.8 billion. Debt to capital improved at 16.2%, capital generation outlook moving forward is very strong. Ample capacity on the M&A front. To your point, today we could deploy CAD 6 billion without issuing new shares on M&A. The outlook, very good and continues to improve. Obviously, with the track record, IRR north of 20% on the CAD 10 billion plus that we've deployed over the last decade. That's the priority.

[Jaeme Gloyn, Analyst at National Bank Financial Markets]

Okay, great. Second one just on the personal property market. Growth is 7%. Nice to see it rebound from the sort of one-time blip last quarter. Underperforming, let's say, the industry growth expectation of around 10%. Is there still some lingering impacts from the previous quarter, or can you dig into that run rate for us a little bit more?

[Charles Brindamour, CEO at Intact Financial Corporation]

Achraf, why don't you take this one?

[Achraf Louitri, SVP of Personal Lines at Intact Financial]

Sure. Thanks, Charles. Jaeme, maybe back just to the Q1 that you referred to. You're right, looking back at Q1, personal property growth was negatively impacted by a one-time impact from our travel business. When we adjust for that one-time impact from travel, we were in the upper single-digit range in Q1. That was the range that we were expecting to be at for the remainder of 2026. When you look at Q2, growth was strong at +7% with one point of unit. Retention remained high and stable, so is our new business competitiveness. From a pricing perspective, we are maintaining our strong rate action. When you zoom out from an industry perspective, industry needs to price for inflation severity in addition to the long-term climate trend.

[Achraf Louitri, SVP of Personal Lines at Intact Financial]

In June, we just saw multiple cat events that hit both the west and east of the country, and these are a reminder of the volatility of the product, and we expect will continue to support the current hard market conditions. All things considered, we remain comfortable with our growth profile in the upper single-digit range and maintain a positive outlook from the industry perspective.

[Charles Brindamour, CEO at Intact Financial Corporation]

Yeah. I don't think we'll be far from the industry if you look at it quarter by quarter. Obviously, Q1 had this one-time travel thing. We're in the zone and big bottom-line outperformance as well. One of the group, this segment performing really well.

[Operator]

Thank you. Next question will be from Mario Mendonca at TD Securities. Please go ahead, Mario.

[Mario Mendonca, Analyst at TD Securities]

Good morning. Charles, if we could go to the U.K. business one more time. I can see from a financial perspective that this year at least, and presumably you'd expect a lot more from this in the future, it's not making a big financial contribution to the company. Like sub-CAD 100 million in earnings this year, likely relative to maybe a CAD 4 billion consolidated earnings. Help me understand how the U.K. fits into the total company. Is having this U.K. business important as you pursue global specialty? Is it important to have a U.K. business, or is this just a business that stands on its own, like a standalone, it has the merits of belonging inside Intact? Help me understand this business.

[Charles Brindamour, CEO at Intact Financial Corporation]

Mario, you're talking about the U.K. domestic commercial alliance business, correct?

[Mario Mendonca, Analyst at TD Securities]

Yeah. Does it play a bigger role for this company, or is it just a standalone, it lives on its own merits?

[Charles Brindamour, CEO at Intact Financial Corporation]

I think first of all, the U.K. commercial alliance market is a big market. It's bigger than Canada. It's an attractive market, and the competitive set and the type of business the domestic U.K. business is doing is very consistent with what we do in Canada and our skill set in Canada. We view this as a business opportunity where we're capable to win because we know that space. That's the first point. Is it existential to Intact to pursue that business opportunity? No. It's a business opportunity where we think we can win, and therefore, that's what we're working on. Second, that footprint in the U.K., that regional business in the U.K. opens up hundreds of distribution relationships that otherwise would not be available to distribute some of our specialty lines product.

[Charles Brindamour, CEO at Intact Financial Corporation]

Embedded in the U.K. commercial lines domestic business is a number of local specialties like regional marine, as well as regional, what we call FinPro or call that management liability. I think, Mario, this is a business opportunity where we think we've got the skills to outperform. It is an extension of our ability to distribute our specialty lines product. It makes sense to be there. Lastly, I think if people had to pick a business profile to operate P&C insurance in the U.K., and you ask them to design from a white page what they'd like their business to look like, they would design the business we're building now. Therefore, we add capital, we add competencies. This is a business opportunity. We're investing and trying to make the most out of it, and I think we will outperform. It's not existential. No. That's clear.

[Charles Brindamour, CEO at Intact Financial Corporation]

It's a very good business opportunity, and it complements nicely our specialty lines operation.

[Mario Mendonca, Analyst at TD Securities]

I think that's clear. Thank you.

[Charles Brindamour, CEO at Intact Financial Corporation]

Thank you, Mario.

[Operator]

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

[Paul Holden, Analyst at CIBC]

Thank you. Good morning. First question is going back to M&A. Charles, you are very clear on where you stand and why the opportunity set you view as rich. One question I think about is, you will recognize it, more broadly across the industry, you are seeing soft pricing conditions, obviously more so in certain lines of products versus others, how does that impact your appetite for M&A? Specifically, I guess I am thinking about timing. Why is now the right time if there is soft pricing conditions to do an acquisition?

[Charles Brindamour, CEO at Intact Financial Corporation]

I think it is a great question, Paul. We are cycle agnostic when we look at acquisitions. Why are we cycle agnostic when we look at acquisitions? It all depends of the price, first and foremost. Second, if you outperform, which we do in the segments where we want to deploy capital, bear in mind, Canada, 8 points of combined ratio outperformance, U.S., 8 points of combined ratio outperformance. You can absorb pressure with that sort of outperformance because it takes a short period of time when you already have a footprint, which we do, to generate that outperformance across a larger platform. So what are the practical realities of being in a competitive marketplace when you look at M&A? You might take a slightly different stance on top line in the near term as you integrate, just as we have shown in the case of the U.K.

[Charles Brindamour, CEO at Intact Financial Corporation]

Dislocation can be a bit higher. You bake that in your DCF upfront. You model a couple of years' worth of disruption that might be greater in a softer market than in a hard market. Then you sit back and you look at the IRR first. You look at the accretion, earnings power accretion. You look at what it does to your book value, look at what it does to ROE. If things hang together, you can pull the trigger. So we've done very good transactions in hard markets. We've done very good transactions in softer markets. In aggregate, you really need the outperformance to make a difference, and that's why we're really keen on the North American sort of landscape to deploy capital. For me, it's a little bit like you. We look at a DCF.

[Charles Brindamour, CEO at Intact Financial Corporation]

We bake in the near to midterm conditions in which we operate, if the numbers work, we pull the trigger. I would say in my framework, as described earlier, of strategic fit, economic threshold, and availability, in this environment we think there are more options that tick the three boxes than a year ago.

[Paul Holden, Analyst at CIBC]

Okay. That's a good answer. Second question is going back to the U.K., and I don't want to beat this one to death, but you're talking about reaching your profit objective of low 90s 24 to 36 months from now. Now, if I go back in time and I think look at the original timeline, it would've been earlier than that. Maybe you can just help us understand better why it's taking a little bit longer to get to that low 90s objective. Are there certain things that have come up that have been unexpected? Are there certain things that are just taking longer to execute on than originally planned? Anyways, any color you could provide there would be helpful. Thanks.

[Charles Brindamour, CEO at Intact Financial Corporation]

Yeah. I think, first of all, you have to look at the fact that we have bought NIG to double down on the space we like, then we've exited personal lines. We're conducting a disposal and an integration at the same time, while we're investing in modern system and in pricing and risk selection environment. It's heavy lifting. It's taking time. Is it taking a bit longer than what we thought? Maybe. Directionally speaking, I don't view the U.K. as materially different than I did 12, 24 months ago. Lots has happened in the past 24 months. As I said, broker advocacy is up, experience is up, engagement is up. I like the trajectory. It's heavy lifting. That's for sure. It's a material transformation. Ken, maybe you want to add a bit of color.

[Ken Anderson, CFO at Intact Financial Corporation]

One other point, Just going back to where we're starting from in 2024, 2025, average combined ratio at 94. With the capital we have deployed in the U.K., that 94 combined is a mid-teens operating ROE on the capital that's at work in the U.K. The starting point, obviously we're aiming to get to 90, make no mistake, but with a run rate performance in the mid-90s, the operating ROE is not a significant drag on our overall performance.

[Paul Holden, Analyst at CIBC]

Okay. That's it for me. Thanks for your time.

[Operator]

Ladies and gentlemen, a reminder to please press star one should you have any questions. Thank you. Next will be Bart Dziarski at RBC Capital Markets. Please go ahead, Bart.

[Bart Dziarski, Analyst at RBC Capital Markets]

Great. Thanks for taking the question. Good morning, everyone. Just wanted to stick with as well with the U.K. and I. Maybe to clarify, Charles, you talked about the trajectory being a two to three-year one. Do we have that right to understand 2028 is when we should see that combined ratio hit 90%? If so, does that impact when the business may be operationally ready for a bolt-on acquisition in that geography?

[Charles Brindamour, CEO at Intact Financial Corporation]

I think you should see a migration towards 90% over that period. That's the first point. As Ken said, this business is running then in the ROE in the upper teens, and it has oxygen from an operational point of view. We would deploy capital even if it's not at 90. Be clear. Bart, the most important thing for me right now is I don't doubt the trajectory. I doubt the team's ability to absorb another acquisition in the near term. That's the element that would lead me to say, ideally, you don't add inorganic opportunities in the near term in that space. We would deploy capital if operationally the team is ready to handle it, and that could be before 24 to 36 months. Why? Because this would be ROE accretive, likely.

[Bart Dziarski, Analyst at RBC Capital Markets]

Got it. That's helpful. Thanks, Charles. Then maybe one on distribution income. 4% growth, I think year to date it's tracking below the 10%. You talked about investments in the business, could you maybe quantify how much that impacted the growth and, maybe more importantly, when we should expect a resumption to that 10% long-term growth target? Thanks.

[Ken Anderson, CFO at Intact Financial Corporation]

Bart, the Q2 distribution income growth was about 4%. It was tempered by investments that BrokerLink made to improve service levels somewhat related to the Ontario reforms. We certainly expect the growth to return to at least the 10% level in the coming quarters. Why do we say that? Firstly, that impact from the volume on the Ontario reform was not as high as we anticipated, so expenses should normalize in the second half of this year. The growth pipeline continues to be strong at BrokerLink, so there's opportunities to grow both organically and inorganically. Also in the context of broader distribution income, MGAs remain an attractive avenue for growth. Recall since 2020, we've put over CAD 600 million to work in MGAs. They collectively are writing CAD 1.5 billion of premium today, and we're continuing to deploy capital in that space.

[Ken Anderson, CFO at Intact Financial Corporation]

Maybe lastly, On Side, which is counter-cyclical restoration business, that will benefit in the coming quarters from that elevated level of cat losses that we've seen in the second quarter. Over the past five and 10 years, we've compounded distribution income in the mid-teens. We very much expect to get back to at least a 10% rate in the coming quarters.

[Bart Dziarski, Analyst at RBC Capital Markets]

Very helpful. Thanks for taking my questions.

[Operator]

Thank you. Ladies and gentlemen, this is all the time we have today. I would now like to turn the call back over to Geoff Kwan.

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

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 third quarter results are scheduled to be released after market close on Tuesday, November the 3rd, 2026, with the earnings call at 11:00 A.M. Eastern the following day. Thank you again. This concludes our call.

[Operator]

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

Participants

Executives

• Geoff Kwan, Chief Investor Relations Officer
• Charles Brindamour, CEO
• Ken Anderson, CFO
• Patrick Barbeau, EVP and COO
• Achraf Louitri, SVP of Personal Lines

Analysts

• John Aiken, Analyst at Jefferies
• Alex Scott, Analyst at Barclays
• Tom MacKinnon, Analyst at BMO Capital Markets
• Jaeme Gloyn, Analyst at National Bank Financial Markets
• Mario Mendonca, Analyst at TD Securities
• Paul Holden, Analyst at CIBC
• Bart Dziarski, Analyst at RBC Capital Markets