Intact to Record C$257 Million in Canada Flood Losses
Intact Financial Corp. (IFC), the largest property and casualty insurer in Canada, will record losses of C$257 million ($248 million) from flooding in Alberta and Toronto, and a train explosion in Quebec.
The insurer will post C$123 million in losses, equal to 92 cents a share, in second-quarter results expected to be released on July 31, according to a statement today. Third-quarter earnings will be reduced by C$134 million, or C$1.01 a share. The company was expected to report second-quarter profit before one-time items of 98 cents a share, based on the average estimate of nine analysts in a Bloomberg survey.
“The devastation brought on by recent flooding and torrential rain is unprecedented,” said Chief Executive Officer Charles Brindamour.
About 16,000 customers were affected by the disasters, including the worst floods in Alberta’s history that shut down businesses and forced 75,000 residents to evacuate. Floods in Toronto, the country’s financial capital, left some residents without electricity for more than a week. A train disaster in Lac-Megantic, Quebec killed as many as 47 people.
Alberta water damage to homes, cars, and businesses led to C$300 million of insured losses, or C$105 million after taxes and reinsurance, the Toronto-based company said. The July 6 explosion in Lac-Megantic that leveled the downtown area will cost the company C$25 million in the third quarter. In Toronto, the heaviest one-day rainfall since 1937 that covered subway lines and roadways and knocked out power for 300,000 people, caused C$170 million of insurable damage.
Intact rose 1.3 percent to C$58.26 at 9:58 a.m. in Toronto.
“We expect the pre-announcement will remove some of the uncertainty and overhang on the stock,” Tom Mackinnon, an analyst at BMO Capital Markets, said in a note to clients today. The third-quarter loss is higher than expected, which is a “modest negative,” he said.
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