Where Intact continues to see commercial lines pressure
Intact Financial Corporation (IFC) continues to see pressure at the larger end of its commercial property book, but the remainder of the portfolio remains strong, with a robust 74% combined ratio in Canada for the second quarter of 2025.
“The pressure continues to be observed for larger risks, as we’ve talked about in the last year, and some specialty segments, such as…management liability [and] cyber,” IFC CEO Charles Brindamour says during an earnings call last week. “In the last three, four months…large commercial property risks is where we’ve seen a bit of weakness this quarter — really at the larger end of commercial prop, not across the board in commercial prop.”
An investor asked if the pressure was from large accounts, such as large multinationals, because it impacts other geographies outside Canada.
“Not only large multinationals, but I think it’s a good way to generalize what part of the market you are seeing the most pressure,” Brindamour responds.
Intact saw a 1% increase in its operating direct premiums written (DPW) in 2025 Q2 for the Canadian commercial lines segment, from $1.51 billion in 2024 Q2 to about $1.52 billion in the second quarter of this year. This reflected low- to mid-single-digit rates, and sustained competition in large accounts, Brindamour says during the call.
Pressure remains localized to these particular large accounts.
“This is still very much a constructive marketplace,” Brindamour says. “Conditions in the SME (small- and medium-sized enterprises) and mid-market space are pretty healthy, actually. And keep in mind this is the bulk of our portfolio.”
In Canada in particular, the biggest headwind is “mix, and that’s just a top-line headwind,” Brindamour says. He describes “mix shifting” as Intact moving toward a somewhat smaller customer on average, and likely simpler terms and conditions.
“What does that mean in practice?” Brindamour asks. “Yes, there’s pressure in large commercial, but then we’re winning at the lower end.
“We’re winning at the lower end of mid-market. We’re winning at the lower end of the SME space. Frankly, if you look at the profitability curve, we’re pretty comfortable with that mix shift.”
An investor also asked if the pressure is coming from the reinsurance side.
“Just to be clear, we’re not big users of reinsurance,” Brindamour says. “We use reinsurance for tail risk purposes. Otherwise, we’re really not using reinsurance much, quite frankly, and therefore don’t feel any of that pressure.”
Brindamour reiterates the ‘drag’ on mix shifting remains at the top end of commercial property lines, but Intact remains well-prepared to handle the challenge.
“Our teams in property know exactly where the margin is and how much room they have to compete and operate with that book, and we monitor that behaviour,” he says. “And we’ve got a pretty tight tool in governance at the top end.
“Accounts are reviewed with the actuaries individually, and as a result, I’m very confident that our teams are navigating…these conditions very well.”
Looking ahead, Brindamour sees market conditions as “favourable and constructive” to industry growth in the commercial lines space, with industry premium growth in North America expected in the mid-single-digit range.
At 74%, Intact’s combined ratio in Canadian commercial lines in 2025 Q2 was by far its best segment that quarter, improving 9.6 points from 83.6% a year ago.
The combined ratio for its Canadian personal property segment was 84.5%, a deterioration of 6.5 points from 78% a year ago. In personal auto, the combined ratio was 90.3% in the second quarter of 2025, down 1.1 points from 91.4% in 2024 Q2.
Intact’s combined ratio for its Canada segment as a whole improved 1.6 points year-over-year, from 85.4% in 2024 Q2 to 83.8% in 2025 Q2.
