Paul TaylorIntact FinancialIFC.TOPAST TOP PICKJun 23, 2015

IFC is the industry-leading property and casualty insurer in Canada and it has held a strong lead for many years. Its main competitors include DFY, TRV, FFH, GWO, SLF, and a few other private insurers. 

IFC has demonstrated the highest annual returns against these names over both a five and 10-year timeframe. IFC holds the highest market share in Canada for P&C, representing around 17% market share as of 2022. IFC trades at a relatively higher valuation compared to its peers, although, we feel this is justified given its industry-leading position and quality fundamentals. Its main segments include Canadian P&C insurance (69% of sales), UK and international (21% of sales), and specialty lines within the US (10% of sales).

IFC has decided to sell the UK direct personal lines operations (RSA's assets). This move allows RSA to focus on becoming a leading UK commercial and specialty lines player, which we feel is a smart strategic move. Commercial and specialty lines is a more lucrative line of business, and we feel IFC has made the right move. The stock has recovered from the initial news, and continues to demonstrate its quality management team.
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Well-run and enjoys impressive growth through acquisitions. Has pricing power. He expects more growth and market share. High profitability, but trades at a higher-than-market 17x PE. You can buy a position here.

The biggest P&C insurer at 20% market share. They boast sharp underwriting, consistently around 90-95% combine ratios, and ROE is higher than peers at 15% ROE. Expects them to keep buying smaller companies in a fragmented industry. Their huge bond portfolio is thriving during high bond yields; that's a kicker.

It is the gold standard for companies in property and casualty insurance, but is expensive. He prefers Definity (DFY) which has better value, better results and is growing faster. Definity is transferring from a policy holder type of company to a corporation and there is lots of upside in acquisitions that could be made.

It is in the insurance business, has made good acquisitions, and executes well.

Spectacularly well run. Only thing holding him back is the price, has to justify how he's going to get a good return. Hefty valuation, probably well deserved. He'd be interested at least 20% cheaper than today.

Super-high quality. Sold on peak levels. His thinking was, "How much better can it get?" Monitoring closely, and he'd get back in at a lower level.

There have been a lot of natural disasters this year, but IFC has still absorbed those, because they have strong capital and operating ratios. Still growth and trades at a high PE, though. How will self-driving cars impact insurance. That said, IFC has been a winner, a great growth stock.

Well managed company.
Challenges given all of the forest fires.
Lots of claims over the summer.
Hard to value company.
Inflation not worry given pricing power.
Wants to see how company performs through tough economic times.

Spectacular company that has performed well.
Currently insurance pricing not making up for losses. 
Tough period for the company at the moment, but will recover.
Will buy if share price falls.

Gold standard for P&C in Canada. Cost challenges, but policies renew annually at higher rates. Great, blue-chip, well-managed business. He owns DFY, as it's cheaper and growing faster.

Climate change is impacting the P&C insurance world, increasing claims and pressuring companies like this. Share have done well in the past 12 months, but he sees challenges ahead for this sector. Higher interest rates offer some relief to them. 

Well-run and has done well in recent years, but it needs to be cheaper before he buys it. P&C insurance is a good business to be in now.

Not interested in P&C insurance, and IFC shares are close to all-time highs. Not now.

Recently bought another PC insurer (see top picks) for its better valuation and wider international exposure, but Intact offers good exposure to this sector.