I last reviewed Intact Financial (IFC.to) in this July 30, 2025 post at which time the Q2 and YTD2025 results (as of June 30, 2025) were the most current. In that post, I disclose the purchase of 100 shares @ $292.36 in one 'Core' account and another 100 shares @ $292.85 in another 'Core' account in the FFJ Portfolio raising my exposure to 725 shares.
IFC's share price has experienced weakness following these purchases. After listening to members of management at September 4 and September 25 presentations, my long-term outlook for the company is unchanged.
Despite no significant change to the business following my last review, the company's valuation has improved following a share price pullback. Given IFC's improved valuation, I have increased my IFC exposure with the October 20, 2025 purchase of another 100 shares @ ~$259.85 in a 'Core' account in the FFJ Portfolio.
Business Overview
IFC is the largest provider of Property & Casualty insurance in Canada, a leading Specialty Lines insurer with international expertise, and a leader in Commercial Lines in the UK and Ireland. At FYE2024 (December 31), it had a global team of 31,000 employees delivering services through more than 350 offices.
The company has grown organically and through strategic acquisitions.
In FY2009, its Direct Premiums Written (DPW) amounted to $4.3B and the company's market capitalization was $4.5B. In FY2024, DPW amounted to ~$24B and the company's market capitalization was ~$47B.
As at the end of Q2 2025, IFC's:
- annualized total shareholder return (TSR) was +15%.
- net operating income per share (NOIPS) attributable to common shareholders (3, 5, and 7 year compound annual growth rate) was 5%, 19%, and 14%.
- Debt-to-capital ratio was 18.4% - below IFC's long-term leverage target of 20%.
In FY2024, IFC's DPW in:
- Canada was ~$16B. Its 2030 ambition is ~$25B.
- UK and International was £2.7B. Its 2030 ambition is ~£5B.
- Global Specialty Lines (GSL) was ~$6.4B. Its 2030 ambition is ~$10B.
GSL is IFC's international specialty insurance platform, operating under the Intact Insurance Specialty Solutions brand. It offers insurance products that go beyond standard property and casualty coverage, targeting complex, high-value, and industry-specific risks such as:
- Marine, aviation, and energy;
- Management and professional liability;
- Surety, inland marine, and excess casualty;
- Affinity and customized specialty programs.
Further details are provided in IFC's 2025 Investor Day Presentation and Q2 2025 Earnings Presentation that are accessible here.
Valuation
Using my ~$259.85 purchase price and current forward-adjusted diluted EPS broker estimates, the forward-adjusted diluted PE levels are:
- FY2025 - 13 brokers - mean of $17.65 and low/high of $16.70 - $18.56. The forward adjusted diluted PE is ~14.7.
- FY2026 - 13 brokers - mean of $17.35 and low/high of $16.70 - $17.90. The forward adjusted diluted PE is ~15.
- FY2027 - 8 brokers - mean of $18.64 and low/high of $17.71 - $19.29. The forward adjusted diluted PE is ~13.9.
In my prior review I wrote:
Using my ~$292.61 average purchase price on July 30, 2025 and the currently available forward-adjusted diluted EPS broker estimates, the forward-adjusted diluted PE levels are:
- FY2025 - 13 brokers - mean of $16.74 and low/high of $16.02 - $18.91. The forward adjusted diluted PE was ~17.5.
- FY2026 - 14 brokers - mean of $17.54 and low/high of $16.26 - $18.24. The forward adjusted diluted PE is ~16.7.
- FY2027 - 4 brokers - mean of $18.93 and low/high of $18.52 - $19.65. The forward adjusted diluted PE is ~15.5.
These earnings estimates are likely to be adjusted over the coming days. Furthermore, IFC's share price may experience further weakness in the short-term. After some deliberation, I elected to add to my IFC exposure even though shares appear to be fairly valued/marginally overvalued.
Final Thoughts
My long-term outlook for the company is the same as that reflected in my July 30 post.
When I completed my 2025 Mid-Year Portfolio Review, it was my 28th largest holding. Following my July 30 and October 20 purchases, it is likely still a top 30 holding despite the share price pullback.
I currently hold 306 shares in a 'Core' account and 522 shares in another 'Core' account.
I wish you much success on your journey to financial freedom!
Note: Please send any feedback, corrections, or questions to [email protected].
Disclosure: I am long IFC.
Disclaimer: I do not know your circumstances and do not provide individualized advice or recommendations. I encourage you to make investment decisions by conducting your research and due diligence. Consult your financial advisor about your specific situation.
I wrote this article myself and it expresses my own opinions. I do not receive compensation for it and have no business relationship with any company mentioned in this article.
