Balancing the Books: Intact sees decrease total loss severity, Q3 2021

Toronto, Ontario ⁠— Intact Financial Corp. reported its Q3 2021 financials last week, where the auto insurer said it maintains a mid-80s combined ratio on its Canadian personal auto business, with a slight decrease in the severity of total losses.

Intact said, for the third quarter of 2021, the severity of claims on auto physical damage was five percent higher than the same period of 2020. 

Chief Operating Officer Patrick Barbeau said one factor is recent driving habits; Intact has observed lighter traffic, particularly during morning rush hour, compared to rush hour traffic prior to the pandemic.

“That creates more severe accidents, with fewer small bumper claims in the mix,” said Barbeau.

That being said, Intact said it’s seen “significant increases” in parts recoveries on its write-offs.

“When a car is declared a total loss, we sell the damaged car for the parts. We have seen significant increases there, in recoveries. So, when I look at Q3, the total loss severity is actually slightly down this year, versus last.”

Intact reported last Tuesday its combined ratio in personal auto in Canada, was 85.1 percent in the most recent quarter, only 0.2 percent higher than 84.9 percent in Q3 2020.

“Driving is definitely very close to normal if not at normal. Patterns of driving, though, are different,” said Intact CEO Charles Brindamour during the earnings call, referring to traffic patterns during COVID-19.

Across Intact’s global operations, direct premiums written saw a 68 percent increase, though 61 percent of that was spurred by the company’s acquisition of RSA PLC’s Canadian, British and Middle Eastern operations.


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