Why Intact says it’s shielded from the softer commercial market cycle

Despite softening in Canada’s commercial insurance lines, a significant majority of Intact Insurance’s commercial lines book is in the small medium enterprise (SME) space, protecting the company’s profit margins, Intact executives told investors in an earnings call Wednesday.

“With 85% of our [Canadian commercial] business in SME and mid-market, where pricing is favourable, there’s significant opportunity for us to further improve top line growth,” Intact Financial Corporation Charles Brindamour told investment firm reps during the company’s 2025 Q3 earnings call.

“It tends to be a more stable space, and that’s an advantage we have as a firm. Not just because of the cycle, but because the law of large numbers works in the small, mid-size business [space], and therefore our pricing acumen can be put to work. That makes it even better to navigate those cycles.”

Various P&C insurance professionals have told Canadian Underwriter commercial lines softening is segmented. Larger rate cuts are happening in the large accounts and specialty commercial markets such as professional lines (D&O) and cyber, brokers have told CU.

Brindamour notes softening has also been reported in large commercial property lines.

Referencing larger commercial accounts, Brindamour touted the advantages of scale in navigating the softening market cycle, which has been in a downward trend for the past year and a half.

“In large accounts, where we continue to see elevated competition, our sophistication in pricing and risk selection, as well as more than 20 specialty verticals, enable us to choose where we play,” Brindamour reported. “This environment really plays to our strengths.”

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Brindamour said “the beauty of specialty lines [is that] you can choose where you grow, regardless of the environment in which you operate.”

Within specialty lines, Intact is focusing on a number of growth opportunities, including insuring Canadian life sciences businesses, marine, renewable energy, surety, and trade credit.

Technological investments in machine learning and AI have allowed the company to achieve faster top line growth in commercial lines, Brindamour said. Benefits of these technologies include enhancing the company’s pricing, risk selection, and how it leverages data, he said.

“The investments we’ve made in AI over the past decade are currently generating more than $150 million in annual recurring benefits,” he said. “The recent expansion of our underwriting advisor from Canadian commercial into one of our specialty lines has already resulted in our ability to quote 20% more than before, due to faster data ingestion and processing. We expect this level to significantly increase over time.”

In the commercial lines segment, Intact reported a 3% increase in operating direct premiums written for 2025 Q3. Third quarter operating DPW in the commercial segment was $1.262 billion.

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The company forecasts the Canadian P&C industry will show commercial premium growth in the “mid-single-digits” over the next year.

Overall, Intact’s combined ratio for all lines, personal and commercial, was 89.1% in 2025 Q3.   

In commercial lines, specifically, Intact reported an 82.8% combined ratio in 2025 Q3, down from 94.4% over the same period last year.

Of note, Intact’s Cat loss ratio in commercial lines was 6.3% in 2025 Q3, down considerably from last year’s record Cat loss season, when the company’s Cat loss ratio was 24.2% This year, the company noted its third-quarter Cat loss ratio was driven by “large commercial fires.”

David Gambrill

David has twice served as Canadian Underwriter’s senior editor, both from 2005 to 2012, and again from 2017 to the present.