Q: Have been considering a purchase of Intact Financial for exposure to insurance sector. But already own BRK.B , which I tend to think of in terms of its portfolio of holdings , but has at its core their insurance business .
Different animals , I guess , but how would you think about this ?
All other considerations aside , would you add to BRK.B or initiate a position in IFC ?
Different animals , I guess , but how would you think about this ?
All other considerations aside , would you add to BRK.B or initiate a position in IFC ?
5i Research Answer:
While BRK.B can be considered a financials company and roughly 25% to 30% of its business is made up of insurance, it is fairly diversified, across other sectors including manufacturing, energy, retail, etc. IFC is a more pure-play insurance company that is directly exposed to the Canadian P&C industry.
IFC has outperformed BRK.B over the past 10 years when measured in total returns by about 2% annually, but it is a much smaller, and more focused company. For an investor that is looking for a conservative, balanced approach, we would prefer BRK.B due to its prestige and history, but for a slightly higher growth tilt with concentrated exposure to Canada and the insurance sector, we like IFC.