With insurance claims due to climate change appearing to increase rapidly, what is your take on the prospects of Intact as a property and casualty insurer. My thought would be that property insurance is a shrinking market as insurers appear to abandon markets due to increase risk (e.g., Florida and California). Even locally insurers are starting to refuse to cover properties against flooding. What is the long-term business case for investing in IFC? Thank you. Michael
Canada is 65% of revenue, and though we have our issues flooding, fires and hurricanes are less of an issue up here. Certainly there are risks, but IFC has shown mostly consistent growth over the past 20 years (ex 2023) and, at least so far, these issues have not impacted the company's ability to grow. It comes down to diversification of its business lines and regional exposure. It is also a pricing issue. Higher risk areas get higher premiums. The business variability makes the stock cheaper than it would be otherwise, and this can create opportunity. Also, consensus calls for very good earnings growth over the next two years. The stock has done well (up 78% in five years) and offers a decent dividend. It is not perfect, but we would consider the climate issue as something to 'watch' but not 'worry' about, at least in the short term.