The Canadian Press

ntact Financial Corp. (TSX:IFC), one of Canada’s largest property and casualty insurers, cheered investors Wednesday with a big turnaround in its fourth-quarter results and a 6.25% increase in its quarterly dividend.

Intact, which offers home, auto and business insurance under the Intact, Novex Group, Belairdirect and Grey Power brands, said it earned $96.7 million or 81¢ a share in the quarter.

A year ago, the Toronto-based company formerly known as ING Canada, reported a Q4 loss of $64.1 million or 53¢ a share.

Intact said it would increase its quarterly dividend by 2¢ to 34¢ a common share beginning in March following what its chief executive said was a strong fourth quarter and promising outlook for premiums.

On the Toronto Stock Exchange, Intact shares were up $1.74 or more than 4% at $40.82 at midafternoon with more than 300,000 shares changing hands.

Intact said revenue from premiums in the fourth quarter increased by 4.5% to $1 billion from $968.2 million a year earlier.

For the full year, net income was $126.7 million or $1.06 a share, relatively flat compared with $1.28.2 million or $1.05 per share in 2008. Revenue was $4.3 billion compared with $4.1 billion in 2008.

The company says home insurance premiums are increasing across the industry as a result of severe storms. Personal auto insurance premiums are also increasing, mainly in Ontario, reflecting higher medical costs in the province.

“This was a particularly strong quarter with much improved underwriting performance,” said Charles Brindamour, Intact’s president and CEO.

“The return to profitability of our home insurance business was a significant achievement, which reflects the positive outcome of our comprehensive improvement plan and more moderate weather conditions.”

Brindamour also said the company’s top-line has also been gaining momentum, reflecting the impact of more favourable pricing conditions and “the success of our organic growth initiatives.”

“While the industry pricing environment is unfolding as we anticipated, the unpredictability of weather patterns and the high cost of medical claims in Ontario may continue to impact the industry’s performance in the short term,” he added.

In business insurance, there have been clear signs that prices are firming, particularly in Ontario, with similar conditions expected to develop across the country over time, Intact said.

For 2009, the company had investment losses of $169.5 million, the majority of which were associated with the implementation of a hedging program as well as non-cash embedded derivative losses resulting from a substantial appreciation of the preferred share portfolio.

Meanwhile, the company’s book value per share rose 13.3% to $24.88, mainly as a result of the substantial appreciation in the market value of its investment portfolio.

At year-end, Intact had $858.7 million in excess capital reflecting the issuance of $400 million of debt instruments during the year and an increase in the value of the company’s investment portfolio.