Intact Financial Shores Up Capital Ahead of Bank of Canada Decision

Intact Financial Corporation (TSX:IFC) has reworked its capital stack ahead of the Bank of Canada's decision day, signaling a shift in the Canadian property and casualty sector. The company placed limited recourse capital notes privately and announced its intention to redeem a series of rate reset preferred shares.

The Montreal-based group reported catastrophe and large loss activity above expectations during the spring quarter, reflecting a season with wildfire and flooding events affecting communities across several provinces.

Intact's move is a response to the changing landscape in the Canadian insurance sector, where regulators have confirmed their treatment of limited recourse capital notes as a hybrid instrument. This allows issuers to absorb losses and count towards regulatory capital at a lower after-tax cost.