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The Canada-based company's second-quarter net income declined to C$74.2 million or C$0.62 per share from C$112.0 million or C$0.91 per share in the prior year period. 

Intact's former parent Dutch insurance firm ING Groep NV (ING) Wednesday reported a 96.3% decline in its second-quarter profit, as real estate impairments and other charges drove down its banking division to a loss. ING also said it has decided not to pay an interim dividend on common shares over 2009.

On the US markets Tuesday, the entire property and casualty industry was way down as MBIA, Inc. (MBI) was downgraded to Underweight by JPMorgan on Monday, which sent the stock reeling, gapping down at the open and closing down nearly 13% from the previous day.

Arguably the biggest name in the industry and still garnering headlines is American International Group (AIG). The company had hoped the severe damage from Credit Default Swaps was behind it, but weakness in the sector and overall market uncertainty related to financial services brought the stock down over 13% on Tuesday.

Intact attributed the decline in net income to a non-cash C$36.6 million loss on embedded derivatives. This loss was recognized due to a sharp increase in the value of the company's perpetual preferred shares portfolio.

Net operating income decreased to C$92.9 million or C$0.77 per share from C$109.5 million or C$0.89 per share in the previous year.

"The average estimate of earnings per share and net operating income per share for the second quarter among the analysts who follow the company were $0.81 and $0.88 respectively," the company said.

Intact, formerly known as ING Canada Inc, operates in two segments: the underwriting segment, and the corporate and distribution segment. It is the largest provider of automobile, home and business insurance in Canada insuring about four million individuals and businesses across Canada.

Intact's net premiums earned for the quarter were C$1.011 billion, higher than C$996.1 million in the year-ago period. Direct premiums written advanced to C$1.248 billion from C$1.218 billion in the prior year.

Charles Brindamour, President & CEO, of the company, said, "The growth of our direct written premiums is beginning to show positive momentum as industry conditions are pointing to a firmer pricing environment in all lines of business over the next 12 months."

Underwriting income slipped to C$43.2 million from C$43.4 million. Interest and dividend income slipped to C$76.4 million from C$85.9 million in the previous year. Net investment losses for the latest period were C$35.1 million, compared to C$28.7 million last year.

Expenses for the period increased to C$967.4 million from C$924.6 million reported last year.

For the first half, net income dropped to C$37.9 million or C$0.32 per share from C$135.0 million or C$1.09 per share in the previous year. Net premiums earned grew to C$2 billion from $C1.988 billion.

Additionally, the company said its board declared a quarterly dividend of C$0.32 per common share, which will be payable on September 30, to shareholders of record on September 14.

Looking ahead, Intact said home and auto insurance premiums are increasing across the industry as a result of cost pressures in auto insurance in Ontario as well as water-related damages in home insurance. In business insurance, current market indications suggest that the pricing environment will begin to firm up over the next 12 months.

IFC.TO closed Tuesday's regular trade at C$34.55, down C$0.14 or 0.40%, on 191,672 shares. For the past year, the stock traded in the range of C$26.03-C$43.04.

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MBIA, Inc. (MBI) was downgraded to Underweight by JPMorgan on Monday, which sent the stock reeling, gapping down at the open and closing down nearly 13% from the previous day.

Arguably the biggest name in the industry and still garnering headlines is American International Group (AIG). The company had hoped the severe damage from Credit Default Swaps was behind it, but weakness in the sector and overall market uncertainty related to financial services brought the stock down over 13% on Tuesday.

Smaller player Amtrust Financial Services (AFSI) came out of the day with small gains after announcing a 6 cent dividend on Monday.

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