01:03 PM EST, 11/22/2024 (MT Newswires) -- National Bank views the Alberta government's auto insurance reforms as "slightly" positive for auto insurers Intact Financial ( IFCZF ) and Definity Financial ( DFYFF ).

"While the increase in the rate cap is an improvement from previous policy, it is likely not sufficient to cover the rising costs of claims that have occurred over the past several years," notes analyst Jaeme Gloyn. One third of auto insurers that wrote business in Alberta in 2023 were unprofitable, he adds.

"While we expect DFY will reassess Sonnet's prospects in Alberta, given Sonnet's 125% combined ratio in 2023 we believe the announcement likely won't be enough to get DFY to re-enter the market with Sonnet in the near term."

Definity Financial ( DFYFF ) is rated Outperform, with a $67 target.

Intact Financial ( IFCZF ) is rated Outperform, with a $296 target.

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