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How Intact's under-the-radar CEO, Charles Brindamour, used his actuarial prowess to quadruple the stock price of Canada's largest property and casualty insurer

Photographs Andrew Rowat

In a lot of ways, Charles Brindamour runs his insurance company like you might run a successful casino: Every year, you gotta make sure you take in more money than you pay out. Sure, those payouts can be staggeringly big, but as long as the money keeps flowing in, the house always wins.

Shockingly, the CEO of Intact, Canada's largest property and casualty insurer, is almost alone in this belief. In a bid to grab market share, many smaller competitors are willing to actually lose money on the policies they sell. They make their profits by investing the money from payments. But that's not the way Intact rolls. Not under Brindamour, anyway.

A Laval University-educated actuary, Brindamour is all about the numbers. This CEO isn't content to turn in a performance that beats the industry average. His goal is to dominate the property and casualty (P&C) insurance sector. For Brindamour, it's a good year if the average Canadian P&C company is putting up, say, a 10% return on equity, while Intact posts 15%. In fact, since Brindamour became the boss, Intact has posted a return on equity that averages 600 basis points (six percentage points) higher than the industry. That's a stunning margin of victory—most CEOs would sell their grandmother to outperform their peers by just 100 basis points. Intact's returns, in fact, rival those of far larger U.S. insurers, such as industry leaders Progressive Corp. and Berkshire Hathaway-owned Geico.

In a Canadian market that features 202 companies trying to sell you property and casualty insurance, Intact has climbed to become the market leader, but it still has a relatively modest 17% share; second-ranked Aviva has 10% (see chart, page 46). But Brindamour quietly and confidently predicts that within a decade, Intact will serve one in three Canadians, boosting its market share among P&C companies to more than 30%.

To accomplish this, Intact has been snapping up a series of rivals in friendly takeovers, but the domestic market is no longer big enough to satisfy Brindamour's ambitions. The company recently announced its first major foray into the massive U.S. market, with the $2.3-billion acquisition of specialty insurer OneBeacon Insurance Group. The takeover is expected to close this fall.

Brindamour, clad in a blue suit, shirt and tie that all seem to reflect his bespectacled pool-blue eyes, outlines Intact's eat-or-be-eaten approach over a sushi lunch in an Intact boardroom. Over the course of a 90-minute chat, he eats exactly one piece of raw fish. He's too busy explaining how Intact does things differently and his plans to build out a U.S. specialty insurance business. "This industry is a volatile one," Brindamour says enthusiastically, ignoring his plate. "It's risky, it's super-fragmented and you really have to crush your competitors to have a great business. This is one of the key strategic views of our organization."

Intact traces its Canadian roots back to 1809 and the founding of Halifax Insurance Co., which protected the city against the financial calamity caused by house fires. Skip forward to the late 1950s, and Halifax Insurance was bought by a predecessor to ING Group, the Dutch financial conglomerate. According to company lore, the Europeans saw an opportunity to sell insurance to the Dutch immigrants who had settled in Canada after the Second World War.

Brindamour, a Quebec City native, joined the company right out of university in 1992. He was only 22 years old, and both his father and mother had previously worked for Quebec-based insurance companies that were acquired by ING. His first two years were spent at regional offices in Quebec, then he moved to the Toronto headquarters to take a job that shaped his future: building a division that tracked and used the masses of data that were available to the company. "That's when I lost my accent," he deadpans.

ING executives took note of the young actuary's skills and sent him first to head office in Holland, then to launch a new division in Romania, where Brindamour oversaw the sale of private-sector insurance to formerly communist consumers as the company's chief actuary and chief financial officer. In 1999, he returned to Canada, where he worked on insurance underwriting, eventually leading the company's acquisition, strategic planning and financing groups. He emerged as heir apparent when he was named chief operating officer in 2007. Brindamour says he was still seen as a bit of a kid in 2008, when then-CEO Claude Dussault stepped aside and named the 38-year-old as his successor. "The board is sitting there and they see this guy who barely started to shave show up, and we're facing the financial crisis," he recalls with a smile.

During his first year as CEO, ING neglected its Canadian offspring. The parent company took a beating when credit markets melted down, and the Dutch government ultimately stepped in to keep ING afloat. "The group repeated, to me in particular, that we were non-core," Brindamour says, repeating the word "non-core" several times in bludgeoning monotone for emphasis. "I thought, 'I don't care.' You know, we're having fun, and the business is doing well."

By the end of Brindamour's first year as CEO, ING opted to focus on Europe and sell its Canadian banking and insurance operations to raise cash. Bank of Nova Scotia later grabbed the bank, then known as ING Direct Canada, and rebranded it as Tangerine. The insurance operation was spun out as a fully independent company in one of the largest share sales ever on the Toronto Stock Exchange; ING raised $2.2 billion by selling its entire stake in February 2009. As part of the decision to cut ties, ING Insurance Canada was rebranded as Intact. The new name, wrapped in red square brackets to capture Canada's colours, was suggested by an outside consultant, and Brindamour says it resonated because "Intact is about our promise to customers, helping them get back on track when an unforeseen event occurs."

In cutting ties, the Dutch missed out on a treat: Intact shares now command four times the price that ING received, and the Canadian company doubled its common share payout with nine dividend hikes in eight years. Canadian Imperial Bank of Commerce was one of the leaders of the 2009 share sale for ING, and the bank's current CEO, Victor Dodig, subsequently got to know Brindamour. "With his background as an actuary," Dodig says, "Charles is well versed in the industry. But what he brings to the table is a thoughtful approach and the ability to translate that deep understanding into business strategy."

What is Brindamour's deep understanding, the secret sauce propelling Intact ahead of its peers? It starts with the way the CEO approaches the business. Like the owner of a casino, you need to hold on to more cash than you pay out, and Intact is built to consistently turn a profit simply from selling insurance policies. Extra cash generated from the company's $14.4-billion investment portfolio is gravy—the capital needed to fuel expansion and maintain Intact's 600-basis-point outperformance. Intact has posted just one quarterly underwriting loss on Brindamour's watch, in 2013, when the insurer was hit by the train derailment at Lac-Mégantic, Quebec, as well as devastating flooding in southern Alberta and Ontario—it was the costliest year for natural disasters Canada had ever recorded.

Accurately pricing insurance, by predicting whose car will crash or whose home will flood, requires an actuary's skills and a whole lot of data. The amount of information available to number-crunchers is growing exponentially, and Brindamour pushes Intact to drink deeply from this well. In breaking down the company's lead over rivals, Brindamour says approximately a third of Intact's industry-beating performance comes from the company's deft touch with data. "We have the largest database in the industry," he says, "and we've been honing it for 25 years."

Intact's workforce includes 30 experts in artificial intelligence, working with computers to mine information from every conceivable source—soaking up data on everything from climate change to trends in teenage texting while driving—all in an effort to make Intact more efficient, to more accurately match the price of a policy and the cost of a claim. One recent product of the tech team's efforts: software that cut the time needed to apply online for car insurance from 10 minutes to three, bringing in more clients without relaxing underwriting standards. "Our greatest source of growth is always going to be creating a better customer experience. Our No. 2 source of growth is to pursue consolidation of the Canadian marketplace," Brindamour says. He adds: "A third growth pipeline is to build the leading North American specialty lines company."

As a leader, Brindamour is known for a unique approach to major corporate decisions. He sets an agenda for a key meeting, gathers top executives and asks each to explain their view. He doesn't really speak—no questions—until the end of the session. "It's exceptionally difficult to stay silent when discussing something important. Most CEOs drive a decision within the first five minutes of the meeting, just by the tone of their questions," says Cam di Prata, CEO of private equity firm Gibraltar & Co., where Brindamour is a founding investor and adviser. "Charles wants to make sure he hasn't missed anything, and he doesn't want to inject his own perceived bias into the discussion."

Brindamour's ability to objectively absorb information and combine it with a deep understanding of how the business works gives him a unique edge, di Prata says. "You run into leaders who approach everything from a digital, data-driven point of view and think the old approach to doing business is short-sighted, and those leaders typically fail. And you get leaders who run things the old-fashioned way and ignore data, and they also fail. Success tends to come when you combine traditional leadership with a high EQ and deep understanding of data, and that's what Charles does."

He may be the CEO of a market-leading Canadian company, but Brindamour is virtually invisible outside financial circles. That's partly a personal choice: The married father of two teenaged daughters keeps a low public profile. Di Prata says marathon runs, fly fishing and voracious reading are Brindamour's preferred forms of relaxation; the two share a passion for John le Carré spy thrillers. The low profile is also typical of the industry: Insurance isn't a product people enjoy paying for—the only thing worse than doling out premiums for something you never want or need is actually having something terrible happen that requires making a claim. That helps explain why Intact, despite a $13-billion market capitalization and millions of customers across the country, flies under most people's radar.

Outside the office, Brindamour spends time with a 40-something business crowd who work across a variety of industries—leaders in telecom, social media, venture capital and banking—but share a common interest in shaking up the old order by using technology to do business better. Many of these executives have roots outside the clubby network of business school graduates who made up the last generation of CEOs at Canadian banks and insurers. "There is a new emerging crop of CEOs who grew up immersed in data and tech. The last crop of CEOs was impressive, but the new generation is prepared to innovate in ways we haven't seen before," says Janet Ecker, CEO of the Toronto Financial Services Alliance (TFSA), where Brindamour is a long-time member of the leadership council. Ecker, a former Ontario finance minister, says Brindamour was one of the first CEOs she knows to flag climate change as a business issue, and he did so by setting out a framework not just for preventing global warming, but also for mitigating and adapting to the risks that come with it.

"I was introduced to Charles by Duncan Jackman, who described him as the smartest guy in insurance, which was quite a compliment, because Duncan knows everyone in insurance," says Som Seif, founder of fund manager Purpose Investments. Jackman is head of holding company E-L Financial, and he opted to quit the P&C industry and focus on life and health insurance in 2013 by selling his company, Dominion of Canada General Insurance Co., to one of the largest U.S. players, Travelers Co.

"Charles took the time to build an intimate knowledge of every part of the business—the brokers, the underwriting, the investments, the different lines—and that knowledge allows him to be disruptive in the way he approaches the industry," says Seif, whose company offers low-cost exchange-traded funds directly to investors. "Charles really gets the dollars and cents of the operating side of the business, but at the same time, he's always probing where the industry is going and how to position the company." For instance, Brindamour has made several trips to San Francisco to meet with tech disrupters, conducting the kind of research that eventually helped Intact land a contract to insure Uber's Canadian drivers.

For Intact, being disruptive in insurance means retooling the way the product is sold. In the P&C sector, policies are traditionally flogged by independent agents. Brindamour says serving insurance brokers effectively, with quick decisions on policies and a client-friendly approach to paying claims, remains a priority. But the company has also pursued customers through a separately branded division, Belairdirect, which features a knight in shining armour in ad campaigns pitching car and home insurance you can apply for online or by phone.

A key plank in Intact's growth platform is a seemingly limitless appetite for acquisitions. When Canadian Western Bank decided to exit the P&C sector in 2015, Brindamour snapped up its Canadian Direct Insurance unit for $189 million; the division was subsequently integrated into Belairdirect. Intact pounces when foreign insurers quit Canada, dropping $2.6 billion in 2011 to purchase the domestic operations of France's AXA. The company is also moving into lucrative smaller markets with few competitors, emerging as a leader in motorbike insurance in 2012 by acquiring a company called Jevco for $530 million.

Brindamour's toughest acquisition, however, may be right in front of him. With OneBeacon—which is based in Bermuda but does business across the U.S. in niches such as insurance for ships, tech companies and community banks—Brindamour is betting that Intact can bring the same driven approach it developed in its home market to the States. It's a strategy that's resulted in more losers than winners among Canadian companies, and as Intact expands south of the border, experts say the company could struggle to meet the high standards set in Canada. "There is an expectation that management will improve the operating results of the business, but OneBeacon comes in geography and in lines of business where Intact has not operated in the past," noted Paul Holden, an insurance analyst at CIBC World Markets, in a recent report. "There is a risk that improvements fall short of expectations."

When it comes to meeting or beating ex-pectations, Brindamour can take lessons from role models such as former Toronto-Dominion Bank CEO Ed Clark, who created a domestic market leader by championing a merger with Canada Trust and subsequently used acquisitions to build a major U.S. retail bank. Clark famously carried around massive binders detailing post-merger integration plans. Brindamour says he and predecessor Claude Dussault, now Intact's chairman, created a similar blueprint in 2001, when they bought the Canadian P&C operations of Swiss insurer Zurich. "Zurich was a meaningful deal because it allowed us to organize ourselves," says Brindamour. "We documented everything we did on integration and then used that book for all subsequent transactions."

"Charles does M&A differently. He seems to have a wonderful touch when it comes to integrating workforces, yet he makes decisions on staffing very early in the process and acts decisively to put teams in place," says the TFSA's Ecker. She adds that Brindamour inspires loyalty through the ranks at Intact by holding frequent "touch base" meetings with many of his employees, including rigorous but friendly monthly evaluations of managers and their projects.

The acquisition of OneBeacon has yet to close, but Brindamour is already thinking about his next deals. He predicts Intact will continue to find opportunities to buy Canadian P&C businesses from any number of sellers, including foreign companies, the Canadian banks and mutual insurers, which are owned by their policyholders. In the U.S., Intact plans to avoid taking on market leaders such as Progressive and Geico, and instead remain focused on specialty insurance, expanding in segments where OneBeacon's earnings outsize returns. Once the deal for the U.S. insurer closes and the Intact approach is adopted, OneBeacon is expected to exit a handful of less lucrative lines of business. Brindamour says it may take time to find additional expansion opportunities south of the border—they won't even start looking until they've spent two years improving performance at OneBeacon.

Like a casino owner, Brindamour knows his success lies in understanding the odds and using that data to his advantage. A company abandoned by its former owner has already become a competitor-crushing leader in its field, and Brindamour has a game plan he can replicate, year after year. He knows the numbers better than anyone, and he intends to keep on winning.