Q: Can you explain why CB’s PE is half of IFC? They are in the same business, and the former has better combined ratio. It baffles me.
Thanks,
Liping
Thanks,
Liping
5i Research Answer:
IFC is the leading P&C insurer in Canada, while CB trades in a more saturated market in the US. Essentially, IFC is a big fish in a small pond. IFC has a larger personal lines business, which is typically more stable, more predictable, whereas CB has a larger commercial and specialty lines exposure. IFCs higher valuation also reflects its slightly stronger and more consistent growth rates.