Intact Financial has deep pockets, seeking M&A

* Property and casualty insurer has C$1 billion to spend

* Seeking to bulk up commercial business

* Stock on a roll this year

TORONTO, Nov 16 (Reuters) - Intact Financial Corp (IFC.TO) is on the hunt for acquisitions to build on its leading position in the Canadian property and casualty insurance segment, the company's chief executive said on Tuesday.

The Toronto-based company, which operates under banners including Grey Power and belairdirect, seeks in particular to bulk up its mid-market commercial P&C business, where it currently holds a 4 percent market share.

"Consolidation of the Canadian industry ... is a big lever to move the (growth) needle in the coming 12 to 24 months," CEO Charles Brindamour said at an investor presentation.

"We're sitting on C$800 million ($784 million) of excess capital. ... Clearly one of our priorities is to deploy that effectively."

He said Intact has total acquisition capacity of about C$1 billion.

While there has been little consolidation in the industry of late, he said behind-the-scenes activity has picked up in the past three months. He said that could in part reflect anticipation of stricter capital reforms being contemplated by international regulators.

Intact, which has an annual target of 10 percent growth in operating earnings, could also consider dividend increases and share buybacks.

Company executives said Intact, which up until last year was known as ING Canada, has raised its dividend annually, even through the financial crisis. It last raised the payout in February.

The company posted a stronger-than-expected third-quarter profit earlier this month, due to higher premiums and a stronger underwriting performance.

Its shares, up 27 percent year-to-date, dropped 55 Canadian cents, or 1.2 percent, to C$47.27 on the Toronto Stock Exchange on Tuesday.

($1=$1.02 Canadian) (Reporting by Cameron French; Editing by Frank McGurty)