Intact Financial Corporation · TSX:IFC
Intact Financial — Q3 2013 Earnings Presentation
20 slides from Intact Financial's earnings presentation, Nov 6, 2013
Slide 1: Intact Financial Corporation Q3-2013 Review of Performance
Intact Financial Corporation (TSX: IFC) Continuing our journey to build a world-class P&C insurer Review of performance Q3-2013 Wednesday, November 6th, 2013
Slide 2: Charles Brindamour, Chief Executive Officer
Charles Brindamour Chief Executive Officer
Slide 3: Q3-2013 key points
Q3-2013 key points Highlights • Net operating income per share of $0.41, despite $1.52 per share in previously announced catastrophe losses • Combined ratio of 102.8%, including 15.2 points of catastrophe losses • Premium growth of 6% primarily reflects the addition of Jevco in July and August, as S
Slide 4: Plan for delivering 10 point improvement in personal property
Plan for delivering 10 point improvement in personal property Combined Ratio Composition Actions within 12 months 113.6% 109.0% 96.5% 103.5% 93.5% 110.7% 8.7% 8.6% • Rates 20.3% 13.3% 5.9% 10.3% • Limit water coverage • Curtail hail/wind exposure • Tie prevention to pricing 104.3% 101.2% • Exposure
Slide 5: Ontario auto environment
Ontario auto environment Ontario government’s strategy to reduce both rates and costs • Reduce insurance rates by an average of 15% over 2 years – 3% - 5% by January 2014, 8% by August 2014, for the full 15% by August 2015 • We expect the government to announce some cost reduction measures in the co
Slide 6: Personal auto: Telematics
Personal auto: Telematics Why Where & When • Offers customers the option to control • Available in Quebec later this year premiums through good driving through brokers and direct to consumers behaviour • Increases price accuracy • Encourages safer driving habits • Other provinces in the months to co
Slide 7: Canadian P&C industry 12-month outlook
Canadian P&C industry 12-month outlook We remain well-positioned to continue outperforming the Canadian P&C insurance industry in the current environment • Industry premiums are likely to increase at a low single-digit rate, with low single-digit growth in personal auto and commercial lines and uppe
Slide 8: Summary and key takeaways
Summary and key takeaways • We have a sustainable competitive advantage versus the industry due to our disciplined approach and quality operations • We remain committed to adapting products to suit consumers’ needs • Our solid financial position enables us to take advantage of growth opportunities •
Slide 9: Mark Tullis, Chief Financial Officer
Mark Tullis Chief Financial Officer
Slide 10: Q3-2013 Financial highlights
Q3-2013 Financial highlights (in $ millions, except as otherwise noted) Q3-2013 Q3-2012 Change YTD-2013 YTD-2012 Change Direct premiums written 1,911 1,798 6% 5,617 5,178 8% Net underwriting income (loss) (50) 67 n/a 75 313 (76)% Combined ratio 102.8% 95.9% 6.9 pts 98.6% 93.5% 5.1 pts Net operating
Slide 11: Personal lines
Personal lines (in $ millions, except as otherwise noted) Q3-2013 Q3-2012 Change Combined Ratio Breakdown Personal Auto Direct premiums written 911 843 8% 22.8% 25.7% Expense Underwriting income 60 39 54% Ratio 67.3% 72.1% Claims Combined ratio 93.0% 94.9% (1.9) pts Ratio Q3-2013 Q3-2012 • Strong DP
Slide 12: Commercial lines
Commercial lines (in $ millions, except as otherwise noted) Q3-2013 Q3-2012 Change Combined Ratio Breakdown Commercial Auto Direct premiums written 144 132 9% 31.4% 26.8% Expense Underwriting income 22 31 (29)% Ratio 54.6% 50.2% Claims Combined ratio 86.0% 77.0% 9.0 pts Ratio Q3-2013 Q3-2012 • DPW g
Slide 13: High quality investment portfolio
High quality investment portfolio Net investment gains $12.3 billion – conservatively managed (in $ millions, except as otherwise noted) Note: Investment mix is net of hedging positions and financial liabilities related to investments. Q3-2013 Q3-2012 Change Fixed-income securities Loans, 4% Gains (
Slide 14: Financial position remains solid
Financial position remains solid • Our financial position remains solid with an estimated MCT of 199% and $515 million in excess capital • Book value per share of $33.25, 5% higher than a year ago • Operating ROE of 12.7% for the last 12 months • Debt-to-capital ratio of 19%, below our target of 20%
Slide 15: Integrations are on track
Integrations are on track AXA Canada Jevco • Integration of AXA Canada continues to • Continuing to convert policies into IFC progress very well and nearing systems completion • Retention has been good and we are • Almost all policies have been converted working to re-underwrite portions of the and
Slide 16: Strategic, operational and financial strength
Strategic, operational and financial strength • Largest P&C insurance provider in Canada • Solid financial position • Excellent long-term earnings power • Organic growth platforms easily expandable Our solid financial position and disciplined approach to the business provide a strong foundation from
Slide 17: Q4-2013 earnings call Wednesday, February 5th, 2014
Q4-2013 earnings call Wednesday, February 5th, 2014
Slide 18: Investor Relations contact information
Investor Relations contact information Dennis Westfall, CFA Maida Sit, CFA Vice President, Investor Relations Manager, Investor Relations Phone: 416.341.1464 ext 45122 Phone: 416.341.1464 ext 45153 Cell: 416.797.7828 Email: Maida.Sit@intact.net Email: Dennis.Westfall@intact.net General Contact Info
Slide 19: Forward looking statements and disclaimer
Forward looking statements and disclaimer Certain of the statements included in this presentation about the Company’s current and future plans, expectations and intentions, results, levels of activity, performance, goals or achievements or any other future events or developments constitute forward-l
Slide 20: Forward looking statements and disclaimer
Forward looking statements and disclaimer Disclaimer This Presentation does not constitute or form part of any offer for sale or solicitation of any offer to buy or subscribe for any securities nor shall it or any part of it form the basis of or be relied on in connection with, or act as any inducem