Intact Financial Corporation · TSX:IFC
Intact Financial — Q2 2006 Earnings Presentation
17 slides from Intact Financial's earnings presentation, Aug 10, 2006
Slide 1: 2006 Second Quarter Financial and Operating Results
ingcanada.com ingcanada.com 2006 Second Quarter Financial and Operating Results August 10, 2006 P. 1
Slide 2: Forward-Looking Statement Disclaimer
ingcanada.com Forward-Looking Statement Disclaimer Certain of the statements contained in this presentation about our 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 3: Presenters: Dussault, Tullis, Brindamour
ingcanada.com Claude Dussault, President & CEO Mark Tullis, Senior Vice-President & CFO Charles Brindamour, Executive Vice-President P. 3
Slide 4: Q2 2006 Highlights
ingcanada.com Q2 2006 Highlights Continued strong financial results Net income of $205.9 million (down 7.9% from Q2 05) Earnings per share of $1.54 (vs $1.67 in Q2 05) Return on equity, for the last 12 months of 27.5% (vs 37.8% in Q2 05) Combined ratio of 82.7% (vs 81.2% in Q2 05) Debt to
Slide 5: Earnings Reconciliation – Pre-tax
ingcanada.com Earnings Reconciliation – Pre-tax ($ millions) Q2 05 Pre-tax income $323.7 Prior year claims development (27.1) Current accident year* (22.8) Industry pools (7.1) Catastrophes 42.9 Underwriting income (14.1) Realized investment and other gains (12.0) Other (1.9) Q2 06 Pre-tax income $2
Slide 6: Direct Premiums Written
ingcanada.com Direct Premiums Written ($ millions) $3,905 $4,000 $3,576 $3,444 $3,107 $3,000 $2,192 $2,000 + 0.4% $1,171 $1,176 $1,000 $0 2001 2002 2003 2004 Q2/05 2005 Q2/06 Top-line growth flat primarily due to rate reductions. Excluding the AGR business, YoY growth was +1.9% due to an increase in
Slide 7: Net Premiums Earned
ingcanada.com Net Premiums Earned ($ millions) $4,000 $3,840 $3,365 $3,000 $2,761 $2,337 $2,019 $2,000 0.0 % $956 $956 $1,000 $0 2001 2002 2003 2004 Q2/05 2005 Q2/06 NPE flat YoY primarily due to rate decreases. P. 7
Slide 8: Combined Ratio
ingcanada.com Combined Ratio 120% Claims ratio Expense ratio 102.7% 101.2% 98.1% 100% 86.0% 81.2% 86.0% 82.7% 29.0% 27.4% 80% 30.0% 29.4% 29.7% 29.6% 30.6% 60% 40% 73.7% 73.8% 68.1% 56.6% 51.6% 56.3% 52.1% 20% 0% 2001 2002 2003 2004 Q2/05 2005 Q2/06 Continued strong combined ratio despite less favou
Slide 9: Investment Yields
ingcanada.com 1) Investment Yields 10% 8% 6.5% 6.0% 5.9% 2) 6% 5.3% 5.0% 4.8% 5.1% 4% 2% 0% 3) 2001 2002 2003 2004 Q2/05 2005 Q2/06 Yields reflect higher dividend income from our common and preferred share portfolios. 1) Pre-tax, at book value, for P&C insurance subsidiaries excluding realized gains
Slide 10: Realized Investment and Other Gains
ingcanada.com 1) Realized Investment and Other Gains ($ millions) $250 $223.5 $200 $150 $132.4 $100 $46.8 $50 $34.2 $32.1 $34.8 $2.5 $0 2001 2002 2003 2004 Q2/05 2005 Q2/06 Gains on equities and derivatives more than offset fixed income losses. 1) Pre-tax P. 10
Slide 11: Net Income
ingcanada.com Net Income ($ millions) $781.8 $800 $700 $624.2 $600 $500 $400 -7.9% $300 $223.6 $205.9 $200 $150.5 $100 $0 2003 2004 Q2/05 2005 Q2/06 Continued strong earnings driven by favourable claims experience and solid investment results. P. 11
Slide 12: Return On Equity
ingcanada.com 1) Return On Equity 50% 40.9% 40% 37.8% 31.6% 30% 27.5% 20% 16.5% 10% 0% 2003 2004 Q2/05 2005 Q2/06 Strong returns generated on a rapidly increasing equity base. 1) Last twelve months P. 12
Slide 13: Debt to Total Capital Ratio
ingcanada.com Debt to Total Capital Ratio 50% 40% 37.5% 32.8% 30.5% 30% 20% 11.1% 10% 4.8% 4.2% 3.8% 0% 2001 2002 2003 2004 Q2/05 2005 Q2/06 Growth in retained earnings results in declining leverage; remaining debt to be repaid in Q3 06. P. 13
Slide 14: Questions and Answers
ingcanada.com Questions and Answers P. 14
Slide 15: Questions and Answers
ingcanada.com Questions and Answers Question 1: What’s happening to the current accident year loss experience? Answer: The current accident year loss ratio, strong across all lines of business, deteriorated by roughly 2 points in Q2 06 and 0.6 point year to date. The change from 2005 is primarily dr
Slide 16: Questions and Answers
ingcanada.com Questions and Answers Question 2: Although the results are very good, what’s going on in personal auto – the combined ratio, while still healthy, deteriorated by 13.8 points YoY? Answer: The combined ratio increased 13.8 points to 83.6% in Q2 06 and 10.3 points to 88.4% YTD. This deter
Slide 17: Coming: Q3 06 Earnings Release and Conference Call
ingcanada.com ingcanada.com Coming Thursday, November 9, 2006 at 10:00 a.m.: Q3 06 Earnings Release and Conference Call P. 17