Intact Financial Corporation · TSX:IFC
Intact Financial — Q1 2007 Earnings Presentation
17 slides from Intact Financial's earnings presentation, May 16, 2007
Slide 1: 2007 First Quarter Financial and Operating Results
2007 First Quarter Financial and Operating Results May 16, 2007
Slide 2: Forward-Looking Statement Disclaimer
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 looking stateme
Slide 3: Presenters: CEO, COO and CFO
Claude Dussault, President & Chief Executive Officer Charles Brindamour, Chief Operating Officer Mark Tullis, Chief Financial Officer 3
Slide 4: 2007 Q1 Highlights
2007 Q1 Highlights Financial Summary Q1 07 Q1 06 Change Direct premiums written (in millions) $854.0 $812.5 5.1% Direct premiums written (excluding pools, in millions) $846.3 $812.5 4.2% Written insured risks (in thousands) 950.4 915.0 3.9% Net income (in millions) $126.2 $185.9 (32.1)% Net operatin
Slide 5: Income Before Income Taxes - Reconciliation
Income Before Income Taxes - Reconciliation (in millions) 2006 Q1 Income before income taxes $268.4 Lower favourable prior year claims development $(24.8) Current accident year: Lower losses from catastrophes 5.7 Better results from Facility Association 6.6 Lower underwriting income (27.1) Change in
Slide 6: Direct Premiums Written
Direct Premiums Written Quarterly Annual (in millions) (in millions) $1 000 $3 905 $3 990 $854 $4 000 $3 576 $822 $813 $3 444 $800 $728 $683 $3 000 +2.2% $600 +5.1% $2 000 $400 $200 $1 000 $0 $0 Q103 Q104 Q105 Q106 Q107 2003 2004 2005 2006 Strong growth in direct premiums written in Q107 was driven
Slide 7: Direct Premiums Written – by Lines
Direct Premiums Written – by Lines Personal lines Commercial Lines (in millions) (in millions) $3,000 $2,808 $1,400 $2,657 $1,248 $1,161 $1,183 $2,348 $2,415 $1,200 $1,096 $2,500 $1,000 $2,000 $800 $1,500 -2.0% +8.5% $600 $1,000 $400 $550 $597 $262 $257 $500 $200 $- $- 2003 2004 2005 2006 Q106 Q107
Slide 8: Combined Ratio
Combined Ratio Quarterly 103,8% 101,8% 2003 1,20 95,8% 94,7% 100% 93,8% 93,6% 93,4% 1,10 2004 91,5% 89,9% 88,1% 87,7% 86,9% 86,7% 90% 1,00 2005 83,9% 82,7% 81,2% 78,9% 0,90 2006 80% 0,80 2007 70% 0,70 4-Yr ING Seasonal Indicator 60% 0,60 Q1 Q2 Q3 Q4 Due to the seasonality of the P&C industry, combin
Slide 9: Combined Ratio - by Lines
Combined Ratio - by Lines Personal Lines Commercial Lines 105.5% 105.4% 98.5% 98.4% 120% 96.0% 101.3% 94.6% 100.5% 94.0% 93.9% 100% 98.8% 91.3% 95.5% 94.5% 89.0% 92.8% 88.1% 91.7% 88.2% 100% 86.7% 85.0% 84.9% 85.9% 84.9% 84.3% 83.7% 83.1% 82.7% 81.4% 81.2% 80.4% 77.7% 77.5% 73.8% 80% 80% 60% 60% 40%
Slide 10: Cost-based Yield
Cost-based Yield1) 5.9% 6% 2) 5.3% 5.1% 4.8% 4.9% 4.8% 4% 2% 0% 4) 3) 2003 2004 2005 2006 Q106 Q107 Interest and dividend income increased year-over-year. 1) Pre-tax, at book value. 2) Calculation based on adjusted book value reflecting January 2004 quota share commutation; excluding this adjustment
Slide 11: Sources of Earnings
Sources of Earnings (in millions) $781.8 $800 $658.1 $624.2 $169.5 $600 $91.9 $127.5 $400 $612.3 $532.3 $530.6 $185.9 $150.5 $200 $126.2 $6.5 $72.0 $12.3 $144.0 $113.9 $113.9 $0 2003 2004 2005 2006 Q106 Q107 Net operating income Realized invested assets and other gains Net operating income was uncha
Slide 12: Net Underwriting Income - by Lines
Net Underwriting Income - by Lines Personal lines Commercial Lines (in millions) (in millions) $200 $500 $162 $156 $160 $382 $400 $131 $339 $120 $300 $242 $87 $80 $200 $40 $100 $40 $40 $37 $3 $- $- 2003 2004 2005 2006 Q106 Q107 2003 2004 2005 2006 Q106 Q107 -$100 -$36 Net underwriting income decreas
Slide 13: Return on Equity
Return on Equity1) 50% 40.9% 40% 31.6% 30% 20.8% 19.4% 20% 16.5% 10% 0% 2003 2004 2005 2006 Q107 Return on equity remained relatively stable in Q107 despite lower profitability, reflecting the impact of the share buy-back. 1) Net income over the last 12 months divided by the average of beginning and
Slide 14: Questions and Answers
Questions and Answers ING S®» 14
Slide 15: Impairments
Impairments Why did the Company’s impairments increase in the first quarter? We perform an impairment review every quarter to determine if any invested assets need to be impaired. They are impaired when the market value has declined significantly and we believe that it is unlikely to recover within
Slide 16: Earned Premiums
Earned Premiums What do you mean by one less day of earned premium in Q107? We adjusted our allocation process for earned premiums which resulted in approximately one less day of premiums to be included in the first quarter compared to the first quarter of 2006, negatively impacting our underwriting
Slide 17: Coming: August 8, 2007 Q2 Earnings Conference Call
Coming: August 8, 2007 at 10:00 a.m. Q2 07 Earnings Conference Call www.ingcanada.com