Intact Financial Corporation · TSX:IFC
Intact Financial — ING Canada — Investor Presentation (December 2008)
14 slides from Intact Financial's investor presentation, December 2008
Slide 1: Investor Presentation November/December 2008
Investor Presentation November/December 2008
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: Leader in the property & casualty insurance market in Canada
Leader in the property & casualty insurance market in Canada Who we are Broad distribution • $4.1 billion in direct premiums written in 2007 • #1 in Ontario, Québec, Alberta, Nova Scotia • Substantial size and scale advantage • Industry outperformer and consolidator • Strong financial position and s
Slide 4: Operational strengths and competitive advantages
Operational strengths and competitive advantages Five-year average loss ratios 75% 71.6% Industry ING Canada 70% 65.4% 63.5% 64.0% 64.9% 65% 59.4% 60% 55% 52.6% 51.0% 50% Size and scale Sophisticated In-house claims advantage drives benefits pricing and expertise, innovation, 45% that are difficult
Slide 5: Combined ratio versus P&C insurance industry
Combined ratio* versus P&C insurance industry ING Canada versus the industry – 2008 YTD 106% 104.0% ING Canada 104% 98.3% 102.6% 101.8% 102% Industry AVG 100.5% 100% 98.3% 98% 96% 94% Top 5 Top 10 Top 15 ING (average) (average) (average) Canada Source: MSA Research; Industry excludes Lloyd’s and ICB
Slide 6: Performance goals that drive our strategy
Performance goals that drive our strategy Return on equity Operating earnings Beat Canadian P&C industry Grow at least 10% ROE by 5 points per year over time every year Customer satisfaction Employee engagement Employee engagement index Customer satisfaction index in the top 10 percentile score of >
Slide 7: Well-positioned to capitalize on major trends
Well-positioned to capitalize on major trends Premises Impact Strategy Strengths Customers embrace • New entrants are likely Invest in people • People’s technology rapidly • Brokers will consolidate as • Attract and develop top talent commitment and scale is increasingly important • Build our own pi
Slide 8: Financial strength and flexibility
Financial strength and flexibility Financial flexibility Financial strength ratings (FSR) • Significant excess capital of $502 • Moody’s Investor Services: million* and MCT of 199.9% • Long-term issuer rating – A3 • No debt with capacity for 20% debt-to- • P&C subsidiaries – Aa3 total-capital • A.M.
Slide 9: M&A environment more conducive to consolidation
M&A environment more conducive to consolidation M&A environment Acquisition capacity • P&C insurance industry is highly $1.2 billion fragmented Excess $502 • Industry ROEs are down from recent capital1 record highs Debt $724 • Foreign parent companies are capacity2 generally in less favourable capit
Slide 10: High-quality $6.8B investment portfolio that is prudently managed
High-quality $6.8B investment portfolio that is prudently managed Portfolio quality Portfolio mix* • Investment philosophy focused on Other capital preservation and income 4% generation Fixed income • $6.8 billion investment portfolio: Common 54% shares • Common and preferred share portfolios 20% ar
Slide 11: Resilient business in a challenging economic and capital market environment
Resilient business in a challenging economic and capital market environment ROE correlation to GDP growth* • Demand for our product is relatively inelastic 35% 32.2% • Expense base is largely variable 29.8% TSX Composite 30% 25% 26.2% TSX Financials Index • Risk selection model that includes Lifecos
Slide 12: 10-year performance relative to the TSX
10-year performance relative to the TSX* 10-year CAGR Gap to TSX ING Cdn. TSX ING P&C Canada P&C Comp Gap Gap Revenue growth 13.6% 7.5% 3.0% 10.6 4.5 Operating earnings growth 19.8% 13.6% 10.2% 9.6 3.4 Return on equity 16.3% 11.1% 10.4% 5.9 0.7 Operating return on equity 15.7% 8.6% 11.5% 4.2 -2.9 •
Slide 13: Canadian P&C insurance industry outlook
Canadian P&C insurance industry outlook Canadian P&C insurance ING Canada’s response industry environment • Cost inflation and capital market • Maintaining disciplined approach to conditions will continue to put pressure pricing and underwriting on P&C insurance industry results • Staying ahead of t
Slide 14: Conclusion
Conclusion • Largest P&C insurance company with substantial scale advantage in the market • Substantial operational strengths that will enable us to deliver superior underwriting results • Risk selection and underwriting discipline puts emphasis on certain factors, such as financial stability, which