Intact Financial Corporation · TSX:IFC
Intact Financial — ING Canada — Investor Presentation (December 2007)
23 slides from Intact Financial's investor presentation, December 2007
Slide 1: Investor Presentation – December 2007
Investor Presentation – December 2007 Investor Relations: Michelle Dodokin, Vice President, Investor Relations Email: michelle.dodokin@ingcanada.com (416) 344-8044
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: Who is ING Canada?
the ING Sw advantage Who is ING Canada? ING *®
Slide 4: Leader in the Canadian P&C market
Leader in the Canadian P&C market 11% market share ROE Performance of our Insurance Subsidiaries Compared to Canadian P&C Insurance Industry $4 billion direct written premiums 40% 4.6 million written insured risks 30% 10-year avg. $7.3 billion investment portfolio = 18.4% 20% Canadian Indust
Slide 5: Industry-leading growth rate
Industry-leading growth rate ING Canada Premium Growth vs. Industry 400% 10-year CAGR = 13.8% 300% 200% Industry 2) 10-year CAGR 100% = 7.6% 0% 03 04 05 06 96 97 98 99 00 01 02 20 20 20 20 20 19 19 19 19 20 20 ___________ 1 Based on direct premiums written 2 Source: MSA Research Software, P&C Indust
Slide 6: Largest personal lines insurer in the country
Largest personal lines insurer in the country 2006 Automobile direct written premiums (DPW) Personal and commercial auto loss ratios vs. industry – personal and commercial ($millions) $2,500.0 2,284 Maintaining healthy gap in loss ratio versus industry $2,000.0 1,741 80 1,445 $1,500.0 75.2 ING 75 In
Slide 7: 3rd largest commercial lines competitor in Canada
3rd largest commercial lines competitor in Canada ING Commercial Non-Auto Superior Loss Ratio DWP and Market Share vs. Key Competitors 2006 Gap vs. Industry (bps) Commercial Property & Liability combined ($ millions) 900 785 800 700 591 600 531 1000 956.1 500 900 400 840.8 811.1 300 800 750.2 200 69
Slide 8: Distribution through three key channels
Distribution through three key channels • Maximizing growth through broker, 2006 Direct written premiums by distribution channel ($millions) direct, and affiliated distribution channels Affiliated Distribution • Same ROE objectives for all three Network, $462.4, 12% channels belairdirect, • Consumer
Slide 9: Scale advantage drives significant benefits
Scale advantage drives significant benefits Direct Premiums Written* ($ billions) $4.0 4.0 Top five Top five insurers $3.0 insurers 3.1 represent represent 35.2% of the 35.2% of the market $2.0 market 2.1 1.9 1.8 Key Key benefits benefits $1.0 of of scale scale $0.0 TD Meloche Pricing and underwri
Slide 10: Consolidator in a fragmented marketplace
Consolidator in a fragmented marketplace Potential for future Top 20 P&C Insurers 1) acquisitions given Market Share (DPW, 2006) Total = 78.5% fragmented nature of industry Bank-owned 5.8% Capital strength tempered ING Canada by disciplined, patient Foreign-owned 11.0% Private approach to acquis
Slide 11: $7.3B portfolio managed on an after-tax return basis
$7.3B portfolio managed on an after-tax return basis Investment philosophy ÆPreservation of capital ING Canada Invested Assets ÆAsset diversification by Asset Class 1) Incremental returns through active portfolio management Other Portfolio quality 3% ÆMore than 90 percent of our fixed income p
Slide 12: Strong capital position
Strong capital position ■ Excess capital at insurance companies of $338.6 million (at 160% MCT)* ■ $519 million in liquid investments at holding company* ■ $1 billion shelf filing remains untapped ■ Focused on utilizing or returning excess capital − Successful acquisition track record − Completed a
Slide 13: Unrelenting focus on our key goals
Unrelenting focus on our key goals Leveraging our sustainable competitive advantages to consistently outperform the Canadian property and casualty (P&C) industry. Exceed the Canadian P&C industry by Return on Equity at least 500 basis points annually Exceed the annual growth rate of the Organic Grow
Slide 14: Leading through the P&C Cycle
Leading through the P&C Cycle 14
Slide 15: Managing for growth and profit
Managing for growth and profit Leverage scale to create effective pricing and underwriting models Scale Use scale to create claims and expense cost advantage Strategically use ROE gap advantage to: – Improve returns at industry low points Balance – Accelerate growth when markets correct Cycl
Slide 16: Creating value through the cycle – Personal Lines
Creating value through the cycle – Personal Lines • Scoring tools and expand price segmentation Enhance Expand • >95% of claims managed in-house ROE • Expansion of Rely Network to reduce claims costs Gap by Reduce >500bps • Six sigma processes for content replacement / building repairs Leverage • Bu
Slide 17: Creating value through the cycle – Commercial Lines
Creating value through the cycle – Commercial Lines • Scale allows us to define—with a strong degree Leverage of credibility—segments and risk characteristics that create opportunity for profitable growth Expand ROE • Pinpoint areas of under-performance in the Gap by Target portfolio and determine a
Slide 18: Staying ahead of the curve in pricing and claims
Staying ahead of the curve in pricing and claims Industry pricing/claims environment ING Strategy • Medical cost inflation in Ontario personal • Early identification of emerging trends to auto reflects some atrophy in the provincial quickly effect rate adjustments and reforms, which was expected ove
Slide 19: Appendices
the TING Sp advantage Appendices ING *® 19
Slide 20: Largest personal lines insurer in the country
Largest personal lines insurer in the country 2006 Auto premiums by province ($millions) 2006 Personal property premiums by province ($millions) British Columbia, $32.3, 1% Other, $38.5, 2% Other, $41.3, 5% Nova Scotia, Nova Scotia, $36.0, 4% $79.2, 3% Alberta, $103.2, 12% Ontario, $283.1, Alberta,
Slide 21: Long-term drivers of industry outperformance
Long-term drivers of industry outperformance • Extensive database of historical customer data • Focus on long-term value creation: Scale • Preferred supplier relationships: – Preservation of capital –reduces costs Advantage – Diversification of risk –facilitates timely claim settlement – Manage on a
Slide 22: What drives P&C cyclicality?
What drives P&C cyclicality? Inefficient Supply-driven industry industry capital Excess capital influences price competition management Time lag between pricing, historical data, final confirmation of costs Time lag Rate adjustments are made after trends develop Premiums recognized over th
Slide 23: Q3-07 Financial Highlights
Q3-07 Financial Highlights Financial Summary Q3 07 Q3 06 Change Direct premiums written (excluding pools, in millions) $1,091.2 $1,059.1 3.0% Written insured risks (in thousands) 1,273.1 1,242.9 2.4% Net income (in millions) $ 92.0 $ 156.8 (41.3)% Net operating income (in millions) $ 95.2 $ 132.3 (2