Intact Financial Corporation · TSX:IFC
Intact Financial — Q3 2014 Earnings Presentation
21 slides from Intact Financial's earnings presentation, Nov 5, 2014
Slide 1: Review of Performance Q3-2014
REVIEW OF PERFORMANCE Q3-2014 Intact Financial Corporation (TSX:IFC) Wednesday, November 5th, 2014 Intact Financial Corporation
Slide 2: Charles Brindamour, Chief Executive Officer
Charles Brindamour Chief Executive Officer Intact Financial Corporation
Slide 3: Q3 key points & highlights
Q3 key points & highlights • Net operating income per share of $1.37, despite $0.70 per share in catastrophe losses • Combined ratio of 93.2%, leading to an operating ROE of 14.3% • Commercial P&C action plan ongoing despite Q3 underwriting results • Strong financial position with $497 million of ex
Slide 4: Outperforming our financial targets
Outperforming our financial targets $4.50 900 $4.00 800 $3.50 $3.00 700 $2.50 600 $2.00 $1.50 500 500 bps $1.00 target 400 $0.50 $0.00 300 YTD-2011 YTD-2012 YTD-2013 YTD-2014 3-year avg. H1-2014 Year-over-year NOIPS growth ROE outperformance Q3-2014 year-to-date NOIPS represents a CAGR We have consi
Slide 5: Commercial P&C action plan
Commercial P&C action plan Targeting a combined ratio sustainably in the low 90s • YTD-2014 reported combined ratio of 96.7% While we are pleased with our 98.2% 108.2% 109.0% 100.0% 105.6% 100.5% 84.7% progress thus far, actions to improve performance will continue 12.4% 7.4% 2.3% 2.6% 2.0% 26.4% In
Slide 6: Home Improvement Plan
Home Improvement Plan Targeting a combined ratio sustainably below 95% Our Home Improvement Plan is helping to • YTD-2014 reported combined ratio of 94.4% improve our results, with ultimate benefits despite 11.3 points of catastrophe losses to be generated over the next 9-15 months • Retention bette
Slide 7: Ontario auto update
Ontario auto update Context Update • There is an Ontario government mandate • We believe that the recent election putting to reduce insurance rates by an average the Liberal government in a majority of 15% by August 2015 position facilitates their ability to implement – Rate reductions are to be aid
Slide 8: P&C industry 12-month outlook
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 upper Premium
Slide 9: 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 Our strong financial position enables us to take advantage of growth opportunities We continue our shareholder-friendly approach to capital management Inta
Slide 10: Louis Marcotte, Chief Financial Officer
Louis Marcotte Senior Vice President and Chief Financial Officer Intact Financial Corporation
Slide 11: Q3-2014 financial highlights
Q3-2014 financial highlights (in $ millions, except as otherwise noted) Q3-2014 Q3-2013 Change YTD-2014 YTD-2013 Change Direct premiums written 1,913 1,911 - 5,589 5,617 - Underwriting income (loss) 124 (50) nm 303 75 304% Combined ratio 93.2% 102.8% (9.6) pts 94.4% 98.6% (4.2) pts Net operating inc
Slide 12: Personal lines
Personal lines (in $ millions, except as otherwise noted) Q3-2014 Q3-2013 Change Combined Ratio Breakdown Personal Auto Direct premiums written 909 911 - 24.4% 25.7% Expense Ratio Underwriting income 36 60 (40)% 71.4% 67.3% Claims Combined ratio 95.8% 93.0% 2.8 pts Ratio Q3-2014 Q3-2013 • DPW were r
Slide 13: Commercial lines
Commercial lines (in $ millions, except as otherwise noted) Q3-2014 Q3-2013 Change Combined Ratio Breakdown Commercial Auto Direct premiums written 148 144 3% 27.2% 31.4% Expense Ratio Underwriting income 16 21 (24)% 62.2% 54.6% Claims Combined ratio 89.4% 86.0% 3.4 pts Ratio Q3-2014 Q3-2013 • DPW i
Slide 14: High quality investment portfolio
High quality investment portfolio $13.2 billion of high quality investments – strategically managed Net investment gains (losses) Investment mix (in $ millions, except as otherwise noted) (net of hedging positions and financial liabilities Q3-2014 Q3-2013 Change related to investments) Fixed-income
Slide 15: Strong financial position
Strong financial position • Our financial position was strong with an estimated MCT of 203% and $497 million in excess capital • Book value per share increased by 10% over the past 12 months to $36.44 • Operating ROE of 14.3%, despite incurring $289 million in pre-tax net catastrophe losses • Debt-t
Slide 16: IFC Investor Day and Q4-2014 earnings call dates
IFC Investor Day Wednesday, December 3th, 2014 Q4-2014 earnings call Wednesday, February 4th, 2015 Intact Financial Corporation
Slide 17: Contact Investor Relations
Contact Investor Relations General Contact Info Dennis Westfall, CFA, MBA Vice President, Investor Relations Website: http://www.intactfc.com Phone: 416.344.8004 Click on “Investor Relations” tab Mobile: 416.797.7828 Email: dennis.westfall@intact.net Email: ir@intact.net Maida Sit, CFA Phone: Direct
Slide 18: Appendix
Appendix Intact Financial Corporation
Slide 19: Impact of 2-year policy conversion
Impact of 2-year policy conversion • As part of our Home Improvement Plan, we are no longer offering two-year property policies in Québec to allow for more responsive pricing • At renewal, these policies will be converted to one-year policies • Q3-2014 DPW negatively impacted by almost 2 points; no
Slide 20: Forward-looking statements
Forward-looking statements 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-looking statemen
Slide 21: 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 inducement to enter into, any contract or commitm