Intact Financial Corporation · TSX:IFC
Intact Financial — Q4 2014 Earnings Presentation
21 slides from Intact Financial's earnings presentation, Feb 4, 2015
Slide 1: Review of Performance Q4-2014
REVIEW OF PERFORMANCE Q4-2014 Intact Financial Corporation (TSX:IFC) Wednesday, February 4th, 2015 Intact Financial Corporation
Slide 2: Charles Brindamour, Chief Executive Officer
Charles Brindamour Chief Executive Officer Intact Financial Corporation
Slide 3: Key points & highlights
Key points & highlights • Net operating income per share of $1.84 in Q4-2014 • Combined ratio of 88.2% in Q4-2014 driven by our profitability initiatives and favourable weather conditions • Operating ROE of 16.3% with an 11% increase in book value per share over the past 12 months • Quarterly divide
Slide 4: Outperforming our financial targets
Outperforming our financial targets $6.00 1000 900 $5.00 800 $4.00 700 $3.00 600 $2.00 500 500 bps $1.00 target 400 $0.00 300 2011 2012 2013 2014 3-year avg. YTD Q3-14 NOIPS growth ROE outperformance Our 2014 net operating income per share of $5.67 We have consistently exceeded our 500 bps ROE repre
Slide 5: Home Improvement Plan
Home Improvement Plan Targeting a combined ratio sustainably below 95% Our Home Improvement Plan is helping to • FY2014 reported combined ratio of 89.0% improve our results, with ultimate benefits despite 8.6 points of catastrophe losses to be generated over the next 6-12 months • Retention better t
Slide 6: Commercial P&C action plan
Commercial P&C action plan Targeting a combined ratio sustainably in the low 90s While we are pleased with our • FY2014 reported combined ratio of 94.2% progress thus far, actions to 98.2% 108.2% 109.0% 100.0% 105.6% 100.5% 84.7% 87.1% improve performance will continue 12.4% 7.4% Initiatives rolled
Slide 7: Ontario auto update
Ontario auto update Context Update • There is an Ontario government mandate • We believe that the June-2014 election to reduce insurance rates by an average which put the Liberal government in a of 15% by August 2015 majority position facilitates their ability to – Rate reductions are to be aided by
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, mid single digit growth in commercial
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, Senior Vice President and Chief Financial Officer
Louis Marcotte Senior Vice President and Chief Financial Officer Intact Financial Corporation
Slide 11: Q4-2014 financial highlights
Q4-2014 financial highlights (in $ millions, except as otherwise noted) Q4-2014 Q4-2013 Change FY2014 FY2013 Change Direct premiums written 1,760 1,702 3% 7,349 7,319 - Underwriting income 216 67 222% 519 142 265% Combined ratio 88.2% 96.3% (8.1) pts 92.8% 98.0% (5.2) pts Net operating income per sh
Slide 12: Personal lines
Personal lines (in $ millions, except as otherwise noted) Q4-2014 Q4-2013 Change Combined Ratio Breakdown Personal Auto Direct premiums written 739 734 1% 24.8% 23.1% Expense Ratio Underwriting income 53 14 279% 68.9% 75.3% Claims Combined ratio 93.7% 98.4% (4.7) pts Ratio Q4-2014 Q4-2013 • DPW incr
Slide 13: Commercial lines
Commercial lines (in $ millions, except as otherwise noted) Q4-2014 Q4-2013 Change Combined Ratio Breakdown Commercial Auto 27.6% 25.3% Direct premiums written 163 150 9% Expense Ratio Underwriting income (loss) 1 (1) nm 71.9% 75.1% Claims Combined ratio 99.5% 100.4% (0.9) pts Ratio Q4-2014 Q4-2013
Slide 14: High quality investment portfolio
High quality investment portfolio $13.4 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 Q4-2014 Q4-2013 Change related to investments) Fixed-income
Slide 15: Strong financial position
Strong financial position • Our financial position was strong with an estimated MCT of 209% • Book value per share increased by 11% over the past 12 months to $37.75 • Operating ROE of 16.3%, while maintaining $681 million in excess capital • Debt-to-capital ratio of 17.3%, below our target of 20% I
Slide 16: Q1-2015 earnings call and Annual Meeting of Shareholders
Q1-2015 earnings call Wednesday, May 6th, 2015 Annual Meeting of Shareholders Wednesday, May 6th, 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 • Although the impact was immaterial in Q4-2014, we expec
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