Slide 1: Investor Presentation
INVESTOR PRESENTATION November 2023
Slide 2: Advisory Regarding Forward-Looking Information
2 ADVISORY REGARDING FORWARD-LOOKING INFORMATION This presentation contains “forward-looking information” within the meaning of applicable securities laws in Canada. Forward-looking information may relate to our future business, financial outlook and anticipated events or results and may include inf
Slide 3: Company Overview
COMPANY OVERVIEW
Slide 4: Definity is a Leading Canadian P&C Insurer
4 DEFINITY IS A LEADING CANADIAN P&C INSURER We are a personal and commercial P&C insurer offering auto, property, liability, pet, and specialty insurance solutions through multiple distribution channels Over 150 Years of Operations in Canada $3.9B IN GROSS WRITTEN PREMIUMS(3) FOR TTM Q3 2023 (2) B.
Slide 5: Diversified Operating Model
5 DIVERSIFIED OPERATING MODEL Personal Lines Commercial Lines Brands Companies and Brands to Service Different Segments of the Market Broker Platform Platforms for P&C and Multi-Channel Distribution Specialty Lines Platforms Intermediated Digital Direct Intermediated Digital Direct Intermediated Dis
Slide 6: Company Highlights
COMPANY HIGHLIGHTS
Slide 7: Company Highlights
7 COMPANY HIGHLIGHTS Leading Canadian P&C Insurer in a Large and Growing Market Superior Customer and Broker Experience Highly Scalable Digital Platforms and Growing Broker Distribution Capabilities Market Leading Commercial Insurance Capabilities Sophisticated Pricing Methodologies and Disciplined
Slide 8: Positioned to Successfully Navigate Industry Landscape
8 POSITIONED TO SUCCESSFULLY NAVIGATE INDUSTRY LANDSCAPE KEY GLOBAL P&C DRIVERS KEY CANADA P&C DRIVERS Primacy of Customer Scale and Experience • 6th Largest P&C Insurer in Canada(1) Diversification • 3rd Largest Carrier in Broker Channel in Canada(1) Increasing Broker Channel Remains • Largest Full
Slide 9: Our Strategy
9 OUR STRATEGY STRATEGIC OBJECTIVES OUR PURPOSE Building a better world Consistently Position Definity as Become one of the by helping our clients Maintain our digital deliver disciplined a purpose-driven five largest P&C and communities leadership financial sustainability insurers in Canada adapt a
Slide 10: Superior Customer and Broker Experience
10 SUPERIOR CUSTOMER AND BROKER EXPERIENCE Our Digital Platforms, Sonnet and Vyne, enable our customers and brokers to access competitively priced insurance in a fast, easy to use manner IMPACT EVERY ASPECT OF THE VALUE CHAIN We believe that our sophisticated Digital Platforms enable rapid scaling o
Slide 11: Sophisticated Pricing and Disciplined Data-Driven Underwriting Underpin Sustainable Profitability
11 SOPHISTICATED PRICING AND DISCIPLINED DATA-DRIVEN UNDERWRITING UNDERPIN SUSTAINABLE PROFITABILITY COMMERCIAL CLOUD-BASED CLAIMS INFRASTRUCTURE INSURANCE PLATFORMS ⚫ Sophisticated ⚫ Predictive modelling ⚫ Access to one of the ⚫ Over 40 models used DATA marketing and evaluates customer largest Comm
Slide 12: Positioned for Expansion Across Several Commercial Insurance Segments
12 POSITIONED FOR EXPANSION ACROSS SEVERAL COMMERCIAL INSURANCE SEGMENTS SMALL BUSINESS MID-MARKET SPECIALTY Target market size: ~$9.5B(1) Target market size: ~$8.5B(1) Target market size: ~$6.0B(1) Key growth opportunities: Key growth opportunities: Key growth opportunities: ⚫ Leverage digital capa
Slide 13: Driving Profitable Growth in Personal Auto
13 DRIVING PROFITABLE GROWTH IN PERSONAL AUTO BY LEVERAGING DIGITAL ASSETS AND BROKER RELATIONSHIPS TODAY PERSONAL AUTO GWP GROWTH (2,3) ✓ 4.6% YOY 7% CAGR in annual personal auto GWP(2,3) in 2019-2022 since $1,579 the launch of Sonnet and Vyne(1) $1,453 $441 $1,350 ✓ $422 $1,285 17-point improvemen
Slide 14: Robust Growth in Personal Property with Improved Underwriting
14 ROBUST GROWTH IN PERSONAL PROPERTY WITH IMPROVED UNDERWRITING TODAY PERSONAL PROPERTY GWP GROWTH (2,3) 11.8% YOY ✓ 17% CAGR in annual personal property GWP(2,3) in 2019-2022 since the launch of Sonnet and Vyne(1) $308 $895 $1,013 ✓ 2-point improvement in combined ratio(3) from 2019-2022(4) $276 $
Slide 15: Growing and Profitable Commercial Insurance Capabilities
15 GROWING AND PROFITABLE COMMERCIAL INSURANCE CAPABILITIES TODAY COMMERCIAL INSURANCE GWP GROWTH (2,3) 13.0% YOY 20% CAGR in annual commercial insurance GWP(2,3) in 2019- ✓ 2022 reflecting strong growth across each of our segments – Small business, Mid-Market, and Specialty(1) $257 $291 $729 $910 $
Slide 16: Our Leading Broker Platform
16 OUR LEADING BROKER PLATFORM Our national broker platform provides immediate opportunities to scale and grow the earnings profile of the business Benefits to Definity Premiums • Diversified product base allows for repeatable distribution Current Ambition income and complementary earnings contribut
Slide 17: A Heightened Focus on Culture and Developing Executive Bench Strength
17 A HEIGHTENED FOCUS ON CULTURE AND DEVELOPING EXECUTIVE BENCH STRENGTH Philip Mather Paul MacDonald Fabian Richenberger Liam McFarlane Brigid Pelino Rowan Saunders EVP & CFO EVP, Personal Insurance EVP, Commercial SVP & Chief Risk and President & CEO SVP & Chief People & & Digital Channels Insuran
Slide 18: Definity, It's Better Here
18 DEFINITY, IT’S BETTER HERE 2023 Company Our engagement journey Key Statistics Recognition 72% 80% 80% 78% 65% 93% retention rate of Definity employee 59% 54% engagement high-performers 2015 2017 2019 2020 2021 2022 2023 87% of employees feel accepted and included for who they are at work 55% of a
Slide 19: ESG Highlights
19 ESG HIGHLIGHTS Our purpose: Building a better world by helping our clients and communities adapt and thrive. ENVIRONMENT SOCIAL GOVERNANCE • Target: Achieve net zero • Target: At least 30% women, • 12 of 13 Board directors are emissions from operations 15% equity-deserving (BIPOC, independent, in
Slide 20: Financial Performance and Risk Management
FINANCIAL PERFORMANCE AND RISK MANAGEMENT
Slide 21: Our Financial Targets
21 OUR FINANCIAL TARGETS Gross Written Premium (1) Combined Ratio (1) Operating ROE (1) 9.7% YTD-2023 97.8% YTD-2023 8.8% for the last 12 months Grow GWP at an upper single digit Maintain a full year combined ratio to approximately 10% rate (2) Generate an annual operating ROE in the mid-90s (2) as
Slide 22: Significant Financial Flexibility
22 SIGNIFICANT FINANCIAL FLEXIBILITY UNLEVERED BALANCE SHEET WITH SIGNIFICANT EXCESS CAPITAL FINANCIAL CAPACITY(1) ICA(2) CBCA(3) ⚫ We have almost $700 million in financial capacity(1) to fund our strategic growth Consolidated Excess Capital at 190% MCT: initiatives for the coming years(2) - Definit
Slide 23: Prudent Approach to Reserving and Reinsurance
23 PRUDENT APPROACH TO RESERVING AND REINSURANCE PRUDENT RESERVING PRACTICES ROBUST REINSURANCE FRAMEWORK • Closely monitor adequacy of reserves Structured to provide protection against individual large losses and catastrophe events above a certain threshold and • Favourable prior year development (
Slide 24: Conservative and Diversified Investment Portfolio
24 CONSERVATIVE AND DIVERSIFIED INVESTMENT PORTFOLIO PORTFOLIO HIGHLIGHTS DIVERSE ASSET ALLOCATION FIXED INCOME PORTFOLIO(1) BB 1% 81% of total portfolio in high quality ✓ fixed income securities, cash, and short- term investments BBB 12% 10.0% AAA 74% of the preferred stocks in the ✓ 1.8% 37% portf
Slide 25: Appendix
é APPENDIX i ~ definity.
Slide 26: 12-Month Industry Outlook
26 12-MONTH INDUSTRY OUTLOOK Personal Auto Personal Property Commercial Insurance • We expect the frequency of claims to • Due to the volatility of weather events, • The elevated risks for an economic continue to normalize toward pre- combined with the ongoing inflationary slowdown remain, with infl
Slide 27: Recognized by Customers and Industry
27 RECOGNIZED BY CUSTOMERS AND INDUSTRY CUSTOMER AND BROKER RECOGNITION INDUSTRY / EXPERT RECOGNITION Insurance Nexus ✓ ~51 (1) Sonnet average Net Promoter Score (>50 is considered excellent) Canadian Insurance Carrier of the Year Award Innovation Award (2018) Innovation in Customer Service (2017) (
Slide 28: Financial Results
28 FINANCIAL RESULTS IFRS 17 / IFRS 9 IFRS 4 / IAS 39 Q3-2023 Q3-2022 2022 2021 2020 2019 Insurance revenue 984.1 895.9 Insurance service expenses (932.2) (835.7) Net (expenses) income from reinsurance contracts held (1.5) 30.9 Insurance service result 50.4 91.1 Net investment income 46.3 36.0 133.1
Slide 29: Selected Financial Ratios
29 SELECTED FINANCIAL RATIOS IFRS 17 / IFRS 9 IFRS 4 / IAS 39 Q3-2023 Q3-2022 2022 2021 2020 2019 Gross written premiums YOY growth (1) 9.0% 11.5% 12.4% 15.2% 11.7% 1.5% Claims ratio (1) 72.9% 64.7% 61.2% 60.8% 62.3% 73.1% Expense ratio (1) 29.6% 32.0% 32.9% 32.3% 32.3% 31.9% Combined ratio (1) 102.
Slide 30: Balance Sheet
30 BALANCE SHEET IFRS 17 / IFRS 9 IFRS 4 / IAS 39 Q3-2023 2022 2022 2021 2020 2019 Total cash and investments 5,009.4 5,097.7 5,098.4 5,753.1 4,876.6 4,285.7 Restricted cash 257.3 302.1 302.1 110.8 - - Premiums receivable 1,188.8 1,075.9 958.7 850.7 Income taxes receivable 22.0 81.7 81.7 0.2 2.1 3.0
Slide 31: Supplementary Financial Measures and Non-GAAP Financial Measures and Ratios
31 SUPPLEMENTARY FINANCIAL MEASURES AND NON-GAAP FINANCIAL MEASURES AND RATIOS The Company’s unaudited condensed interim consolidated financial statements and accompanying notes for the quarter ended September 30, 2023 have been prepared in accordance with International Financial Reporting Standards
Slide 32: Contact Us
32 CONTACT US Investor Relations Corporate Communications Definity Financial Corporation Sarah Attwells Investor Relations Department AVP, Corporate Affairs 121 King St West, Suite 1400, (C) 226-753-1130 Toronto, ON M5H 3T9 sarah.attwells@definity.com (TF) 1-866-902-4724 IR@definity.com General Inqu
Slide 33: Definity
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