Intact Financial Corporation · TSX:IFC
Intact Financial — ING Canada — Q4 2006 Earnings Presentation
18 slides from Intact Financial's earnings presentation, Feb 15, 2007
Slide 1: 2006 Fourth Quarter and Full Year Financial and Operating Results
ingcanada.com ingcanada.com 2006 Fourth Quarter and Full Year Financial and Operating Results February 15, 2007 P. 1
Slide 2: Forward-Looking Statement Disclaimer
ingcanada.com 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 l
Slide 3: Presenters
ingcanada.com Claude Dussault, President & Chief Executive Officer Mark Tullis, Chief Financial Officer Charles Brindamour, Chief Operating Officer P. 3
Slide 4: 2006 Highlights
ingcanada.com 2006 Highlights Continued strong financial results vs record results of 2005 Net income of $658.1 million (vs $781.8 million in 2005) Earnings per share of $4.92 (vs $5.85 in 2005) Return on equity of 20.8% Combined ratio of 89.4% Debt to total capital ratio of 0% Book valu
Slide 5: Earnings Reconciliation – Pre-tax
ingcanada.com Earnings Reconciliation – Pre-tax ($ millions) 2005 Pre-tax income $ 1,090.9 Prior year claims development (107.7) Current accident year: Catastrophes 20.5 Facility Association (4.5) Other (42.2) Underwriting income (133.9) Realized investment and other gains (30.0) Other 25.0 2006 Pre
Slide 6: Direct Premiums Written
ingcanada.com Direct Premiums Written ($ millions) $3,905 $3,990 $4,000 $3,576 $3,444 $3,000 $2,000 $905 $964 $1,000 +6.5% $0 2003 2004 Q4/05 2005 Q4/06 2006 Growth in written premiums evident despite rate reductions during the year given ongoing increases in the number of written insured risks (+3.
Slide 7: Net Premiums Earned
ingcanada.com Net Premiums Earned ($ millions) $4,000 $3,840 $3,827 $3,365 $3,000 $2,761 $2,000 $961 $980 $1,000 +1.9% $0 2003 2004 Q4/05 2005 Q4/06 2006 Earned premiums flat for the full year but growing toward year end as written insured risks grow, prior rate reductions run their course and rate
Slide 8: Combined Ratio
ingcanada.com Combined Ratio 120% Claims ratio Expense ratio 98.1% 100% 93.6% 86.0% 86.9% 86.0% 89.4% 80% 30.0% 29.4% 29.4% 30.8% 29.7% 30.3% 60% 40% 68.1% 64.2% 56.6% 56.1% 56.3% 59.1% 20% 0% 2003 2004 Q4/05 2005 Q4/06 2006 Continued healthy combined ratio despite less favourable prior year claims
Slide 9: Investment Yields
ingcanada.com 1) Investment Yields 5.9% 6% 2) 5.3% 5.0% 4.9% 4.8% 4.5% 4% 2% 0% 3) 2003 2004 Q4/05 2005 Q4/06 2006 Yields reflect continued low interest rates 1) Pre-tax, at book value, for P&C insurance subsidiaries excluding realized gains and losses 2) Calculation based on adjusted book value ref
Slide 10: Realized Investment and Other Gains
ingcanada.com 1) Realized Investment and Other Gains ($ millions) $250 $223.5 $193.5 $200 $150 $132.4 $100 $67.2 $50 $32.1 $15.3 $0 2003 2004 Q4/05 2005 Q4/06 2006 Gains driven primarily by equities 1) Pre-tax P. 10
Slide 11: Net Income
ingcanada.com Net Income ($ millions) $781.8 $800 $658.1 $624.2 $600 -15.8% $400 $196.9 $200 $150.5 $109.4 -44.4% $0 2003 2004 Q4/05 2005 Q4/06 2006 While YoY comparisons are difficult given outstanding results in 2005, current year earnings remain solid driven by continued favourable claims experie
Slide 12: Return On Equity
ingcanada.com Return On Equity ROE Book Value Per Share 45% $30 $25.58 $25 $21.63 30% $20 $15.40 $15 40.9% $7.40 15% 31.6% $10 20.8% 16.5% $5 0% $0 2003 2004 2005 2006 Strong returns generated on a rapidly increasing equity base P. 12
Slide 13: Debt to Total Capital Ratio
ingcanada.com Debt to Total Capital Ratio 40% 32.8% 30% 20% 11.1% 10% 4.2% 0.0% 0% 2003 2004 2005 2006 Debt fully repaid in 2006 P. 13
Slide 14: Questions and Answers
ingcanada.com Questions and Answers P. 14
Slide 15: Questions and Answers
ingcanada.com Questions and Answers Question 1: It seemed as if the weather last quarter was reasonably subdued notwithstanding the storms in B.C., one of your smaller markets. Given that, the catastrophe charge this quarter seems high. Did I miss something? Answer: Although the Canadian weather see
Slide 16: Questions and Answers
ingcanada.com Questions and Answers Question 2: The effective tax rate increased quite a bit in the quarter. Can you explain? Answer: Please refer to table 6.1 of the consolidated interim financial statements (unaudited) and the following additional remarks. 1. Non taxable dividend income: The trans
Slide 17: Questions and Answers
ingcanada.com Questions and Answers Question 3: Why did you end up with net transfers of $10.2 million less earned premiums YoY from pools in Q4/06? Is this a market share issue? Are the pools depopulating? Answer: It is not related to market share. $6.8 MM relates to lower earned premiums from FA d
Slide 18: Q1 07 Earnings Conference Call
ingcanada.com ingcanada.com Coming Wednesday, May 16, 2007 at 10:00 a.m. Q1 07 Earnings Conference Call P. 18