Definity Financial Corp. · TSX:DFY
Definity Financial — Q1 2022 Earnings Presentation
20 slides from Definity Financial's earnings presentation, May 13, 2022
Slide 1: Q1-2022 Quarterly Report
Q1-2022 QUARTERLY REPORT May 13, 2022
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: Supplementary Financial Measures and Non-GAAP Financial Measures and Ratios
3 SUPPLEMENTARY FINANCIAL MEASURES AND NON-GAAP FINANCIAL MEASURES AND RATIOS We prepare our financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (the “IASB”) (referred to herein as “GAAP” or “IFRS”). We measure
Slide 4: Rowan Saunders
ROWAN SAUNDERS President & Chief Executive Officer
Slide 5: Q1-2022 Financial Highlights
5 Q1-2022 FINANCIAL HIGHLIGHTS Operating EPS(1) Gross Written Premiums Combined Ratio(1) $0.55 $742M (12.7% YoY) 92.2% Book Value per Share(1) Financial Capacity(1,2) Operating ROE (TTM)(1) $20.41 (13% YoY) ~$1 Billion 11.2% 1 This is a supplementary financial measure, non-GAAP financial measure, or
Slide 6: Company Update
6 COMPANY UPDATE Strong foundation for long-term success “We are not Investments in people and technology helping to generate profitable growth satisfied to rely solely on past Rapidly scaling Sonnet digital direct business investments, but Business is now over $300 million in annual premiums rather
Slide 7: 12-Month Industry Outlook
7 12-MONTH INDUSTRY OUTLOOK Personal Personal Commercial Auto Property Insurance • We expect the frequencies of claims to • The volatility of weather events • We expect the commercial lines steadily increase over the next 12 combined with inflationary pressures market to remain firm for the next 12
Slide 8: Key Financial Metrics
8 KEY FINANCIAL METRICS Gross Written Premium Growth Combined Ratio(1) Operating ROE(1) Q1-2022 Q1-2022 TTM 12.7% 92.2% 11.2% TARGET(2) TARGET(2) TARGET(2) Grow GWP annually at an Maintain an annual Generate an annual average rate of combined ratio in the mid-90s Operating ROE in the upper single ap
Slide 9: Philip Mather
PHILIP MATHER Executive Vice-President & Chief Financial Officer
Slide 10: Q1-2022 Personal Auto
10 Q1-2022 PERSONAL AUTO ($ in millions, except as otherwise noted) Q1-22 Q1-21 Δ Gross Written Premiums (TTM) ($ in millions) GWP $322.2 $302.7 6.4% $1,446 $1,427 $1,398 $1,410 NEP $349.1 $319.4 9.3% $1,335 $1,348 $1,306 $1,319 $1,292 Underwriting Income $13.2 $31.2 ($18.0) Core AY Claims Ratio(1)
Slide 11: Q1-2022 Personal Property
11 Q1-2022 PERSONAL PROPERTY ($ in millions, except as otherwise noted) Q1-22 Q1-21 Δ Gross Written Premiums (TTM) ($ in millions) GWP $200.4 $171.2 17.1% $895 $924 $859 $819 $779 NEP $216.5 $176.0 23.0% $751 $719 $685 $655 Underwriting Income $17.5 $14.9 $2.6 Core AY Claims Ratio(1) 52.3% 53.9% (1.
Slide 12: Q1-2022 Commercial Insurance
12 Q1-2022 COMMERCIAL INSURANCE ($ in millions, except as otherwise noted) Q1-22 Q1-21 Δ Gross Written Premiums (TTM) ($ in millions) $945 GWP $219.9 $184.8 19.0% $910 $872 $827 $770 NEP $202.8 $170.9 18.7% $729 $688 $656 $630 Underwriting Income $29.5 $11.9 $17.6 Core AY Claims Ratio(1) 54.1% 57.0%
Slide 13: Q1-2022 Consolidated Profitability
13 Q1-2022 CONSOLIDATED PROFITABILITY ($ in millions, except as otherwise noted) Q1-22 Q1-21 Δ Operating Income (Loss)(1) ($ in millions) GWP $742.5 $658.7 12.7% $97.9 $1.5 $84.9 $65.9 $80.3 $68.5 $79.6 $62.9 $23.7 $62.4 $0.9 $1.8 $3.1 $22.9 $25.8 Claims Ratio(1,2) 59.3% 58.5% 0.8 pts $15.5 $24.2 $2
Slide 14: Q1-2022 Investment Portfolio
14 Q1-2022 INVESTMENT PORTFOLIO Net Investment Income (TTM) Dividend & Interest Income ($ in millions) ($ in millions) $106 $27.5 $27.0 $27.4 $26.2 $25.7 $25.1 $25.2 $25.7 $103 $102 $24.3 $100 $100 $7.2 $7.7 $97 $96 $95 $97 $7.2 $7.3 $7.7 $8.5 $7.4 $6.9 $7.6 $20.3 $19.0 $18.4 $18.5 $19.7 $17.7 $17.4
Slide 15: Q1-2022 Capital Management
15 Q1-2022 CAPITAL MANAGEMENT ($ in millions, except as otherwise noted) ICA(2) CBCA(3) Consolidated Book Value q/q Δ($M) Excess Capital at 200%: $64.6 - Definity Insurance Company $95.8 $95.8 ($87.5) - Definity Financial Corporation $636.5 $636.5 ($20.3) $6.6 Total Excess Capital $732.3 $732.3 $2,3
Slide 16: Q1-2022 Capital Management
16 Q1-2022 CAPITAL MANAGEMENT Capital Management Actions Minimum Capital Test Trend(1) • Transfer of $400M of capital from Definity Insurance to 275% 275% 268% 272% 272% Definity Financial 253% • Non-renewal of our personal insurance quota share 242% arrangement 223% • Strategic partnership with APO
Slide 17: Our Strategy
17 OUR STRATEGY STRATEGIC OBJECTIVES Consistently OUR PURPOSE Become one of the Maintain our digital Sustain our demonstrate five largest P&C underwriting Building a better world by leadership disciplined financial Insurers in Canada profitability helping our clients and management communities adapt
Slide 18: Questions?
"9B, QUESTIONS? definity.
Slide 19: Contact Us
19 CONTACT US Investor Relations Corporate Communications Definity Financial Corporation Sarah Attwells Investor Relations Department Director, Corporate Affairs 121 King St West, Suite 1400, (C) 416-986-9360 Toronto, ON M5H 3T9 sarah.attwells@definityfc.com (TF) 1-866-902-4724 IR@definityfc.com Gen
Slide 20: definity.
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