Intact Financial Corporation · TSX:IFC
Intact Financial — Q4 2010 Earnings Presentation
18 slides from Intact Financial's earnings presentation, February 2011
Slide 1: Q4-2010 Review of performance
Q4-2010 Review of performance
Slide 2: Q4-2010 Review of performance conference call
Q4-2010 Review of performance conference call Charles Brindamour Chief Executive Officer Mark Tullis Chief Financial Officer Martin Beaulieu SVP, Personal lines Byron Hindle SVP, Commercial lines 2
Slide 3: Charles Brindamour, Chief Executive Officer
Charles Brindamour Chief Executive Officer
Slide 4: Q4-2010 Key points
Q4-2010 Key points Fourth quarter highlights • Net operating income per share of $0.70 in Q4 • Quarterly dividend increased for the sixth consecutive year; up 8.8% to $0.37 per share • Continued healthy premium growth of 4.8%, with contributions from all lines of business • Operating ROE of 13.2% in
Slide 5: 12-month industry outlook
12-month industry 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 similar pace as in 2010, with Premium growth mid-single digit growth in personal auto (driven by Ontario); uppe
Slide 6: 2010 successful; we remain confident of our prospects
2010 successful; we remain confident of our prospects • Our strategies and action plans continued to pay off in 2010: − Top-line premium growth of 5.2% − Combined ratio improved 3.3 points to 95.4% − Net operating income per share up 47.7% − Excess capital of over $800 million ~ $500 million returne
Slide 7: Mark Tullis, Chief Financial Officer
Mark Tullis Chief Financial Officer
Slide 8: Financial highlights
Financial highlights (in $ millions, except as otherwise noted) Q4-2010 Q4-2009 Change 2010 2009 Change Direct premiums written $1,062.2 $1,011.4 4.8% $4,498.1 $4,274.9 5.2% Net underwriting income $21.8 $56.0 (61.1)% $193.8 $54.0 258.9% Combined ratio 98.0% 94.6% 3.4 pts 95.4% 98.7% (3.3) pts Net o
Slide 9: Weather impacts personal lines
Weather impacts personal lines (in $ millions, except as otherwise noted) Combined ratios Personal auto Q4-2010 Q4-2009 Change 103.0% 98.0% 98.1% 94.9% Direct premiums written $493.7 $474.6 4.0% 24.6% 24.4% 25.1% 23.6% Underwriting income $(16.5) $10.4 n/a 78.4% 73.6% 73.0% 71.3% (loss) Combined rat
Slide 10: Solid results in commercial lines
Solid results in commercial lines (in $ millions, except as otherwise noted) Q4-2010 Q4-2009 Change Combined ratios Commercial auto 93.9% 86.0% 79.8% Direct premiums written 70.4% $85.1 $80.4 5.8% 29.4% 29.9% 28.3% 29.2% Net underwriting income $5.1 $23.8 (78.6)% 64.5% 56.1% 51.5% 41.2% Combined rat
Slide 11: High quality investment portfolio
High quality investment portfolio Healthy investment portfolio $8.7 billion in cash and invested assets • 98.6% of bonds are rated A or better Cash and short • 80.0% of preferred shares are rated P1 or P2 Loans term notes 6.3% 4.0% • Minimal U.S. exposure • No leveraged investments Common shares 12.
Slide 12: Strong capital position enables us to return capital
Strong capital position enables us to return capital Strong balance sheet NCIB update as of February 8, 2011 • Financial position remains very strong with • Number of shares purchased: 8 million $808.5 million in excess capital, based on • Average price per share: $44.25 MCT of 170% • Total cost to
Slide 13: Strategic, operational and financial strength
Strategic, operational and financial strength • Largest P&C insurance company with substantial scale advantage in the market • Strong financial position • Excellent long-term earnings power • Organic growth platforms easily expandable • M&A environment more conducive to consolidation Disciplined pri
Slide 14: Forward-looking statement disclaimer
Forward-looking statement disclaimer Certain of the statements in this document 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 statements.
Slide 15: Appendices
Appendices | intact] —
Slide 16: Key drivers of change in operating income in Q4-2010
Key drivers of change in operating income in Q4-2010 (in $ millions, except as otherwise noted) Pre-tax operating income, 2009 $125.8 Higher / Changes in pre-tax operating income: (lower) Key points • Favourable prior year development, at 5.3% of Favourable prior year claims development (12.9) openi
Slide 17: Composition of invested assets at December 31, 2010
Composition of invested assets at December 31, 2010 Market Unrealized % of market % of market values G/L values values net of Asset class in $ millions Q4-2010 hedges Q4-2010 Cash and cash equivalents $500.6 $0 5.8% 6.3% Fixed income securities $4,458.0 $36.9 51.5% 61.1% Preferred shares $1,503.6 $(
Slide 18: Q1-2011 Earnings conference call
Q1-2011 Earnings conference call Wednesday May 4, 2011