Slide 1: Review of performance Q1-2014
Intact Financial Corporation (TSX: IFC) Review of performance Q1-2014 Wednesday, May 7th, 2014
Slide 2: Charles Brindamour, Chief Executive Officer
Charles Brindamour Chief Executive Officer
Slide 3: Q1-2014 key points
Q1-2014 key points Highlights • Net operating income per share of $0.94, down 8% excluding a non- recurring favourable tax item in Q1-2013 • Combined ratio of 97.1% as the harsh winter resulted in 4.3 points of catastrophe losses and higher claims frequency • Book value per share increased 3% during
Slide 4: Ontario auto environment
Ontario auto environment Ontario government’s strategy to reduce both rates and costs • Reduce insurance rates by an average of 15% over a two-year period – This process to date has resulted in an average 5.7% industry reduction approved as of Q1-2014 – IFC will be reducing rates by 5.3% on average,
Slide 5: Progressing on our plan to deliver a 10 point improvement in personal property
Progressing on our plan to deliver a 10 point improvement in personal property Combined Ratio Composition Benefits generated next 15-21 months Ongoing: 109.0% 96.5% 103.5% 93.5% 104.4% 91.8% • Renewing at higher rates • Increasing education and awareness, 8.6% 5.9% 13.8% 17.9% leveraging our “insura
Slide 6: Canadian P&C industry 12-month outlook
Canadian 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 and commercial lines and uppe
Slide 7: 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 managemen
Slide 8: Louis Marcotte, Senior Vice President and Chief Financial Officer
Louis Marcotte Senior Vice President and Chief Financial Officer
Slide 9: Q1-2014 Financial highlights
Q1-2014 Financial highlights (in $ millions, except as otherwise noted) Q1-2014 Q1-2013 Change Direct premiums written (reported) 1,503 1,524 (1)% Direct premiums written (underlying)1 1,532 1,524 1% Net underwriting income 51 83 (39)% Combined ratio 97.1% 95.1% 2.0 pts Net operating income per shar
Slide 10: Impact of two-year policy conversion on DPW
Impact of two-year policy conversion on DPW • 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 • Q1-2014 DPW negatively impacted by two points;
Slide 11: Personal lines
Personal lines (in $ millions, except as otherwise noted) Q1-2014 Q1-2013 Change Combined Ratio Breakdown Personal Auto Direct premiums written 697 691 1% 24.2% 26.4% Expense Underwriting income 25 48 (48)% Ratio 72.8% 67.7% Claims Combined ratio 97.0% 94.1% 2.9 pts Ratio Q1-2014 Q1-2013 • DPW was u
Slide 12: Commercial lines
Commercial lines (in $ millions, except as otherwise noted) Q1-2014 Q1-2013 Change Combined Ratio Breakdown Commercial Auto Direct premiums written 129 132 (2)% 28.3% 30.5% Expense Underwriting income 15 4 275% Ratio 61.0% 66.8% Claims Combined ratio 89.3% 97.3% (8.0) pts Ratio Q1-2014 Q1-2013 • DPW
Slide 13: High quality investment portfolio
High quality investment portfolio Net investment gains (losses) $12.4 billion – conservatively managed (in $ millions, except as otherwise noted) Note: Investment mix is net of hedging positions and financial liabilities related to investments. Q1-2014 Q1-2013 Change Fixed-income strategies Cash and
Slide 14: Strong financial position
Strong financial position • Our financial position was strong with an estimated MCT of 213% and $670 million in excess capital • Book value per share of $34.80 • Operating ROE of 9.9%, despite incurring $586 million in pre-tax net catastrophe losses • Debt-to-capital ratio of 18.4%, below our target
Slide 15: Strategic, operational and financial strength
Strategic, operational and financial strength • Largest P&C insurance provider in Canada • Strong financial position • Excellent long-term earnings power • Organic growth platforms easily expandable Our solid financial position and disciplined approach to the business provide a strong foundation fro
Slide 16: Q2-2014 earnings call Wednesday, July 30th, 2014
Q2-2014 earnings call Wednesday, July 30th, 2014
Slide 17: Investor Relations contact information
Investor Relations contact information Dennis Westfall, CFA Maida Sit, CFA Vice President, Investor Relations Manager, Investor Relations Phone: 416.344.8004 Phone: 416.341.1464 ext 45153 Cell: 416.797.7828 Email: Maida.Sit@intact.net Email: Dennis.Westfall@intact.net General Contact Info Email: ir@
Slide 18: Forward-looking statements and disclaimer
Forward-looking statements and disclaimer 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-l
Slide 19: Forward-looking statements and disclaimer
Forward-looking statements and 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 inducem