Intact Financial Corporation · TSX:IFC
Intact Financial — Q4 2013 Earnings Presentation
20 slides from Intact Financial's earnings presentation, Feb 5, 2014
Slide 1: Continuing our journey to build a world-class P&C insurer
Intact Financial Corporation (TSX: IFC) Continuing our journey to build a world-class P&C insurer Review of performance Q4-2013 Wednesday, February 5th, 2014
Slide 2: Charles Brindamour, Chief Executive Officer
Charles Brindamour Chief Executive Officer
Slide 3: Q4-2013 key points
Q4-2013 key points Highlights • Operating ROE of 11.2% in 2013 despite incurring $530 million in pre-tax catastrophe losses • Net operating income per share of $1.05 in Q4-2013 with a combined ratio of 96.3% • Quarterly dividend raised 9% to $0.48 per share • AXA and Jevco integration activities are
Slide 4: Plan for delivering 10 point improvement in personal property
Plan for delivering 10 point improvement in personal property Combined Ratio Composition Benefits generated next 18-24 months 113.6% 109.0% 96.5% 103.5% 93.5% 104.4% Ongoing: 8.7% • Renewals at the higher rates 8.6% 13.3% 17.9% 5.9% 10.3% • Increasing education and awareness • Reducing earthquake ex
Slide 5: 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 2 years – Average 4% industry reduction approved in Q4-2013, effective on new business and renewals through the first half of 2014 (approximately half of the marke
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 solid financial position enables us to take advantage of growth opportunities • We continue our shareholder-friendly approach to capital management
Slide 8: Mark Tullis
Mark Tullis Executive Vice President, Governance and Capital Management
Slide 9: Q4-2013 Financial highlights
Q4-2013 Financial highlights (in $ millions, except as otherwise noted) Q4-2013 Q4-2012 Change FY2013 FY2012 Change Direct premiums written 1,702 1,690 1% 7,319 6,868 7% Net underwriting income 67 138 (51)% 142 451 (69)% Combined ratio 96.3% 92.1% 4.2 pts 98.0% 93.1% 4.9 pts Net operating income per
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 • Q4-2013 DPW negatively impacted by one point;
Slide 11: Personal lines
Personal lines (in $ millions, except as otherwise noted) Q4-2013 Q4-2012 Change Combined Ratio Breakdown Personal Auto Direct premiums written 734 722 2% 23.1% 25.7% Expense Underwriting income (loss) 14 (25) nm Ratio 75.3% 77.4% Claims Combined ratio 98.4% 103.1% (4.7) pts Ratio Q4-2013 Q4-2012 •
Slide 12: Commercial lines
Commercial lines (in $ millions, except as otherwise noted) Q4-2013 Q4-2012 Change Combined Ratio Breakdown Commercial Auto Direct premiums written 25.3% 150 146 3% Expense 29.5% Underwriting income (loss) (1) 23 nm Ratio 75.1% 54.7% Claims Combined ratio 100.4% 84.2% 16.2 pts Ratio Q4-2013 Q4-2012
Slide 13: High quality investment portfolio
High quality investment portfolio Net investment gains (losses) $12.3 billion – conservatively managed (in $ millions, except as otherwise noted) Note: Investment mix is net of hedging positions and financial liabilities related to investments. Q4-2013 Q4-2012 Change Cash and short- Fixed-income str
Slide 14: Financial position remains solid
Financial position remains solid • Our financial position remains solid with an estimated MCT of 203% and $550 million in excess capital • Book value per share of $33.94 • Operating ROE of 11.2% for the last 12 months, despite incurring $530 million in pre-tax catastrophe losses • Debt-to-capital ra
Slide 15: Integration activities are now complete
Integration activities are now complete AXA Canada Jevco • Policy conversions are complete • The process of converting policies onto IFC systems has been largely • We continue to make progress with the completed and targeted broker service decommissioning of AXA systems and customer retention levels
Slide 16: Strategic, operational and financial strength
Strategic, operational and financial strength • Largest P&C insurance provider in Canada • Solid 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 from
Slide 17: Q1-2014 earnings call & Annual Meeting of Shareholders
Q1-2014 earnings call & Annual Meeting of Shareholders Wednesday, May 7th, 2014
Slide 18: 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 19: 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 20: 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