Slide 1: Review of Performance Q2-2014
REVIEW OF PERFORMANCE Q2-2014 Intact Financial Corporation (TSX:IFC) Wednesday, July 30th, 2014 Intact Financial Corporation
Slide 2: Charles Brindamour, Chief Executive Officer
Charles Brindamour Chief Executive Officer Intact Financial Corporation
Slide 3: Q2 Key points & highlights
Q2 Key points & highlights • Net operating income per share of $1.53 with a combined ratio of 92.9% • Underlying direct premiums written growth of 1.7% despite corrective actions in property lines and rate reductions in Ontario auto • Home improvement plan successfully rolling out; retention reflect
Slide 4: Home Improvement Plan
Home Improvement Plan Targeting a combined ratio sustainably below 95% • YTD-2014 reported combined ratio of 92.6% Our Home Improvement Plan is helping to despite almost 9 points of catastrophe losses improve our results, with ultimate benefits • Retention better than expected to be generated over t
Slide 5: Ontario auto update
Ontario auto update Context Update • There is an Ontario government mandate • We believe that the recent election putting to reduce insurance rates by an average the Liberal government in a majority of 15% by August 2015 position facilitates their ability to implement – Rate reductions are to be aid
Slide 6: P&C industry 12-month outlook
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 upper Premium
Slide 7: Four avenues of growth
Four avenues of growth Personal lines • Build on outperformance in auto to • Continue to expand support to our accelerate growth broker partners • Industry premiums likely to be bolstered by hard market conditions in personal • Optimize brand architecture property Commercial lines Firming Develop •
Slide 8: 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 management Inta
Slide 9: Louis Marcotte, Senior Vice President and Chief Financial Officer
Louis Marcotte Senior Vice President and Chief Financial Officer Intact Financial Corporation
Slide 10: Q2-2014 Financial highlights
Q2-2014 Financial highlights (in $ millions, except as otherwise noted) Q2-2014 Q2-2013 Change H1-2014 H1-2013 Change Direct premiums written 2,173 2,182 - 3,676 3,706 (1)% Net underwriting income 128 42 205% 179 125 43% Combined ratio 92.9% 97.5% (4.6) pts 95.0% 96.3% (1.3) pts Net operating income
Slide 11: Impact of 2-year policy conversion on DPW
Impact of 2-year policy conversion • 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 • Q2-2014 DPW negatively impacted by two points; no effec
Slide 12: Personal lines
Personal lines (in $ millions, except as otherwise noted) Q2-2014 Q2-2013 Change Combined Ratio Breakdown Personal Auto Direct premiums written 1,031 1,037 (1)% 25.7% 25.8% Expense Underwriting income 72 106 (32)% Ratio 65.8% 61.4% Claims Combined ratio 91.5% 87.2% 4.3 pts Ratio Q2-2014 Q2-2013 • DP
Slide 13: Commercial lines
Commercial lines (in $ millions, except as otherwise noted) Q2-2014 Q2-2013 Change Combined Ratio Breakdown Commercial Auto Direct premiums written 192 186 3% 29.4% 30.0% Expense Underwriting income 32 16 100% Ratio 49.5% 60.2% Claims Combined ratio 79.5% 89.6% (10.1) pts Ratio Q2-2014 Q2-2013 • DPW
Slide 14: High quality investment portfolio
High quality investment portfolio $12.9 billion of high quality investments – strategically managed Net investment gains (losses) Investment mix (in $ millions, except as otherwise noted) (net of hedging positions and financial liabilities Q2-2014 Q2-2013 Change related to investments) Fixed-income
Slide 15: Strong financial position
Strong financial position • Our financial position was strong with an estimated MCT of 208% and $657 million in excess capital • Book value per share increased by 9.5% over the past 12 months to $36.29 • Operating ROE of 11.6%, despite incurring $446 million in pre-tax net catastrophe losses • Debt-
Slide 16: Q3-2014 earnings call Wednesday, November 5th, 2014
Q3-2014 earnings call Wednesday, November 5th, 2014 Intact Financial Corporation
Slide 17: Contact Investor Relations
Contact Investor Relations General Contact Info Dennis Westfall, CFA, MBA Vice President, Investor Relations Website: http://www.intactfc.com Phone: 416.344.8004 Click on “Investor Relations” tab Mobile: 416.797.7828 Email: dennis.westfall@intact.net Email: ir@intact.net Maida Sit, CFA Phone: Direct
Slide 18: Forward-looking statements
Forward-looking statements 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-looking statemen
Slide 19: 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 inducement to enter into, any contract or commitm