Intact Financial Corporation · TSX:IFC
Intact Financial — Merger or Acquisition (May 2011)
15 slides from Intact Financial's merger presentation, May 31, 2011
Slide 1: IFC's Acquisition of AXA Canada: Building a World-Class Canadian P&C Insurer
Intact Financial Corporation (TSX: IFC) IFC’s Acquisition of AXA Canada: Building a World-Class Canadian P&C Insurer May 31, 2011
Slide 2: Forward Looking Statements and Disclaimer
Forward Looking Statements and Disclaimer Certain of the statements included in this press release about IFC’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
Slide 3: 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
Slide 4: IFC's Acquisition of AXA Canada: Building a World-Class Canadian P&C Insurer
IFC’s Acquisition of AXA Canada: Building a World-Class Canadian P&C Insurer Strong Strategic Fit Financially Compelling • Strengthens IFC’s premiums by over 40% • Management estimates IRR1 of 20% • Bolsters our risk selection and claims • Acquisition is accretive to NOIPS2,3 in 2012; annual managem
Slide 5: Leading Position…
Leading Position… Top 10 Canadian P&C Insurance Companies by 2010 Direct Premiums Written ($ billions) 6.5 3.3 2.4 2.4 2.3 2.0 2.0 1.9 1.7 1.6 PF Intact + Aviva TD RSA Co-operators AXA Wawanesa State Farm Economical Desjardins AXA Assurance Rank 1 2 3 4 5 6 7 8 9 10 Share 16.5% 8.4% 6.1% 6.0% 5.9% 5
Slide 6: …Leading Performance
…Leading Performance Return on equity (2010) Combined ratio (2010) Intact pro forma 14.9% Intact pro forma 94.8% Top 20 adjusted* 3.2% Top 20 adjusted* 105.0% Outperformance 11.7% Outperformance 10.2% *Excludes AXA *Excludes AXA Expands our outperformance versus the Top 20 P&C insurance industry ben
Slide 7: A Financially Compelling Transaction
A Financially Compelling Transaction Purchase Price $2.6 billion cash consideration plus potential contingent consideration1 Components P&C insurance | P&C Distribution | Life & Health insurance Purchase Metrics P/BV2 = 1.8x | P/E3 = 11.6x Transaction Economics Estimated IRR of 20%4 | Accretive to N
Slide 8: AXA Canada: Expanding our Expertise
AXA Canada: Expanding our Expertise − Offers a range of P&C and Life & Health insurance products through its relationships with 1,300 insurance brokers and 2,700 independent insurance advisors − The sixth largest P&C insurer in Canada with a 5.1% share in 2010 − Strong presence in Quebec, Ontario an
Slide 9: AXA Canada: Best-in-Class Performer
AXA Canada: Best-in-Class Performer AXA Canada P&C Insurance Financial Highlights1 Direct Premiums Written Net Income and ROE Combined Ratio (C$ billions) 20% 18% (C$ millions) $350 17% 17% 18% Expense Ratio $300 DPW $2.016% $1.9 Claims Ratio $1.7 14% $250 $1.5 $1.6 11% 12% $200 10% 93.8% 97.7% 90.2
Slide 10: IFC + AXA: A Winning Combination
IFC + AXA: A Winning Combination − Greater earnings stability as a result of increased diversification: ~ Higher exposure to commercial lines accomplishes an important strategic objective ~ Less reliance on personal automobile insurance ~ Improves geographic footprint in underrepresented areas (Queb
Slide 11: A Synergistic and Accretive Acquisition
A Synergistic and Accretive Acquisition − The combined company is expected to generate operational synergies in excess of $100 million annually (after-tax) − Synergies primarily related to operating and investment expenses: ~ Systems-related ~ External loss adjustment expenses ~ Operational efficien
Slide 12: Achieving Our Optimal Capital Structure
Achieving Our Optimal Capital Structure Sources of Funding: ¾ Excess capital $500 million Capital above 200% MCT ¾ Net equity proceeds $800 million In the form of subscription receipts ¾ Acquisition financing $1,300 million Senior unsecured committed facility $2,600 million Replaceable by: ¾ Term lo
Slide 13: Building a World-Class Canadian P&C Insurer
Building a World-Class Canadian P&C Insurer Strong strategic fit: combining sophisticated underwriting and claims management, while enhancing our multi-channel distribution • Increased scale advantage bolsters our risk selection and claims management capabilities • Enhanced commercial lines mid-mark
Slide 14: Questions and Answers
Questions and Answers [intact] = 13
Slide 15: Investor Relations Contact Information
Investor Relations Contact Information Dennis Westfall Director, Investor Relations Phone: 416.341.1464 ext 45122 Cell: 416.797.7828 Email: Dennis.Westfall@intact.net Email: ir@intact.net Phone: 416. 941.5336 or 1.866.778.0774 (toll-free within North America) Fax: 416.941.0006 www.intactfc.com/Inves