Intact Financial Corporation · TSX:IFC
Intact Financial — Q3 2010 Earnings Presentation
18 slides from Intact Financial's earnings presentation, November 2010
Slide 1: Q3-2010 Review of performance
Q3-2010 Review of performance
Slide 2: Q3-2010 Review of performance conference call
Q3-2010 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: Q3-2010 Key points
Q3-2010 Key points Third quarter highlights • Net operating income per share of $0.78 based on good underwriting performance • Healthy combined ratio of 96.6% despite significant storm losses • Book value per share growth of 10.7% during the past 12 months • Continued solid growth of 5.4% in direct
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 • Frequency of water damage and storms remains Home insurance an issue for property lines • We see no abatement of price strengthening for the coming 18-24 mon
Slide 6: Q3 solid; we remain confident of our prospects
Q3 solid; we remain confident of our prospects • Our industry outlook remains largely unchanged heading into the final quarter of 2010 • We had a solid quarter, as our strategies and action plans continue to pay off, both from the perspective of growth and the bottom-line • Looking ahead, we believe
Slide 7: Mark Tullis, Chief Financial Officer
Mark Tullis Chief Financial Officer
Slide 8: Q3-2010 Financial highlights
Q3-2010 Financial highlights (in $ millions, except as otherwise noted) Q3-2010 Q3-2009 Change YTD-2010 YTD-2009 Change Direct premiums written $1,205.8 $1,144.1 5.4% $3,437.9 $3,263.6 5.3% Net underwriting income $36.7 ($53.2) n/a $171.9 ($2.1) n/a Combined ratio 96.6% 105.2% (8.6) pts 94.5% 100.1%
Slide 9: Growth continues in personal lines
Growth continues in personal lines (in $ millions, except as otherwise noted) Combined ratios Personal auto Q3-2010 Q3-2009 Change 96.3% 95.9% 96.3% 93.8% Direct premiums written $625.5 $589.8 6.1% 23.2% 21.3% 25.2% 23.3% 73.1% 74.6% Underwriting income $19.8 $21.4 (7.5)% 71.1% 70.5% Combined ratio
Slide 10: Strong underwriting in commercial lines
Strong underwriting in commercial lines (in $ millions, except as otherwise noted) Q3-2010 Q3-2009 Change Combined ratios Commercial auto 80.5% 87.1% 83.2% 83.1% Direct premiums written $79.0 $73.6 7.3% 28.4% 30.1% 28.1% 28.7% z Net underwriting income $16.2 $10.2 58.8% 51.8% 58.7% 53.1% 55.0% Combi
Slide 11: High quality investment portfolio
High quality investment portfolio Healthy investment portfolio $8.6 billion in cash and invested assets • 98.5% of bonds are rated A or better Loans • 79.0% of preferred shares are rated P1 or P2 Cash and short 4.0% term notes 5.1% • Minimal U.S. exposure Common shares 12.2% • No leveraged investmen
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 November 2, 2010 • Financial position remains very strong with • Number of shares purchased: 7.0 million $800.0 million in excess capital, based on MCT of 170% • Average price per share: $43.65 • Our ratio of
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: Q4-2010 Earnings conference call
Q4-2010 Earnings conference call Wednesday February 9, 2011
Slide 16: Appendices
Appendices | intact] —
Slide 17: Key drivers of change in operating income in Q3-2010
Key drivers of change in operating income in Q3-2010 (in $ millions, except as otherwise noted) Pre-tax operating income, 2009 $23.3 Higher / Changes in pre-tax operating income: (lower) Key points • Favourable prior year development, at 2.5% of Favourable prior year claims development 11.3 opening
Slide 18: Composition of invested assets at September 30, 2010
Composition of invested assets at September 30, 2010 Market Unrealized % of market % of market values G/L values values net of Asset class in $ millions Q3-2010 hedges Q3-2010 Cash and cash equivalents $412.4 $0 4.8% 5.1% Fixed income securities $4,591.1 $72.9 53.4% 61.1% Preferred shares $1,489.0 (