���������������������� ������� Intact Financial Corporation (TSX:IFC) Wednesday, February 10 th 2016 Intact Financial Corporation
��������������� !� Chief Executive Officer Intact Financial Corporation
"�#�$ ��%��&���'���'�%� • Net operating income per share of $1.97 with a solid combined ratio of 88.6% • Strong underlying DPW growth of 7%, driven by 6 points of organic growth • Operating ROE of 16.6% for the last twelve months with total excess capital of $625 million • Book value per share up 6% this year to $39.83 • Quarterly dividend increased 9% to $0.58 per share Important notes: � Unless otherwise noted, DPW refers to DPW as reported under IFRS, excluding industry pools (referred to as “DPW” or “reported DPW” in this presentation). � All underwriting results and related ratios exclude the MYA, but include our share of the results of jointly held insurance operations. � Net investment income includes our share of the results of jointly held insurance operations. � Catastrophe claims are any one claim, or group of claims, equal to or greater than $7.5 million, related to a single event. � All references to “total excess capital” in this presentation include excess capital in the P&C insurance subsidiaries at 170% MCT plus excess capital outside of the P&C insurance subsidiaries, unless otherwise noted. � Certain totals, subtotals and percentages may not agree due to rounding. Not meaningful (nm) is used to indicate that the current and prior year figures are not comparable, not meaningful, or if the percentage change exceeds 1,000%. Intact Financial Corporation 3
�!%$��( ����'� !��(����)���� %��'�%� $7.00 800 500 bps target $6.00 700 $5.00 600 $4.00 500 $3.00 400 $2.00 300 $1.00 200 $0.00 5-year avg. YTD Q3-2015 2011 2012 2013 2014 2015 NOIPS growth ROE outperformance Our FY2015 net operating income per share of We have consistently exceeded our 500 bps ROE $6.38 represents a 5-year compound growth rate outperformance target versus the industry* of 13% Industry data: IFC estimates based on MSA Research excluding Lloyd’s, ICBC, SGI, SAF, MPI, Genworth and IFC. IFC’s ROE corresponds to the AROE, which excludes the after-tax impact of acquisition-related items. Intact Financial Corporation 4
�&�����!�%�#����� �%�� !%� * We remain well-positioned to continue !%$��( ����' the Canadian P&C insurance industry in the current environment • We expect low-single-digit growth personal auto, as mild rate reductions in Ontario are offset by increases in other markets • Market We expect upper single-digit growth in personal property, supported by continuing hard market conditions environment • We expect mid single-digit growth in commercial lines, as continued low interest rates and elevated loss ratio of the past years have translated into firmer conditions • In the current interest rate environment, we estimate that the industry’s pre-tax investment yield will decline slightly, given its asset mix and duration • Economic data suggests that more time is required for global recovery to take Capital markets hold • Industry capital levels could be negatively impacted if volatility results in continued downward pressure on market values • We expect growth at a low single digit rate • We expect the industry’s combined ratio to continue to improve in 2016 from Overall the recent peak above 100% in 2013 • Overall, we expect the industry’s ROE to trend back toward its long-term average of 10%. Intact Financial Corporation 5
+%� �'�,� ���,�����'� -%� Personal Lines Commercial Lines Year-over-year underlying DPW growth Year-over-year underlying DPW growth 5.7% Contribution from CDI 10.0% 4.9% 9.5% 4.1% 4.0% 2.9% 2.7% 2.0% 6.4% 0.6% -3.2% 3.7% 2.5% 2.1% 1.5% 1.1% 0.7% Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Intact Financial Corporation 6
���� ��������� Combined Ratio Breakdown Q4-2015 Q4-2014 Change (in $ millions, except as otherwise noted) Personal Auto DPW (underlying) 808 739 9% 25.9% Expense 24.8% Ratio Underwriting income 28 53 (47)% 71.0% 68.9% Claims Ratio Combined ratio 96.9% 93.7% 3.2 pts Q4-2015 Q4-2014 • Solid underlying DPW growth of 9%, with 2.5 points of contribution from CDI, was mainly driven by our organic growth initiatives and rational market dynamics • Combined ratio deteriorated by 3.2 points primarily due to headwinds from body injury trends in Alberta Combined Ratio Breakdown Q4-2015 Q4-2014 Change (in $ millions, except as otherwise noted) Personal Property DPW (underlying) 452 407 11% Expense 33.6% 33.9% Ratio Underwriting income 123 109 13% 38.8% 40.0% Claims Combined ratio 72.7% 73.6% (0.9) pts Ratio Q4-2015 Q4-2014 • Underlying DPW growth of 11.1% comes from 8.4 points of organic growth and a 2.7 point contribution from the CDI acquisition • Combined ratio of 72.7% was 0.9 points better than Q4-2014 due to our profitability initiatives, absence of CAT losses and benign weather conditions Intact Financial Corporation 7
� ����)��������� Combined Ratio Breakdown Q4-2015 Q4-2014 Change (in $ millions, except as otherwise noted) Commercial P&C 37.7% DPW (underlying) Expense 477 468 3% 39.4% Ratio Underwriting income 83 53 57% 49.4% 40.7% Claims Ratio Combined ratio 80.1% 87.1% (7.0) pts Q4-2015 Q4-2014 • Underlying DPW grew 2.9%, all organic, buoyed by increasing rates and solid retention levels • Combined ratio improved by 7 points due to several factors, including lower large losses, profitability initiatives, higher prior year claims development and benign weather Combined Ratio Breakdown Q4-2015 Q4-2014 Change (in $ millions, except as otherwise noted) Commercial Auto 29.3% 27.6% DPW (underlying) Expense 168 163 3% Ratio 78.6% Underwriting income (loss) (13) 1 nm 71.9% Claims Ratio Combined ratio 107.9% 99.5% 8.4 pts Q4-2015 Q4-2014 • Underlying DPW grew 2.7%, led by strength from its regular, trucking and fleet businesses • Combined ratio deteriorated 8.4 points, as prior year claims development became unfavourable. We are implementing corrective measures, targeting a combined ratio sustainably in the low 90’s. Intact Financial Corporation 8
��.��%��'����'� -%� Brands Brand awareness has increased notably though greater advertising presence, highlighting the Intact Insurance 30 Minute Claims Guarantee, and continuing sports sponsorships. Digital experience We continued to invest in digital innovation, including faster quoting engines on both intact.ca and belairdirect.com websites, and a practical, new online tool called Coverage Advisor. Diverse product offering We are focusing on growing our business by introducing innovative products such as Lifestyle Advantage or the new Enhanced Water Damage Package in personal property, as well as solutions for cyber risk, fleet telematics, and drones in commercial lines. Intact Financial Corporation 9
+!����#�����*�#�%�*��-�#� � We have a �!�%����,���) �$�%�%�.�� ��.��%�'�� versus the industry due to our disciplined approach and quality operations � Our �%� �'�(����)����$ ��%� �� enables us to take advantage of growth opportunities � We continue our ������ �����(������# approach to capital management Intact Financial Corporation 10
/ !������) %%� Senior Vice President and Chief Financial Officer Intact Financial Corporation
��������(����)������'���'�%� Q4-2015 Q4-2014 Change FY2015 FY2014 Change (in $ millions, except as otherwise noted) DPW 1 1,897 1,760 8% 7,907 7,349 8% DPW (underlying) 1 1,908 1,775 7% 7,922 7,461 6% Underwriting income 1 221 216 5 628 519 109 Combined ratio 88.6% 88.2% 0.4 pts 91.7% 92.8% (1.1) pts Net operating income per share to common $1.97 $1.84 7% $6.38 $5.67 13% shareholders 1 Earnings per share to common $1.46 $1.52 (4)% $5.20 $5.79 (10)% shareholders Operating return on common shareholders equity for the last 16.6% 16.3% 0.3 pts 12 months 1 • Underlying DPW grew by 7.5% compared to Q4-2014, driven by organic growth initiatives, and included 1.7 points from our acquisition of CDI • Our 88.6% combined ratio reflects a solid underwriting performance driven by our profitability initiatives in personal property and commercial P&C, combined with mild weather conditions 1 Refer to Section 22 - Non-IFRS financial measures of the MD&A Intact Financial Corporation 12
Recommend
More recommend
