(in Canadian dollars except as otherwise noted)
TORONTO, July 28,
2022 /CNW/ - (TSX: IFC)
Highlights
- Net operating income per share1 was $3.14 with meaningful accretion from RSA and
strong investment and underwriting results
- Operating DPW2 grew 36% in the
quarter, driven by the RSA acquisition and 4% organic
growth, led by commercial lines
- Operating combined ratio1 of 90.7% was strong
across all geographies, but higher than last year mainly
due to catastrophe losses
- EPS of $6.64 in the
quarter reflecting strong operating results,
significant gains on investments and the sale of Codan Denmark
- OROE1 of 15.4% and
ROE1 of 18.5% reflecting robust operating and
non-operating performance
- Total capital margin remains strong at $2.5 billion despite a volatile macroeconomic
environment
- After one year, NOIPS1 accretion from the RSA
acquisition was well above expectations at 15%, and
integration remains on track
Charles Brindamour, Chief
Executive Officer, said:
"We delivered strong results in Q2-2022 with contribution
from all segments. In the one year since the close of the RSA
acquisition, we have achieved $175M
in run-rate synergies and greatly strengthened our Canadian and
specialty lines platforms. We remain optimistic about the growth
opportunities across our business and particularly in specialty
lines. We expect that our disciplined underwriting and deep claims
expertise will continue to be assets in navigating inflation
pressures, climate change and evolving driving patterns."
Consolidated
Highlights1
|
|
|
|
(in millions of
Canadian dollars except as otherwise noted)
|
Q2-2022
|
Q2-2021
|
Change
|
H1-2022
|
H1-2021
|
Change
|
Operating direct
premiums written1
|
5,807
|
4,297
|
36 %
|
10,485
|
6,819
|
54 %
|
Direct premiums
written
|
6,238
|
4,414
|
41 %
|
11,331
|
6,957
|
63 %
|
Operating combined
ratio1
|
90.7 %
|
86.7 %
|
4.0 pts
|
91.2 %
|
87.8 %
|
3.4 pts
|
Underwriting
income1
|
441
|
464
|
(5) %
|
837
|
761
|
10 %
|
Operating net
investment income1
|
211
|
154
|
37 %
|
416
|
295
|
41 %
|
Distribution
income1
|
141
|
118
|
19 %
|
233
|
180
|
29 %
|
Net operating income
attributable to common shareholders1
|
553
|
502
|
10 %
|
1,028
|
846
|
22 %
|
Net income
|
1,184
|
573
|
107 %
|
1,631
|
1,087
|
50 %
|
Per share measures (in
dollars)
|
|
|
|
|
|
|
Net operating income
per share (NOIPS)1
|
$3.14
|
$3.26
|
(4) %
|
$5.84
|
$5.69
|
3 %
|
Earnings per share
(EPS)
|
$6.64
|
$3.59
|
85 %
|
$9.17
|
$7.10
|
29 %
|
Return on equity for
the last 12 months
|
|
|
|
|
|
|
Operating
ROE1
|
15.4 %
|
19.8 %
|
(4.4) pts
|
|
|
|
ROE
|
18.5 %
|
19.6 %
|
(1.1) pts
|
|
|
|
Book value per share
(in dollars)1
|
$80.86
|
$77.67
|
4 %
|
|
|
|
Total capital
margin
|
2,479
|
2,558
|
(79)
|
|
|
|
Adjusted
debt-to-total-capital ratio1
|
20.3 %
|
24.1 %
|
(3.8) pts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
___________________________________________
|
1 This press
release contains non-GAAP financial measures and Non-GAAP ratios
(each as defined in National Instrument 52-112 "Non-GAAP and Other
Financial Measures Disclosure". Refer to Section 19 –
Non-GAAP and other financial measures in the Q2-2022
Management's Discussion and Analysis for further
details.
|
2 DPW
change (growth) is presented in constant currency
|
Common Share Dividend
- The Board of Directors approved the quarterly dividend of
$1.00 per share on the Company's
issued and outstanding common shares. The dividend is payable on
September 30, 2022, to all
shareholders of record as at September 15,
2022.
Normal Course Issuer Bid
- As at June 30, 2022, the Company
had repurchased and cancelled 556,440 common shares for
approximately $100 million under its
normal course issuer bid ("NCIB") program. The NCIB program allows
to purchase for cancellation up to 5,282,458 common shares until
February 15, 2023, representing
approximately 3% of the Company's issued and outstanding common
shares as at February 8, 2022.
12-Month Industry Outlook
- Over the next twelve months, we expect firm-to-hard insurance
market conditions to continue in most lines of business, supported
by high pre-pandemic combined ratios, inflation, and climate
change.
- In Canada, we expect firm
market conditions to continue in personal property. Personal auto
premium growth is expected to progress towards the mid-single-digit
range to reflect inflation and evolving driving patterns.
- In commercial lines, in both the US and Canada, hard market conditions are expected to
continue.
- In the UK&I, hard market conditions are expected to
continue across commercial lines. In personal lines, near term
industry growth levels are uncertain as companies navigate pricing
reforms and inflation.
Segment Results
(in millions of
Canadian dollars except as otherwise noted)
|
Q2-2022
|
Q2-2021
|
Change
|
H1-2022
|
H1-2021
|
Change
|
Operating direct
premiums written
|
|
|
|
Canada
|
4,047
|
3,051
|
33 %
|
6,956
|
5,176
|
34 %
|
UK&I
|
1,157
|
n/a
|
n/a
|
2,456
|
n/a
|
n/a
|
US
|
603
|
512
|
14 %
|
1,073
|
909
|
16 %
|
Corporate (RSA - June
2021)
|
n/a
|
734
|
nm
|
n/a
|
734
|
nm
|
Total
|
5,807
|
4,297
|
36 %
|
10,485
|
6,819
|
54 %
|
Operating
combined ratio
|
|
|
|
Canada
|
90.6 %
|
85.0 %
|
5.6 pts
|
90.4 %
|
86.5 %
|
3.9 pts
|
UK&I
|
91.3 %
|
n/a
|
n/a
|
95.2 %
|
n/a
|
n/a
|
US
|
91.1 %
|
90.3 %
|
0.8 pts
|
89.0 %
|
93.3 %
|
(4.3) pts
|
Corporate (RSA - June
2021)
|
n/a
|
90.7 %
|
n/a
|
n/a
|
90.7 %
|
nm
|
Total
|
90.7 %
|
86.7 %
|
4.0 pts
|
91.2 %
|
87.8 %
|
3.4 pts
|
Underwriting
income
|
|
|
|
Canada
|
312
|
374
|
(62)
|
633
|
656
|
(23)
|
UK&I
|
89
|
n/a
|
n/a
|
101
|
n/a
|
n/a
|
US
|
38
|
37
|
1
|
93
|
51
|
42
|
Corporate and
Other
|
2
|
(4)
|
6
|
10
|
(3)
|
13
|
RSA – June
2021
|
n/a
|
57
|
n/a
|
n/a
|
57
|
nm
|
Total
|
441
|
464
|
(23)
|
837
|
761
|
76
|
Q2-2022 Insurance Business Performance
- Operating DPW growth of 36% in constant
currency mainly reflected the RSA acquisition. Organic
growth was 4%, led by 7% growth in commercial lines.
- Operating combined ratio was strong at 90.7%, but 4.0
points higher than last year due to a $175
million increase in catastrophe losses. The operating
combined ratio in Canada was a
solid 90.6%, 5.6 points above last year, driven by higher
catastrophe losses and driving activity, partially offset by a
reduction in variable commissions. In the UK&I, the operating
combined ratio was a strong 91.3% in a seasonally favourable
quarter. In the US, the operating combined ratio of 91.1% was in
line with expectations.
Lines of Business
P&C Canada
- Personal auto premiums grew by 28%, driven by RSA and 1%
organic growth. The operating combined ratio was a strong 89.8%,
but 7.4 points higher than last year reflecting increased
driving activity and higher severity driven in part by inflation.
This was offset in part by lower variable commissions. Although
driving activity was up from the prior year, claims frequency
remained below pre-pandemic levels.
- Personal property premiums grew by 28%, driven by RSA
and 6 points of organic growth in firm market conditions. The
operating combined ratio of 97.6% was 14.3 points higher than last
year as a result of elevated weather activity, compared to very
mild weather in the comparable period.
- Commercial lines premium growth of 42% was driven by RSA
and strong organic growth of 7%, supported by hard market
conditions. The operating combined ratio improved by 3.6 points to
a very strong 86.0%, helped by our profitability actions over time
and lower variable commissions.
- Distribution income grew by 19%, driven by
accretive acquisitions over the past 12 months and higher income
from our On Side Restoration business.
P&C UK&I
- Personal lines operating DPW was $424 million. We remained disciplined in
competitive market conditions, with recent pricing reforms
impacting UK home and motor. The strong operating combined ratio of
88.3% reflects 5.2 points of favourable development in
catastrophe losses driven by a revised estimate of the February
windstorms, bolstered by favourable seasonality in Q2.
- Commercial lines operating DPW was $733 million in hard market conditions. The
operating combined ratio was 93.6%, reflecting elevated catastrophe
losses, offset in part by a lower-than-expected expense ratio.
P&C US
- US Commercial premium growth was strong at 14%
driven by new business, increased exposures, and rate increases in
favourable market conditions. The operating combined
ratio remained solid at 91.1%, and 0.8 points higher than last year
due to non-weather catastrophe losses.
Investments
- Operating net investment income of $211 million for the quarter increased 37%
year-over-year, mainly driven by the RSA acquisition and
higher yields captured against the backdrop of rising interest
rates.
- Net gains excluding FVTPL bonds of $400
million reflects significant gains on equity securities as
we repositioned certain portfolios in a volatile environment.
Net Operating Income, EPS and ROE
- Net operating income attributable to common
shareholders of $553
million is up 10% from a year ago, reflecting a
meaningful contribution from the RSA acquisition and strong
investment and underwriting results, offset in part by higher
catastrophe losses.
- Earnings per share of $6.64 was 85% higher than last year, as
robust operating results were bolstered by realized gains on
investments and the sale of RSA's Danish business, Codan Forsikring
A/S ("Codan Denmark").
- Operating ROE of 15.4% and ROE of 18.5% for
the 12 months to June 30, 2022
reflected strong performance across the business.
Balance Sheet
- The Company ended the quarter in a strong financial position,
with a total capital margin of $2.5 billion, in line with Q1-2022
levels.
- IFC's book value per share (BVPS) of $80.86 as at June 30,
2022 increased 4% from a year ago driven by strong earnings,
partially offset by mark-to-market losses on our investments due to
the increase in interest rates and the recent volatility in capital
markets.
- The adjusted debt-to-total capital ratio decreased to
20.3% as at June 30, 2022,
in line with our long term target, as proceeds from the sale of
Codan Denmark were used to pay down debt during the quarter.
RSA Acquisition
- RSA contributed approximately 15% to NOIPS for the
13-month period since closing. Given the overall strength of
Intact's results, double-digit accretion is evidence of the quality
of the acquired businesses.
- We remain on track to realize at least $250 million of pre-tax annual run-rate synergies
in 2024. As at June 30, 2022 we
estimate that we have delivered $175
million in run-rate synergies.
- Integration activities are progressing well. In
Canada, policy conversion in the broker channel remains a top
priority. In Q2, we started the conversion of the larger Commercial
lines policies, while nearly 85% of Personal lines broker
policies and Commercial lines small business and fleet policies
have been converted to Intact systems to date.
- On May 2, 2022, the sale of Codan
Denmark to Alm. brand A/S Group was completed for a total base cash
consideration of DKK 12.6 billion
($2.3 billion), subject to
post-closing adjustments. IFC received 50% of the proceeds.
- On July 7, 2022 we completed the
sale of our 50% stake in RSA Middle East to National Life &
General Insurance Company (NLGIC), majority owned by Oman
International Development and Investment Co. (OMINVEST) for
proceeds of approximately $175
million (USD135 million),
subject to post-closing adjustments.
Preferred Share Dividends
The Board of Directors also approved a quarterly dividend of
21.225 cents per share on the
Company's Class A Series 1 preferred shares, 21.60625 cents per share on the Class A Series 3
preferred shares, 32.5 cents per
share on the Class A Series 5 preferred shares, 33.125 cents per share on the Class A Series 6
preferred shares, 30.625 cents per
share on the Class A Series 7 preferred shares, 33.75 cents per share on the Class A Series 9
preferred shares, and 32.8125 cents
per share on the Class A Series 11 preferred shares. The dividends
are payable on September 30, 2022, to
shareholders of record as at September 15,
2022.
Analysts' Estimates
- The average estimates of earnings per share and net operating
income per share for the quarter among the analysts who follow the
Company were $3.36 and $2.71, respectively.
Management's Discussion and Analysis (MD&A) and
Consolidated Financial Statements
This Press Release, which was approved by the Company's Board of
Directors on the Audit Committee's recommendation, should be read
in conjunction with the Q2-2022 MD&A as well as the Q2-2022
Consolidated Financial Statements, which are available on the
Company's website at www.intactfc.com and later today on SEDAR at
www.sedar.com.
For the definitions of measures and other insurance-related
terms used in this Press Release, please refer to the MD&A and
to the glossary available in the "Investors" section of the
Company's website at www.intactfc.com.
Conference Call Details
Intact Financial Corporation will host a conference call to
review its earnings results tomorrow at 10:00 a.m. ET. To listen to the call via live
audio webcast and to view the Company's Financial Statements,
MD&A, presentation slides, Supplementary financial information
and other information not included in this press release, visit the
Company's website at www.intactfc.com and link to "Investors". The
conference call is also available by dialing 416-764-8659 or
1-888-664-6392 (toll-free in North
America). Please call 10 minutes before the start of the
call. A replay of the call will be available on July 29, 2022 at 2:00 p.m.
ET until midnight on August 5,
2022. To listen to the replay, call 416-764-8677 or
1-888-390-0541 (toll-free in North
America), entry code 018351. A transcript of the call will
also be made available on Intact Financial Corporation's
website.
About Intact Financial Corporation
Intact Financial Corporation (TSX: IFC) is the largest provider
of property and casualty (P&C) insurance in Canada, a leading provider of global specialty
insurance, and, with RSA, a leader in the U.K. and Ireland. Our business has grown organically
and through acquisitions to over $20
billion of total annual premiums.
In Canada, Intact distributes
insurance under the Intact Insurance brand through a wide network
of brokers, including its wholly-owned subsidiary BrokerLink, and
directly to consumers through belairdirect. Intact also provides
affinity insurance solutions through the Johnson Affinity
Groups.
In the US, Intact Insurance Specialty Solutions provides a range
of specialty insurance products and services through independent
agencies, regional and national brokers, and wholesalers and
managing general agencies.
Outside of North America, the
Company provides personal, commercial and specialty insurance
solutions across the U.K., Ireland, and Europe through the RSA brands.
Non-GAAP and other financial measures
Non-GAAP financial measures and Non-GAAP ratios (which are
calculated using Non-GAAP financial measures) do not have
standardized meanings prescribed by IFRS (or GAAP) and may not be
comparable to similar measures used by other companies in our
industry. Non-GAAP and other financial measures are used by
management and financial analysts to assess our performance.
Further, they provide users with an enhanced understanding of our
financial results and related trends, and increase transparency and
clarity into the core results of the business.
Non-GAAP financial measures and Non-GAAP ratios used in this
Press Release and the Company's financial reports include measures
related to our consolidated performance, our underwriting
performance and our financial strength.
For more information about these supplementary financial
measures, Non-GAAP financial measures, and Non-GAAP ratios,
including definitions and explanations of how these measures
provide useful information, refer to Section 19 – Non-GAAP and
other financial measures in the Q2-2022 MD&A dated July 28, 2022, which is available on our website
at www.intactfc.com and on SEDAR at www.sedar.com.
Table 1
Reconciliation of NOI, NOIPS and OROE to Net income attributable to
shareholders, as reported under IFRS
|
Q2-2022
|
Q2-2021
|
H1-2022
|
H1-2021
|
Net income
attributable to shareholders, as reported under IFRS
|
1,183
|
566
|
1,642
|
1,080
|
Remove:
pre-tax non-operating losses
(gains)
|
(697)
|
(6)
|
(697)
|
(178)
|
Remove:
non-operating tax expense
(benefit)
|
89
|
(45)
|
136
|
(30)
|
Remove: non-operating
component of NCI
|
(6)
|
-
|
(24)
|
-
|
NOI
|
569
|
515
|
1,057
|
872
|
Remove: preferred share
dividends
|
(16)
|
(13)
|
(29)
|
(26)
|
NOI attributable to
common shareholders
|
553
|
502
|
1,028
|
846
|
Divided by
weighted-average number of common shares (in millions)
|
175.8
|
153.9
|
175.9
|
148.5
|
NOIPS, basic and
diluted (in dollars)
|
3.14
|
3.26
|
5.84
|
5.69
|
NOI to common
shareholders for the last 12 months
|
2,199
|
1,698
|
|
Adjusted
average common shareholders' equity,
excluding AOCI
|
14,275
|
8,567
|
|
OROE for the last 12
months
|
15.4 %
|
19.8 %
|
|
Table 2 Reconciliation
of Operating DPW to DPW
|
Q2-2022
|
Q2-2021
|
H1-2022
|
H1-2021
|
|
|
|
|
|
DPW, as reported under IFRS
|
6,238
|
4,414
|
11,331
|
6,957
|
Remove:
impact of industry pools and
fronting
|
(300)
|
(114)
|
(585)
|
(133)
|
Remove: DPW from exited
lines
|
(149)
|
(5)
|
(290)
|
(7)
|
Add: impact of the
normalization for multi-year policies
|
18
|
2
|
29
|
2
|
|
|
|
|
|
Operating DPW, as reported in the
MD&A
|
5,807
|
4,297
|
10,485
|
6,819
|
Operating DPW growth
|
35 %
|
27 %
|
54 %
|
16 %
|
Operating DPW growth (in constant
currency)
|
36 %
|
29 %
|
54 %
|
17 %
|
|
|
|
|
|
Table 3 Reconciliation
of Underwriting income to Underwriting income as reported under
IFRS
|
Q2-2022
|
Q2-2021
|
H1-2022
|
H1-2021
|
|
|
|
|
|
Net earned premiums, as
reported under IFRS
|
4,902
|
3,508
|
9,793
|
6,285
|
Other underwriting
revenues, as reported under IFRS
|
78
|
45
|
151
|
80
|
Net claims incurred, as
reported under IFRS
|
(2,585)
|
(1,857)
|
(5,132)
|
(3,288)
|
Underwriting expenses,
as reported under IFRS
|
(1,640)
|
(1,272)
|
(3,237)
|
(2,228)
|
Underwriting income
(loss), as calculated under IFRS
|
755
|
424
|
1,575
|
849
|
Remove: impact of MYA
on underwriting results
|
(363)
|
29
|
(829)
|
(117)
|
Remove: non-operating
pension expense
|
14
|
16
|
27
|
32
|
Remove: underwriting
loss (income) from exited lines
|
35
|
(5)
|
64
|
(3)
|
Underwriting income
(loss), as reported in the MD&A
|
441
|
464
|
837
|
761
|
Operating
NEP
|
4,758
|
3,482
|
9,500
|
6,241
|
|
|
|
|
|
Operating combined
ratio
|
90.7 %
|
86.7 %
|
91.2 %
|
87.8 %
|
Table 4
Reconciliation of Operating net claims to Net claims incurred, as
reported under IFRS
|
Q2-2022
|
Q2-2021
|
H1-2022
|
H1-2021
|
|
|
|
|
|
Net claims incurred,
as reported under IFRS
|
2,585
|
1,857
|
5,132
|
3,288
|
Remove: positive
(negative) impact of MYA on underwriting results
|
363
|
(29)
|
829
|
117
|
Remove: adjustment for
non-operating pension expense
|
(5)
|
(6)
|
(10)
|
(12)
|
Remove: net claims from
exited lines
|
(118)
|
(12)
|
(233)
|
(26)
|
Net with: other
underwriting revenues
|
(11)
|
-
|
(21)
|
-
|
|
|
|
|
|
Operating net
claims, as reported in the MD&A
|
2,814
|
1,810
|
5,697
|
3,367
|
Remove: net current
year CAT losses
|
(248)
|
(73)
|
(430)
|
(125)
|
Remove: favourable
(unfavourable) PYD
|
179
|
136
|
402
|
286
|
|
|
|
|
|
Operating net claims
excluding current year CAT losses and PYD
|
2,745
|
1,873
|
5,669
|
3,528
|
Operating
NEP
|
4,758
|
3,482
|
9,500
|
6,241
|
Remove: reinstatement
premiums ceded (recovered)
|
3
|
-
|
3
|
1
|
Operating
NEP before reinstatement premiums
|
4,761
|
3,482
|
9,503
|
6,242
|
|
|
|
|
|
Underlying current year
loss ratio1
|
57.6 %
|
53.8 %
|
59.6 %
|
56.6 %
|
CAT loss ratio
(including reinstatement premiums) 1
|
5.3 %
|
2.1 %
|
4.6 %
|
2.0 %
|
(Favourable)
unfavourable PYD ratio2
|
(3.8) %
|
(3.9) %
|
(4.2) %
|
(4.6) %
|
Claims
ratio2
|
59.1 %
|
52.0 %
|
60.0 %
|
54.0 %
|
1 Calculated using Operating NEP
before reinstatement premiums.
|
2 Calculated
using Operating NEP.
|
Table
5 Reconciliation of Operating net
underwriting expenses to Underwriting expenses as reported under
IFRS
|
Q2-2022
|
Q2-2021
|
H1-2022
|
H1-2021
|
|
|
|
|
|
Underwriting
expenses, as reported under IFRS
|
1,640
|
1,272
|
3,237
|
2,228
|
Net with: other
underwriting revenues
|
(67)
|
(45)
|
(130)
|
(80)
|
Remove: adjustment for
non-operating pension expense
|
(9)
|
(10)
|
(17)
|
(20)
|
Remove: underwriting
expenses from exited lines
|
(61)
|
(9)
|
(124)
|
(15)
|
Operating net
underwriting expenses, as reported in the MD&A
|
1,503
|
1,208
|
2,966
|
2,113
|
Commissions
|
787
|
673
|
1,528
|
1,155
|
General
expenses
|
583
|
422
|
1,172
|
747
|
Premium
taxes
|
133
|
113
|
266
|
211
|
Operating
NEP
|
4,758
|
3,482
|
9,500
|
6,241
|
Commissions
ratio
|
16.6 %
|
19.4 %
|
16.1 %
|
18.5 %
|
General expenses
ratio
|
12.2 %
|
12.1 %
|
12.3 %
|
11.9 %
|
Premium taxes
ratio
|
2.8 %
|
3.2 %
|
2.8 %
|
3.4 %
|
Expense
ratio
|
31.6 %
|
34.7 %
|
31.2 %
|
33.8 %
|
Table 6
Reconciliation of ROE to Net income attributable to shareholders,
as reported under IFRS
|
Q2-2022
|
Q2-2021
|
H1-2022
|
H1-2021
|
|
|
|
|
|
Net income
attributable to shareholders
|
1,183
|
566
|
1,642
|
1,080
|
Remove: preferred share
dividends
|
(16)
|
(13)
|
(29)
|
(26)
|
|
|
|
|
|
Net income
attributable to common shareholders
|
1,167
|
553
|
1,613
|
1,054
|
Divided by
weighted-average number of common shares (in millions)
|
175.8
|
153.9
|
175.9
|
148.5
|
EPS, basic and
diluted (in dollars)
|
6.64
|
3.59
|
9.17
|
7.10
|
|
|
|
|
Net income
attributable to common shareholders for the last 12
months
|
2,573
|
1,740
|
|
Adjusted
average common shareholders'
equity
|
13,934
|
8,895
|
|
ROE for the last 12
months
|
18.5 %
|
19.6 %
|
|
|
|
|
|
|
|
|
|
Table 7 Reconciliation
of Distribution income, Total finance costs, Other operating income
(expense), Total income taxes and Underwriting income with the
Consolidated financial statements
|
MD&A
captions
|
Pre-tax
|
|
|
As presented in the
Financial statements
|
Distribution
income
|
Total
finance
costs
|
Other
operating
income (expense)1
|
Operating investment income
|
Total
income
taxes
|
Non-
operating
results
|
Underwriting
income
|
Total F/S
caption
|
For the quarter
ended June 30, 2022
|
|
|
|
|
|
|
|
|
Underwriting
income1
|
-
|
-
|
-
|
-
|
-
|
314
|
441
|
755
|
Investment
income
|
-
|
-
|
-
|
220
|
-
|
2
|
-
|
222
|
Other
revenues
|
137
|
-
|
1
|
-
|
-
|
-
|
-
|
138
|
Net gains
(losses)
|
-
|
-
|
-
|
-
|
-
|
123
|
-
|
123
|
Gain on sale of
business
|
-
|
-
|
-
|
-
|
-
|
423
|
-
|
423
|
Share of profits from
investments in associates and joint ventures
|
59
|
(3)
|
-
|
-
|
(14)
|
(5)
|
-
|
37
|
Finance
costs
|
-
|
(43)
|
-
|
-
|
-
|
-
|
-
|
(43)
|
Acquisition,
integration and restructuring costs
|
-
|
-
|
-
|
-
|
-
|
(103)
|
-
|
(103)
|
Other
expenses
|
(55)
|
-
|
(32)
|
-
|
-
|
(57)
|
-
|
(144)
|
Income tax benefit
(expense)
|
-
|
-
|
-
|
-
|
(215)
|
-
|
-
|
(215)
|
|
|
|
|
|
|
|
|
|
Total, as reported
in MD&A
|
141
|
(46)
|
(31)
|
220
|
(229)
|
697
|
441
|
|
For the quarter
ended June 30, 2021
|
|
|
|
|
|
|
|
|
Underwriting
income1
|
-
|
-
|
-
|
-
|
-
|
(40)
|
464
|
424
|
Investment
income
|
-
|
-
|
-
|
161
|
-
|
-
|
-
|
161
|
Other
revenues
|
92
|
-
|
13
|
-
|
-
|
-
|
-
|
105
|
Net gains
(losses)
|
-
|
-
|
-
|
-
|
-
|
25
|
-
|
25
|
Gain
on the RSA Acquisition
|
-
|
-
|
-
|
-
|
-
|
200
|
-
|
200
|
Share of profits from
investments in associates and joint ventures
|
60
|
(2)
|
-
|
-
|
(14)
|
(6)
|
-
|
38
|
Finance
costs
|
-
|
(38)
|
-
|
-
|
-
|
-
|
-
|
(38)
|
Acquisition,
integration and restructuring costs
|
-
|
-
|
-
|
-
|
-
|
(138)
|
-
|
(138)
|
Other
expenses
|
(34)
|
-
|
(25)
|
-
|
-
|
(35)
|
-
|
(94)
|
Income tax benefit
(expense)
|
-
|
-
|
-
|
-
|
(103)
|
-
|
-
|
(103)
|
|
|
|
|
|
|
|
-
|
|
Total, as reported
in MD&A
|
118
|
(40)
|
(12)
|
161
|
(117)
|
6
|
464
|
|
|
|
|
|
|
|
|
|
|
|
Table 8 Reconciliation
of Distribution income, Total finance costs, Other operating income
(expense), Total income taxes and Underwriting income with the
Consolidated financial statements
|
MD&A
captions
|
Pre-tax
|
|
|
As presented in the
Financial statements
|
Distribution
income
|
Total
finance costs
|
Other
operating
income (expense)1
|
Operating investment income
|
Total
income taxes
|
Non-
operating
results
|
Underwriting
income
|
Total F/S
caption
|
For the six-month
period ended June 30, 2022
|
|
|
|
|
|
|
|
|
Underwriting
income1
|
-
|
-
|
-
|
-
|
-
|
738
|
837
|
1,575
|
Investment
income
|
-
|
-
|
-
|
433
|
-
|
4
|
-
|
437
|
Other
revenues
|
268
|
-
|
4
|
-
|
-
|
-
|
-
|
272
|
Net gains
(losses)
|
-
|
-
|
-
|
-
|
-
|
(173)
|
-
|
(173)
|
Gain on sale of
business
|
-
|
-
|
-
|
-
|
-
|
423
|
-
|
423
|
Share of profits from
investments in associates and joint ventures
|
97
|
(4)
|
-
|
-
|
(22)
|
(9)
|
-
|
62
|
Finance
costs
|
-
|
(84)
|
-
|
-
|
-
|
-
|
-
|
(84)
|
Acquisition,
integration and restructuring costs
|
-
|
-
|
-
|
-
|
-
|
(167)
|
-
|
(167)
|
Other
expenses
|
(132)
|
-
|
(66)
|
-
|
-
|
(119)
|
-
|
(317)
|
Income tax benefit
(expense)
|
-
|
-
|
-
|
-
|
(380)
|
-
|
-
|
(380)
|
|
|
|
|
|
|
|
|
|
Total, as reported
in MD&A
|
233
|
(88)
|
(62)
|
433
|
(402)
|
697
|
837
|
|
For the six-month
period ended June 30, 2021
|
|
|
|
|
|
|
|
|
Underwriting
income1
|
-
|
-
|
-
|
-
|
-
|
88
|
761
|
849
|
Investment
income
|
-
|
-
|
-
|
307
|
-
|
-
|
-
|
307
|
Other
revenues
|
181
|
-
|
16
|
-
|
-
|
-
|
-
|
197
|
Net gains
(losses)
|
-
|
-
|
-
|
-
|
-
|
143
|
-
|
143
|
Gain on the RSA
Acquisition
|
-
|
-
|
-
|
-
|
-
|
200
|
-
|
200
|
Share of profits from
investments in associates and joint ventures
|
83
|
(6)
|
-
|
-
|
(18)
|
(10)
|
-
|
49
|
Finance
costs
|
-
|
(66)
|
-
|
-
|
-
|
-
|
-
|
(66)
|
Acquisition,
integration and restructuring costs
|
-
|
-
|
-
|
-
|
-
|
(181)
|
-
|
(181)
|
Other
expenses
|
(84)
|
-
|
(34)
|
-
|
-
|
(62)
|
-
|
(180)
|
Income tax benefit
(expense)
|
-
|
-
|
-
|
-
|
(219)
|
-
|
-
|
(219)
|
|
|
|
|
|
|
|
|
|
Total, as reported
in MD&A
|
180
|
(72)
|
(18)
|
307
|
(237)
|
178
|
761
|
|
|
|
|
|
|
|
|
|
|
|
1 Comprised of the following captions
in the Consolidated statements of income: Net earned premiums,
Other underwriting revenues, Net claims incurred and Underwriting
expenses.
|
Table 9
Calculation of BVPS and BVPS (excluding AOCI)
|
|
|
As at June
30,
|
|
|
2022
|
2021
|
|
|
|
|
|
Equity attributable to
shareholders, as reported under IFRS
|
|
|
15,515
|
14,851
|
Remove: Preferred
shares, as reported under IFRS
|
|
|
(1,322)
|
(1,175)
|
|
|
|
|
|
Common shareholders'
equity
|
|
|
14,193
|
13,676
|
Remove: AOCI, as
reported under IFRS
|
|
|
1,165
|
(483)
|
|
|
|
|
|
Common shareholders'
equity (excluding AOCI)
|
|
|
15,358
|
13,193
|
|
|
|
|
|
Number of common shares
outstanding at the same date (in millions)
|
|
|
175.5
|
176.1
|
BVPS
|
|
|
80.86
|
77.67
|
BVPS (excluding
AOCI)
|
|
|
87.50
|
74.93
|
|
|
|
|
|
|
Table 10 Adjusted
average common shareholders' equity and Adjusted average common
shareholders' equity (excluding AOCI)
As at June
30,
|
2022
|
2021
|
|
|
|
Ending common
shareholders' equity
|
14,193
|
13,676
|
Remove: common shares
issued during the period
|
-
|
(4,311)
|
Ending common
shareholders' equity, excluding common shares issued during the
period
|
14,193
|
9,365
|
Beginning common
shareholders' equity
|
13,676
|
7,716
|
Average common
shareholders' equity, excluding common shares issued during the
period
|
13,934
|
8,541
|
Weighted impact of June
1, 2021 common shares issuance
|
-
|
354
|
Adjusted average common shareholders'
equity
|
13,934
|
8,895
|
|
|
|
Ending
common shareholders' equity
(excluding AOCI)
|
15,358
|
13,193
|
Remove: common shares
issued during the period
|
-
|
(4,311)
|
Ending common
shareholders' equity, excluding AOCI and common shares issued
during the period
|
15,358
|
8,882
|
Beginning common
shareholders' equity, excluding AOCI
|
13,193
|
7,544
|
Average common
shareholders' equity, excluding AOCI and common shares issued during the
period
|
14,275
|
8,213
|
Weighted impact of June
1, 2021 common shares issuance
|
-
|
354
|
Adjusted average common shareholders'
equity, excluding AOCI
|
14,275
|
8,567
|
Table 11 Reconciliation of Debt
outstanding (excluding hybrid debt) and Adjusted total capital to
Debt outstanding, Equity attributable to shareholders and Equity
attributable to NCI, as reported under IFRS
As at
|
June
30
2022
|
March
31
2022
|
Dec.
31
2021
|
|
|
|
|
Debt outstanding, as
reported under IFRS
|
4,345
|
5,370
|
5,229
|
Remove: hybrid
subordinated notes
|
(247)
|
(247)
|
(247)
|
|
|
|
|
Debt outstanding
(excluding hybrid debt)
|
4,098
|
5,123
|
4,982
|
|
|
|
|
Debt outstanding, as
reported under IFRS
|
4,345
|
5,370
|
5,229
|
Equity attributable to
shareholders, as reported under IFRS
|
15,515
|
15,787
|
15,674
|
Equity attributable to
NCI, as reported under IFRS
|
|
|
|
Include: RSA Insurance
Group plc, as reported under IFRS
Tier 1
notes
|
-
|
-
|
510
|
Preferred
shares
|
285
|
285
|
285
|
Adjusted total
capital
|
20,145
|
21,442
|
21,698
|
|
|
|
|
Debt outstanding
(excluding hybrid debt)
|
4,098
|
5,123
|
4,982
|
Adjusted total
capital
|
20,145
|
21,442
|
21,698
|
Adjusted
debt-to-total capital ratio
|
20.3 %
|
23.9 %
|
23.0 %
|
|
|
|
|
Debt outstanding, as
reported under IFRS
|
4,345
|
5,370
|
5,229
|
Preferred shares, as
reported under IFRS
|
1,322
|
1,322
|
1,175
|
Equity attributable to
NCI: RSA Insurance Group plc,
as reported under IFRS
Tier 1
notes
|
-
|
-
|
510
|
Preferred
shares
|
285
|
285
|
285
|
Debt outstanding and
preferred shares (including NCI)
|
5,952
|
6,977
|
7,199
|
Adjusted total
capital (see above)
|
20,145
|
21,442
|
21,698
|
Total leverage
ratio
|
29.5 %
|
32.5 %
|
33.2 %
|
Adjusted
debt-to-total capital
ratio
|
20.3 %
|
23.9 %
|
23.0 %
|
Preferred shares and
hybrids
|
9.2 %
|
8.6 %
|
10.2 %
|
Forward Looking Statements
Certain statements made in this news release are forward-looking
statements. These forward-looking statements include, without
limitation, statements relating to the outlook for the property and
casualty insurance industry in Canada, the US and the UK, the Company's
business outlook, the Company's growth prospects, the impact on the
Company in relation to the occurrence of and in response to the
coronavirus (COVID-19) pandemic and ensuing events, the acquisition
and integration of RSA Insurance Group PLC ("RSA"), the sale
of the Company's 50% stake in RSA Middle East B.S.C. (c) to
National Life & General Insurance Company (NLGIC) (the "Sale
of Middle East"), the receipt of all requisite approvals or
clearances of the Sale of Middle East in a timely manner and on
terms acceptable to the Company, the realization of the expected
strategic, financial and other benefits of the Sale of Middle East,
and the sale of Codan Denmark . All such forward-looking statements
are made pursuant to the 'safe harbour' provisions of applicable
Canadian securities laws.
Forward-looking statements, by their very nature, are subject to
inherent risks and uncertainties and are based on several
assumptions, both general and specific, which give rise to the
possibility that actual results or events could differ materially
from our expectations expressed in or implied by such
forward-looking statements as a result of various factors,
including those discussed in the Company's most recently filed
Annual Information Form dated February 8,
2022 and available on SEDAR at www.sedar.com. As a result,
we cannot guarantee that any forward-looking statement will
materialize and we caution you against relying on any of these
forward-looking statements. Except as may be required by Canadian
securities laws, we do not undertake any obligation to update or
revise any forward-looking statements contained in this news
release, whether as a result of new information, future events or
otherwise. Please read the cautionary note at the beginning of the
Q2-2022 MD&A.
SOURCE Intact Financial Corporation