(in Canadian dollars except as otherwise noted)
TORONTO, Nov. 8, 2022
/CNW/ - (TSX: IFC)
Highlights
- Net operating income per share1 decreased 6% to
$2.70, reflecting a slight
increase in operating combined ratio, offset in part by higher
investment and distribution income
- Operating DPW2 grew 2% as
continued solid growth in specialty lines was partially offset by
profitability actions, including strategic exits
- Operating combined ratio1 was robust at
92.6%, with very strong results in commercial lines and
Canada personal auto performing as
expected
- EPS increased 26% to $2.02
with solid operating and non-operating performance, while last
year's results were impacted by an impairment charge on an
investment
- OROE1 and ROE1 were
strong at 15.0% and 19.1%, respectively, reflecting continued
strong performance
- BVPS was stable year-over-year, as strong earnings were
offset by significant mark-to-market losses on investments
Charles Brindamour, Chief
Executive Officer, said:
"We achieved solid operating performance across the platform
despite active weather and ongoing cost pressures. Our people are
working hard to get customers back on track after the devastation
caused by recent hurricanes. At the same time, our balance sheet
remains resilient in the context of volatile capital market
conditions which we continue to monitor closely. Finally, we
continued to make progress on the integration of RSA, with
synergies tracking towards our recently increased target of a
$350 million run-rate in
2024."
Consolidated
Highlights1
|
|
|
|
(in millions of
Canadian dollars except as otherwise noted)
|
Q3-2022
|
Q3-2021
|
Change
|
YTD-2022
|
YTD-2021
|
Change
|
Operating direct
premiums written1,2
|
5,443
|
5,447
|
2 %
|
15,928
|
12,266
|
31 %
|
Direct premiums
written2
|
5,796
|
5,719
|
4 %
|
17,127
|
12,676
|
37 %
|
Operating combined
ratio1
|
92.6 %
|
91.3 %
|
1.3 pts
|
91.7 %
|
89.3 %
|
2.4 pts
|
Underwriting
income1
|
362
|
426
|
(15) %
|
1,199
|
1,187
|
1 %
|
Operating net
investment income1
|
232
|
191
|
21 %
|
648
|
486
|
33 %
|
Distribution
income1
|
111
|
105
|
6 %
|
344
|
285
|
21 %
|
Net operating income
attributable to common shareholders1
|
473
|
505
|
(6) %
|
1,501
|
1,351
|
11 %
|
Net income
|
370
|
300
|
23 %
|
2,001
|
1,387
|
44 %
|
Per share measures (in
dollars)
|
|
|
|
|
|
|
Net operating income
per share (NOIPS)1
|
$2.70
|
$2.87
|
(6) %
|
$8.54
|
$8.56
|
- %
|
Earnings per share
(EPS)
|
$2.02
|
$1.60
|
26 %
|
$11.20
|
$8.46
|
32 %
|
Return on equity for
the last 12 months
|
|
|
|
|
|
|
Operating
ROE1
|
15.0 %
|
18.3 %
|
(3.3) pts
|
|
|
|
ROE1
|
19.1 %
|
16.5 %
|
2.6 pts
|
|
|
|
Book value per share
(in dollars)
|
$78.90
|
$79.21
|
- %
|
|
|
|
Total capital
margin
|
2,490
|
2,693
|
(203)
|
|
|
|
Adjusted
debt-to-total-capital ratio1
|
22.5 %
|
23.9 %
|
(1.4) 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 23 – Non-GAAP and other
financial measures in the Q3-2022 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
December 30, 2022, to all
shareholders of record as at December 15,
2022.
Normal Course Issuer Bid
- As at September 30, 2022, the
Company had repurchased and cancelled 817,790 common shares for
approximately $149 million under its
normal course issuer bid ("NCIB") program. The NCIB program allows
the Company 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, driven by
inflation and climate change.
- In Canada, we expect firm
market conditions to continue in personal property. Personal auto
premium growth is expected to be in the mid-single-digit range over
the next 12 months, to reflect inflation and evolving driving
patterns.
- In commercial and specialty lines across all geographies, hard
market conditions are expected to continue.
- In the UK&I, we expect the personal property market to firm
as it reacts to inflationary pressures and adapts to reform
measures. Personal motor has begun to firm and we anticipate this
to increase over time.
Segment Results
(in millions of
Canadian dollars except as otherwise noted)
|
Q3-2022
|
Q3-2021
|
Change
|
YTD-2022
|
YTD-2021
|
Change
|
Operating direct
premiums written2
|
|
|
|
Canada
|
3,664
|
3,564
|
3 %
|
10,620
|
8,740
|
22 %
|
UK&I
|
1,071
|
1,264
|
(4) %
|
3,527
|
1,264
|
nm
|
US
|
708
|
619
|
10 %
|
1,781
|
1,528
|
14 %
|
Corporate and Other
(RSA – June 2021)
|
n/a
|
n/a
|
nm
|
n/a
|
734
|
nm
|
Total
|
5,443
|
5,447
|
2 %
|
15,928
|
12,266
|
31 %
|
Operating
combined ratio
|
|
|
|
Canada
|
92.7 %
|
89.2 %
|
3.5 pts
|
91.2 %
|
87.6 %
|
3.6 pts
|
UK&I
|
93.5 %
|
93.9 %
|
(0.4) pts
|
94.6 %
|
93.9 %
|
nm
|
US
|
90.5 %
|
92.8 %
|
(2.3) pts
|
89.5 %
|
93.0 %
|
(3.5) pts
|
Corporate and Other
(RSA – June 2021)
|
n/a
|
n/a
|
nm
|
n/a
|
90.7 %
|
nm
|
Total
|
92.6 %
|
91.3 %
|
1.3 pts
|
91.7 %
|
89.3 %
|
2.4 pts
|
Underwriting
income
|
|
|
|
Canada
|
249
|
356
|
(107)
|
882
|
1,012
|
(130)
|
UK&I
|
64
|
72
|
(8)
|
165
|
72
|
nm
|
US
|
45
|
30
|
15
|
138
|
81
|
57
|
Corporate and
Other
|
4
|
(32)
|
36
|
14
|
(35)
|
49
|
RSA – June
2021
|
n/a
|
n/a
|
nm
|
n/a
|
57
|
nm
|
Total
|
362
|
426
|
(64)
|
1,199
|
1,187
|
12
|
Q3-2022 Insurance Business
Performance
- Excluding strategic exits, operating DPW grew 4% on a
constant currency basis, reflecting solid rate increases and strong
growth in specialty lines, tempered by the impact of pricing
discipline and footprint optimization in the UK&I.
- Operating combined ratio of 92.6% was 1.3 points higher
than last year. The operating combined ratio in Canada was 92.7%, 3.5 points above last year,
mainly owing to inflation and higher claims frequency in personal
auto. In the UK&I, the operating combined ratio was down 0.4
points to 93.5%, with strong performance in commercial lines. In
the US, the operating combined ratio improved 2.3 points to 90.5%,
in line with expectations.
Lines of Business
P&C Canada
- Personal auto premiums decreased 1% from the prior year.
This reflected new business pressures from reduced policy shopping
in a muted rate environment, and rate actions taken ahead of
competitors. The operating combined ratio of 93.0% was 7.9 points
higher than last year, due to inflation and higher claims
frequency. We expect to deliver a sub-95 combined ratio in the next
12 months as a result of our ongoing rate and underwriting
actions.
- Personal property premiums grew by 7% in firm market
conditions. The operating combined ratio of 98.4% was 4.9 points
higher than last year, primarily due to higher weather-related
losses, compared to a particularly strong quarter last year.
- Commercial lines premium growth of 4% reflected robust
rate actions in hard market conditions. The operating combined
ratio was a strong 87.9%, reflecting a robust underlying
performance.
- Distribution income grew 6% to $111 million, driven by the addition of Highland
Insurance Solutions to our portfolio, partially offset by lower
variable commission revenues compared to an elevated amount in the
prior-year quarter.
P&C UK&I
- Personal lines premiums declined 13% on a constant
currency basis, almost 8 points of which was due to the sale of our
Middle East business. We remained
disciplined in competitive market conditions, with pricing reforms
impacting UK home and motor. The operating combined ratio of 105.5%
was up 7.6 points from the prior year, and higher than
expectations. This was largely due to elevated subsidence claims,
driven by unusually dry conditions in the UK, and additional
reserves to reflect the latest inflation expectations.
- Commercial lines premiums grew 3% on a constant currency
basis. Excluding impacts from the sale of our Middle East business and the optimization of
our delegated portfolio, top line grew 9%, reflecting hard market
conditions and strong retention levels. The operating combined
ratio was 85.0%, due to profitability actions over the past 12
months, as well catastrophe losses in line with expectations.
P&C US
- US Commercial premiums grew 10% on a constant currency
basis. Excluding the impact of strategic exits, growth was 14%,
driven by new business, increased exposures, and rate increases in
favourable market conditions. The operating combined ratio improved
2.3 points to 90.5%, due to our profitability actions, including
the exit from Public Entities.
Investments
- Operating net investment income of $232 million for the quarter increased 21%
year-over-year, mainly driven by higher reinvestment yields.
- Net losses excluding FVTPL bonds of $2 million, included losses on common shares,
partially offset by net foreign currency gains in UK&I.
Net Operating Income, EPS and
ROE
- Net operating income attributable to common shareholders
of $473 million fell 6% from
Q3-2021, reflecting inflation pressures and higher weather-related
losses in personal lines, partially offset by strong investment and
distribution results.
- Earnings per share of $2.02 was 26% higher than last year,
reflecting solid operating and non-operating performances, while
last year's results were impacted by an impairment on a venture
investment.
- Operating ROE of 15.0% and ROE of 19.1% for the
12 months to September 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 and solid regulatory capital ratios in all
jurisdictions, despite challenging capital markets.
- The adjusted debt-to-total capital ratio increased
temporarily to 22.5% as at September 30, 2022, mainly reflecting the
issuance of the Series 14 unsecured medium-term notes in USD as
well as the impact of volatile capital markets. The net proceeds
from this offering will be used to repay the principal amount of
debt maturing subsequent to quarter-end. On a pro-forma basis, this
reimbursement will decrease our adjusted debt-to-total capital
ratio by 1.5 points.
- IFC's book value per share (BVPS) was $78.90 at September
30, 2022, largely unchanged from prior year. Strong earnings
were offset by mark-to-market losses on our investments due to the
increase in interest rates and the recent volatility in capital
markets.
RSA Acquisition
- RSA contributed approximately 15% accretion to
NOIPS for the sixteen-month period since closing.
- We are on track to realize at least $350 million of pre-tax annual run-rate synergies
in 2024. As at September 30, 2022
we estimate that we delivered $235
million in annualized run-rate synergies.
- Integration activities are progressing well. In Q3, we
started the conversion of Johnson's retail policies to
belairdirect. To date, over 95% of policies outside of Johnson and
specialty lines have converted to Intact systems. Retention
continues to be aligned with, or better than, historical RSA
experience.
- On July 7, 2022 we completed the
sale of our 50% stake in RSA Middle East B.S.C. (c) (the "Sale of
Middle East") to National Life
& General Insurance Company (NLGIC), majority owned by Oman
International Development and Investment Co. (OMINVEST) for
proceeds of $175 million
(USD135 million).
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, 32.50 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. These
dividends are payable on December 31,
2022, to shareholders of record as at December 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 $2.60 and $2.76, 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 Q3-2022 MD&A as well as the Q3-2022
Interim 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 11:00 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 November 9, 2022 at 2:00
p.m. ET until midnight on November
16, 2022. To listen to the replay, call 416-764-8677 or
1-888-390-0541 (toll-free in North
America), entry code 663122 . 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 23 – Non-GAAP and
other financial measures in the Q3-2022 MD&A dated November 8, 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
|
Q3-2022
|
Q3-2021
|
YTD
2022
|
YTD
2021
|
Net income
attributable to shareholders, as reported under IFRS
|
370
|
295
|
2,012
|
1,375
|
Remove:
pre-tax non-operating results
|
150
|
265
|
(547)
|
87
|
Remove:
non-operating tax expense
(benefit)
|
(32)
|
(41)
|
104
|
(71)
|
Remove: non-operating
component of NCI
|
-
|
-
|
(24)
|
-
|
NOI
|
488
|
519
|
1,545
|
1,391
|
Remove: preferred share
dividends
|
(15)
|
(14)
|
(44)
|
(40)
|
NOI attributable to
common shareholders
|
473
|
505
|
1,501
|
1,351
|
Divided by
weighted-average number of common shares (in millions)
|
175.4
|
176.1
|
175.7
|
157.8
|
NOIPS, basic and
diluted (in dollars)
|
2.70
|
2.87
|
8.54
|
8.56
|
NOI to common
shareholders for the last 12 months
|
2,167
|
1,805
|
|
Adjusted
average common shareholders' equity,
excluding AOCI
|
14,415
|
9,840
|
|
OROE for the last 12
months
|
15.0 %
|
18.3 %
|
|
Table 2 Reconciliation
of Operating DPW to DPW
|
Q3-2022
|
Q3-2021
|
YTD 2022
|
YTD 2021
|
|
|
|
|
|
DPW, as reported under
IFRS
|
5,796
|
5,719
|
17,127
|
12,676
|
Remove:
impact of industry pools and
fronting
|
(309)
|
(212)
|
(894)
|
(345)
|
Remove: DPW from exited
lines
|
(56)
|
(84)
|
(346)
|
(91)
|
Add: impact of the
normalization for multi-year policies
|
12
|
24
|
41
|
26
|
|
|
|
|
|
Operating DPW, as
reported in the MD&A
|
5,443
|
5,447
|
15,928
|
12,266
|
Operating DPW
growth
|
- %
|
67 %
|
30 %
|
34 %
|
Operating DPW growth
(in constant currency)
|
2 %
|
68 %
|
31 %
|
35 %
|
|
|
|
|
|
Table 3 Reconciliation
of Underwriting income to Underwriting income as reported under
IFRS
|
Q3-2022
|
Q3-2021
|
YTD
2022
|
YTD
2021
|
|
|
|
|
|
Net earned premiums, as
reported under IFRS
|
4,945
|
4,950
|
14,738
|
11,235
|
Other underwriting
revenues, as reported under IFRS
|
78
|
77
|
229
|
157
|
Net claims incurred, as
reported under IFRS
|
(2,767)
|
(2,883)
|
(7,899)
|
(6,171)
|
Underwriting expenses,
as reported under IFRS
|
(1,653)
|
(1,718)
|
(4,890)
|
(3,946)
|
Underwriting income
(loss), as calculated under IFRS
|
603
|
426
|
2,178
|
1,275
|
Remove: impact of MYA
on underwriting results
|
(291)
|
(37)
|
(1,120)
|
(154)
|
Remove: non-operating
pension expense
|
15
|
16
|
42
|
48
|
Remove: underwriting
loss (income) from exited lines
|
35
|
21
|
99
|
18
|
Underwriting income
(loss), as reported in the MD&A
|
362
|
426
|
1,199
|
1,187
|
Operating
NEP
|
4,880
|
4,871
|
14,380
|
11,112
|
|
|
|
|
|
Operating combined
ratio
|
92.6 %
|
91.3 %
|
91.7 %
|
89.3 %
|
Table 4 Reconciliation
of Operating net claims to Net claims incurred, as reported under
IFRS
|
Q3-2022
|
Q3-2021
|
YTD
2022
|
YTD
2021
|
|
|
|
|
|
Net claims incurred,
as reported under IFRS
|
2,767
|
2,883
|
7,899
|
6,171
|
Remove: positive
(negative) impact of MYA on underwriting results
|
291
|
37
|
1,120
|
154
|
Remove: adjustment for
non-operating pension expense
|
(6)
|
(6)
|
(16)
|
(18)
|
Remove: net claims from
exited lines
|
(74)
|
(63)
|
(307)
|
(89)
|
Net with: other
underwriting revenues
|
(10)
|
(18)
|
(31)
|
(18)
|
|
|
|
|
|
Operating net
claims, as reported in the MD&A
|
2,968
|
2,833
|
8,665
|
6,200
|
Remove: net current
year CAT losses
|
(229)
|
(365)
|
(659)
|
(490)
|
Remove: favourable
(unfavourable) PYD
|
143
|
148
|
545
|
434
|
|
|
|
|
|
Operating net claims
excluding current year CAT losses and PYD
|
2,882
|
2,616
|
8,551
|
6,144
|
Operating
NEP
|
4,880
|
4,871
|
14,380
|
11,112
|
Remove: reinstatement
premiums ceded (recovered)
|
4
|
-
|
7
|
1
|
Operating
NEP before reinstatement premiums
|
4,884
|
4,871
|
14,387
|
11,113
|
|
|
|
|
|
Underlying current year
loss ratio1
|
58.9 %
|
53.7 %
|
59.5 %
|
55.3 %
|
CAT loss ratio
(including reinstatement premiums) 1
|
4.8 %
|
7.5 %
|
4.6 %
|
4.4 %
|
(Favourable)
unfavourable PYD ratio2
|
(2.9) %
|
(3.0) %
|
(3.8) %
|
(3.9) %
|
Claims
ratio2
|
60.8 %
|
58.2 %
|
60.3 %
|
55.8 %
|
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
|
Q3-2022
|
Q3-2021
|
YTD
2022
|
YTD
2021
|
|
|
|
|
|
Underwriting
expenses, as reported under IFRS
|
1,653
|
1,718
|
4,890
|
3,946
|
Net with: other
underwriting revenues
|
(68)
|
(59)
|
(198)
|
(139)
|
Remove: adjustment for
non-operating pension expense
|
(9)
|
(10)
|
(26)
|
(30)
|
Remove: underwriting
expenses from exited lines
|
(26)
|
(37)
|
(150)
|
(52)
|
Operating net
underwriting expenses, as reported in the MD&A
|
1,550
|
1,612
|
4,516
|
3,725
|
Commissions
|
828
|
901
|
2,356
|
2,056
|
General
expenses
|
588
|
576
|
1,760
|
1,323
|
Premium
taxes
|
134
|
135
|
400
|
346
|
Operating
NEP
|
4,880
|
4,871
|
14,380
|
11,112
|
Commissions
ratio
|
17.0 %
|
18.5 %
|
16.4 %
|
18.5 %
|
General expenses
ratio
|
12.1 %
|
11.8 %
|
12.2 %
|
11.9 %
|
Premium taxes
ratio
|
2.7 %
|
2.8 %
|
2.8 %
|
3.1 %
|
Expense
ratio
|
31.8 %
|
33.1 %
|
31.4 %
|
33.5 %
|
Table 6
Reconciliation of ROE to Net income attributable to shareholders,
as reported under IFRS
|
Q3-2022
|
Q3-2021
|
YTD
2022
|
YTD
2021
|
|
|
|
|
|
Net income
attributable to shareholders
|
370
|
295
|
2,012
|
1,375
|
Remove: preferred share
dividends
|
(15)
|
(14)
|
(44)
|
(40)
|
|
|
|
|
|
Net income
attributable to common shareholders
|
355
|
281
|
1,968
|
1,335
|
Divided by
weighted-average number of common shares (in millions)
|
175.4
|
176.1
|
175.7
|
157.8
|
EPS, basic and
diluted (in dollars)
|
2.02
|
1.60
|
11.20
|
8.46
|
|
|
|
|
Net income
attributable to common shareholders for the last 12
months
|
2,647
|
1,700
|
|
Adjusted
average common shareholders'
equity
|
13,888
|
10,279
|
|
ROE for the last 12
months
|
19.1 %
|
16.5 %
|
|
Table 7
Reconciliation of consolidated results on a MD&A basis with
the interim 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
net
investment
income
|
Total
income
taxes
|
Non-
operating
results
|
Underwriting
income
|
Total
F/S
caption
|
For the quarter
ended September 30, 2022
|
|
|
|
|
|
|
|
|
Underwriting
income1
|
-
|
-
|
-
|
-
|
-
|
241
|
362
|
603
|
Investment
income
|
-
|
-
|
-
|
240
|
-
|
-
|
-
|
240
|
Investment
expenses
|
-
|
-
|
-
|
(8)
|
-
|
-
|
-
|
(8)
|
Other
revenues
|
120
|
-
|
4
|
-
|
-
|
-
|
-
|
124
|
Net gains
(losses)
|
-
|
-
|
-
|
-
|
-
|
(229)
|
-
|
(229)
|
Gain on sale of
business
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Share of profits from
investments in
associates and joint ventures
|
37
|
(3)
|
-
|
-
|
(8)
|
(3)
|
-
|
23
|
Finance
costs
|
-
|
(43)
|
-
|
-
|
-
|
-
|
-
|
(43)
|
Acquisition,
integration and restructuring costs
|
-
|
-
|
-
|
-
|
-
|
(102)
|
-
|
(102)
|
Other
expenses
|
(46)
|
-
|
(49)
|
-
|
-
|
(57)
|
-
|
(152)
|
Income tax benefit
(expense)
|
-
|
-
|
-
|
-
|
(86)
|
-
|
-
|
(86)
|
|
|
|
|
|
|
|
|
|
Total, as reported
in MD&A
|
111
|
(46)
|
(45)
|
232
|
(94)
|
(150)
|
362
|
|
For the quarter
ended September 30, 2021
|
|
|
|
|
|
|
|
|
Underwriting
income1
|
-
|
-
|
-
|
-
|
-
|
-
|
426
|
426
|
Investment
income
|
-
|
-
|
-
|
202
|
-
|
-
|
-
|
202
|
Investment
expenses
|
-
|
-
|
-
|
(11)
|
-
|
-
|
-
|
(11)
|
Other
revenues
|
110
|
-
|
6
|
-
|
-
|
-
|
-
|
116
|
Net gains
(losses)
|
-
|
-
|
-
|
-
|
-
|
(88)
|
-
|
(88)
|
Gain
on the RSA Acquisition
|
-
|
-
|
-
|
-
|
-
|
4
|
-
|
4
|
Share of profits from
investments in associates
and joint ventures
|
36
|
(2)
|
-
|
-
|
(8)
|
(4)
|
-
|
22
|
Finance
costs
|
-
|
(45)
|
-
|
-
|
-
|
-
|
-
|
(45)
|
Acquisition,
integration and restructuring costs
|
-
|
-
|
-
|
-
|
-
|
(115)
|
-
|
(115)
|
Other
expenses
|
(41)
|
-
|
(17)
|
-
|
-
|
(62)
|
-
|
(120)
|
Income tax benefit
(expense)
|
-
|
-
|
-
|
-
|
(91)
|
-
|
-
|
(91)
|
|
|
|
|
|
|
|
-
|
|
Total, as reported
in MD&A
|
105
|
(47)
|
(11)
|
191
|
(99)
|
(265)
|
426
|
|
|
|
|
|
|
|
|
|
|
|
Table 8
Reconciliation of consolidated results on a MD&A basis with
the interim 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
net
investment
income
|
Total
income
taxes
|
Non-
operating
results
|
Underwriting
income
|
Total
F/S
caption
|
For the nine-month
period ended September
30, 2022
|
|
|
|
|
|
|
|
|
Underwriting
income1
|
-
|
-
|
-
|
-
|
-
|
979
|
1,199
|
2,178
|
Investment
income
|
-
|
-
|
-
|
673
|
-
|
4
|
-
|
677
|
Investment
expenses
|
-
|
-
|
-
|
(25)
|
-
|
-
|
-
|
(25)
|
Other
revenues
|
388
|
-
|
8
|
-
|
-
|
-
|
-
|
396
|
Net gains
(losses)
|
-
|
-
|
-
|
-
|
-
|
(402)
|
-
|
(402)
|
Gain on sale of
business
|
-
|
-
|
-
|
-
|
-
|
423
|
-
|
423
|
Share of profits from
investments in
associates and joint ventures
|
134
|
(7)
|
-
|
-
|
(30)
|
(12)
|
-
|
85
|
Finance
costs
|
-
|
(127)
|
-
|
-
|
-
|
-
|
-
|
(127)
|
Acquisition,
integration and restructuring costs
|
-
|
-
|
-
|
-
|
-
|
(269)
|
-
|
(269)
|
Other
expenses
|
(178)
|
-
|
(115)
|
-
|
-
|
(176)
|
-
|
(469)
|
Income tax benefit
(expense)
|
-
|
-
|
-
|
-
|
(466)
|
-
|
-
|
(466)
|
|
|
|
|
|
|
|
|
|
Total, as reported
in MD&A
|
344
|
(134)
|
(107)
|
648
|
(496)
|
547
|
1,199
|
|
For the nine-month
period ended September
30, 2021
|
|
|
|
|
|
|
|
|
Underwriting
income1
|
-
|
-
|
-
|
-
|
-
|
88
|
1,187
|
1,275
|
Investment
income
|
-
|
-
|
-
|
509
|
-
|
-
|
-
|
509
|
Investment
expenses
|
-
|
-
|
-
|
(23)
|
-
|
-
|
-
|
(23)
|
Other
revenues
|
291
|
-
|
22
|
-
|
-
|
-
|
-
|
313
|
Net gains
(losses)
|
-
|
-
|
-
|
-
|
-
|
55
|
-
|
55
|
Gain on the RSA
Acquisition
|
-
|
-
|
-
|
-
|
-
|
204
|
-
|
204
|
Share of profits from
investments in associates
and joint ventures
|
119
|
(8)
|
-
|
-
|
(26)
|
(14)
|
-
|
71
|
Finance
costs
|
-
|
(111)
|
-
|
-
|
-
|
-
|
-
|
(111)
|
Acquisition,
integration and restructuring costs
|
-
|
-
|
-
|
-
|
-
|
(296)
|
-
|
(296)
|
Other
expenses
|
(125)
|
-
|
(51)
|
-
|
-
|
(124)
|
-
|
(300)
|
Income tax benefit
(expense)
|
-
|
-
|
-
|
-
|
(310)
|
-
|
-
|
(310)
|
|
|
|
|
|
|
|
|
|
Total, as reported
in MD&A
|
285
|
(119)
|
(29)
|
486
|
(336)
|
(87)
|
1,187
|
|
|
|
|
|
|
|
|
|
|
|
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 September
30,
|
2022
|
2021
|
|
|
|
Equity attributable to
shareholders, as reported under
IFRS
|
15,150
|
15,123
|
Remove:
Preferred shares, as reported under IFRS
|
(1,322)
|
(1,175)
|
|
|
|
Common shareholders'
equity
|
13,828
|
13,948
|
Remove:
AOCI, as
reported under IFRS
|
1,629
|
(575)
|
|
|
|
Common shareholders'
equity (excluding AOCI)
|
15,457
|
13,373
|
|
|
|
Number of common shares
outstanding at the same date (in
millions)
|
175.3
|
176.1
|
BVPS
|
78.90
|
79.21
|
BVPS (excluding
AOCI)
|
88.19
|
75.95
|
Table 10 Adjusted average
common shareholders' equity and Adjusted average common
shareholders' equity (excluding AOCI)
As at September
30,
|
2022
|
2021
|
|
|
|
|
Ending common
shareholders' equity
|
13,828
|
13,948
|
|
Remove: common shares
issued during the period
|
-
|
(4,311)
|
|
Ending common
shareholders' equity, excluding common shares issued during the
period
|
13,828
|
9,637
|
|
Beginning common
shareholders' equity
|
13,948
|
8,040
|
|
Average common
shareholders' equity, excluding common shares issued during the
period
|
13,888
|
8,838
|
|
Weighted impact of June
1, 2021 common shares issuance
|
-
|
1,441
|
|
Adjusted average common shareholders'
equity
|
13,888
|
10,279
|
|
Ending
common shareholders' equity
(excluding AOCI)
|
15,457
|
13,373
|
|
Remove: common shares
issued during the period
|
-
|
(4,311)
|
|
Ending common
shareholders' equity, excluding AOCI and common shares issued
during the period
|
15,457
|
9,062
|
|
Beginning common
shareholders' equity, excluding AOCI
|
13,373
|
7,736
|
|
Average common
shareholders' equity, excluding AOCI and common shares issued during the
period
|
14,415
|
8,399
|
|
Weighted impact of June
1, 2021 common shares issuance
|
-
|
1,441
|
|
Adjusted average common shareholders'
equity, excluding AOCI
|
14,415
|
9,840
|
|
|
|
|
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
|
Sept.
30
2022
|
June
30
2022
|
Dec.
31
2021
|
|
|
|
|
Debt outstanding, as
reported under IFRS
|
4,796
|
4,345
|
5,229
|
Remove: hybrid
subordinated notes
|
(247)
|
(247)
|
(247)
|
|
|
|
|
Debt outstanding
(excluding hybrid debt)
|
4,549
|
4,098
|
4,982
|
|
|
|
|
Debt outstanding, as
reported under IFRS
|
4,796
|
4,345
|
5,229
|
Equity attributable to
shareholders, as reported under IFRS
|
15,150
|
15,515
|
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
|
20,231
|
20,145
|
21,698
|
|
|
|
|
Debt outstanding
(excluding hybrid debt)
|
4,549
|
4,098
|
4,982
|
Adjusted total
capital
|
20,231
|
20,145
|
21,698
|
Adjusted
debt-to-total capital ratio
|
22.5 %
|
20.3 %
|
23.0 %
|
|
|
|
|
Debt outstanding, as
reported under IFRS
|
4,796
|
4,345
|
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)
|
6,403
|
5,952
|
7,199
|
Adjusted total
capital
|
20,231
|
20,145
|
21,698
|
Total leverage
ratio
|
31.7 %
|
29.5 %
|
33.2 %
|
Adjusted
debt-to-total capital
ratio
|
22.5 %
|
20.3 %
|
23.0 %
|
Preferred shares and
hybrids
|
9.2 %
|
9.2 %
|
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"), and the realization of expected strategic,
financial and other benefits of the Sale of Middle East. 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
Q3-2022 MD&A.
SOURCE Intact Financial Corporation