(in Canadian dollars except as otherwise noted)
TORONTO, Feb. 7, 2023
/CNW/ - (TSX: IFC)
Highlights1,2
- Operating DPW growth accelerated to 3% in the
quarter, and 5% excluding strategic exits, on favourable
market conditions
- Operating combined ratio was a solid 91.5% in Q4-2022
and 91.6% for the full year despite elevated catastrophe
losses and inflation
- Net operating income per share of $3.34 in the quarter and $11.88 for the full year reflected higher
investment and distribution income, which partially offset lower
underwriting margins
- EPS decreased to $2.26 in
Q4-2022, but was up 9% for the full year on higher
operating income and investment gains
- OROE of 14.3% and ROE of 16.5% reflected strong
operating performance in a challenging environment
- Balance sheet remained strong with a total capital margin of
$2.4 billion and BVPS of
$80.33 despite capital markets
volatility
- Quarterly dividend increased by 10% to $1.10 per common share
Charles Brindamour, Chief
Executive Officer, said:
"The resilience of our platform was again evident in 2022
with a mid-teens ROE despite elevated catastrophe losses and
inflation pressures. At the same time, we made significant progress
on the RSA integration, which contributed 16% to net operating
income per share for the full year and drove 23% growth in
premiums. With the business operating at a low 90s combined ratio,
positive top line momentum across all segments and a strong balance
sheet, we are well positioned to deliver on our financial and
strategic objectives in the year ahead. We are therefore pleased to
increase dividends to common shareholders for the eighteenth
consecutive year."
Consolidated
Highlights
|
(in millions of
Canadian dollars except as otherwise noted)
|
Q4-2022
|
Q4-2021
|
Change
|
2022
|
2021
|
Change
|
Operating direct
premiums written1,2
|
5,125
|
5,017
|
3 %
|
21,053
|
17,283
|
23 %
|
Direct premiums
written2
|
5,528
|
5,318
|
5 %
|
22,655
|
17,994
|
28 %
|
Operating combined
ratio1
|
91.5 %
|
87.8 %
|
3.7 pts
|
91.6 %
|
88.8 %
|
2.8 pts
|
Underwriting
income1
|
427
|
600
|
(29) %
|
1,626
|
1,787
|
(9) %
|
Operating net
investment income1
|
279
|
220
|
27 %
|
927
|
706
|
31 %
|
Distribution
income1
|
93
|
77
|
21 %
|
437
|
362
|
21 %
|
Net operating income
attributable to common shareholders1
|
585
|
666
|
(12) %
|
2,086
|
2,017
|
3 %
|
Net income
|
419
|
701
|
(40) %
|
2,420
|
2,088
|
16 %
|
Per share measures (in
dollars)
|
|
|
|
|
|
|
Net operating income
per share (NOIPS)1
|
$3.34
|
$3.78
|
(12) %
|
$11.88
|
$12.41
|
(4) %
|
Earnings per share
(EPS)
|
$2.26
|
$3.85
|
(41) %
|
$13.46
|
$12.40
|
9 %
|
Return on equity for
the last 12 months
|
|
|
|
|
|
|
Operating
ROE1
|
14.3 %
|
17.8 %
|
(3.5) pts
|
|
|
|
ROE1
|
16.5 %
|
17.0 %
|
(0.5) pts
|
|
|
|
Book value per share
(in dollars)
|
$80.33
|
$82.34
|
(2) %
|
|
|
|
Total capital
margin
|
2,379
|
2,891
|
(18) %
|
|
|
|
Adjusted debt-to-total
capital ratio1
|
21.2 %
|
23.0 %
|
(1.8) pts
|
|
|
|
____________________________________________
|
1This
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 36 – Non-GAAP and
other financial measures in the Q4-2022 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 a $0.10 per share increase in the quarterly
dividend to $1.10 per share on the
Company's outstanding common shares. This represents a 10% increase
and marks the 18th consecutive annual increase in
our common share dividend since our IPO in 2004.
Normal Course Issuer Bid
- As at December 31, 2022, the
Company had repurchased and cancelled 824,990 common shares for
approximately $150 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. The Board has authorized, subject to TSX approval, the
renewal of the NCIB to purchase for cancellation up to 3% of the
Company's issued and outstanding common shares commencing
February 17, 2023.
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, natural disasters, and a hard reinsurance market.
- In Canada, we expect firm
market conditions to continue in personal property. Personal auto
premiums are expected to grow by mid single digits in response to
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, natural disasters and a
hard reinsurance market. 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)
|
Q4-2022
|
Q4-2021
|
Change
|
2022
|
2021
|
Change
|
Operating direct
premiums written2
|
Canada
|
3,417
|
3,283
|
4 %
|
14,037
|
12,023
|
17 %
|
UK&I
|
1,144
|
1,274
|
(4) %
|
4,671
|
2,538
|
nm
|
US
|
564
|
460
|
13 %
|
2,345
|
1,988
|
14 %
|
Corporate and Other
(RSA for June 2021)
|
n/a
|
n/a
|
nm
|
n/a
|
734
|
nm
|
Total
|
5,125
|
5,017
|
3 %
|
21,053
|
17,283
|
23 %
|
Operating combined
ratio
|
Canada
|
88.7 %
|
84.4 %
|
4.3 pts
|
90.5 %
|
86.7 %
|
3.8 pts
|
UK&I
|
104.0 %
|
93.0 %
|
11.0 pts
|
97.0 %
|
93.4 %
|
nm
|
US
|
85.1 %
|
92.5 %
|
(7.4) pts
|
88.2 %
|
92.9 %
|
(4.7) pts
|
Corporate and Other
(RSA for June 2021)
|
n/a
|
n/a
|
nm
|
n/a
|
90.7 %
|
nm
|
Total
|
91.5 %
|
87.8 %
|
3.7 pts
|
91.6 %
|
88.8 %
|
2.8 pts
|
Underwriting
income
|
Canada
|
385
|
513
|
(128)
|
1,267
|
1,525
|
(258)
|
UK&I
|
(42)
|
80
|
(122)
|
123
|
152
|
nm
|
US
|
83
|
36
|
47
|
221
|
117
|
104
|
Corporate and
Other
|
1
|
(29)
|
30
|
15
|
(64)
|
79
|
RSA – June
2021
|
n/a
|
n/a
|
nm
|
n/a
|
57
|
nm
|
Total
|
427
|
600
|
(173)
|
1,626
|
1,787
|
(161)
|
Q4-2022 Insurance Business Performance
- Operating DPW grew by 3%, or 5% excluding strategic
exits, a point higher than in the preceding quarter, reflecting
solid rate momentum across all geographies.
- Underwriting performance was solid with an overall operating
combined ratio of 91.5%. In Canada, the strong operating combined ratio of
88.7% was attributable to personal property and commercial lines,
partially offset by the impact of inflation and higher
weather-related frequency in personal auto. In the UK&I, the
operating combined ratio increased to 104.0%, led by elevated
catastrophe and large losses in personal lines, as well as ongoing
inflation pressures. In the US, the operating combined ratio
improved to 85.1%, largely due to lower catastrophe losses and our
profitability actions over time.
Lines of Business
P&C Canada
- Personal auto premiums increased 2% from the prior year,
improving three points from the preceding quarter as a result of
rate increases and a firming market. The operating combined ratio
of 95.8% was slightly higher than expected due to the impact of
challenging winter conditions on claims frequency. The 8.3-point
increase from the prior year was driven by moderating inflation and
higher frequency. We continue to expect to deliver a seasonally
adjusted sub-95 combined ratio in the next 12 months as a
result of our ongoing rate and underwriting actions.
- Personal property premiums grew by 5% in firm market
conditions. The operating combined ratio was strong at 76.9%,
decreasing 2.6 points from the prior year due to lower catastrophe
losses and expenses. For the full year, the operating combined
ratio was 90.1% despite elevated catastrophe activity, reflecting
the underlying strength of the business, as well as rate actions in
firm market conditions.
- Commercial lines premium growth of 6% reflected rate
actions, led by strength in commercial property and specialty
lines. The operating combined ratio was a solid 89.0% despite
increasing 4.7 points from the prior year on the back of higher
catastrophe losses and less favourable prior-year development. The
combined ratio for the full year was strong at 87.9% and reflected
the impact of profitability actions in favourable market
conditions.
P&C UK&I
- Personal lines premiums declined 12% on a constant
currency basis, approximately 9 points of which was attributable to
the sale of our Middle East
business. We remained disciplined in competitive market conditions,
which continue to be influenced by pricing reforms introduced at
the beginning of 2022. The operating combined ratio of 120.8%
primarily reflected 20 points of catastrophe losses from unusually
severe winter conditions, well above our expectations, as well as
inflationary pressures.
- Commercial lines premiums grew 9% on a constant currency
basis, excluding the impacts from the sale of our Middle East business and the
optimization of our delegated portfolio, driven by rate
actions in hard market conditions and strong retention levels. The
operating combined ratio was a solid 92.8%, though up 2.4 points
from the prior year due to higher large losses.
P&C U.S.
- US Commercial premiums grew 13% on a constant currency
basis, as new business, increased exposures, and rate increases
more than offset the impact of strategic exits. The operating
combined ratio improved 7.4 points to 85.1%, driven by our
profitability actions, including the exit from Public Entities, as
well as an absence of catastrophe losses in the quarter.
Distribution and Investment Income
- Distribution income grew 21% to $93 million in Q4-2022 and by 21% to $437 million for the full year, driven by
accretive acquisitions (including Highland Insurance Solutions), a
solid contribution from our On Side restoration business, and
organic growth.
- Operating net investment income of $279 million for the quarter increased 27%
year-over-year, mainly driven by higher reinvestment yields on
the back of rising interest rates over the past 12 months.
- Net losses excluding FVTPL bonds of $81 million were driven by fair value
adjustments to investment properties, impairments on common equity
investments, and realized losses in the sale of available-for-sale
bond portfolio, partially offset by gains on equities and hedging
instruments.
Net Operating Income, EPS and ROE
- Net operating income attributable to common
shareholders of $585
million decreased 12% from Q4-2021, as lower
underwriting income was partially offset by higher investment and
distribution income, as well as the recognition of additional
deferred tax assets on higher expected profitability in the
UK&I.
- Earnings per share of $2.26 were 41% lower than last year,
primarily due to net investment losses amid volatile capital
markets.
- Operating ROE of 14.3% and ROE of 16.5% for
the 12 months to December 31, 2022
reflected strong operating performance.
Balance Sheet
- The Company ended the quarter in a strong financial position,
with a total capital margin of $2.4 billion and solid regulatory
capital ratios in all jurisdictions, despite challenging capital
markets.
- The adjusted debt-to-total capital
ratio decreased to 21.2% as at
December 31, 2022, mainly due to the
repayment of US senior notes in the quarter. The adjusted
debt-to-capital ratio was slightly higher than our long-term target
of 20% on account of recent market volatility.
- IFC's book value per share (BVPS) was $80.33 at December 31,
2022, down 2% from the prior year. Strong earnings were
offset by mark-to-market losses on our investments due to rising
interest rates and the recent volatility in capital markets. By
contrast, BVPS was up 2% from Q3-2022, driven by solid operating
results and mark-to-market gains in our available-for-sale
securities portfolio, partially offset by market-related losses in
our pension plans.
RSA Acquisition
- RSA contributed approximately 16% accretion to
NOIPS in 2022.
- We are on track to realize at least $350 million of pre-tax annual run-rate synergies
in 2024. As at December 31, 2022
we estimate that we delivered $260
million in annualized run-rate synergies.
- Integration activities are progressing well. The
conversion of policies outside of Johnson and specialty lines to
Intact systems has been completed. In direct distribution, 12% of
Johnson's retail policies have converted to belairdirect since the
process was initiated in Q3-2022. Overall, retention continues to
be aligned with, or better than, historical RSA experience.
Preferred Share Dividends
- The Board of Directors also approved a quarterly dividend of
30.25625 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. The dividends
are payable on March 31, 2023, to
shareholders of record on March 15,
2023.
Analysts' Estimates
- The average estimate of earnings per share and net
operating income per share for the quarter among the analysts
who follow the Company was $2.62 and
$3.03, 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 MD&A for the year ended December 31 2022, as well as the Consolidated
Financial Statements for the years ended December 31, 2022 and 2021, 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 Consolidated 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
February 8, 2023 at 2:00 p.m. ET until midnight on February 15, 2023. To listen to the replay, call
416-764-8677 or 1-888-390-0541 (toll-free in North America), entry code 417120. 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 $21
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 U.S., 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 36 – Non-GAAP and
other financial measures in the MD&A for the year ended
December 31, 2022 dated February 7, 2023, 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
|
Q4-2022
|
Q4-2021
|
2022
|
2021
|
|
|
|
|
|
Net income
attributable to shareholders, as reported under IFRS
|
412
|
692
|
2,424
|
2,067
|
Remove:
Pre-tax non-operating losses
(gains)
|
236
|
(17)
|
(311)
|
70
|
Remove:
Non-operating tax expense
(benefit)1
|
(47)
|
4
|
57
|
(67)
|
Remove: Non operating
component of NCI
|
-
|
-
|
(24)
|
-
|
NOI
|
601
|
679
|
2,146
|
2,070
|
Remove: preferred share
dividends
|
(16)
|
(13)
|
(60)
|
(53)
|
NOI attributable to
common shareholders
|
585
|
666
|
2,086
|
2,017
|
Divided by
weighted-average number of common shares (in millions)
|
175.3
|
176.1
|
175.6
|
162.4
|
NOIPS, basic and
diluted (in dollars)
|
3.34
|
3.78
|
11.88
|
12.41
|
NOI to common
shareholders for the last 12 months
|
2,086
|
2,017
|
|
|
Adjusted
average common shareholders' equity,
excluding AOCI
|
14,567
|
11,357
|
|
|
OROE for the last 12
months
|
14.3 %
|
17.8 %
|
|
|
Table 2 Reconciliation
of Operating DPW to DPW
|
Q4-2022
|
Q4-2021
|
2022
|
2021
|
|
|
|
|
|
DPW, as reported under
IFRS
|
5,528
|
5,318
|
22,655
|
17,994
|
Remove:
impact of industry pools and
fronting
|
(402)
|
(260)
|
(1,296)
|
(605)
|
Remove: DPW from exited
lines
|
(5)
|
(70)
|
(351)
|
(161)
|
Add: impact of the
normalization for multi-year policies
|
4
|
29
|
45
|
55
|
|
|
|
|
|
Operating DPW, as
reported in the MD&A
|
5,125
|
5,017
|
21,053
|
17,283
|
Operating DPW
growth
|
2 %
|
75 %
|
22 %
|
44 %
|
Operating DPW growth
(in constant currency)
|
3 %
|
75 %
|
23 %
|
45 %
|
Table 3 Reconciliation
of Underwriting income to Underwriting income, as calculated under
IFRS
|
Q4-2022
|
Q4-2021
|
2022
|
2021
|
|
|
|
|
|
Net earned premiums, as
reported under IFRS
|
5,054
|
5,003
|
19,792
|
16,238
|
Other underwriting
revenues, as reported under IFRS
|
83
|
79
|
312
|
236
|
Net claims incurred, as
reported under IFRS
|
(3,123)
|
(2,796)
|
(11,022)
|
(8,967)
|
Underwriting expenses,
as reported under IFRS
|
(1,644)
|
(1,665)
|
(6,534)
|
(5,611)
|
Underwriting income
(loss), as calculated under IFRS
|
370
|
621
|
2,548
|
1,896
|
Remove: impact of MYA
on underwriting results
|
(7)
|
(72)
|
(1,127)
|
(226)
|
Remove: non-operating
pension expense
|
14
|
16
|
56
|
64
|
Remove: underwriting
loss (income) from exited lines
|
50
|
35
|
149
|
53
|
Underwriting income
(loss), as reported in the MD&A
|
427
|
600
|
1,626
|
1,787
|
Operating
NEP
|
5,004
|
4,931
|
19,384
|
16,043
|
|
|
|
|
|
Operating combined
ratio
|
91.5 %
|
87.8 %
|
91.6 %
|
88.8 %
|
Table 4 Reconciliation
of Operating net claims to Net claims incurred, as reported under
IFRS
|
Q4-2022
|
Q4-2021
|
2022
|
2021
|
|
|
|
|
|
Net claims incurred,
as reported under IFRS
|
3,123
|
2,796
|
11,022
|
8,967
|
Remove: positive
(negative) impact of MYA on underwriting results
|
7
|
72
|
1,127
|
226
|
Remove: adjustment for
non-operating pension expense
|
(5)
|
(6)
|
(21)
|
(24)
|
Remove: net claims from
exited lines
|
(80)
|
(83)
|
(387)
|
(172)
|
Net with: other
underwriting revenues
|
(12)
|
(6)
|
(43)
|
(24)
|
|
|
|
|
|
Operating net
claims, as reported in the MD&A
|
3,033
|
2,773
|
11,698
|
8,973
|
Remove: net current
year CAT losses
|
(167)
|
(186)
|
(826)
|
(676)
|
Remove: favourable
(unfavourable) PYD
|
188
|
160
|
733
|
594
|
|
|
|
|
|
Operating net claims
excluding current year CAT losses and PYD
|
3,054
|
2,747
|
11,605
|
8,891
|
Operating
NEP
|
5,004
|
4,931
|
19,384
|
16,043
|
Remove: reinstatement
premiums ceded (recovered)
|
11
|
-
|
18
|
1
|
Operating
NEP before reinstatement premiums
|
5,015
|
4,931
|
19,402
|
16,044
|
|
|
|
|
|
Underlying current year
loss ratio1
|
60.9 %
|
55.7 %
|
59.8 %
|
55.5 %
|
CAT loss ratio
(including reinstatement premiums) 1
|
3.6 %
|
3.8 %
|
4.3 %
|
4.2 %
|
(Favourable)
unfavourable PYD ratio2
|
(3.8) %
|
(3.3) %
|
(3.8) %
|
(3.8) %
|
Claims
ratio2
|
60.7 %
|
56.2 %
|
60.3 %
|
55.9 %
|
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
|
Q4-2022
|
Q4-2021
|
2022
|
2021
|
|
|
|
|
|
Underwriting
expenses, as reported under IFRS
|
1,644
|
1,665
|
6,534
|
5,611
|
Net with: other
underwriting revenues
|
(71)
|
(73)
|
(269)
|
(212)
|
Remove: adjustment for
non-operating pension expense
|
(9)
|
(10)
|
(35)
|
(40)
|
Remove: underwriting
expenses from exited lines
|
(20)
|
(24)
|
(170)
|
(76)
|
Operating net
underwriting expenses, as reported in the MD&A
|
1,544
|
1,558
|
6,060
|
5,283
|
Commissions
|
753
|
829
|
3,109
|
2,885
|
General
expenses
|
650
|
591
|
2,410
|
1,914
|
Premium
taxes
|
141
|
138
|
541
|
484
|
Operating
NEP
|
5,004
|
4,931
|
19,384
|
16,043
|
Commissions
ratio
|
15.0 %
|
16.8 %
|
16.1 %
|
18.0 %
|
General expenses
ratio
|
13.0 %
|
12.0 %
|
12.4 %
|
11.9 %
|
Premium taxes
ratio
|
2.8 %
|
2.8 %
|
2.8 %
|
3.0 %
|
Expense
ratio
|
30.8 %
|
31.6 %
|
31.3 %
|
32.9 %
|
Table 6 Reconciliation
of ROE to Net income attributable to shareholders, as reported
under IFRS
|
Q4-2022
|
Q4-2021
|
2022
|
2021
|
|
|
|
|
|
Net income
attributable to shareholders
|
412
|
692
|
2,424
|
2,067
|
Remove: preferred share
dividends
|
(16)
|
(13)
|
(60)
|
(53)
|
|
|
|
|
|
Net income
attributable to common shareholders
|
396
|
679
|
2,364
|
2,014
|
Divided by
weighted-average number of common shares (in millions)
|
175.3
|
176.1
|
175.6
|
162.4
|
EPS, basic and
diluted (in dollars)
|
2.26
|
3.85
|
13.46
|
12.40
|
|
|
|
|
|
Net income
attributable to common shareholders for the last 12
months
|
2,364
|
2,014
|
|
|
Adjusted
average common shareholders'
equity
|
14,289
|
11,826
|
|
|
ROE for the last 12
months
|
16.5 %
|
17.0 %
|
|
|
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
net
investment
income
|
Total
income
taxes
|
Non-
operating
losses
|
Underwriting
income
|
Total F/S
caption
|
For the quarter
ended December 31, 2022
|
|
|
|
|
|
|
|
|
Underwriting
income1
|
-
|
-
|
-
|
-
|
-
|
(57)
|
427
|
370
|
Investment
incomes
|
-
|
-
|
-
|
289
|
-
|
-
|
-
|
289
|
Investment
expenses
|
-
|
-
|
-
|
(10)
|
-
|
-
|
-
|
(10)
|
Other
revenues
|
149
|
-
|
-
|
-
|
-
|
-
|
-
|
149
|
Net gains
(losses)
|
-
|
-
|
-
|
-
|
-
|
(27)
|
-
|
(27)
|
Gain on sale of
business
|
-
|
-
|
-
|
-
|
-
|
(2)
|
-
|
(2)
|
Share of profits from
investments in associates and joint ventures
|
35
|
(5)
|
-
|
-
|
(6)
|
(6)
|
-
|
18
|
Finance
costs
|
-
|
(50)
|
-
|
-
|
-
|
-
|
-
|
(50)
|
Acquisition,
integration and restructuring costs
|
-
|
-
|
-
|
-
|
-
|
(84)
|
-
|
(84)
|
Other
expenses
|
(91)
|
-
|
(27)
|
-
|
-
|
(60)
|
-
|
(178)
|
Income tax benefit
(expense)
|
-
|
-
|
-
|
-
|
(56)
|
-
|
-
|
(56)
|
Total, as reported
in MD&A
|
93
|
(55)
|
(27)
|
279
|
(62)
|
(236)
|
427
|
|
For the quarter
ended December 31, 2021
|
|
|
|
|
|
|
|
|
Underwriting
income1
|
-
|
-
|
-
|
-
|
-
|
21
|
600
|
621
|
Investment
incomes
|
-
|
-
|
-
|
231
|
-
|
-
|
-
|
231
|
Investment
expenses
|
-
|
-
|
-
|
(11)
|
-
|
-
|
-
|
(11)
|
Other
revenues
|
98
|
-
|
10
|
-
|
-
|
-
|
-
|
108
|
Net gains
(losses)
|
-
|
-
|
-
|
-
|
-
|
194
|
-
|
194
|
Gain on the RSA
acquisition
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Share of profits from
investments
in associates and
joint ventures
|
27
|
(1)
|
-
|
-
|
(4)
|
(6)
|
-
|
16
|
Finance
costs
|
-
|
(42)
|
-
|
-
|
-
|
-
|
-
|
(42)
|
Acquisition,
integration and restructuring costs
|
-
|
-
|
-
|
-
|
-
|
(133)
|
-
|
(133)
|
Other
expenses
|
(48)
|
-
|
(6)
|
-
|
-
|
(59)
|
-
|
(113)
|
Income tax benefit
(expense)
|
-
|
-
|
-
|
-
|
(170)
|
-
|
-
|
(170)
|
Total, as reported
in MD&A
|
77
|
(43)
|
4
|
220
|
(174)
|
17
|
600
|
|
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
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
net
investment
income
|
Total
income
taxes
|
Non-
operating
losses
|
Underwriting
income
|
Total F/S
caption
|
For the year ended
December 31, 2022
|
|
|
|
|
|
|
|
|
Underwriting
income1
|
-
|
-
|
-
|
-
|
-
|
922
|
1,626
|
2,548
|
Investment
incomes
|
-
|
-
|
-
|
962
|
-
|
4
|
-
|
966
|
Investment
expenses
|
-
|
-
|
-
|
(35)
|
-
|
-
|
-
|
(35)
|
Other
revenues
|
537
|
-
|
8
|
-
|
-
|
-
|
-
|
545
|
Net gains
(losses)
|
-
|
-
|
-
|
-
|
-
|
(429)
|
-
|
(429)
|
Gain on sale of
business
|
-
|
-
|
-
|
-
|
-
|
421
|
-
|
421
|
Share of profits from
investments
in associates and
joint ventures
|
169
|
(12)
|
-
|
-
|
(36)
|
(18)
|
-
|
103
|
Finance
costs
|
-
|
(177)
|
-
|
-
|
-
|
-
|
-
|
(177)
|
Acquisition,
integration and restructuring costs
|
-
|
-
|
-
|
-
|
-
|
(353)
|
-
|
(353)
|
Other
expenses
|
(269)
|
-
|
(142)
|
-
|
-
|
(236)
|
-
|
(647)
|
Income tax benefit
(expense)
|
-
|
-
|
-
|
-
|
(522)
|
-
|
-
|
(522)
|
|
|
|
|
|
|
|
|
|
Total, as reported
in MD&A
|
437
|
(189)
|
(134)
|
927
|
(558)
|
311
|
1,626
|
|
For the year ended
December 31, 2021
|
|
|
|
|
|
|
|
|
Underwriting
income1
|
-
|
-
|
-
|
-
|
-
|
109
|
1,787
|
1,896
|
Investment
incomes
|
-
|
-
|
-
|
740
|
-
|
-
|
-
|
740
|
Investment
expenses
|
-
|
-
|
-
|
(34)
|
-
|
-
|
-
|
(34)
|
Other
revenues
|
389
|
-
|
32
|
-
|
-
|
-
|
-
|
421
|
Net gains
(losses)
|
-
|
-
|
-
|
-
|
-
|
249
|
-
|
249
|
Gain on the RSA
acquisition
|
-
|
-
|
-
|
-
|
-
|
204
|
-
|
204
|
Share of profits from
investments
in associates and
joint ventures
|
146
|
(9)
|
-
|
-
|
(30)
|
(20)
|
-
|
87
|
Finance
costs
|
-
|
(153)
|
-
|
-
|
-
|
-
|
-
|
(153)
|
Acquisition,
integration and restructuring costs
|
-
|
-
|
-
|
-
|
-
|
(429)
|
-
|
(429)
|
Other
expenses
|
(173)
|
-
|
(57)
|
-
|
-
|
(183)
|
-
|
(413)
|
Income tax benefit
(expense)
|
-
|
-
|
-
|
-
|
(480)
|
-
|
-
|
(480)
|
|
|
|
|
|
|
|
|
|
Total, as reported
in MD&A
|
362
|
(162)
|
(25)
|
706
|
(510)
|
(70)
|
1,787
|
|
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 December
31,
|
2022
|
2021
|
|
|
|
Equity attributable to
shareholders, as reported under
IFRS
|
15,400
|
15,674
|
Remove:
Preferred shares, as reported under IFRS
|
(1,322)
|
(1,175)
|
|
|
|
Common shareholders'
equity
|
14,078
|
14,499
|
Remove:
AOCI, as
reported under IFRS
|
1,085
|
(529)
|
|
|
|
Common shareholders'
equity (excluding AOCI)
|
15,163
|
13,970
|
|
|
|
Number of common shares
outstanding at the same date (in
millions)
|
175.257
|
176.082
|
BVPS
|
80.33
|
82.34
|
BVPS (excluding
AOCI)
|
86.52
|
79.34
|
Table 10 Adjusted average common
shareholders' equity and Adjusted average common shareholders'
equity (excluding AOCI)
|
2022
|
2021
|
|
|
|
Ending common
shareholders' equity
|
14,078
|
14,499
|
Remove: common shares
issued during the year
|
-
|
(4,311)
|
Ending common
shareholders' equity, excluding common shares issued during the
year
|
14,078
|
10,188
|
Beginning common
shareholders' equity
|
14,499
|
8,408
|
Average common
shareholders' equity, excluding common shares issued during the
year
|
14,289
|
9,298
|
Weighted impact of June
1, 2021 common shares issuance
|
-
|
2,528
|
Adjusted average common shareholders'
equity
|
14,289
|
11,826
|
Ending
common shareholders' equity
(excluding AOCI)
|
15,163
|
13,970
|
Remove: common shares
issued during the year
|
-
|
(4,311)
|
Ending common
shareholders' equity, excluding AOCI and common shares issued
during the year
|
15,163
|
9,659
|
Beginning common
shareholders' equity, excluding AOCI
|
13,970
|
7,999
|
Average common
shareholders' equity, excluding AOCI and common shares issued during the
year
|
14,567
|
8,829
|
Weighted impact of June
1, 2021 common shares issuance
|
-
|
2,528
|
Adjusted average common shareholders'
equity, excluding AOCI
|
14,567
|
11,357
|
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
|
Dec.
31
2022
|
Sept.
30
2022
|
Dec.
31
2021
|
|
|
|
|
Debt outstanding, as
reported under IFRS
|
4,522
|
4,796
|
5,229
|
Remove: hybrid
subordinated notes
|
(247)
|
(247)
|
(247)
|
|
|
|
|
Debt outstanding
(excluding hybrid debt)
|
4,275
|
4,549
|
4,982
|
Debt outstanding, as
reported under IFRS
|
4,522
|
4,796
|
5,229
|
Equity attributable to
shareholders, as reported under IFRS
|
15,400
|
15,150
|
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
|
20,207
|
20,231
|
21,698
|
|
|
|
|
Debt outstanding
(excluding hybrid debt)
|
4,275
|
4,549
|
4,982
|
Adjusted total
capital
|
20,207
|
20,231
|
21,698
|
Adjusted
debt-to-total capital ratio
|
21.2 %
|
22.5 %
|
23.0 %
|
|
|
|
|
Debt outstanding, as
reported under IFRS
|
4,522
|
4,796
|
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)
|
6,129
|
6,403
|
7,199
|
Adjusted total
capital
|
20,207
|
20,231
|
21,698
|
Total leverage
ratio
|
30.3 %
|
31.7 %
|
33.2 %
|
Adjusted
debt-to-total capital
ratio
|
21.2 %
|
22.5 %
|
23.0 %
|
Preferred shares and
hybrids
|
9.1 %
|
9.2 %
|
10.2 %
|
Forward Looking Statements
Certain statements made in this news release are forward-looking
statements. These statements include, without limitation,
statements relating to the outlook for the property and casualty
insurance industry in Canada, the
U.S. and the UK, the Company's business outlook, the Company's
growth prospects, , the ongoing impact of the coronavirus
(COVID-19) pandemic, the acquisition and integration of RSA, and
the realization of the expected strategic, financial and other
benefits of the sale of the Company's 50% stake in RSA Middle East
B.S.C. (c) 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 7,
2023 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
MD&A for the year ended December 31,
2022.
SOURCE Intact Financial Corporation