Building a Leading P&C Insurer
- Expands our leadership position in
Canada with a broader customer offering - Bolsters our leading specialty lines platform and brings international expertise
- Entry into the
U.K. andIreland at scale with a strong and seasoned team - Increases investment in our core capabilities to strengthen our outperformance
- High single digit NOIPS accretion expected in the first 12 months, increasing to upper teens within 36 months
- Maintaining mid-teens OROE target and BVPS to increase by over 20% at close
- Strong total capital margin at over
$2 billion following close and debt-to-capital ratio expected to reach 20% within 36 months
"Bringing together Intact and RSA will expand our leadership and accelerate our strategy as we continue to focus on outperformance across our business," said
Pursuant to the Acquisition, Intact retains RSA's Canadian,
With the Acquisition, Intact is taking a significant step to accelerate its strategy and drive significant value creation.
Expands leadership in
Intact's leadership position in
Creates a leading specialty lines platform
Intact bolsters its North American specialty lines platform by adding international capabilities, scale and expertise in existing lines, as well as adding new verticals. The specialty lines platform will grow by approximately 30% to over
Entry into the
In the
Strengthens ability to outperform
The Acquisition increases Intact's premiums by approximately 70% and enables further investment in the Company's core capabilities of data, risk selection, claims and supply chain management to sustain and drive increased outperformance across the markets in which it operates.
Financially compelling with significant shareholder value creation
The Acquisition provides a unique opportunity to create significant value for Intact's shareholders, with an expected internal rate of return ("IRR") above the Company's 15% threshold.
The Acquisition is expected to generate high single digit net operating income per share ("NOIPS") accretion in the first 12 months following closing of the Acquisition, increasing to upper teens within 36 months. The expected NOIPS accretion is driven by adding RSA's profitable business to Intact and by generating over
Intact expects its operating ROE ("OROE") to be in the mid-teens level in the medium term. Book value per share ("BVPS") is estimated to increase by over 20% on the closing of the Acquisition, reflecting the equity issued to finance the Acquisition and the estimated current fair value of the net assets acquired.
The Acquisition supports Intact's financial objectives to grow NOIPS by 10% yearly over time and exceed the industry ROE by 500 basis points annually.
Strong capital position maintained
Intact will maintain its strong capital position, with an estimated total capital margin above
Issuance of common shares pursuant to subscription receipts
A portion of Intact's approximately £3.0 billion (
Upon closing of the Acquisition, the common shares of Intact issuable pursuant to the 23,791,824 Cornerstone Subscription Receipts issued by Intact in
Trading in the Underwritten Subscription Receipts on the
In addition, pursuant to the terms of both of the Cornerstone Subscription Receipts and the Underwritten Subscription Receipts, a dividend equivalent payment of
About
In
In the
About Tryg A/S
Tryg is one of the leading non-life insurance companies in the Nordic region with activities in
Forward-looking statements
Certain of the statements included in this press release about the Acquisition, including the anticipated impact and benefits thereof, the delisting of the Underwritten Subscription Receipts, the commencement of trading of the common shares issued in respect of the Cornerstone Subscription Receipts and the Underwritten Subscription Receipts, the timing for the payment of dividend equivalent payments or any other future events or developments constitute forward-looking statements. The words "may", "will", "would", "should", "could", "expects", "plans", "intends", "trends", "indications", "anticipates", "believes", "estimates", "predicts", "likely", "potential" or the negative or other variations of these words or other similar or comparable words or phrases, are intended to identify forward-looking statements. Unless otherwise indicated, all forward-looking statements in this press release are made as of
Forward-looking statements are based on estimates and assumptions made by management based on management's experience and perception of historical trends, current conditions and expected future developments, as well as other factors that management believes are appropriate in the circumstances. In addition to other estimates and assumptions which may be identified herein, estimates and assumptions have been made regarding, among other things, the realization of the expected strategic, financial and other benefits of the Acquisition, and economic and political environments and industry conditions. There can be no assurance that the strategic and financial benefits expected to result from the Acquisition will be realized. Many factors could cause the Company's actual results, financial performance or condition, or achievements to differ materially from those expressed or implied by the forward-looking statements herein, including, without limitation, the following factors:
- expected regulatory processes and outcomes in connection with the Company's business;
- the Company's ability to implement its strategy or operate its business as management currently expects;
- the Company's ability to accurately assess the risks associated with the insurance policies it writes;
- unfavourable capital market developments or other factors, including the impact of the COVID-19 pandemic and related economic conditions, which may affect the Company's investments, floating rate securities and funding obligations under its pension plans;
- the cyclical nature of the P&C insurance industry;
- management's ability to accurately predict future claims frequency and severity, including in the high net worth and personal auto lines of business;
- government regulations designed to protect policyholders and creditors rather than investors;
- litigation and regulatory actions, including with respect to the COVID-19 pandemic;
- periodic negative publicity regarding the insurance industry;
- intense competition;
- the Company's reliance on brokers and third parties to sell its products to clients and provide services to the Company and the impact of COVID-19 and related economic conditions on such brokers and third parties;
- the Company's ability to successfully pursue its acquisition strategy;
- the Company's ability to execute its business strategy;
- the Company's ability to improve its combined ratio, retain business and achieve synergies and maintain market position arising from successful integration plans relating to the Acquisition, as well as management's estimates and expectations in relation to future economic and business conditions and other factors in relation to the Acquisition and resulting impact on growth and accretion in various financial metrics;
- its ability to otherwise complete the integration of the business acquired within anticipated time periods and at expected cost levels;
- the Company's dependence on key employees and its ability to attract and retain key employees in connection with the Acquisition;
- the Company's ability to achieve synergies arising from successful integration plans relating to acquisitions generally;
- the Company's profitability and ability to improve its combined ratio in
Canada and internationally; - the Company's ability to retain and attract new business in connection with the Acquisition;
- the Company's participation in the
Facility Association (a mandatory pooling arrangement among all industry participants) and similar mandated risk-sharing pools; - terrorist attacks and ensuing events;
- the occurrence and frequency of catastrophe events, including a major earthquake;
- catastrophe losses caused by severe weather and other weather-related losses, as well as the impact of climate change;
- the occurrence of and response to public health crises including epidemics, pandemics or outbreaks of new infectious diseases, including most recently, the coronavirus (COVID-19) pandemic and ensuing events;
- the Company's ability to maintain its financial strength and issuer credit ratings;
- the Company's access to debt and equity financing;
- the Company's ability to compete for large commercial business;
- the Company's ability to alleviate risk through reinsurance;
- the Company's ability to successfully manage credit risk (including credit risk related to the financial health of reinsurers);
- the Company's ability to contain fraud and/or abuse;
- the Company's reliance on information technology and telecommunications systems and potential failure of or disruption to those systems, including in the context of the impact on the ability of our workforce to perform necessary business functions remotely, as well as in the context of evolving cybersecurity risk;
- the impact of developments in technology and use of data on the Company's products and distribution;
- changes in laws or regulations, including those adopted in response to COVID-19 that would, for example, require insurers to cover business interruption claims irrespective of terms after policies have been issued, and could result in an unexpected increase in the number of claims and have a material adverse impact on the Company's results;
- COVID-19 related coverage issues and claims, including certain class actions and related defence costs could negatively impact our claims reserves;
- general economic, financial and political conditions;
- the Company's dependence on the results of operations of its subsidiaries and the ability of the Company's subsidiaries to pay dividends;
- the volatility of the stock market and other factors affecting the trading prices of the Company's securities, including in the context of the COVID-19 pandemic;
- the Company's ability to hedge exposures to fluctuations in foreign exchange rates;
- future sales of a substantial number of the Company's common shares; and
- changes in applicable tax laws, tax treaties or tax regulations or the interpretation or enforcement thereof.
All of the forward-looking statements included in this press release are qualified by these cautionary statements and those made in the section entitled Risk Management (Sections 28-33) of our MD&A for the year ended
Non-IFRS Measures
The Company uses both International Financial Reporting Standards ("IFRS") and certain non-IFRS measures to assess performance. Non-IFRS measures do not have any standardized meaning prescribed by IFRS and are unlikely to be comparable to any similar measures presented by other companies. Management analyzes performance based on underwriting ratios such as combined ratio and debt-to-total capital ratio, as well as other non-IFRS financial measures, including IRR, BVPS, NOIPS, OROE, ROE and total capital margin. See Section 36 of the Annual MD&A and Section 21 of the Q1 MD&A, each of which is posted under the Company's profile on SEDAR at www.sedar.com, for the definition and historical reconciliation to the most comparable IFRS measure, where such a measure exists.
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