Intact Financial : Presentation ( PDF 858 KB )

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Forward-looking statements

Certain of the statements included in this presentation about the Company's current and future plans, expectations and intentions, results, levels of activity, performance, goals or achievements 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 MD&A are made as at December 31, 2020, and are subject to change after that date. This MD&A contains forward-looking statements with respect to the proposed acquisition (the "RSA Acquisition") of RSA Insurance Group PLC ("RSA") and the completion of and timing for completion of the RSA Acquisition, as well as with respect to the acquisition of The Guarantee and Frank Cowan Company Limited ("FCC") and with respect to the impact of COVID-19 and related economic conditions on the Company's operations and financial performance.

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 receipt of all requisite approvals relating to the RSA Acquisition in a timely manner and on terms acceptable to the Company, the realization of the expected strategic, financial and other benefits of the RSA Acquisition, and economic and political environments and industry conditions. However, the completion of the RSA Acquisition is subject to customary closing conditions, termination rights and other risks and uncertainties, including, without limitation, regulatory approvals, and there can be no assurance that the RSA Acquisition will be completed. There can also be no assurance that if the RSA Acquisition is completed, the strategic and financial benefits expected to result from the RSA Acquisition will be realized. Many factors could cause the Company's actual results, performance or achievements or future events or developments to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, the following factors

•	expected regulatory processes and outcomes in connection with its business;	•	unfavourable capital markets developments or other factors that may adversely affect the
•	the Company's ability to implement its strategy or operate its business as		Company's ability to refinance the bridge for the RSA Acquisition;
	management currently expects;	•	the Company's ability to improve its combined ratio, retain existing and attract new business,
•	its ability to accurately assess the risks associated with the insurance policies that		retain key employees and achieve synergies and maintain market position arising from
	the Company writes;		successful integration plans relating to the RSA Acquisition, as well as management's
• unfavourable capital market developments or other factors, including the impact of		estimates and expectations in relation to future economic and business conditions and other
	the COVID-19 pandemic and related economic conditions, which may affect the		factors in relation to the RSA Acquisition and resulting impact on growth and accretion in
	Company's investments, floating rate securities and funding obligations under its		various financial metrics;
	pension plans;	•	the Company's ability to otherwise complete the integration of the business acquired within
•	the cyclical nature of the P&C insurance industry;		anticipated time periods and at expected cost levels, as well as its ability to operate in new
•	management's ability to accurately predict future claims frequency and severity,		jurisdictions relating to the RSA Acquisition;
	including in the high net worth and personal auto lines of business;	• the Company's profitability and ability to improve its combined ratio in the United States;
•	government regulations designed to protect policyholders and creditors rather than	•	the Company's participation in the Facility Association (a mandatory pooling arrangement
	investors;		among all industry participants) and similar mandated risk-sharing pools;
•	litigation and regulatory actions, including with respect to the COVID-19 pandemic;	•	terrorist attacks and ensuing events;
• periodic negative publicity regarding the insurance industry;	•	the occurrence and frequency of catastrophe events, including a major earthquake;
•	intense competition;	•	catastrophe losses caused by severe weather and other weather-related losses, as well as the
•	the Company's reliance on brokers and third parties to sell its products to clients		impact of climate change;
	and provide services to the Company and the impact of COVID-19 and related	•	the occurrence of and response to public health crises including epidemics, pandemics or
	economic conditions on such brokers and third parties;		outbreaks of new infectious diseases, including, most recently, the COVID-19 pandemic and
• the Company's ability to successfully pursue its acquisition strategy;		ensuing events;
•	the Company's ability to execute its business strategy;	• the Company's ability to maintain its financial strength and issuer credit ratings;
•	the Company's ability to achieve synergies arising from successful integration plans	•	the Company's access to debt and equity financing;
	relating to acquisitions;	•	the Company's ability to compete for large commercial business;
•	the uncertainty of obtaining in a timely manner, or at all, the regulatory approvals	•	the Company's ability to alleviate risk through reinsurance;
	required to complete the RSA Acquisition;	•	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;
• the Company's dependence on and ability to retain key employees;
• 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-19related 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 crisis;
• the Company's ability to hedge exposures to fluctuations in foreign exchange rates, including those related to purchase price and book value related to the RSA Acquisition;
• future sales of a substantial number of its 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 presentation 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 December 31, 2020 and in the risk section entitled Risk management (Section 19) of our MD&A for the quarter that ended March 31, 2021. These factors are not intended to represent a complete list of the factors that could affect the Company. These factors should, however, be considered carefully. Although the forward-looking statements are based upon what management believes to be reasonable assumptions, the Company cannot assure investors that actual results will be consistent with these forward-looking statements. When relying on forward-looking statements to make decisions, investors should ensure the preceding information is carefully considered. Undue reliance should not be placed on forward-looking statements made herein. The Company and management have no intention and undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

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Disclaimer

This presentation does not constitute or form part of any offer for sale or solicitation of any offer to buy or subscribe for any securities nor shall it or any part of it form the basis of or be relied on in connection with, or act as any inducement to enter into, any contract or commitment whatsoever.

The information contained in this presentation concerning the Company does not purport to be all-inclusive or to contain all the information that a prospective purchaser or investor may desire to have in evaluating whether or not to make an investment in the Company. The information is qualified entirely by reference to the Company's publicly disclosed information.

No representation or warranty, express or implied, is made or given by or on behalf of the Company or any of its the directors, officers or employees as to the accuracy, completeness or fairness of the information or opinions contained in this presentation and no responsibility or liability is accepted by any person for such information or opinions. In furnishing this presentation, the Company does not undertake or agree to any obligation to provide the attendees with access to any additional information or to update this presentation or to correct any inaccuracies in, or omissions from, this presentation that may become apparent. The information and opinions contained in this presentation are provided as at the date of this presentation. The contents of this presentation are not to be construed as legal, financial or tax advice. Each prospective purchaser should contact his, her or its own legal adviser, independent financial adviser or tax adviser for legal, financial or tax advice.

The Company both IFRS and non-IFRS financial measures to assess our performance. Non-IFRS financial measures do not have standardized meanings prescribed by IFRS and may not be comparable to similar measures used by other companies in our industry. The non-IFRS measures included in this MD&A are: direct premiums written (DPW) and DPW growth in constant currency; net earned premiums (NEP); underlying current year loss ratio; PYD and PYD ratio; total net claims and claims ratio; underwriting expenses and expense ratio; underwriting income and combined ratio; distribution EBITA and Other; finance costs; other income (expense); income before income taxes and total income taxes; pre-tax operating income, net operating income (NOI), net operating income per share (NOIPS) and operating return on equity (OROE); adjusted net income, adjusted earnings per share (AEPS) and adjusted return on equity (AROE). See Section 21 - Non-IFRS financial measures for the definition and reconciliation to the most comparable IFRS measures.

Important notes:

• Non-IFRSfinancial measures and other insurance-related terms used in this presentation are defined in the glossary available in the "Investors" section of our web site at www.intactfc.com.
• Abbreviations and definitions of selected key terms used in this presentation are defined in Section 25 - Glossary and definitions of our Q1-2021 MD&A.
• Underwriting results exclude the impact of exited lines from the effective date with no restatement of comparatives. See Section 20 - Non-operating results for details of our Q1-2021 MD&A.
• When relevant, to enhance the analysis of our results with comparative periods, we present changes in constant currency, which exclude the impact of fluctuations in foreign exchange rates from one period to the other. Approximately 15% of our DPW is denominated in USD.
• On November 18, 2020, we announced that, together with the Scandinavian P&C leader Tryg A/S, we have reached an agreement to acquire RSA Insurance Group plc (RSA). All financing is secured and closing is expected on June 1, 2021. See Section 11 - Acquisition of RSA's Canadian, UK and International operations of our Q1-2021 MD&A
• Certain totals, subtotals and percentages may not agree due to rounding. Not meaningful (nm) is used to indicate that the current and prior year figures are not comparable, not meaningful, or if the percentage change exceeds 1,000%.

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Key points & highlights

$2.40	89.3%	+1%
NOIPS	Combined Ratio	Premium Growth
increased 49%, driven by strong	improved by 5.0 points, driven	but approximately +6% on an
underwriting and distribution	by strong fundamentals across	underlying basis
performances	the business

+20%	19.0%	$3.0B
BVPS	Operating ROE	Total Capital Margin

year-over-year, to $62.19 driven by	Above our historical mid-teens	including $850 million in debt and
strong operating performance and	average	hybrids issued to finance the RSA
investment gains		acquisition