TORONTO, Nov. 10,
2022 /CNW/ - (TSX: DFY)
(in Canadian dollars except as otherwise noted)
Highlights
- Premium growth was 10.9% in the quarter, driven by the success
of our strategic expansions across the business and ongoing firm
market conditions
- Combined ratio1 of 96.6% included 5.7 points of
catastrophe losses (3.5 points of which related to Hurricane
Fiona), and was bolstered by an otherwise solid underwriting
performance
- Operating net income1 of $46.5 million in Q3 2022, compared to
$60.7 million in Q3 2021, resulting
in operating EPS1 of $0.40
per share. Operating ROE1 was 9.7% over the last twelve
months
- Financial position remained resilient, despite capital market
volatility, with book value per share1 of $19.54, up 0.2% in the quarter and 0.1% higher
than a year ago
- Acquired a majority stake in McDougall Insurance on
October 3, building a broker
partnership with proven M&A expertise that is expected to be
immediately accretive and provide earnings diversification via
distribution income
Executive Messages
"From a top line perspective, we reported a robust 10.9%
increase in premiums in the third quarter, while maintaining our
disciplined approach amid firm market conditions. Our ongoing
strategic expansion efforts in recent years have borne fruit, with
commercial lines crossing $1 billion
and total premiums reaching $3.5
billion in the past 12 months. We are also excited by the
opportunity to expand our partnership with McDougall Insurance, a
strong franchise that accelerates our strategy to strengthen our
distribution capabilities. We delivered solid underwriting
performance in the quarter with a combined ratio of 96.6% against a
backdrop of normalizing auto claims frequency, ongoing inflation
pressures, and somewhat elevated losses from catastrophes. We
continue to work with those impacted by Hurricane Fiona's
devastation and are committed to delivering on our purpose to help
our clients and communities adapt and thrive."
– Rowan Saunders, President &
CEO
"Solid underwriting and higher net investment income combined to
generate an operating ROE of 9.7%. Our business model continues to
demonstrate its resiliency, as we've maintained a strong financial
position in the face of numerous headwinds thus far in 2022,
including elevated catastrophe losses and significant volatility in
capital markets. The rising yield environment again negatively
impacted our fixed income investments and book value growth but
continues to benefit us in the form of higher net investment
income, which is expected to persist in the coming quarters. We
believe we are well positioned to continue delivering value to
shareholders as we grow profitably and deploy our capital in a
manner that enhances earnings, while maintaining significant
capacity for future opportunities."
– Philip Mather, EVP &
CFO
Consolidated Results
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(in millions of
dollars, except as otherwise noted)
|
|
Q3
2022
|
Q3
2021
|
Change
|
|
2022
YTD
|
2021
YTD
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross written
premiums
|
|
|
|
|
944.1
|
851.5
|
10.9 %
|
|
2,671.3
|
2,384.8
|
12.0 %
|
Net earned
premiums
|
|
|
|
|
830.0
|
725.1
|
14.5 %
|
|
2,398.0
|
2,088.6
|
14.8 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Claims
ratio1
|
|
|
|
|
64.0 %
|
60.5 %
|
3.5
pts
|
|
62.0 %
|
59.9 %
|
2.1
pts
|
Expense
ratio1
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|
|
|
|
32.6 %
|
31.9 %
|
0.7
pts
|
|
32.9 %
|
32.7 %
|
0.2
pts
|
Combined
ratio1
|
|
|
|
|
96.6 %
|
92.4 %
|
4.2
pts
|
|
94.9 %
|
92.6 %
|
2.3
pts
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|
|
|
|
|
|
|
|
|
|
|
|
Underwriting
income
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|
|
|
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27.9
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55.1
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(27.2)
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|
122.1
|
154.2
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(32.1)
|
Net investment
income
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|
|
|
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36.0
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24.6
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11.4
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93.6
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71.8
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21.8
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Net
income
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41.1
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53.3
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(12.2)
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110.4
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179.6
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(69.2)
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Operating net
income1
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46.5
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60.7
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(14.2)
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159.9
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174.0
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(14.1)
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Q3
2022
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Q3
2021
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Change
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|
2022
YTD
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2021
YTD
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Change
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|
|
|
|
|
|
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|
|
Per share measures
(in dollars)
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Diluted EPS
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0.35
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0.51
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(0.16)
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0.94
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1.72
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(0.78)
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Operating
EPS1
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0.40
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0.58
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(0.18)
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1.37
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1.67
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(0.30)
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Book value per share
("BVPS")1
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19.54
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19.52
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0.02
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Rolling 12 months
return measures
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Return on equity
("ROE")1
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6.8 %
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13.1 %
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(6.3)
pts
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Operating
ROE1
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9.7 %
|
13.6 %
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(3.9)
pts
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- Gross written premiums ("GWP") for the third
quarter of 2022 increased by $92.6
million or 10.9% compared to the third quarter of 2021,
driven by growth across all our lines of business. Personal lines
GWP was up 8.8% with increases in both our broker and direct
businesses. Commercial lines GWP increased 16.7% as we continued to
focus on profitable growth in this line of business. Customer
relief related to the COVID-19 pandemic ended in May 2022 and did not impact GWP in the third
quarter of 2022 (Q3 2021: decrease of approximately $14 million), but did reduce net earned premiums
by approximately $10 million (Q3
2021: $15 million).
Year to date, GWP increased by $286.5
million or 12.0% compared to 2021. Personal lines GWP
increased 9.8% and commercial lines GWP increased 17.8%. The impact
of the customer relief related to the COVID-19 pandemic on our
underwriting results year to date was a reduction in GWP of
approximately $21 million (2021:
$42 million) and a reduction in net
earned premiums of approximately $36
million (2021: $44
million).
- Underwriting income for the third quarter of 2022 was
$27.9 million and the combined ratio
was 96.6%, compared to underwriting income of $55.1 million and a combined ratio of 92.4% in
the same quarter a year ago. Our underwriting results were solid
despite the impact of catastrophe losses, including Hurricane Fiona
in the Atlantic region in September. Catastrophe losses impacted
the combined ratio by 5.7 percentage points, compared to 5.1
percentage points in the same quarter a year ago. The combined
ratio increased due to a rise in the core accident year claims
ratio and higher catastrophe losses, which were partially offset by
higher favourable prior year claims development.
Year to date, our underwriting income decreased by $32.1 million and led to a combined ratio of
94.9% in 2022 as compared to 92.6% in 2021. Results were impacted
by higher catastrophe losses, which included the wind storm in
Ontario and Québec in the second
quarter, and Hurricane Fiona in the third quarter, as well as an
increase in the core accident year claims ratio. These impacts were
partially offset by higher favourable prior year claims
development. Catastrophe losses impacted the combined ratio by
4.6 percentage points, compared to only 2.8 percentage points in
2021.
- Net investment income increased $11.4 million in the third quarter of 2022 and
$21.8 million year to date, driven
primarily by higher fixed income yields, as well as the investment
of funds generated from our underwriting results and business
growth, and net proceeds retained by the Company from the initial
public offering ("IPO") and related transactions.
Net Income and Operating Net
Income
- Net income was $41.1
million in the third quarter of 2022 compared to
$53.3 million in the third quarter of
2021. Net income decreased due primarily to lower underwriting
income, partially offset by higher net investment income.
Year to date, net income was $110.4
million compared to $179.6
million in 2021 due primarily to the same factors that
impacted the third quarter, and investment impairment charges
of $20.5 million in 2022 reflective
of the significant volatility in equity markets. In 2021, we also
recorded realized gains of $37.5
million on our equity portfolio that were triggered on the
sale of certain investments to facilitate a transfer to a new
investment manager for foreign equities.
In the third quarter of 2022 and year to date,
the significant increase in fixed income yields resulted in
higher market value losses on our bond portfolio, which were
largely offset by a discounting recovery on our claim
liabilities.
- Operating net income decreased to $46.5 million in the third quarter of 2022
compared to $60.7 million in the
third quarter of 2021 driven by lower underwriting income, partly
offset by an increase in net investment income. Year to date,
operating net income was $159.9
million compared to $174.0
million in 2021.
- Operating ROE was 9.7% for the twelve-month period ended
September 30, 2022 compared to 13.6%
in 2021. Operating ROE was lower due to the dilutive impact of
higher average equity as well as lower operating net income
generated during the twelve-month period ended September 30, 2022.
Line of Business Results
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(in millions of
dollars, except as otherwise noted)
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|
Q3
2022
|
Q3
2021
|
Change
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|
2022
YTD
|
2021
YTD
|
Change
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Personal
insurance
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Gross written
premiums
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Auto
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411.2
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381.7
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7.7 %
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1,153.4
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1,071.0
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7.7 %
|
Property
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275.6
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249.3
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10.5 %
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744.7
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657.5
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13.3 %
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Total
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686.8
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631.0
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8.8 %
|
|
1,898.1
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1,728.5
|
9.8 %
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|
|
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Combined
ratio1
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|
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Auto
|
|
|
|
|
95.9 %
|
91.3 %
|
4.6
pts
|
|
94.9 %
|
90.0 %
|
4.9
pts
|
Property
|
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|
|
|
100.8 %
|
100.3 %
|
0.5
pts
|
|
99.0 %
|
100.5 %
|
(1.5)
pts
|
Total
|
|
|
|
|
97.7 %
|
94.6 %
|
3.1
pts
|
|
96.5 %
|
93.8 %
|
2.7
pts
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|
|
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|
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Commercial
insurance
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Gross written
premiums
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|
|
|
|
257.3
|
220.5
|
16.7 %
|
|
773.2
|
656.3
|
17.8 %
|
Combined
ratio1
|
|
|
|
|
93.6 %
|
86.4 %
|
7.2
pts
|
|
90.7 %
|
89.3 %
|
1.4
pts
|
Personal Insurance
- Overall, personal lines GWP increased 8.8% in the third
quarter of 2022 (9.8% year to date). Sonnet GWP was $95.6 million in the third quarter of 2022, an
increase of 9.0% compared to $87.7
million in the third quarter of 2021. Sonnet GWP was
$245.2 million year to date, an
increase of 13.7% compared to $215.6
million in 2021. Personal lines underwriting income was
$13.6 million in the quarter compared
to $28.9 million in the same quarter
a year ago. Year to date, personal lines underwriting income was
$62.3 million compared to
$96.1 million in 2021.
- Personal auto GWP increased 7.7% in the quarter
(7.7% year to date), driven by improved retention in our broker
business, an increase in average written premiums, and the growth
in Sonnet. Customer relief related to the COVID-19 pandemic ended
in May 2022. The impact of customer
relief was nil in the quarter versus a reduction in GWP of
approximately $11 million in the
third quarter of 2021. The combined ratio of 95.9% in the quarter
(Q3 2021: 91.3%) increased due primarily to an increase in the core
accident year claims ratio driven by higher claims frequency
combined with inflationary cost pressures, largely within the auto
physical damage coverage. Year to date, the personal auto combined
ratio was impacted by an increase in the core accident year claims
ratio and a decrease in favourable prior year claims
development.
- Personal property GWP increased 10.5% in the quarter
(13.3% year to date), benefitting from continued firm market
conditions and the growth in Sonnet. The combined ratio was 100.8%
in the quarter, as an increase in the core accident year claims
ratio from an unusually strong third quarter of 2021 was offset by
a decrease in catastrophe losses. Catastrophe losses accounted for
10.9 percentage points to the combined ratio in the third quarter
of 2022 compared to 15.5 percentage points in 2021. Year to
date, the personal property combined ratio improved due to an
increase in favourable prior year claims development and a decrease
in the core accident year claims ratio.
Commercial Insurance
- Growth in commercial lines continued in the third
quarter of 2022. GWP increased 16.7% in the quarter (17.8% year to
date), as we benefitted from continued strong broker support,
higher retention levels, strong rate achievement in a firm market
environment, and continued scaling of specialty capabilities.
- Commercial lines combined ratio was 93.6% and
underwriting income was $14.3 million
in the quarter compared to the unusually strong combined ratio of
86.4% and underwriting income of $26.2
million in the same quarter a year ago. The decrease in
underwriting income was largely driven by the impact of catastrophe
losses. Catastrophe losses accounted for 9.1 percentage points
to the combined ratio in the third quarter of 2022 compared to only
0.8 percentage points in 2021. Year to date, the commercial
lines combined ratio was 90.7% and underwriting income was
$59.8 million compared to 89.3% and
underwriting income of $58.1 million
in 2021. The year-to-date commercial lines combined ratio increased
due to an increase in catastrophe losses, partially offset by
higher favourable prior year claims development.
1
|
This is a supplementary
financial measure, non-GAAP financial measure, or a non-GAAP ratio.
Refer to Supplementary financial measures and non-GAAP financial
measures and ratios in this news release, and Section 11 –
Supplementary financial measures and non-GAAP financial measures
and ratios in the Q3-2022 Management's Discussion and Analysis
dated November 10, 2022 for further details, which is available on
the Company's website at www.definityfinancial.com and on SEDAR at
www.sedar.com.
|
Financial Position
|
|
|
|
|
|
|
|
(in millions of
dollars, except as otherwise noted)
|
|
|
|
|
As
at
September
30,
2022
|
As at
December 31,
2021
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial
position
|
|
|
|
|
|
|
|
|
|
|
|
Investments
|
|
|
|
|
|
|
|
|
4,854.9
|
5,365.8
|
(510.9)
|
Total equity
|
|
|
|
|
|
|
|
|
2,240.9
|
2,396.3
|
(155.4)
|
Consolidated excess
capital at 200% MCT
|
|
|
593.1
|
759.3
|
(166.2)
|
- Total equity decreased by $155.4
million since December 31,
2021 driven by market value declines in our available for
sale bond portfolio due to a significant increase in fixed income
yields, and the declines in equity markets. These were partially
offset by strong underwriting income and increasing net investment
income. Total equity increased $211.1
million since September 30,
2021 and our capital position remains strong, well in excess
of both internal and regulatory minimum capital requirements as of
September 30, 2022, with a
consolidated excess capital position exceeding $590 million and an unlevered balance sheet.
Dividend
- On November 10, 2022, the Board
of Directors declared a $0.125 per
share dividend, payable on December 28,
2022 to shareholders of record at the close of business on
December 15, 2022.
Conference Call
Definity will conduct a conference call to review information
included in this news release and related matters at 10:00 a.m. ET on November
11, 2022. The conference call will be available
simultaneously and in its entirety to all interested investors and
the news media at www.definityfinancial.com. A transcript will be
made available on Definity's website within two business days.
About Definity Financial
Corporation
Definity Financial Corporation ("Definity", which includes its
subsidiaries where the context so requires) is one of the leading
property and casualty insurers in Canada, with over $3.5
billion in gross written premiums for the 12 months ended
September 30, 2022 and over $7.9
billion in assets as at September 30,
2022.
Cautionary Note Regarding
Forward-Looking Information
This news release contains "forward-looking information" within
the meaning of applicable securities laws in Canada. Forward-looking information may relate
to our future business, financial outlook and anticipated events or
results and may include information regarding our financial
position, business strategy, growth strategies, addressable
markets, budgets, operations, financial results, taxes, dividend
policy, plans and objectives. Particularly, information regarding
our expectations of future results, performance, achievements,
prospects or opportunities or the markets in which we operate is
forward-looking information. In some cases, forward-looking
information can be identified by the use of forward-looking
terminology such as "plans", "targets", "expects" or "does not
expect", "is expected", "an opportunity exists", "budget",
"scheduled", "estimates", "forecasts", "projection", "prospects",
"strategy", "intends", "anticipates", "does not anticipate",
"believes", or variations of such words and phrases or statements
that certain actions, events or results "may", "could", "would",
"might", "will", "will be taken", "occur" or "be achieved". In
addition, any statements that refer to expectations, intentions,
projections or other characterizations of future events or
circumstances contain forward-looking information. Statements
containing forward-looking information are not historical facts but
instead represent management's expectations, estimates and
projections regarding possible future events or circumstances.
Forward-looking information in this news release is based on our
opinions, estimates and assumptions in light of our experience and
perception of historical trends, current conditions and expected
future developments, as well as other factors that we currently
believe are appropriate and reasonable in the circumstances.
Despite a careful process to prepare and review the forward-looking
information, there can be no assurance that the underlying
opinions, estimates and assumptions will prove to be correct.
Forward-looking information is necessarily based on a number of
opinions, estimates and assumptions that we considered appropriate
and reasonable as at the date such statements are made, and are
subject to many factors that could cause our actual results,
performance or achievements, or other future events or
developments, to differ materially from those expressed or implied
by the forward-looking statements, including, without limitation,
the following factors:
- Definity's ability to appropriately price its insurance
products to produce an acceptable return;
- Definity's ability to accurately assess the risks associated
with the insurance policies that it writes;
- Definity's ability to assess and pay claims in accordance with
its insurance policies;
- litigation and regulatory actions, including potential claims
in relation to demutualization and our IPO, and COVID-19-related
class-action lawsuits that have arisen and which may arise,
together with associated legal costs;
- Definity's ability to obtain adequate reinsurance coverage to
transfer risk;
- Definity's ability to accurately predict future claims
frequency or severity, including the frequency and severity of
weather-related events and the impact of climate change;
- Definity's ability to address inflationary cost pressures
through pricing, supply chain, or cost management
actions;
- the occurrence of unpredictable catastrophe events;
- unfavourable capital market developments, interest rate
movements, changes to dividend policies or other factors which may
affect our investments or the market price of our common
shares;
- changes associated with the transition to a low-carbon economy,
including reputational and business implications from stakeholders'
views of our climate change approach or that of our industry;
- Definity's ability to successfully manage credit risk from its
counterparties;
- foreign currency fluctuations;
- Definity's ability to meet payment obligations as they become
due;
- Definity's ability to maintain its financial strength rating or
credit rating;
- Definity's dependence on key people;
- Definity's ability to attract, develop, motivate, and retain an
appropriate number of employees with the necessary skills,
capabilities, and knowledge;
- Definity's ability to appropriately manage and protect the
collection and storage of information;
- Definity's reliance on information technology systems,
internet, network, data centre, voice or data communications
services and the potential disruption or failure of those systems
or services, including as a result of cyber security risk;
- failure of key service providers or vendors to provide services
or supplies as expected, or comply with contractual or business
terms;
- Definity's ability to obtain, maintain and protect its
intellectual property rights and proprietary information or prevent
third parties from making unauthorized use of our technology;
- compliance with and changes in legislation or its
interpretation or application, or supervisory expectations or
requirements, including changes in effective income tax rates,
risk-based capital guidelines, and accounting standards;
- failure to design, implement and maintain effective control
over financial reporting which could have a material adverse effect
on our business;
- deceptive or illegal acts undertaken by an employee or a third
party, including fraud in the course of underwriting insurance or
settling insurance claims;
- Definity's ability to respond to events impacting its ability
to conduct business as normal;
- Definity's ability to implement its strategy or operate its
business as management currently expects;
- the impact of public-health crises, such as pandemics or other
health risk events including the COVID-19 pandemic and their
associated operational, economic, legislative and regulatory
impacts, including impacts on Definity's ability to maintain
operations and provide services to customers and on the
expectations of governmental or regulatory authorities concerning
the provision of customer relief;
- general economic, financial, and political conditions,
particularly those in Canada;
- the competitive market environment and cyclical nature of the
P&C insurance industry;
- the introduction of disruptive innovation;
- distribution channel risk, including Definity's reliance on
brokers to sell its products;
- Definity's dividend payments being subject to the discretion of
the Board and dependent on a variety of factors and conditions
existing from time to time;
- there can be no assurance that Definity's normal course issuer
bid will be maintained, unchanged and/or completed;
- Definity's dependence on the results of operations of its
subsidiaries and the ability of the subsidiaries to pay
dividends;
- Definity's ability to manage and access capital and liquidity
effectively;
- Definity's ability to successfully identify, complete,
integrate and realize the benefits of acquisitions or manage the
associated risks;
- periodic negative publicity regarding the insurance industry or
Definity;
- management's estimates and expectations in relation to
interests in the broker distribution channel and the resulting
impact on growth, income, and accretion in various financial
metrics; and
- the completion and timing of Definity continuing under the
Canada Business Corporations Act.
If any of these risks or uncertainties materialize, or if the
opinions, estimates or assumptions underlying the forward-looking
information prove incorrect, actual results or future events might
vary materially from those anticipated in the forward-looking
information. The opinions, estimates or assumptions referred to
above and described in greater detail in the "11 – Risk Management
and Corporate Governance" section of the December 31, 2021 Management's Discussion and
Analysis should be considered carefully by readers.
Although we have attempted to identify important factors that
could cause actual results to differ materially from those
contained in forward-looking information, the factors above are not
intended to represent a complete list and there may be other
factors not currently known to us or that we currently believe are
not material that could also cause actual results or future events
to differ materially from those expressed in such forward-looking
information. There can be no assurance that such forward-looking
information will prove to be accurate, as actual results and future
events could differ materially from those anticipated in such
information. Accordingly, readers should not place undue reliance
on forward-looking information, which speaks only as at the date
made. The forward-looking information contained in this news
release represents our expectations as at the date of this news
release (or as the date they are otherwise stated to be made) and
are subject to change after such date. However, we disclaim any
intention or obligation or undertaking to update or revise any
forward-looking information whether as a result of new information,
future events or otherwise, except as required under applicable
securities laws in Canada.
All of the forward-looking information contained in this news
release is expressly qualified by the foregoing cautionary
statements.
Supplementary Financial Measures
and Non-GAAP Financial Measures and Ratios
We measure and evaluate performance of our business using a
number of financial measures. Among these measures are the
"supplementary financial measures", "non-GAAP financial measures",
and "non-GAAP ratios" (as such terms are defined under Canadian
Securities Administrators' National Instrument 52-112 – Non-GAAP
and Other Financial Measures Disclosure), and in each case are not
standardized financial measures under GAAP. The supplementary
financial measures, non-GAAP financial measures, and non-GAAP
ratios in this news release may not be comparable to similar
measures presented by other companies. These measures should not be
considered in isolation or as a substitute for analysis of our
financial information reported under GAAP. These measures are used
by financial analysts and others in the P&C insurance industry
and facilitate management's comparisons to our historical operating
results in assessing our results and strategic and operational
decision-making. For more information about these supplementary
financial measures, non-GAAP financial measures, and non-GAAP
ratios, including (where applicable) definitions and explanations
of how these measures provide useful information, refer to Section
11 – Supplementary financial measures and non-GAAP financial
measures and ratios in the Q3-2022 Management's Discussion and
Analysis dated November 10, 2022,
which is available on our website at www.definityfinancial.com and
on SEDAR at www.sedar.com.
Net income is the most directly comparable GAAP financial
measure disclosed in our interim consolidated financial statements
to operating net income, operating income, and non-operating gains
(losses), which are considered non-GAAP financial measures. Below
is a quantitative reconciliation of operating net income, operating
income, and non-operating gains (losses) to net income for the
three months and nine months ended September
30, 2022 and 2021:
|
|
|
|
|
|
(in millions of
dollars)
|
|
Q3
2022
|
Q3
2021
|
2022
YTD
|
2021
YTD
|
Net income
|
|
41.1
|
53.3
|
110.4
|
179.6
|
Remove: income tax
expense
|
|
(10.0)
|
(16.2)
|
(28.3)
|
(56.5)
|
Income before income
taxes
|
|
51.1
|
69.5
|
138.7
|
236.1
|
|
|
|
|
|
|
Remove: non-operating
gains (losses)
|
|
|
|
|
|
Recognized (losses) gains on investments
|
|
|
|
|
|
Realized
(losses) gains on sale of AFS investments
|
|
(12.2)
|
2.2
|
(38.7)
|
46.3
|
Net losses
on FVTPL investments
|
|
(10.2)
|
(9.3)
|
(164.2)
|
(57.9)
|
Impairment losses on AFS investments
|
|
(1.2)
|
-
|
(20.5)
|
-
|
Impact of discounting
|
|
15.5
|
1.9
|
159.8
|
35.2
|
Demutualization and IPO-related expenses1
|
|
1.3
|
(4.7)
|
(1.0)
|
(13.4)
|
Amortization of intangible assets recognized in business
combinations1
|
|
(0.7)
|
(0.8)
|
(1.9)
|
(2.9)
|
Other1,2
|
|
0.3
|
0.6
|
(0.6)
|
0.3
|
Non-operating
(losses) gains
|
|
(7.2)
|
(10.1)
|
(67.1)
|
7.6
|
Operating
income
|
|
58.3
|
79.6
|
205.8
|
228.5
|
Operating income tax
expense
|
|
(11.8)
|
(18.9)
|
(45.9)
|
(54.5)
|
Operating net
income
|
|
46.5
|
60.7
|
159.9
|
174.0
|
1
|
Included in Other
(expenses) income in our consolidated financial
statements.
|
2
|
Other represents
foreign currency translation of an insurtech venture capital fund,
acquisition-related expenses, and a number of other expenses or
revenues that in the view of management are not part of our
insurance operations and are individually and in the aggregate not
material.
|
The following table shows the components of our calculation
of ROE, a non-GAAP ratio, for the periods ended September 30:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the 12 months
ended
September 30,
|
(in millions of
dollars, except as otherwise noted)
|
|
|
|
|
|
|
|
2022
|
2021
|
Net income
|
|
|
|
144.1
|
246.3
|
Total
equity1
|
|
|
|
2,240.9
|
2,029.8
|
Adjustment for
Over-Allotment option and Anti-Dilution
Adjustment2
|
|
|
|
(37.0)
|
-
|
Adjusted total
equity
|
|
|
|
2,203.9
|
2,029.8
|
Average adjusted total
equity3
|
|
|
|
2,116.8
|
1,876.2
|
ROE
|
|
|
|
6.8 %
|
13.1 %
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
Total equity is as at
September 30, 2022 and 2021.
|
2
|
Over-Allotment option
and Anti-Dilution Adjustment were prorated for the 53 days prior to
the IPO date of November 23, 2021.
|
3
|
Average adjusted total
equity is the average of adjusted total equity (total equity as
shown on our consolidated balance sheet, adjusted for significant
capital transactions, if applicable) at the end of the period and
the end of the preceding 12-month period. Total equity and adjusted
total equity as at September 30, 2020 was $1,722.7
million.
|
The following table shows the components of our calculation of
operating ROE, a non-GAAP ratio, for the periods ended September 30:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the 12 months
ended
September 30,
|
(in millions of
dollars, except as otherwise noted)
|
|
|
|
|
|
|
|
|
|
|
|
2022
|
2021
|
Operating net
income1
|
|
|
|
|
|
206.3
|
247.4
|
Total equity, excluding
AOCI2
|
|
|
|
|
|
2,352.2
|
1,949.1
|
Adjustment for
Over-Allotment option and Anti-Dilution
Adjustment3
|
|
|
|
|
|
(37.0)
|
-
|
Adjusted total equity,
excluding AOCI
|
|
|
|
|
|
2,315.2
|
1,949.1
|
Average adjusted total
equity, excluding AOCI4
|
|
|
|
|
|
2,132.2
|
1,822.4
|
Operating
ROE
|
|
|
|
|
|
9.7 %
|
13.6 %
|
1
|
Operating net income is
a non-GAAP financial measure.
|
2
|
Total equity, excluding
accumulated other comprehensive income ("AOCI") is as at September
30, 2022 and 2021.
|
3
|
Over-Allotment option
and Anti-Dilution Adjustment were prorated for the 53 days prior to
the IPO date of November 23, 2021.
|
4
|
Average adjusted total
equity, excluding AOCI is the average of adjusted total equity,
excluding AOCI (total equity and AOCI each as shown on our
consolidated balance sheet, adjusted for significant capital
transactions, if applicable) at the end of the period and the end
of the preceding 12-month period. Total equity, excluding AOCI, and
adjusted total equity, excluding AOCI, as at September 30, 2020 was
$1,695.8 million.
|
SOURCE Definity Financial Corporation