(in Canadian dollars except as otherwise noted)
TORONTO, July 30,
2024 /CNW/ - (TSX: IFC)
Highlights
- Operating DPW1,2 growth of 6%, largely organic and
led by continued momentum in personal lines
- Combined ratio1 of 87.1% reflected a solid
underlying performance across all geographies and limited
catastrophe activity
- Net operating income per share1 increased to
$4.86 (and EPS of $4.04) driven by very strong underwriting
results, as well as solid growth in investment and distribution
income
- Operating ROE1 increased by 4 points year-over-year
to 17.0%, while a 13.7% ROE1 fuelled a BVPS1
growth of 15% over the same period
- Strong balance sheet with $2.9
billion of total capital margin1 from solid
earnings and adjusted debt-to-total capital ratio1 down
to 19.8%
Charles Brindamour, Chief
Executive Officer, said:
"With the recent flooding and wildfire events in Canada, our teams have been quick to respond
and are actively helping customers get back on track. In these
difficult times, we are reminded of how important our purpose is
and why our work matters. For the second quarter, our business
delivered strong results, predominately due to excellent
underlying performance across all lines of business. Operating ROE
was in the high-teens on the back of solid earnings growth. Top
line momentum continues to be strong, especially in personal lines,
and we are focused on making the most of the current market
conditions in commercial lines by leveraging our distribution
channels and pricing expertise. With our profitability momentum,
balance sheet strength and investments in our competitive
advantages, we are well on our way to return to our 10% net
operating income per share growth trajectory and to outperform the
industry ROE by at least 500 basis points every year."
|
Consolidated Highlights
(in millions of Canadian dollars except as otherwise
noted)
|
Q2-2024
|
Q2-2023
|
Change
|
H1-2024
|
H1-2023
|
Change
|
|
|
Operating direct premiums
written1,2
|
6,655
|
6,226
|
6 %
|
11,765
|
11,035
|
6 %
|
|
|
Combined ratio1,3
|
87.1 %
|
96.3 %
|
(9.2) pts
|
89.1 %
|
94.2 %
|
(5.1) pts
|
|
|
Underwriting
income1,3
|
681
|
184
|
270 %
|
1,140
|
578
|
97 %
|
|
|
Operating net
investment income
|
387
|
326
|
19 %
|
767
|
621
|
24 %
|
|
|
Distribution
income1
|
169
|
137
|
23 %
|
269
|
242
|
11 %
|
|
|
Net operating income
attributable to common shareholders1
|
866
|
410
|
111 %
|
1,513
|
952
|
59 %
|
|
|
Net income
|
758
|
260
|
192 %
|
1,431
|
637
|
125 %
|
|
|
Per share measures (in dollars)
|
|
|
|
|
|
|
|
|
Net operating income
per share (NOIPS)1,4
|
$4.86
|
$2.34
|
108 %
|
$8.48
|
$5.43
|
56 %
|
|
|
Earnings per share
(EPS) - diluted4
|
$4.04
|
$1.30
|
211 %
|
$7.72
|
$3.36
|
130 %
|
|
|
Book value per
share1
|
$88.00
|
$76.29
|
15 %
|
|
|
|
|
|
Return on equity for the last 12
months
|
|
|
|
|
|
|
|
|
Operating
ROE1
|
17.0 %
|
12.9 %
|
4.1 pts
|
|
|
|
|
|
Adjusted
ROE1
|
16.7 %
|
11.8 %
|
4.9 pts
|
|
|
|
|
|
ROE1
|
13.7 %
|
9.0 %
|
4.7 pts
|
|
|
|
|
|
Total capital
margin1
|
2,884
|
2,482
|
402
|
|
|
|
|
|
Adjusted debt-to-total
capital ratio1
|
19.8 %
|
22.5 %
|
(2.7) pts
|
|
|
|
|
12-Month Industry Outlook
- We expect favourable insurance market conditions to continue,
driven by past catastrophe losses and inflation pressures:
- Both personal property and auto premium growth could reach
double-digits; and
- In commercial and specialty lines across all geographies, we
expect mid-single-digit premium growth.
|
___________________________________________
|
|
1
|
This release contains
Non-GAAP financial measures, Non-GAAP ratios and other financial
measures (each as defined in National Instrument 52-112 "Non-GAAP
and Other Financial Measures Disclosure"). Refer to Section 14 –
Non-GAAP and other financial measures in the Q2-2024 Management's
Discussion and Analysis for further details.
|
|
2
|
DPW change (growth) is
presented in constant currency.
|
|
3
|
Presented on an
undiscounted basis. Underwriting income comparative figures have
been reclassified accordingly.
|
|
4
|
Per share metric is
calculated based on the weighted-average diluted number of common
shares.
|
Segment Results
|
(in millions of
Canadian dollars except as otherwise noted)
|
Q2-2024
|
Q2-2023
|
Change
|
H1-2024
|
H1-2023
|
Change
|
|
Operating direct premiums
written1,2
|
|
Canada
|
4,563
|
4,270
|
7 %
|
7,815
|
7,266
|
8 %
|
|
UK&I3
|
1,315
|
1,202
|
7 %
|
2,560
|
2,437
|
2 %
|
|
US
|
777
|
754
|
1 %
|
1,390
|
1,332
|
4 %
|
|
Total
|
6,655
|
6,226
|
6 %
|
11,765
|
11,035
|
6 %
|
|
Combined
ratio1
|
|
Canada
|
85.4 %
|
97.9 %
|
(12.5)
pts
|
88.1 %
|
94.9 %
|
(6.8)
pts
|
|
UK&I3
|
92.2 %
|
94.1 %
|
(1.9)
pts
|
93.4 %
|
94.3 %
|
(0.9)
pts
|
|
US
|
88.5 %
|
91.3 %
|
(2.8) pts
|
88.3 %
|
90.2 %
|
(1.9) pts
|
|
Combined
ratio
|
87.1 %
|
96.3 %
|
(9.2) pts
|
89.1 %
|
94.2 %
|
(5.1) pts
|
Q2-2024 Consolidated Performance
- Overall operating DPW increased 6% led by rate increases and
unit growth in hard market conditions across personal lines. Within
commercial lines, growth was led by rates in the mid-single digits,
with market conditions varying by line of business.
- Overall combined ratio was strong at 87.1%, 9 points better
than last year, with 7 points attributable to lower catastrophe
losses compared to last year's elevated level and 2 points
attributable to an improvement in our underlying performance.
- Operating net investment income of $387
million increased 19% year-over-year, driven by higher
reinvestment yields captured in the latter half of 2023.
- Distribution income increased by 23% to $169 million, mainly due to higher commission
revenues from solid organic growth and contributions from our
M&A activities.
Lines of Business
P&C Canada
- Personal auto premium grew by 11%, reflecting strong rate
increases and continued unit growth. The combined ratio remained
solid at 91.4%, in a seasonally favourable quarter. This reflected
an underlying performance improvement of 3 points year-over-year,
which tempered lower favourable PYD in the quarter.
- Personal property premiums grew by 9%, driven by strong rate
increases and continued unit growth. The combined ratio was very
strong at 78.0%, reflecting robust underlying results and
favourable PYD, coupled with low catastrophe losses in a typically
active season.
- Commercial lines premiums grew by 1%, reflecting
mid-single-digit rates, mainly offset by continued competition for
large accounts and an unfavourable timing impact in renewals. The
combined ratio was very strong at 83.6%, 6 points lower than last
year, mainly due to lower catastrophe losses.
P&C UK&I2
- Excluding the impact of the UK Personal Lines exit, operating
DPW growth was 42%, mainly due to the DLG brokered commercial lines
acquisition in Q4-2023. Organic growth was 6%, reflecting
mid-single-digit rate actions and solid new business. The combined
ratio was healthy at 92.2%, in line with expectations following the
DLG acquisition.
P&C US2
- Operating DPW grew 1%, as a result of mid-single-digit rate
actions in most lines of business, as well as corrective actions
and reduced exposures in certain segments. The combined ratio
continued to be solid at 88.5% for the quarter, 3 points better
than prior year, reflecting favourable PYD and continued growth in
profitable business lines.
|
___________________________________________
|
|
1
|
This release contains
Non-GAAP financial measures, Non-GAAP ratios and other financial
measures (each as defined in National Instrument 52-112 "Non-GAAP
and Other Financial Measures Disclosure"). Refer to Section 14 –
Non-GAAP and other financial measures in the Q2-2024 Management's
Discussion and Analysis for further details.
|
|
2
|
DPW change (growth) is
presented in constant currency.
|
|
3
|
The comparative period
results presented in the table are on a reported basis. Following
the exit of the UK personal lines operations in 2023, performance
of this segment is now analyzed on a pro-forma basis (which
excludes UK Personal Lines results) for comparability. Pro-forma
growth in constant currency was 42% in Q2-2024 and 35% in H1-2024.
Pro-forma combined ratios were 90.4% for Q2-2023 and 89.4% for
H1-2023.
|
Net Operating Income, EPS and ROE
- Net operating income attributable to common shareholders
increased from last year to $866
million, driven by strong underwriting, investment and
distribution results.
- Earnings Per Share of $4.04, up
$2.74 year-over-year, driven by solid
operating and non-operating performances.
- Operating ROE of 17.0% and ROE of 13.7% reflected strong
earnings across the business.
Balance Sheet
- The Company ended the quarter in a strong financial position,
with a total capital margin of $2.9 billion, with solid regulatory capital
ratios in all jurisdictions.
- Adjusted debt-to-total capital ratio was down to 19.8% as at
June 30, 2024, in line with our
long-term target.
- IFC's book value per share (BVPS) of $88.00 as at June 30,
2024 increased 15% year-over-year, and was 4% higher than
Q1-2024, due to strong operating earnings.
Common Share Dividend
- The Board of Directors approved the quarterly dividend of
$1.21 per share on the Company's
outstanding common shares. The dividends are payable on
September 27, 2024, to shareholders
of record on September 13, 2024.
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, 37.575 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 as of September 30, 2024,
to shareholders of record on September 13,
2024.
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 $3.00 and $3.57, respectively.
Management's Discussion and Analysis (MD&A) and Interim
Condensed 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 Q2-2024 MD&A, as well as the Q2-2024
interim condensed consolidated financial statements, which are
available on the Company's website at www.intactfc.com and later
today on SEDAR+ at www.sedarplus.ca.
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 interim condensed
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 July 31, 2024 at
2 p.m. ET until August 7, 2024. To listen to the replay, call
416-764-8677 or 1-888-390-0541 (toll-free in North America), entry code 632576. 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 UK and Ireland. Our business has grown organically
and through acquisitions to over $22
billion of total annual operating DPW.
In Canada, Intact distributes
insurance under the Intact Insurance brand through agencies and a
wide network of brokers, including its wholly owned subsidiary
BrokerLink. Through belairdirect, Intact distributes directly to
consumers. Intact also provides affinity insurance solutions
through affinity groups, travel insurance, as well as exclusive and
tailored offerings through Intact Prestige.
In the US, Intact Insurance Specialty Solutions provides a range
of specialty insurance products and services through independent
agencies, regional and national brokers, and wholesalers and
managing general agencies.
In the UK, Ireland, and
Europe, Intact provides personal,
commercial and specialty insurance solutions through the RSA, NIG
and FarmWeb 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 14 – Non-GAAP
and other financial measures in the Q2-2024 MD&A dated
July 30, 2024, which is available on
our website at www.intactfc.com and on SEDAR+ at
www.sedarplus.ca.
Table 1 Reconciliation of NOI, NOIPS and OROE to Net
income attributable to shareholders
|
Q2-2024
|
Q2-2023
|
H1-2024
|
H1-2023
|
|
|
|
|
|
|
Net income attributable to shareholders, as reported
under IFRS
|
750
|
252
|
1,423
|
629
|
|
Remove: pre-tax
non-operating results
|
128
|
200
|
140
|
348
|
|
Remove: non-operating
tax expense (benefit)
|
16
|
(19)
|
(5)
|
14
|
|
NOI attributable to
shareholders
|
894
|
433
|
1,558
|
991
|
|
Remove: preferred share
dividends and other equity distribution
|
(28)
|
(23)
|
(45)
|
(39)
|
|
NOI attributable to
common shareholders
|
866
|
410
|
1,513
|
952
|
|
Divided by
weighted-average diluted number of common shares (in
millions)
|
178.5
|
175.3
|
178.5
|
175.3
|
|
NOIPS (in
dollars)
|
4.86
|
2.34
|
8.48
|
5.43
|
|
NOI attributable to
common shareholders for the last 12 months
|
2,575
|
1,952
|
|
|
|
Adjusted average common
shareholders' equity, excluding AOCI
|
15,151
|
15,145
|
|
|
|
OROE for the last 12
months
|
17.0 %
|
12.9 %
|
|
|
Table 2 Reconciliation of underwriting results on a
MD&A basis with the interim condensed consolidated financial
statements (quarterly)
|
Financial statements
|
F/S
|
1
|
2
|
3
|
4
|
5
|
6
|
7
|
8
|
9
|
Total
|
MD&A
|
MD&A
|
|
Quarter ended June 30, 2024
|
|
|
Insurance
revenue
|
6,488
|
(619)
|
(356)
|
|
|
|
|
(207)
|
(12)
|
7
|
(1,187)
|
5,301
|
Operating net
underwriting revenue
|
|
Insurance service
expense
|
(5,196)
|
365
|
370
|
(114)
|
8
|
(44)
|
(237)
|
223
|
12
|
(7)
|
576
|
(4,620)
|
Sum of: Operating net
claims ($2,812 million) and Operating net underwriting
expenses ($1,808 million)
|
|
Expense from
reinsurance contracts
|
(619)
|
619
|
|
|
|
|
|
|
|
|
619
|
-
|
n/a
|
|
Income from reinsurance
contracts
|
365
|
(365)
|
|
|
|
|
|
|
|
|
(365)
|
-
|
n/a
|
|
Insurance service result
|
1,038
|
-
|
14
|
(114)
|
8
|
(44)
|
(237)
|
16
|
-
|
-
|
(357)
|
681
|
Underwriting income (loss)
|
|
Quarter ended June 30, 2023
|
|
|
Insurance
revenue
|
6,243
|
(808)
|
(73)
|
|
|
|
|
(321)
|
(55)
|
30
|
(1,227)
|
5,016
|
Operating net
underwriting revenue
|
|
Insurance service
expense
|
(5,500)
|
541
|
110
|
(112)
|
6
|
(34)
|
(207)
|
339
|
55
|
(30)
|
668
|
(4,832)
|
Sum of: Operating net
claims ($3,109 million) and Operating net underwriting
expenses ($1,723 million)
|
|
Expense from
reinsurance contracts
|
(808)
|
808
|
|
|
|
|
|
|
|
|
808
|
-
|
n/a
|
|
Income from reinsurance
contracts
|
541
|
(541)
|
|
|
|
|
|
|
|
|
(541)
|
-
|
n/a
|
|
Insurance service result
|
476
|
-
|
37
|
(112)
|
6
|
(34)
|
(207)
|
18
|
-
|
-
|
(292)
|
184
|
Underwriting income (loss)
|
Reconciling items in the table above:
|
1
|
Adjustment to present
results net of reinsurance
|
|
2
|
Adjustment to exclude
net underwriting revenue, net claims, net underwriting expenses
from exited lines (treated as non-operating)
|
|
3
|
Adjustment to include
indirect underwriting expenses (from Other income and expense under
IFRS)
|
|
4
|
Adjustment to exclude
the non-operating pension expense
|
|
5
|
Adjustment to
reclassify intercompany commissions (to Distribution income &
Other corporate income (expense))
|
|
6
|
Adjustment to exclude
discount build on claims liabilities (treated as
non-operating)
|
|
7
|
Adjustment to exclude
Net insurance service results from claims acquired in a business
combination (treated as non-operating)
|
|
8
|
Adjustment to
reclassify Assumed (ceded) commissions and premium
adjustments
|
|
9
|
Adjustment to
reclassify Net insurance revenue from retroactive reinsurance
contracts
|
Table 3 Reconciliation of underwriting results on a
MD&A basis with the interim condensed consolidated financial
statements (year-to-date)
|
Financial statements
|
F/S
|
1
|
2
|
3
|
4
|
5
|
6
|
7
|
8
|
9
|
Total
|
MD&A
|
MD&A
|
|
Six-month ended June 30, 2024
|
|
|
Insurance
revenue
|
12,999
|
(1,292)
|
(715)
|
|
|
|
|
(488)
|
(32)
|
22
|
(2,505)
|
10,494
|
Operating net
underwriting revenue
|
|
Insurance service
expense
|
(10,554)
|
679
|
790
|
(262)
|
16
|
(93)
|
(465)
|
525
|
32
|
(22)
|
1,200
|
(9,354)
|
Sum of: Operating net
claims ($5,757 million) and Operating net underwriting
expenses ($3,597 million)
|
|
Expense from
reinsurance contracts
|
(1,292)
|
1,292
|
|
|
|
|
|
|
|
|
1,292
|
-
|
n/a
|
|
Income from reinsurance
contracts
|
679
|
(679)
|
|
|
|
|
|
|
|
|
(679)
|
-
|
n/a
|
|
Insurance service result
|
1,832
|
-
|
75
|
(262)
|
16
|
(93)
|
(465)
|
37
|
-
|
-
|
(692)
|
1,140
|
Underwriting income (loss)
|
|
Six-month ended June 30, 2023
|
|
|
Insurance
revenue
|
12,597
|
(1,655)
|
(153)
|
|
|
|
|
(862)
|
(114)
|
67
|
(2,717)
|
9,880
|
Operating net
underwriting revenue
|
|
Insurance service
expense
|
(11,096)
|
1,274
|
250
|
(198)
|
12
|
(69)
|
(426)
|
904
|
114
|
(67)
|
1,794
|
(9,302)
|
Sum of: Operating net
claims ($5,927 million) and Operating net underwriting
expenses ($3,375 million)
|
|
Expense from
reinsurance contracts
|
(1,655)
|
1,655
|
|
|
|
|
|
|
|
|
1,655
|
-
|
n/a
|
|
Income from reinsurance
contracts
|
1,274
|
(1,274)
|
|
|
|
|
|
|
|
|
(1,274)
|
-
|
n/a
|
|
Insurance service result
|
1,120
|
-
|
97
|
(198)
|
12
|
(69)
|
(426)
|
42
|
-
|
-
|
(542)
|
578
|
Underwriting income (loss)
|
Reconciling items in the table above:
|
1
|
Adjustment to present
results net of reinsurance
|
|
2
|
Adjustment to exclude
net underwriting revenue, net claims, net underwriting expenses
from exited lines (treated as non-operating)
|
|
3
|
Adjustment to include
indirect underwriting expenses (from Other income and expense under
IFRS)
|
|
4
|
Adjustment to exclude
the non-operating pension expense
|
|
5
|
Adjustment to
reclassify intercompany commissions (to Distribution income &
Other corporate income (expense))
|
|
6
|
Adjustment to exclude
discount build on claims liabilities (treated as
non-operating)
|
|
7
|
Adjustment to exclude
Net insurance service results from claims acquired in a business
combination (treated as non-operating)
|
|
8
|
Adjustment to
reclassify Assumed (ceded) commissions and premium
adjustments
|
|
9
|
Adjustment to
reclassify Net insurance revenue from retroactive reinsurance
contracts
|
Table 4 Reconciliation of ROE to Net income
attributable to shareholders
|
Q2-2024
|
Q2-2023
|
H1-2024
|
H1-2023
|
|
Net income attributable to shareholders,
as reported under
IFRS
|
750
|
252
|
1,423
|
629
|
|
Remove: preferred share
dividends and other equity distribution
|
(28)
|
(23)
|
(45)
|
(39)
|
|
Net income
attributable to common shareholders
|
722
|
229
|
1,378
|
590
|
|
Divided by
weighted-average basic number of common shares (in
millions)
|
178.3
|
175.3
|
178.3
|
175.3
|
|
EPS, basic (in
dollars)
|
4.05
|
1.30
|
7.73
|
3.36
|
|
Divided by
weighted-average diluted number of common shares1
(in millions)
|
178.5
|
175.3
|
178.5
|
175.3
|
|
EPS, diluted (in
dollars)
|
4.04
|
1.30
|
7.72
|
3.36
|
|
Net income
attributable to common shareholders for the last 12
months
|
2,020
|
1,280
|
|
|
|
Adjusted average common
shareholders' equity
|
14,698
|
14,226
|
|
|
|
ROE for the last 12
months
|
13.7 %
|
9.0 %
|
|
|
|
1 Includes
the net effect of the exercise of stock options. See Note 18
– Earnings per share to the interim condensed consolidated
financial statements for more details.
|
Table 5 Reconciliation of consolidated results on a
MD&A basis with the interim condensed consolidated financial
statements (quarterly)
|
MD&A captions
|
Pre-tax
|
|
|
|
As presented in the Financial
statements
|
Distribution
income
|
Total
finance
costs
|
Other
operating
income
(expense)
|
Operating
net
investment
income
|
Total
income
taxes
|
Non-
operating
results
|
Underwriting
income
(loss)
|
Total F/S
caption
|
|
For the quarter ended June 30,
2024
|
|
Insurance service
result
|
28
|
|
16
|
|
|
199
|
795
|
1,038
|
|
Net investment
income
|
|
|
|
387
|
|
|
|
387
|
|
Net gains (losses) on
investment portfolio
|
|
|
|
|
|
(34)
|
|
(34)
|
|
Net insurance
financial result
|
|
|
|
|
|
(195)
|
|
(195)
|
|
Share of profits from
investments in associates and joint ventures
|
52
|
(3)
|
(1)
|
|
(11)
|
(9)
|
|
28
|
|
Other net gains
(losses)
|
|
|
|
|
|
74
|
|
74
|
|
Other income and
expense
|
89
|
|
(75)
|
|
|
(73)
|
(114)
|
(173)
|
|
Other finance
costs
|
|
(54)
|
|
|
|
|
|
(54)
|
|
Acquisition,
integration and restructuring costs
|
|
|
|
|
|
(90)
|
|
(90)
|
|
Income tax benefit
(expense)
|
|
|
|
|
(223)
|
|
|
(223)
|
|
|
|
|
|
|
|
|
|
|
Total, as reported in MD&A
|
169
|
(57)
|
(60)
|
387
|
(234)
|
(128)
|
681
|
|
|
For the quarter ended June 30,
2023
|
|
Insurance service
result
|
9
|
|
25
|
|
|
146
|
296
|
476
|
|
Net investment
income
|
|
|
|
326
|
|
|
|
326
|
|
Net gains (losses) on
investment portfolio
|
|
|
|
|
|
(295)
|
|
(295)
|
|
Net insurance
financial result
|
|
|
|
|
|
79
|
|
79
|
|
Share of profits from
investments in associates and joint ventures
|
50
|
(4)
|
(2)
|
|
(11)
|
(5)
|
|
28
|
|
Other net gains
(losses)
|
|
|
|
|
|
2
|
|
2
|
|
Other income and
expense
|
78
|
|
(70)
|
|
|
(51)
|
(112)
|
(155)
|
|
Other finance
costs
|
|
(52)
|
|
|
|
|
|
(52)
|
|
Acquisition,
integration and restructuring costs
|
|
|
|
|
|
(76)
|
|
(76)
|
|
Income tax benefit
(expense)
|
|
|
|
|
(73)
|
|
|
(73)
|
|
|
|
|
|
|
|
|
|
|
Total, as reported in MD&A
|
137
|
(56)
|
(47)
|
326
|
(84)
|
(200)
|
184
|
|
Table 6 Reconciliation of consolidated results on a
MD&A basis with the interim condensed consolidated financial
statements (year-to-date)
|
MD&A captions
|
Pre-tax
|
|
|
|
As presented in the Financial
statements
|
Distribution
income
|
Total
finance
costs
|
Other
operating
income
(expense)
|
Operating
net
investment
income
|
Total
income
taxes
|
Non-
operating
results
|
Underwriting
income
(loss)
|
Total F/S
caption
|
|
For the six-month period ended June 30,
2024
|
|
Insurance service
result
|
71
|
|
22
|
|
|
337
|
1,402
|
1,832
|
|
Net investment
income
|
|
|
|
767
|
|
|
|
767
|
|
Net gains (losses) on
investment portfolio
|
|
|
|
|
|
(74)
|
|
(74)
|
|
Net insurance
financial result
|
|
|
|
|
|
(292)
|
|
(292)
|
|
Share of profits from
investments in associates and joint ventures
|
90
|
(8)
|
1
|
|
(18)
|
(15)
|
|
50
|
|
Other net gains
(losses)
|
|
|
|
|
|
254
|
|
254
|
|
Other income and
expense
|
108
|
|
(111)
|
|
|
(147)
|
(262)
|
(412)
|
|
Other finance
costs
|
|
(111)
|
|
|
|
|
|
(111)
|
|
Acquisition,
integration and restructuring costs
|
|
|
|
|
|
(203)
|
|
(203)
|
|
Income tax benefit
(expense)
|
|
|
|
|
(380)
|
|
|
(380)
|
|
|
|
|
|
|
|
|
|
|
Total, as reported in MD&A
|
269
|
(119)
|
(88)
|
767
|
(398)
|
(140)
|
1,140
|
|
|
For the six-month period ended June 30,
2023
|
|
Insurance service
result
|
45
|
|
24
|
|
|
275
|
776
|
1,120
|
|
Net investment
income
|
|
|
|
621
|
|
|
|
621
|
|
Net gains (losses) on
investment portfolio
|
|
|
|
|
|
(146)
|
|
(146)
|
|
Net insurance
financial result
|
|
|
|
|
|
(172)
|
|
(172)
|
|
Share of profits from
investments in associates and joint ventures
|
97
|
(8)
|
(1)
|
|
(21)
|
(9)
|
|
58
|
|
Other net gains
(losses)
|
|
|
|
|
|
19
|
|
19
|
|
Other income and
expense
|
100
|
|
(101)
|
|
|
(103)
|
(198)
|
(302)
|
|
Other finance
costs
|
|
(102)
|
|
|
|
|
|
(102)
|
|
Acquisition,
integration and restructuring costs
|
|
|
|
|
|
(212)
|
|
(212)
|
|
Income tax benefit
(expense)
|
|
|
|
|
(247)
|
|
|
(247)
|
|
|
|
|
|
|
|
|
|
|
Total, as reported in MD&A
|
242
|
(110)
|
(78)
|
621
|
(268)
|
(348)
|
578
|
|
Table 7 Reconciliation of AEPS and AROE to Net income
attributable to shareholders
|
Q2-2024
|
Q2-2023
|
H1-2024
|
H1-2023
|
|
Net income attributable to shareholders, as reported
under IFRS
|
750
|
252
|
1,423
|
629
|
|
Remove
acquisition-related items, after tax
|
|
|
|
|
|
Amortization of
acquired intangible assets
|
56
|
50
|
113
|
99
|
|
Acquisition and
integration costs
|
41
|
38
|
96
|
83
|
|
Tax adjustments on
acquisition-related items
|
3
|
1
|
3
|
2
|
|
Net result from claims
acquired in a business combination
|
(1)
|
-
|
1
|
1
|
|
Adjusted net income
attributable to shareholders
|
849
|
341
|
1,636
|
814
|
|
Remove: preferred share
dividends and other equity distribution
|
(28)
|
(23)
|
(45)
|
(39)
|
|
Adjusted net income
attributable to common shareholders
|
821
|
318
|
1,591
|
775
|
|
Divided by
weighted-average diluted number of common shares (in
millions)
|
178.5
|
175.3
|
178.5
|
175.3
|
|
AEPS (in
dollars)
|
4.61
|
1.81
|
8.91
|
4.42
|
|
Adjusted net income
attributable to common shareholders for the last 12
months
|
2,453
|
1,682
|
|
|
|
Adjusted average common
shareholders' equity
|
14,698
|
14,226
|
|
|
|
AROE for the last 12
months
|
16.7 %
|
11.8 %
|
|
|
Table 8 Calculation of BVPS and BVPS (excluding
AOCI)
|
As at June 30,
|
2024
|
2023
|
|
|
|
|
Equity attributable to
shareholders, as reported under IFRS
|
17,315
|
14,989
|
|
Remove: Preferred
shares and other equity, as reported under IFRS
|
(1,619)
|
(1,619)
|
|
|
|
|
Common shareholders' equity
|
15,696
|
13,370
|
|
Remove: AOCI, as
reported under IFRS
|
238
|
670
|
|
|
|
|
Common shareholders' equity (excluding
AOCI)
|
15,934
|
14,040
|
|
|
|
|
Number of common shares
outstanding at the same date (in millions)
|
178.4
|
175.3
|
|
BVPS
|
88.00
|
76.29
|
|
BVPS (excluding
AOCI)
|
89.33
|
80.11
|
Table 9 Adjusted average common shareholders' equity
and Adjusted average common shareholders' equity, excluding
AOCI
|
As at June 30,
|
2024
|
2023
|
|
|
|
|
Ending common
shareholders' equity
|
15,696
|
13,370
|
|
Remove: significant
capital transaction in the last 12 months
|
(557)
|
1,195
|
|
Ending common
shareholders' equity, excluding significant capital
transaction
|
15,139
|
14,565
|
|
Beginning common
shareholders' equity
|
13,370
|
14,699
|
|
Average common
shareholders' equity, excluding significant capital
transaction
|
14,255
|
14,632
|
|
Weighted impact of
significant capital transactions1
|
443
|
(406)
|
|
Adjusted average common shareholders'
equity
|
14,698
|
14,226
|
|
|
|
|
Ending
common shareholders' equity, excluding AOCI
|
15,934
|
14,040
|
|
Remove: significant
capital transaction in the last 12 months
|
(557)
|
1,195
|
|
Ending common
shareholders' equity, excluding AOCI and significant capital
transaction
|
15,377
|
15,235
|
|
Beginning common
shareholders' equity, excluding AOCI
|
14,040
|
15,867
|
|
Average common
shareholders' equity, excluding AOCI and significant capital
transaction
|
14,708
|
15,551
|
|
Weighted impact of
significant capital transactions1
|
443
|
(406)
|
|
Adjusted average common shareholders' equity, excluding
AOCI
|
15,151
|
15,145
|
|
1
|
June 30, 2024 figure
represents the weighted impact of the September 13, 2023
significant capital transaction. June 30, 2023 figure represents
the net weighted impact of the February 27, 2023 significant
capital transaction.
|
Table 10 Reconciliation of Debt outstanding
(excluding hybrid debt) and Total capital to Debt outstanding,
Equity attributable to shareholders and Equity attributable to
NCI
|
As at
|
June 30, 2024
|
March 31, 2024
|
Dec. 31, 2023
|
|
|
|
|
|
Debt outstanding, as reported under
IFRS
|
4,650
|
4,714
|
5,081
|
|
Remove: hybrid
subordinated notes
|
(247)
|
(247)
|
(247)
|
|
|
|
|
|
Debt outstanding (excluding hybrid
debt)
|
4,403
|
4,467
|
4,834
|
|
|
|
|
|
Debt outstanding, as
reported under IFRS
|
4,650
|
4,714
|
5,081
|
|
Equity attributable to
shareholders, as reported under IFRS
|
17,315
|
16,740
|
16,190
|
|
Preferred shares from
Equity attributable to non-controlling interests
|
285
|
285
|
285
|
|
Adjusted total
capital
|
22,250
|
21,739
|
21,556
|
|
|
|
|
|
Debt outstanding
(excluding hybrid debt)
|
4,403
|
4,467
|
4,834
|
|
Adjusted total
capital
|
22,250
|
21,739
|
21,556
|
|
Adjusted debt-to-total capital
ratio
|
19.8 %
|
20.5 %
|
22.4 %
|
|
|
|
|
|
Debt outstanding, as
reported under IFRS
|
4,650
|
4,714
|
5,081
|
|
Preferred shares and
other equity, as reported under IFRS
|
1,619
|
1,619
|
1,619
|
|
Preferred shares from
Equity attributable to non-controlling interests
|
285
|
285
|
285
|
|
Debt outstanding and
preferred shares (including NCI)
|
6,554
|
6,618
|
6,985
|
|
Adjusted total
capital
|
22,250
|
21,739
|
21,556
|
|
Total leverage ratio
|
29.5 %
|
30.4 %
|
32.4 %
|
|
Adjusted debt-to-total
capital ratio
|
19.8 %
|
20.5 %
|
22.4 %
|
|
Preferred shares and
hybrids
|
9.7 %
|
9.9 %
|
10.0 %
|
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 U.K., the Company's
business outlook, the Company's growth prospects, the Direct Line
Insurance Group plc's brokered Commercial Lines operations
acquisition and the exit of Royal & Sun Alliance Insurance
Limited ("RSA") from the UK personal lines market, including the
sale of our UK direct personal lines operations to Admiral Group
plc. 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 13,
2024 and available on SEDAR+ at www.sedarplus.ca. 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
Q2-2024 MD&A.
SOURCE Intact Financial Corporation
