Definity Financial Corp. · TSX:DFY
Definity Financial — Q4 2022 Earnings Presentation
20 slides from Definity Financial's earnings presentation, Feb 10, 2023
Slide 1: Q4-2022 Quarterly Report
Q4-2022 QUARTERLY REPORT February 10, 2023
Slide 2: Advisory Regarding Forward-Looking Information
2 ADVISORY REGARDING FORWARD-LOOKING INFORMATION This presentation 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 inf
Slide 3: Supplementary Financial Measures and Non-GAAP Financial Measures and Ratios
3 SUPPLEMENTARY FINANCIAL MEASURES AND NON-GAAP FINANCIAL MEASURES AND RATIOS We prepare our financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (the “IASB”) (referred to herein as “GAAP” or “IFRS”). We measure
Slide 4: Rowan Saunders
ROWAN SAUNDERS President & Chief Executive Officer
Slide 5: Q4-2022 Financial Highlights
5 Q4-2022 FINANCIAL HIGHLIGHTS Operating EPS(1) Gross Written Premiums Combined Ratio(1) $0.67 $943M / +11.3% y/y 91.7% Book Value per Share(1) Financial Capacity(1,2) Operating ROE (TTM)(1) $20.74 / +0.3% y/y $658M 10.0% The Board of Directors declared a $0.1375 per share dividend, representing a 1
Slide 6: 12-Month Industry Outlook
6 12-MONTH INDUSTRY OUTLOOK Personal Auto Personal Property Commercial Insurance • We expect the frequency of claims to • Due to the volatility of weather events • Elevated inflation and interest rates will continue to normalize toward pre-pandemic combined with the ongoing inflationary likely impac
Slide 7: Key Financial Metrics
7 KEY FINANCIAL METRICS Gross Written Premium Growth Combined Ratio(1) Operating ROE(1) FY2022 FY2022 FY2022 11.8% 94.1% 10.0% TARGET(2) TARGET(2) TARGET(2) Grow GWP annually at an Maintain a full year combined Generate an annual upper single digit to approximately ratio in the mid-90s Operating ROE
Slide 8: Philip Mather
PHILIP MATHER Executive Vice-President & Chief Financial Officer
Slide 9: Q4-2022 Personal Auto
9 Q4-2022 PERSONAL AUTO ($ in millions, except as otherwise noted) Q4-22 Q4-21 Δ FY22 FY21 Δ Gross Written Premiums (TTM) ($ in millions) GWP $377.2 $355.5 6.1% $1,530.6 $1,426.5 7.3% $1,531 $1,509 $1,479 $1,427 $1,446 $1,398 $1,410 NEP $379.4 $344.3 10.2% $1,470.7 $1,332.5 10.4% $1,335 $1,348 Under
Slide 10: Q4-2022 Personal Property
10 Q4-2022 PERSONAL PROPERTY ($ in millions, except as otherwise noted) Q4-22 Q4-21 Δ FY22 FY21 Δ Gross Written Premiums (TTM) ($ in millions) GWP $268.0 $237.1 13.0% 1,012.7 $894.6 13.2% $1,013 $956 $982 $924 $895 $859 $819 NEP $240.1 $203.7 17.9% $907.0 $761.2 19.2% $779 $751 Underwriting $23.1 $1
Slide 11: Q4-2022 Commercial Insurance
11 Q4-2022 COMMERCIAL INSURANCE ($ in millions, except as otherwise noted) Q4-22 Q4-21 Δ FY22 FY21 Δ Gross Written Premiums (TTM) ($ in millions) GWP $297.3 $254.0 17.0% $1,070.5 $910.3 17.6% $1,071 $1,027 $990 $945 $910 $872 NEP $231.1 $197.0 17.3% $870.9 $739.9 17.7% $827 $770 $729 Underwriting $2
Slide 12: Q4-2022 Consolidated Profitability
12 Q4-2022 CONSOLIDATED PROFITABILITY ($ in millions, except as otherwise noted) Q4-22 Q4-21 Δ FY22 FY21 Δ Operating Income (Loss)(1) ($ in millions) GWP $942.5 $846.6 11.3% $3,613.8 $3,231.4 11.8% $97.9 $104.7 $1.5 $80.3 $84.9 $23.7 $68.5 $79.6 $39.5 Claims Ratio(1,2) 58.8% 63.1% (4.3) pts 61.2% 60
Slide 13: Q4-2022 Investment Portfolio
13 Q4-2022 INVESTMENT PORTFOLIO Net Investment Income (TTM) Dividend & Interest Income ($ in millions) ($ in millions) $133 $41.1 $37.2 $33.0 $8.8 $119 $27.0 $27.4 $8.7 $25.1 $24.3 $25.2 $25.7 $107 $8.2 $100 $100 $7.7 $8.5 $7.7 $97 $96 $95 $97 $7.4 $6.9 $7.6 $32.3 $28.5 $24.8 $17.7 $17.4 $17.6 $18.0
Slide 14: Q4-2022 Capital Management
14 Q4-2022 CAPITAL MANAGEMENT ($ in millions, except as otherwise noted) ICA(2) CBCA(3) Consolidated Book Value q/q Δ ($ in millions) Excess Capital at 200%: ($7) $67 ($14) - Definity Insurance Company $29 $29 $7 - Definity Financial Corporation $357 $357 $79 $2,372 Total Excess Capital $386 $386 $2
Slide 15: Q4-2022 Capital Management
15 Q4-2022 CAPITAL MANAGEMENT Capital Management Actions Financial Capacity y/y Δ ($ in millions) • Closed the McDougall and T.G. Colley $133 $192 ($339) transactions in October, deploying ~$230M ($279) • Recently applied for approval to continue $1,058 ($63) ($44) under the Canadian Business Corpor
Slide 16: 2023 Reinsurance Program
16 2023 REINSURANCE PROGRAM CAT Excess of Loss Structure Successful placement of all Definity key $1,950M treaties despite difficult renewal season $1,800M • up to $138M Upper limit increased from $1.8B to 1.95B to support We retain We retained up to $60M growth capacity • Net company retention incr
Slide 17: Our Strategy
17 OUR STRATEGY STRATEGIC OBJECTIVES OUR PURPOSE Building a better world Consistently Position Definity as Become one of the by helping our clients Maintain our digital deliver disciplined a purpose-driven five largest P&C and communities leadership financial sustainability insurers in Canada adapt
Slide 18: Questions?
"9B, QUESTIONS? definity.
Slide 19: Contact Us
19 CONTACT US Investor Relations Corporate Communications Definity Financial Corporation Sarah Attwells Investor Relations Department AVP, Corporate Affairs 121 King St West, Suite 1400, (C) 226-753-1130 Toronto, ON M5H 3T9 [email protected] (TF) 1-866-902-4724 [email protected] General Inqu
Slide 20: Definity
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