(TSX: DFY)
(in Canadian dollars except as otherwise noted)
TORONTO , May 11, 2023
/CNW/ -
Highlights
- Gross written premium1 growth of 11.4% in 2023 Q1
supported by ongoing firm market conditions in property and
commercial lines
- Combined ratio1 of 95.3% in 2023 Q1 was bolstered by
the strong performance in personal property and ongoing strong
performance from commercial lines
- Personal auto combined ratio1 of 100.9% reflects
business seasonality, heightened theft, and recent elevated claims
trends in both frequency and severity
- Operating net income1 of $63.4 million in 2023 Q1, relatively unchanged
from 2022 Q1, resulting in Operating EPS1 of
$0.54 per share; trailing 12-month
Operating ROE1 was 9.3%
- Book value per share1 increased to $22.90, 10.4% higher than December 31, 2022 measured under IFRS 4
- Definity, through its subsidiary McDougall, acquired 100% of
McFarlan Rowlands on May 8, establishing a leading broker platform
with significant scale in Ontario
that is expected to be immediately accretive and increase earnings
from distribution by approximately 50%
Executive Messages
"We reported a robust 11.4% increase in premiums in the first
quarter, while maintaining our disciplined underwriting approach
amid firm market conditions. Our combined ratio of 95.3% was in
line with our financial target and reflected strong performances in
our personal property and commercial lines, offsetting a seasonally
elevated period for personal auto results which experienced
persistent inflationary pressures and heightened levels of theft.
Our decline in underwriting income was offset by robust net
investment income and an increasing contribution from our recently
strengthened distribution capabilities. Overall, we generated first
quarter operating net income of $63.4
million, or $0.54 per share,
largely unchanged from a year ago. With the year off to a solid
start, we remain confident in our ability to deliver on our
financial targets while continuing to diversify our insurance
portfolio and sources of earnings. We welcomed McFarlan Rowlands to Definity earlier this week
and believe their partnership with McDougall not only establishes a
leading broker platform in Ontario, but also provides a solid foundation
for national expansion."
– Rowan Saunders, President &
CEO
"We maintained our strong financial position, with book value
per share of $22.90 up 12.2% compared
to the first quarter of 2022 under IFRS 4. Earnings continued to
benefit from the expansion in net investment income, strengthened
by our proactive actions to capture yield in an increasing rate
environment. Additionally, solid underwriting and growing
contributions from our distribution business combined to generate
an operating ROE of 9.3%, despite the significant increase in our
equity base. With over $840 million
in financial capacity, and the continuance application well
underway, we have significant flexibility as we continue to
prioritize reinvestment and growth in our business."
– Philip Mather, EVP &
CFO
Consolidated Results
(in millions of
dollars, except as otherwise noted)
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Q1
2023
|
Q1
2022
(Restated)
|
Change
|
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|
|
|
|
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|
|
|
Insurance
revenue
|
|
|
|
|
|
|
|
|
907.5
|
814.3
|
11.4 %
|
Gross written
premiums1
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|
|
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|
|
|
846.9
|
760.1
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11.4 %
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Net underwriting
revenue1
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839.1
|
765.3
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9.6 %
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Claims
ratio1
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|
|
|
|
|
62.6 %
|
59.1 %
|
3.5
pts
|
Expense
ratio1
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|
|
|
|
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|
32.7 %
|
33.3 %
|
(0.6)
pts
|
Combined
ratio1
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|
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95.3 %
|
92.4 %
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2.9
pts
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Insurance service
result
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93.9
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116.0
|
(22.1)
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Underwriting
income1
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|
|
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39.5
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57.8
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(18.3)
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Net investment
income
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41.0
|
25.8
|
15.2
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Distribution
income1
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8.9
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4.7
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4.2
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Net income (loss)
attributable to common shareholders
|
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|
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100.9
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(32.6)
|
133.5
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Operating net
income1
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|
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|
|
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63.4
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63.3
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0.1
|
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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 12 – Supplementary financial
measures and non-GAAP financial measures and ratios in the 2023 Q1
Management's Discussion and Analysis dated May 11, 2023 for further
details, which is available on the Company's website at
www.definityfinancial.com and on SEDAR at www.sedar.com.
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Q1
2023
|
Q1
2022
(Restated)
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Change
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|
Per share measures
(in dollars)
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Diluted EPS
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0.87
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(0.28)
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1.15
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Operating
EPS1
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0.54
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0.54
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-
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Book value per share
("BVPS")1
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22.90
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21.68
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1.22
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Return on
equity
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Return on equity
("ROE")1
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9.5 %
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N/A
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Operating
ROE1
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9.3 %
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N/A
|
|
Note: 2023 Q1 ROE and
Operating ROE measures are on a rolling twelve-month basis. 2022 Q1
is N/A due to adoption of IFRS 17 — Insurance Contracts
("IFRS 17") and IFRS 9 — Financial Instruments ("IFRS 9").
The full year 2022 Operating ROE is 9.4%.
|
- Gross written premiums ("GWP") for 2023 Q1 increased by
$86.8 million or 11.4% compared to
2022 Q1, with growth across all our lines of business. Personal
lines GWP was up 7.9% with increases in both our broker and direct
businesses. Commercial lines GWP increased 20.0% as we continued to
focus on profitable growth in this line of business.
- Underwriting income for 2023 Q1 was $39.5 million and the combined ratio was 95.3%,
compared to underwriting income of $57.8
million and a combined ratio of 92.4% in the same quarter a
year ago. The combined ratio in our auto lines was impacted by
continued elevated inflation, heightened levels of auto theft, and
an increase in claims frequency as 2022 Q1 benefitted from lower
auto claims frequency due to COVID-19 pandemic lockdowns.
- Net investment income increased $15.2 million in 2023 Q1, driven primarily by
higher fixed income yields that we captured through actively
managing the fixed income portfolio over the past six months,
combined with higher reinvestment rates.
- Distribution income was $8.9
million in 2023 Q1 compared to $4.7
million in 2022 Q1, due primarily to the increased ownership
position in McDougall Insurance Brokers Limited and strong
contingent profit commissions recognized in 2023 Q1.
Net Income and Operating Net Income
- Net income attributable to common shareholders
was $100.9 million in 2023 Q1
compared to a net loss of $32.6
million in 2022 Q1. Net income attributable to common
shareholders increased as a result of a shift to unrealized gains
on investments in the first quarter of 2023 compared to losses in
2022, as well as the factors impacting operating net income.
- Operating net income was $63.4
million in the first quarter of 2023 compared to
$63.3 million in the first quarter of
2022 as higher net investment income and distribution income offset
lower underwriting income.
- Operating ROE was 9.3% for the twelve-month period ended
March 31, 2023 compared to 9.4% for
the full year ended December 31,
2022.
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 12 – Supplementary financial
measures and non-GAAP financial measures and ratios in the 2023 Q1
Management's Discussion and Analysis dated May 11, 2023 for further
details, which is available on the Company's website at
www.definityfinancial.com and on SEDAR at www.sedar.com.
|
Line of Business Results
(in millions of
dollars, except as otherwise noted)
|
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|
Q1
2023
|
Q1
2022
(Restated)
|
Change
|
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|
Personal
insurance
|
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Gross written
premiums1
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Auto
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|
357.8
|
339.8
|
5.3 %
|
Property
|
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|
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|
225.3
|
200.4
|
12.4 %
|
Total
|
|
|
|
|
|
|
|
|
583.1
|
540.2
|
7.9 %
|
|
|
|
|
|
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|
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Combined
ratio1
|
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|
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Auto
|
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100.9 %
|
96.2 %
|
4.7
pts
|
Property
|
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|
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|
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|
91.1 %
|
92.6 %
|
(1.5)
pts
|
Total
|
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|
|
|
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|
|
97.0 %
|
94.8 %
|
2.2
pts
|
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|
Commercial
insurance
|
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Gross written
premiums1
|
|
|
|
|
|
|
|
|
263.8
|
219.9
|
20.0 %
|
Combined
ratio1
|
|
|
|
|
|
|
|
|
90.9 %
|
85.9 %
|
5.0
pts
|
Personal Insurance
- Overall, personal lines GWP increased 7.9% in 2023 Q1.
The direct channel GWP was $94.3
million in 2023 Q1, an increase of 6.9% compared to
$88.2 million in 2022 Q1. Personal
lines underwriting income was $18.3
million in 2023 Q1 compared to $29.0
million in the same quarter a year ago.
- Personal auto GWP increased 5.3% in the quarter,
reflecting an increase in average written premiums and our efforts
to protect profitability amid the Alberta auto rate freeze. The combined ratio
of 100.9% in the quarter (2022 Q1: 96.2%) was impacted by expected
increases in frequency from normalization of driving, continued
elevated levels of claims severity from persistent inflation and
heightened levels of theft. Results in 2022 Q1 also benefitted from
significantly lower auto claims frequency related to COVID-19
pandemic lockdowns.
- Personal property GWP increased 12.4% in the quarter,
benefitting from continued firm market conditions including
increases in average written premiums. The combined ratio in the
quarter was 91.1% (2022 Q1: 92.6%) with improvements driven by a
decrease in catastrophe losses and an improved core accident year
claims ratio. These results were partially offset by lower
favourable prior year claims development.
Commercial Insurance
- Strong growth momentum in commercial lines continued in
2023 Q1 as we benefitted from broad support from our broker
partners across Canada. GWP
increased 20.0% in the quarter driven by strong retention and rate
achievement in a firm market environment and further scaling of our
specialty capabilities.
- Commercial lines benefitted from continued focus on
strong underwriting execution with a combined ratio of 90.9% and
underwriting income of $21.2 million
in the quarter. This compared to the unusually strong combined
ratio of 85.9% and underwriting income of $28.8 million in the same quarter a year ago. The
combined ratio increased due to higher catastrophe losses largely
as a result of two individually large commercial property losses,
and lower favourable prior year claims development. Results in the
first quarter of 2022 also benefitted from lower auto claims
frequency related to COVID-19 pandemic lockdowns.
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 12 – Supplementary financial measures and non-GAAP
financial measures and ratios in the 2023 Q1 Management's
Discussion and Analysis dated May 11, 2023 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
March
31,
2023
|
As at
December
31,
2022
(Restated)
|
Change
|
|
|
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|
|
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|
Financial
position
|
|
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Investments
|
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|
|
|
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|
4,881.5
|
4,897.2
|
(15.7)
|
Equity attributable to
common shareholders
|
|
|
|
|
|
|
|
|
2,637.2
|
2,549.8
|
87.4
|
Financial
capacity
|
|
|
845.9
|
658.5
|
187.4
|
Note: Financial
capacity for December 31, 2022 has not been restated to reflect the
adoption of IFRS 17 and IFRS 9 nor OSFI's MCT 2023
guidelines.
|
- Equity attributable to common shareholders increased by
$87.4 million as at March 31, 2023 or 3.4%, due primarily to
recognized gains on our investment portfolio and higher net
investment income. Our equity attributable to common shareholders
as of January 1, 2022 increased by
$158.1 million or 6.6% on the
adoption of IFRS 17 and IFRS 9.
- The increase in financial capacity as at March 31, 2023 relates primarily to an increase
in capital available from the generation of net income, inclusive
of the unrealized gains generated on the FVTPL investments, and the
impact of our transition to IFRS 17.
- Our capital position as of March 31,
2023 remains strong and well in excess of both internal and
regulatory minimum capital requirements.
Dividend
- On May 11, 2023, our Board of
Directors declared a $0.1375 per
share dividend, payable on June 28,
2023 to shareholders of record at the close of business on
June 15, 2023.
NCIB
- On May 11, 2023, our Board of
Directors approved the renewal of the NCIB, on the same terms and
conditions as the initial NCIB, subject to regulatory approval,
including the approval of TSX, which has not yet been
obtained.
Conference Call
Definity will conduct a conference call to review information
included in this news release and related matters at 11:00 a.m. ET on May 12,
2023. 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 $3.7
billion in gross written premiums for the 12 months ended
March 31, 2023 and over $2.6 billion in equity attributable to common
shareholders as at March 31,
2023.
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, particularly in provinces
where the regulatory environment requires auto insurance rate
increases to be approved or that otherwise impose regulatory
constraints on auto insurance rate increases;
- 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 and
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;
- general economic, financial, political, and social 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;
- management's estimates and judgements in respect of the
adoption of IFRS 17 and the financial impact on various financial
metrics;
- 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, 2022 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 at 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
12 – Supplementary financial measures and non-GAAP financial
measures and ratios in the Q1-2023 Management's Discussion and
Analysis dated May 11, 2023, which is
available on our website at www.definityfinancial.com and on SEDAR
at www.sedar.com. These measures have been updated to reflect the
estimated impact arising from the adoption of IFRS 17 and IFRS
9.
Below are quantitative reconciliations of non-GAAP measures for
the three month periods ended March 31,
2023 and March 31, 2022:
Distribution income:
(in millions of
dollars)
|
|
|
Q1
2023
|
Q1
2022
|
Distribution
revenues1
|
|
|
25.5
|
-
|
Distribution business
expenses2
|
|
|
(16.6)
|
-
|
Share of distribution
profit from investments in associates2
|
|
|
-
|
3.4
|
Remove: Income taxes
included in share of distribution profit from investments in
associates
|
|
|
-
|
1.3
|
Distribution
income
|
|
|
8.9
|
4.7
|
1
Distribution revenues includes commissions on policies underwritten
by external insurance companies.
|
2 Included
in Other (expenses) income in our interim consolidated financial
statements. These amounts exclude amortization of intangible assets
recognized in business combinations.
|
Net claims and adjustment expenses
(in millions of
dollars)
|
|
|
Q1
2023
|
Q1
2022
(Restated)
|
Claims and adjustment
expenses1,2
|
|
|
557.5
|
460.7
|
Impact of onerous
insurance contracts3
|
|
|
(1.2)
|
(0.7)
|
Claims recoverable from
reinsurers for incurred claims2,4
|
|
|
(31.2)
|
(8.0)
|
Net claims and
adjustment expenses
|
|
|
525.1
|
452.0
|
1 Included
in Insurance service expenses and other (expenses) income in our
interim consolidated financial statements.
|
2 Excludes
the impact of discounting and risk adjustment.
|
3 Included
in Insurance service expenses
|
4 Included
in Net expenses from reinsurance contracts held in our interim
consolidated financial statements.
|
Net commissions
(in millions of
dollars)
|
|
|
Q1
2023
|
Q1
2022
(Restated)
|
Commissions1
|
|
|
136.5
|
131.6
|
Commissions earned on
ceded reinsurance2
|
|
|
(11.7)
|
(8.7)
|
Net
commissions
|
|
|
124.8
|
122.9
|
1 Included
in Insurance service expenses in our interim consolidated financial
statements.
|
2 Included
in Net expenses from reinsurance contracts held in our interim
consolidated financial statements.
|
Net underwriting revenue
(in millions of
dollars)
|
|
|
Q1
2023
|
Q1
2022
(Restated)
|
Insurance
revenue
|
|
|
907.5
|
814.3
|
Earned reinsurance
premiums ceded1
|
|
|
(68.4)
|
(49.0)
|
Net underwriting
revenue
|
|
|
839.1
|
765.3
|
1 Included
in Net expenses from reinsurance contracts held in our interim
consolidated financial statements.
|
Operating net income, Operating income, Non-operating gains
(losses)
Net income (loss) attributable to common shareholders 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.
(in millions of
dollars)
|
|
|
Q1
2023
|
Q1
2022
(Restated)
|
Net income (loss)
attributable to common shareholders
|
|
|
100.9
|
(32.6)
|
Remove: income tax
expense (recovery)
|
|
|
30.6
|
(14.9)
|
Income (loss) before
income taxes
|
|
|
131.5
|
(47.5)
|
|
|
|
|
|
Remove: non-operating
gains (losses)
|
|
|
|
|
Recognized gains (losses) on FVTPL investments
|
|
|
91.7
|
(197.8)
|
Discounting1
|
|
|
16.4
|
16.9
|
Risk
adjustment1
|
|
|
2.3
|
4.1
|
Finance (expenses)
income from insurance contracts issued
|
|
|
(64.5)
|
52.7
|
Finance income
(expenses) from reinsurance contracts held
|
|
|
5.6
|
(3.2)
|
Interest on
restricted cash, and demutualization and IPO-related
expenses2
|
|
|
2.5
|
(1.9)
|
Amortization of intangible assets recognized in business
combinations3
|
|
|
(3.2)
|
(0.6)
|
Other2,3
|
|
|
0.1
|
(0.3)
|
Non-operating gains
(losses)
|
|
|
50.9
|
(130.1)
|
Operating
income
|
|
|
80.6
|
82.6
|
Operating income tax
expense
|
|
|
(17.2)
|
(19.3)
|
Operating net
income
|
|
|
63.4
|
63.3
|
1 Included in Insurance service
expenses and Net expenses from reinsurance contracts held in our
interim consolidated financial statements.
|
2
Included in Other (expenses) income in our interim
consolidated financial statements.
|
3 Other
represents foreign currency translation of fintech venture capital
funds, 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.
|
Prior year claims development
(in millions of
dollars)
|
|
|
Q1
2023
|
Q1
2022
(Restated)
|
Changes in fulfilment
cash flows relating to the liabilities for incurred
claims1
|
|
|
(10.8)
|
(50.8)
|
Changes to amounts
recoverable for incurred claims2
|
|
|
3.1
|
10.5
|
Remove: discounting
included above
|
|
|
(16.0)
|
(0.7)
|
Remove: risk adjustment
included above
|
|
|
16.0
|
19.1
|
Prior year claims
development
|
|
|
(7.7)
|
(21.9)
|
1 Included
in Insurance service expenses in our interim consolidated financial
statements.
|
2 Included
in Net expenses from reinsurance contracts held in our interim
consolidated financial statements.
|
Underwriting expenses
(in millions of
dollars)
|
|
|
Q1
2023
|
Q1
2022
(Restated)
|
Net
commissions
|
|
|
124.8
|
122.9
|
Operating
expenses
|
|
|
118.4
|
104.2
|
Premium
taxes
|
|
|
31.3
|
28.4
|
Underwriting
expenses
|
|
|
274.5
|
255.5
|
Underwriting income
(in millions of
dollars)
|
|
|
Q1
2023
|
Q1
2022
(Restated)
|
Net underwriting
revenue
|
|
|
839.1
|
765.3
|
Net claims and
adjustment expenses
|
|
|
525.1
|
452.0
|
Net
commissions
|
|
|
124.8
|
122.9
|
Operating
expenses
|
|
|
118.4
|
104.2
|
Premium
taxes
|
|
|
31.3
|
28.4
|
Underwriting
income
|
|
|
39.5
|
57.8
|
Below are quantitative reconciliations of non-GAAP ratios for the
periods ended March 31, 2023 and
December 31, 2022, as applicable:
ROE
|
|
|
|
|
|
|
For the 12
months ended
|
(in millions of
dollars, except as otherwise noted)
|
|
|
|
|
|
|
March 31,
2023
|
Net income attributable
to common shareholders
|
|
|
|
244.4
|
Equity attributable to
common shareholders1
|
|
|
|
2,637.2
|
Adjusted equity
attributable to common shareholders
|
|
|
|
2,637.2
|
Average adjusted equity
attributable to common shareholders2
|
|
|
|
2,572.0
|
ROE
|
|
|
|
9.5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Equity attributable to common
shareholders is as at March 31, 2023.
|
2 Average adjusted equity
attributable to common shareholders is the average of adjusted
equity attributable to common shareholders (equity attributable to
common shareholders as shown on our consolidated balance sheets,
adjusted for significant capital transactions, if applicable) at
the end of the period and the end of the preceding 12-month period.
Equity attributable to common shareholders and adjusted equity
attributable to common shareholders as at March 31, 2022 was
$2,506.9 million.
|
|
Operating ROE
|
|
|
|
|
|
|
|
|
|
|
|
For the 12 months
ended
|
(in millions of
dollars, except as otherwise noted)
|
March 31,
2023
|
December 31,
2022
(Restated)
|
Operating net
income1
|
|
|
|
|
|
236.9
|
236.8
|
Equity attributable to
common shareholders, excluding AOCI2
|
|
|
|
|
|
2,668.1
|
2,582.2
|
Adjustment for
unrealized gains on FVTPL equity instruments
|
|
|
|
|
|
(30.3)
|
(15.6)
|
Adjusted equity
attributable to common shareholders, excluding AOCI
|
|
|
|
|
|
2,637.8
|
2,566.6
|
Average adjusted equity
attributable to common shareholders, excluding
AOCI3
|
|
|
|
|
|
2,536.1
|
2,515.3
|
Operating
ROE
|
|
|
|
|
|
9.3 %
|
9.4 %
|
1 Operating net income is a non-GAAP
financial measure.
|
2 Equity attributable to common
shareholders, excluding accumulated other comprehensive (loss)
income ("AOCI") is as at March 31, 2023 and December 31,
2022.
|
3 Average adjusted equity
attributable to common shareholders, excluding AOCI is the average
of adjusted equity attributable to common shareholders, excluding
AOCI (equity attributable to common shareholders and AOCI each as
shown on our consolidated balance sheets, adjusted for significant
capital transactions, if applicable) and excluding unrealized gains
or losses on FVTPL equity instruments, at the end of the period and
the end of the preceding 12-month period. Equity attributable to
common shareholders, excluding AOCI, and adjusted equity
attributable to common shareholders, excluding AOCI, as at March
31, 2022 was $2,434.4 million and as at December 31, 2021 was
$2,464.0 million.
|
SOURCE Definity Financial Corporation