(in Canadian dollars except as otherwise noted)
Highlights
- Premium growth was 12.0% in Q4-2021 and 14.8% for the full
year, driven by our strategic expansions in Sonnet, commercial
lines, personal property, and ongoing firm market conditions
- Combined ratio1 of 94.6% in Q4-2021 included 4.8
points of catastrophe losses1, 4.4 points of favourable
prior year claims development, and 4.2 points of auto reserve
strengthening; full year combined ratio improved to 93.1% from
94.6%
- Operating net income1 of $46.5 million in Q4-2021 compared to $73.4 million in Q4-2020 and resulted in
operating EPS1 of $0.42
per share; full year operating net income of $220.4 million led to operating ROE1
of 11.5%
- Full year net income of $213.2
million, in conjunction with the net proceeds from our
recent IPO and related transactions, drove book value up
$578.3 million in 2021, ending the
year at $20.68 per share1,
18% higher than a year ago
- Strong capital position and operational outlook led to the
declaration of an inaugural dividend subsequent to year end
TORONTO, Feb. 10, 2022 /CNW/ -
Executive Message
"The underlying strength of our business was once again
demonstrated this quarter by delivering a 94.6% combined ratio,
inclusive of elevated catastrophe losses and reserve strengthening
related to auto inflationary trends. We benefitted from past
prudence as prior year claims developed favourably in the fourth
quarter, positively impacting underwriting results and offsetting
the inflationary impact. Growth remained robust, as premiums
increased 12% in the quarter, combining with our solid
profitability to generate an operating EPS of $0.42. I am proud of the milestones we achieved
in the fourth quarter, becoming a public company, securing our
Cornerstone investors, and celebrating our 150th
anniversary. These were made possible by the tremendous efforts of
our dedicated employees over many years and the strong support of
our broker partners."
– Rowan Saunders, President &
CEO
"Our financial results in the quarter continued the solid
momentum we've built in recent years. Our balance sheet grew
significantly through the investment of funds generated from our
improved underwriting results and our successful IPO. We ended the
year with total equity approaching $2.4
billion and a book value per share of $20.68, representing an increase of 18% from last
year. We are proud to announce our inaugural dividend and believe
we are well positioned to deliver value to shareholders, while
continuing to support our customers, brokers, and employees."
– Philip Mather, EVP &
CFO
Consolidated Results
(in millions of
dollars, except as otherwise noted)
|
|
Q4
2021
|
Q4
2020
|
Change
|
|
2021
|
2020
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross written
premiums
|
|
|
|
|
846.6
|
755.9
|
12.0%
|
|
3,231.4
|
2,814.7
|
14.8%
|
Net earned
premiums
|
|
|
|
|
745.0
|
665.5
|
11.9%
|
|
2,833.6
|
2,508.7
|
13.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
Claims
ratio1
|
|
|
|
|
63.1%
|
57.1%
|
6.0
pts
|
|
60.8%
|
62.3%
|
(1.5)
pts
|
Expense
ratio1
|
|
|
|
|
31.5%
|
32.0%
|
(0.5)
pts
|
|
32.3%
|
32.3%
|
-
|
Combined
ratio1
|
|
|
|
|
94.6%
|
89.1%
|
5.5
pts
|
|
93.1%
|
94.6%
|
(1.5)
pts
|
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting
income
|
|
|
|
|
40.3
|
72.7
|
(32.4)
|
|
194.5
|
136.4
|
58.1
|
Net investment
income
|
|
|
|
|
25.1
|
23.7
|
1.4
|
|
96.8
|
100.3
|
(3.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
|
|
|
33.7
|
66.7
|
(33.0)
|
|
213.2
|
153.9
|
59.3
|
Operating net
income1
|
|
|
|
|
46.5
|
73.4
|
(26.9)
|
|
220.4
|
184.4
|
36.0
|
|
Q4
2021
|
Q4
2020
|
Change
|
|
2021
|
2020
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share measures
(in dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS
|
|
|
|
|
0.31
|
0.64
|
(0.33)
|
|
2.02
|
1.48
|
0.54
|
Operating
EPS1
|
|
|
|
|
0.42
|
0.71
|
(0.29)
|
|
2.09
|
1.77
|
0.32
|
Book value per share
("BVPS")1
|
|
|
|
|
|
|
|
|
20.68
|
17.48
|
3.20
|
|
|
|
|
|
|
|
|
|
|
|
|
Rolling 12 months
return measures
|
|
|
|
|
|
|
|
|
|
|
|
Return on equity
("ROE")1
|
|
|
|
|
|
|
|
|
10.7%
|
9.0%
|
1.7
pts
|
Operating
ROE1
|
|
|
|
|
|
|
|
|
11.5%
|
11.0%
|
0.5
pts
|
- Gross written premiums ("GWP") for the fourth quarter of
2021 increased by $90.7 million or
12.0% compared to the fourth quarter of 2020, driven by growth
across all our lines of business. Personal lines GWP was up 9.7%
over the same quarter a year ago, with increases in both our broker
and direct businesses. Commercial lines GWP increased 17.8% over
the same quarter a year ago, reflecting our expanded underwriting
capabilities and focus on growth in this line of business. In the
fourth quarter of 2021, customer relief related to the COVID-19
pandemic resulted in a reduction in GWP of approximately
$13 million (2020: $20 million) and a reduction in net earned
premiums of approximately $14 million
(2020: $10 million).
For the year, GWP increased by $416.7
million or 14.8% compared to 2020. Personal lines
GWP increased 11.3% and commercial lines GWP increased
24.9%. The impact of the customer relief related to the COVID-19
pandemic in 2021 was a reduction in GWP of approximately
$55 million (2020: $60 million) and a reduction in net earned
premiums of approximately $58 million
(2020: $25 million).
- Underwriting results for the fourth quarter of 2021
produced underwriting income of $40.3
million and a combined ratio of 94.6%, compared to
underwriting income of $72.7 million
and a combined ratio of 89.1% in the same quarter a year ago. The
lower underwriting income was due primarily to higher levels of
catastrophe losses in the fourth quarter of 2021 as compared to the
fourth quarter of 2020 when the weather was relatively benign, as
well as reserve strengthening for auto inflation recorded in the
current quarter. Catastrophe losses were primarily a result of
flooding in British Columbia and
accounted for 4.8 percentage points for the fourth quarter of 2021,
as compared to catastrophe losses of 2.9 percentage points in the
same quarter a year ago. These were partially offset by higher
favourable prior year claims development, reflective of the prudent
approach we have taken to reserving during this pandemic period of
heightened risk and volatility.
For the year, our underwriting income increased by $58.1 million and led to a combined ratio of
93.1% in 2021 as compared to 94.6% in 2020. Results were driven by
higher favourable prior year claims development and a
continuation of strong core accident year results which
benefitted from lower claims frequency, due in part to
COVID-19-related reduced activity levels (which impacted full year
2021 and only started impacting 2020 in the second quarter). These
were partially offset by the recognition of inflationary trends
across our auto and property lines, which negatively impacted the
combined ratio by approximately 3 points in 2021.
- Net investment income increased $1.4 million in the fourth quarter of 2021 due to
an increase in interest and dividend income. Net investment income
declined $3.5 million for the year as
compared to 2020, due primarily to decreased interest income as a
result of lower yields in the beginning of the year and increased
investment expenses. The investment of funds generated from our
improved underwriting results and business growth helped stabilize
net investment income in 2021.
Net Income and Operating Net Income
- Net income was $33.7
million in the fourth quarter of 2021 compared to
$66.7 million in the fourth quarter
of 2020 due primarily to lower underwriting income and higher
demutualization and IPO-related expenses. For the year, net income
was $213.2 million compared to
$153.9 million in 2020 due primarily
to our improved underwriting performance and realized gains on our
equity portfolio triggered on the sale of certain investments to
facilitate a transfer to a new investment manager for foreign
equities. These were partially offset by higher demutualization and
IPO-related expenses.
- Operating net income was $46.5
million in the fourth quarter of 2021 compared to
$73.4 million in the fourth quarter
of 2020. The decrease in operating net income was due primarily to
lower underwriting income. For the year, operating net income was
$220.4 million compared to operating
net income of $184.4 million in 2020
due primarily to our improved underwriting performance. Operating
EPS was $0.42 in the fourth quarter
of 2021 and $2.09 for the year.
- Operating ROE was 11.5% in 2021 compared to 11.0% in
2020. The increase was driven by a significant improvement in our
underwriting performance in 2021, offset by the dilutive impact of
the large increase in equity year over year.
Line of Business Results
(in millions of
dollars, except as otherwise noted)
|
|
Q4
2021
|
Q4
2020
|
Change
|
|
2021
|
2020
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
Personal
insurance
|
|
|
|
|
|
|
|
|
|
|
|
Gross written
premiums
|
|
|
|
|
|
|
|
|
|
|
|
Auto
|
|
|
|
|
355.5
|
339.2
|
4.8%
|
|
1,426.5
|
1,335.4
|
6.8%
|
Property
|
|
|
|
|
237.1
|
201.1
|
17.9%
|
|
894.6
|
750.7
|
19.2%
|
Total
|
|
|
|
|
592.6
|
540.3
|
9.7%
|
|
2,321.1
|
2,086.1
|
11.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
Combined
ratio1
|
|
|
|
|
|
|
|
|
|
|
|
Auto
|
|
|
|
|
94.9%
|
95.1%
|
(0.2)
pts
|
|
91.2%
|
96.4%
|
(5.2)
pts
|
Property
|
|
|
|
|
93.2%
|
78.0%
|
15.2
pts
|
|
98.6%
|
89.2%
|
9.4
pts
|
Total
|
|
|
|
|
94.3%
|
89.2%
|
5.1
pts
|
|
93.9%
|
94.0%
|
(0.1)
pts
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
insurance
|
|
|
|
|
|
|
|
|
|
|
|
Gross written
premiums
|
|
|
|
|
254.0
|
215.6
|
17.8%
|
|
910.3
|
728.6
|
24.9%
|
Combined
ratio1
|
|
|
|
|
95.5%
|
88.8%
|
6.7
pts
|
|
91.0%
|
96.4%
|
(5.4)
pts
|
Personal Insurance
- Overall, personal lines GWP increased 9.7% in the fourth
quarter of 2021 (11.3% for the year). Sonnet GWP was $77.7 million in the fourth quarter of 2021, an
increase of 17.1% compared to $66.4
million in the fourth quarter of 2020. Sonnet GWP was
$293.3 million for the year, an
increase of 22.4% compared to $239.7
million in 2020. Personal lines produced underwriting income
of $31.5 million in the quarter
compared to $54.2 million in the same
quarter a year ago. For the year, personal lines produced
underwriting income of $127.6 million
compared to $114.2 million in
2020.
- Personal auto GWP increased 4.8% in the quarter (6.8%
for the year), driven by improved new business and the growth in
Sonnet in 2021 and lower levels of customer relief related to the
COVID-19 pandemic in the fourth quarter of 2021 (approximately
$11 million in the fourth quarter of
2021 compared to approximately $18
million in the fourth quarter of 2020). The combined ratio
of 94.9% in the quarter improved slightly over the 95.1% combined
ratio in the same quarter a year ago due primarily to favourable
prior year claims development. The fourth quarter combined ratio
improved despite the benign weather in the fourth quarter of 2020,
as well as the impact of inflationary reserve strengthening
pertaining to physical damage costs for the 2021 accident year, all
recorded in the current quarter. For the year, the personal auto
combined ratio improved due primarily to an increase in favourable
prior year claims development and lower claims frequency due in
part to COVID-19-related reduced activity levels (which impacted
full year 2021 and only started impacting 2020 in the second
quarter).
- Personal property GWP increased 17.9% in the quarter
(19.2% for the year), benefitting from the organic growth enabled
by both Sonnet and VyneTM and continued firm market
conditions in our personal property business. The combined ratio
was 93.2% in the quarter compared to an unusually strong 78.0% in
the same quarter a year ago, as personal property was impacted by a
number of catastrophe losses including the flooding in British Columbia, whereas the fourth quarter
of 2020 experienced relatively benign weather. Catastrophe losses
accounted for 12.7 percentage points to the combined ratio in the
fourth quarter of 2021 compared to only 2.4 percentage points in
2020. For the year, the personal property combined ratio increased
due to an increase in catastrophe losses and proactive reserving
actions with respect to inflation, which impacted both current
accident year claims and prior year claims incurred.
Commercial Insurance
- Overall, the growth momentum in commercial lines
continued in 2021 as we benefitted from a firm market environment
and from expanded underwriting capabilities. GWP increased 17.8% in
the quarter and 24.9% for the year, driven by improved retention,
new business including the impact of our relationship with Uber
(which launched on September 1,
2020), and strong rate achievement.
- Commercial lines produced a combined ratio of 95.5% and
underwriting income of $8.8 million
in the quarter compared to 88.8% and underwriting income of
$18.5 million in the same quarter a
year ago. The lower underwriting income was driven by significant
weather-related impacts in 2021 compared to benign weather in the
prior year, the impact of inflationary reserve strengthening
recorded in the current quarter, and lower favourable prior year
claims development. For the year, the commercial lines produced a
combined ratio of 91.0% and underwriting income of $66.9 million compared to 96.4% and underwriting
income of $22.2 million in 2020. The
commercial lines combined ratio continued to improve as a result of
underwriting initiatives, and due to lower catastrophe losses and
lower claims frequency as a result of the COVID-19 pandemic. These
were partially offset by proactive reserving actions with respect
to inflation taken in 2021, which impacted current accident year
claims and prior year claims.
Financial Position
(in millions of
dollars, except as otherwise noted)
|
|
|
|
|
As at
December
31, 2021
|
As at
December
31, 2020
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial
position
|
|
|
|
|
|
|
|
|
|
|
|
Investments
|
|
|
|
|
|
|
|
|
5,365.8
|
4,366.3
|
999.5
|
Total equity
|
|
|
|
|
|
|
|
|
2,396.3
|
1,818.0
|
578.3
|
Minimum capital test
("MCT")1
|
|
|
|
|
|
|
|
275%
|
268%
|
7 pts
|
Excess capital at
200%
|
|
|
|
|
|
|
|
|
759.3
|
376.3
|
383.0
|
1 Consolidated Definity Insurance
Company
|
- MCTTotal equity increased $578.3
million (31.8%) to approximately $2.4
billion, driven by net income and the net proceeds retained
by the Company from the IPO and related transactions. Definity's
capital position remained well in excess of both minimum internal
capital and external regulatory requirements as of December 31, 2021, with an excess capital
position of $759.3 million and an
unlevered balance sheet.
Dividend
- The Board of Directors declared a $0.175 per share dividend on February 10, 2022 (representing an inaugural
quarterly amount of $0.125 per share
in respect of Q1-2022 in addition to $0.05 per share for the period between the IPO
and December 31, 2021), payable on
March 28, 2022 to shareholders of
record at the close of business on March 15,
2022.
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 February
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 $3.2
billion in gross written premiums in 2021 and over
$7.8 billion in assets as at
December 31, 2021.
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;
- 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 employees;
- 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
independent 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;
- 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; and
- the completion and timing of the Company 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 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
12 – Supplementary financial measures and non-GAAP financial
measures and ratios in the Q4-2021 Management's Discussion and
Analysis dated February 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 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 losses to net income for the three months
and years ended December 31, 2021 and
2020:
(in millions of
dollars)
|
|
Q4
2021
|
Q4
2020
|
|
2021
|
2020
|
Net income
|
|
33.7
|
66.7
|
|
213.2
|
153.9
|
Remove: income tax
expense
|
|
(11.4)
|
(22.1)
|
|
(68.0)
|
(46.7)
|
Income before income
taxes
|
|
45.1
|
88.8
|
|
281.2
|
200.6
|
|
|
|
|
|
|
|
Remove: non-operating
gains (losses)
|
|
|
|
|
|
|
Recognized gains (losses) on investments
|
|
|
|
|
|
|
Realized
gains on sale of AFS investments
|
|
3.3
|
4.5
|
|
49.7
|
12.6
|
Net
(losses) gains on FVTPL investments
|
|
(12.0)
|
1.5
|
|
(70.0)
|
84.8
|
Impairment
losses on AFS investments
|
|
(0.5)
|
(2.0)
|
|
(0.5)
|
(17.6)
|
Impact of discounting
|
|
9.4
|
(10.1)
|
|
44.7
|
(114.0)
|
Demutualization and IPO-related expenses1
|
|
(16.7)
|
(1.6)
|
|
(30.1)
|
(3.8)
|
Amortization of intangible assets recognized in business
combinations1
|
|
(0.6)
|
(1.2)
|
|
(3.5)
|
(4.5)
|
Other1,2
|
|
(0.2)
|
(0.2)
|
|
-
|
1.0
|
Non-operating
losses
|
|
(17.3)
|
(9.1)
|
|
(9.7)
|
(41.5)
|
Operating
income
|
|
62.4
|
97.9
|
|
290.9
|
242.1
|
Operating income tax
expense
|
|
(15.9)
|
(24.5)
|
|
(70.5)
|
(57.7)
|
Operating net
income
|
|
46.5
|
73.4
|
|
220.4
|
184.4
|
1 Included
in Other (expenses) income in our consolidated financial
statements.
|
2 Other
represents foreign currency translation of the insurtech venture
capital fund 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 years ended December 31:
(in millions of
dollars, except as otherwise noted)
|
|
|
|
|
|
|
|
|
|
|
|
2021
|
2020
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
213.2
|
153.9
|
Total
equity1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,396.3
|
1,818.0
|
Adjustment for
Over-Allotment option and Anti-Dilution
Adjustment2
|
(227.6)
|
-
|
Adjusted total
equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,168.7
|
1,818.0
|
Average adjusted total
equity3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,993.3
|
1,714.5
|
ROE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.7%
|
9.0%
|
1 Total
equity is as at December 31, 2021 and 2020.
|
2 Over-Allotment option and
Anti-Dilution Adjustment were prorated for the 326 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) at the end of the period and the end of the preceding
12-month period. Total equity and adjusted total equity as at
December 31, 2019 was $1,611.0 million.
|
The following table shows the components of our calculation of
operating ROE, a non-GAAP ratio, for the years ended December 31:
(in millions of
dollars, except as otherwise noted)
|
|
|
|
|
|
|
|
|
|
|
|
2021
|
2020
|
Operating net
income1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
220.4
|
184.4
|
Total equity, excluding
AOCI2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,298.3
|
1,755.9
|
Adjustment for
Over-Allotment option and Anti-Dilution
Adjustment 3
|
|
(227.6)
|
-
|
Adjusted total equity,
excluding AOCI
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,070.7
|
1,755.9
|
Average adjusted total
equity, excluding AOCI4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,913.3
|
1,682.3
|
Operating
ROE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11.5%
|
11.0%
|
1 Operating net income is a non-GAAP
financial measure.
|
2 Total
equity, excluding AOCI is as at December 31, 2021 and
2020.
|
3 Over-Allotment option and
Anti-Dilution Adjustment were prorated for the 326 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) 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 December 31, 2019 was $1,608.6 million.
|
SOURCE Definity Financial Corporation