Glossary

Includes professional fees and stamp duties related to the closing of an acquisition. Acquisition costs incurred in connection with an acquired business are incurred do not represent an ongoing operating expense of the business.

Include items such as acquisition-related expenses, the initial net impact of a reinsurance coverage for the purpose of an acquisition, severances, retention bonuses, system integration costs, changes in the fair value of the contingent considerations, pre-acquisition finance costs, as well as expenses related to the implementation of significant new accounting standards.

Mean of Common shareholders’ equity at the beginning and end of the period, adjusted on a prorata basis (number of days) for significant capital transactions. Equity attributable to shareholders and Preferred shares are determined in accordance with IFRS.

Total debt outstanding (excluding hybrid debt) at the end of the period, divided by Adjusted total capital.

Adjusted net income attributable to common shareholders, divided by the WANSO.

Adjusted net income attributable to shareholders less preferred share dividends.

Net income attributable to shareholders, as reported under IFRS, adjusted for the after-tax impact of acquisition-related items, such as amortization of intangible assets recognized in business combinations, as well as acquisition and integration costs. Adjusted net income is net of net income (loss) attributable to non-controlling interests.

Adjusted net income attributable to common shareholders for the last 12 months, divided by the Adjusted average common shareholders’ equity over the same period.

The sum of Debt outstanding, Equity attributable to shareholders, Restricted Tier 1 notes and preferred shares instruments held by subsidiaries, at the same date. The restricted Tier 1 notes and preferred shares instruments held by subsidiaries are included in the equity attributable to non-controlling interests.

Brokers in which we hold an equity investment or provide financing.

Excludes Non-controlling interests (NCI).

Mean of Common shareholders’ equity at the beginning and end of the period, adjusted on a prorata basis (number of days) for significant capital transactions, if appropriate.

Mid-month average fair value of investments portfolio held during the reporting period.

Mid-month average fair value of net investments portfolio held during the reporting period. This measure has been adjusted in Q3-2021 to align with the financial statements.

Common shareholders’ equity divided by the number of common shares outstanding at the same date.

Common shareholders’ equity (excluding AOCI) divided by the number of common shares outstanding at the same date.

The liability established to reflect the estimated cost of unpaid claims that have been reported and claims expenses that the insurer will ultimately be required to pay.

Net current year CAT losses plus net reinstatement premiums, expressed as a percentage of Operating NEP before the impact of reinstatement premiums.

Any one claim, or group of claims, equal to or greater than a predetermined CAT threshold, before reinsurance, related to a single event for the current accident year. Effective July 1, 2021, our CAT threshold is as follows by segment: P&C Canada: $10 million, P&C UK&I: £7.5 million and P&C US: US$5 million. Reported CAT losses can either be weather-related or not weather-related and exclude those from exited lines.

Technical accounting provisions comprising case reserves, claims incurred but not reported by policyholders (IBNR), and a risk margin as required by accepted actuarial practice. Claims liabilities are discounted to consider the time value of money, using a rate that reflects the estimated market yield of the underlying assets backing these claims liabilities at the reporting date.

Operating net claims expressed as a percentage of Operating NEP.

The sum of the Claims ratio and the Expense ratio. A combined ratio below 100% indicates a profitable underwriting result. A combined ratio over 100% indicates an unprofitable underwriting result.

Equity attributable to shareholders determined in accordance with IFRS excluding preferred shares at the end of a specific period.

Thresholds below which regulator notification is required together with a company action plan to restore capital levels. The average CAL for all regulated Canadian insurance entities is 173% MCT. The CAT varies by legal Canadian entities. The CAL is 200% RBC for regulated insurance entities in the US and 120% SCR for those in the UK&I.

Current accident year Catastrophe losses, net of reinsurance, excluding those of exited lines.

The total amount of premiums for new and renewal policies written during a specific period, as determined in accordance with IFRS.

DPW (IFRS) normalized for the effect of multi-year policies, excluding the impact of industry pools, fronting and exited lines. This measure matches direct premiums written to the year in which coverage is provided, whereas under IFRS, the full value of multi-year policies is recognized in the year the policy is written.

Operating income excluding interest and taxes related to our distribution and supply chain strategies for a specific period. Distribution EBITA and Other includes the operating results of our consolidated brokers (including our wholly-owned broker, BrokerLink), our share of operating results of our broker associates, as well as the operating results of Intact Public Entities (a specialty managing general agent in Canada) and On Side Developments Ltd. (a Canadian restoration firm).

Includes operating income before interest and taxes from our consolidated brokers, broker associates, Intact Public Entities, On Side Restoration, Coast Underwriters and Johnson Group Benefits.

DPW growth, excluding the impact of foreign currency fluctuations, calculated by applying the exchange rate in effect for the current period results to the results of the previous year.

Net income attributable to common shareholders divided by the WANSO, as reported in the Consolidated statements of income.

Operating net underwriting expenses, expressed as a percentage of Operating NEP.

Finance costs, as reported under IFRS, adjusted to include finance costs from our broker associates, which are accounted for using the equity method under IFRS.

Average number of claims reported in a specific period.

A unit of measurement equivalent to an employee with a full-time workload. If two employees each have a 50% workload, they would represent one full-time equivalent employee.

Pension plan’s assets expressed as a percentage of funded plans’ obligations.

Income before income taxes¹, as reported under IFRS, excluding income taxes from our broker associates, which are accounted for using the equity method under IFRS. In the MD&A, income taxes from our broker associates are included in Total income taxes (MD&A). In the Financial statements, the share of profit (loss) from investments in associates and joint ventures is presented net of taxes.

Reserves for estimated claims that have been incurred but not reported by policyholders, including a reserve for future developments on claims which have been reported.

Industry pools
Canadian operations – When certain automobile owners are unable to obtain insurance via the voluntary insurance market in Canada, they are insured via the Facility Association (“FA”). In addition, entities can choose to cede certain risks to the FA administered Risk Sharing Pool (“RSP”). The related risks associated with FA insurance policies and policies ceded to the RSP are aggregated and shared by the entities in the Canadian P&C insurance industry, generally in proportion to market share and volume of business ceded to the RSP. 

U.S. operations – As a condition of its license to do business in certain states in the U.S., the Company is required to participate in various mandatory shared market mechanisms commonly referred to as residual or involuntary markets. Each state dictates the type of insurance and the level of coverage that must be provided. 

Includes restructuring costs related to an acquisition, such as severances, retention bonuses and system integration, the initial net impact of a reinsurance coverage for the purpose of an acquisition, as well as changes in the fair value of the contingent considerations. With respect to the RSA Acquisition, ADC costs represent the net impact of a reinsurance coverage pursuant to which a third-party reinsurer will assume 50% of negative reserve development in excess of an agreed retention with respect to certain of RSA's UK&I and other claims liabilities for accident years 2020 and prior. Integration costs incurred in connection with an acquired business are incurred do not represent an ongoing operating expense of the business.

A ratio calculated by the Company as the sum of the dollar duration of the pension asset portfolio divided by the dollar duration of the registered pension plans’ obligation. An interest rate hedge ratio below 100% indicates that funded status of the pension plans would increase if government bonds yield rise, all else equal.

A single claim, which is considered significant but that is smaller than the CAT threshold.

Claims liabilities are discounted at the estimated market yield of the assets backing these liabilities. The impact of changes in the discount rate used to discount claims liabilities based on the change in the market-based yield of the underlying assets is referred to as MYA. MYA is included in Net claims incurred under IFRS.

Realized and unrealized gains and losses on our FVTPL bonds are expected to offset MYA, which are both reflected in Non-operating results. The net result of these two items is referred to as the Market Yield Effect.

Annualized total pre-tax investment income (before expenses), divided by the weighted-average investments.

Ratio of total capital available to total capital required, as defined by the Office of the Superintendent of Financial Institutions (OSFI) and Autorité des marchés financiers (AMF).

Current accident year Catastrophe losses, net of reinsurance, excluding those from exited lines.

Net premiums written recognized for accounting purposes as revenue during a specific period including net reinstatement premiums, as determined in accordance with IFRS.

NEP (IFRS), excluding net earned premiums of exited lines.

Net income attributable to shareholders, as reported under IFRS, less preferred share dividends.

Net income attributable to shareholders, as reported under IFRS, excluding the after-tax impact of Non-operating results. NOI is presented net of Net income attributable to non-controlling interests.

Net operating income, less preferred share dividends.

Net operating income attributable to common shareholders, divided by the WANSO.

Direct premiums written (MD&A basis) plus assumed premiums (external and industry pools) less ceded premiums (reinsurers and industry pools).

A group of claims, which is considered significant but that is smaller than the catastrophe threshold, related to a single weather event.

Difference between the asset return (interest income on plan assets), calculated using the expected return on plan assets versus the IFRS discount rate on Intact’s Canadian pension plan assets. The expected return better reflects our operating performance given our internal investment management expertise and the composition of our pension asset portfolio. The non-operating pension expense is included in Net claims incurred and Underwriting expenses under IFRS.

Include elements that are not representative of our operating performance because they relate to special items, bear significant volatility from one period to another, or because they are not part of our normal activities. These include the Amortization of intangible assets recognized in business combinations, Acquisition, integration and restructuring costs, Net gains (losses), Non-operating pension expense, Market yield adjustment on underwriting, Underwriting results from exited lines, as well as other costs or revenues that are not representative of our operating performance.

Catastrophe losses mostly related to large commercial losses (including non-weather-related fires), surety and liability losses, as well as direct losses related to the COVID-19 crisis.

A program for the repurchase of the Company’s own common shares, for cancellation through a stock exchange that is subject to the various rules of the relevant stock exchange and securities commission.

The sum of the Claims ratio and the Expense ratio. An operating combined ratio below 100% indicates a profitable underwriting result. An operating combined ratio over 100% indicates an unprofitable underwriting result.

Direct premiums written normalized for the effect of multi-year policies, excluding the impact of industry pools, fronting and exited lines. This measure matches operating direct premiums written to the year in which coverage is provided, whereas under IFRS, the full value of multi-year policies is recognized in the year the policy is written.

Operating DPW growth, excluding the impact of foreign currency fluctuations, calculated by applying the exchange rate in effect for the current period results to the results of the previous year.

Includes the impact of income taxes from our broker associates, which are accounted for using the equity method (net of tax) under IFRS.

Claims incurred, net of reinsurance (as determined in accordance with IFRS), excluding the Impact of MYA on underwriting results, adjustment for Non-operating pension expense and net claims from exited lines.

NEP, excluding net earned premiums from exited lines.

Net premiums written normalized for the effect of multi-year policies, excluding NPW from exited lines.

Underwriting expenses, net of reinsurance and other underwriting revenues, including commissions, premium taxes and general expenses related to underwriting activities but excluding the adjustment for non-operating pension expense and underwriting expenses from exited lines.

Net operating income attributable to common shareholders for the last 12 months, divided by the Adjusted average common shareholders’ equity (excluding accumulated other comprehensive income) over the same period.

Includes general corporate expenses related to the operation of the group and our public company status, consolidation adjustments, and other operating items.

The number of insurance policies in effect at a specific date. If two or more separate risks are covered under the same insurance policy, this counts as one policy in force. Policies in force exclude pet insurance given its low value.

Income before income taxes, as reported under IFRS, excluding income taxes from our broker associates, which are accounted for using the equity method under IFRS. In the MD&A, income taxes from our broker associates are included in Total income tax expense (benefit). In the Financial statements, the share of profit (loss) from investments in associates and joint ventures is presented net of taxes.

Represents Income before income taxes, as reported under IFRS, including the Share of income tax expense (benefit) of broker associates (accounted for using the equity method – net of tax – under IFRS), and excluding the pre-tax impact of Non-operating results. Comprises of the following items: Underwriting income, Net investment income, Distribution income, Total finance costs and Other operating income (expense).

Change in total prior year claims liabilities during a specific period, net of reinsurance, excluding the PYD related to exited lines. A decrease to claims liabilities is referred to as favourable prior year claims development. An increase in claims liabilities is referred to as unfavourable prior year claims development.

Prior year claims development (IFRS basis), net of reinsurance, excluding the PYD related to exited lines. 

PYD, expressed as a percentage of Operating NEP.

Minimum capital test (as defined by the Office of the Superintendent of Financial Institutions  and the Autorité des marchés financiers in Canada), Risk-based capital requirements (as defined by the National Association of Insurance Commissioners in the US), and Solvency capital requirement (as defined by the Prudential Regulation Authority in the UK&I).

Premium payable to restore the original reinsurance policy limit as a result of a reinsurance loss payment under a catastrophe coverage. Reinstatement premiums are reported in Net earned premiums under IFRS.

An insurance company that agrees to indemnify another insurance or reinsurance company, the ceding company, against all or a portion of the insurance or reinsurance risks underwritten by the ceding company, under one or more policies.

Includes restructuring costs not related to an acquisition and expenses related to the implementation of significant new accounting standards.

Net income attributable to common shareholders for the last 12 months, divided by the Adjusted average common shareholders’ equity over the same period.

Risk-based capital, as defined by the National Association of Insurance Commissioners (NAIC) in the U.S. 

Average cost of a claim calculated by dividing the total cost of claims by the total number of claims.

Ratio of Eligible Own Funds to Solvency Capital Requirement as defined under Solvency II and regulated by the Prudential Regulation Authority in the UK.

Periodic payments to claimants for a determined number of years for life, typically in settlement for a claim under a liability policy, usually funded through the purchase of an annuity.

Total capital margin includes capital in excess of the internal CALs for insurance entities in Canadian, US, UK and other internationally regulated jurisdictions and the funds held in non-regulated entities less any ancillary own funds committed by the Company.

Finance costs, as reported under IFRS, adjusted to include finance costs from our broker associates, which are accounted for using the equity method under IFRS (included in Share of profit from investments in associates and joint ventures under IFRS).

Income tax benefit (expense), as reported under IFRS, adjusted to include income taxes from our broker associates, which are accounted for using the equity method under IFRS.

Income tax expense, as reported under IFRS, adjusted to include income taxes from our broker associates, which are accounted for using the equity method under IFRS. 

Claims incurred, net of reinsurance (as determined in accordance with IFRS), excluding the Impact of MYA on underwriting results, adjustment for Non-operating pension expense and net claims of exited lines.

Total net claims, excluding Current year CAT claims and prior year claims development, expressed as a percentage of NEP (MD&A basis) before reinstatement premiums.

Underwriting expenses, net of reinsurance and other underwriting revenues, including commissions, premium taxes and general expenses related to underwriting activities but excluding the adjustment for non-operating pension expense and underwriting expenses of exited lines.

NEP (MD&A basis) less Total net claims and Underwriting expenses (MD&A basis) for a specific period.

Operating NEP less Operating net claims and Operating net underwriting expenses for a specific period. Underwriting income (loss) represents Net earned premiums, Other underwriting revenues, Net claims incurred and Underwriting expenses, all of which reported under IFRS, excluding the impact of MYA on underwriting results, non-operating pension expense and underwriting results from exited lines.

Included the results of the US Commercial’s business Programs, Architects and Engineers, Healthcare (effective July 1, 2019), BC auto exit (effective in Q4-2020), as well as UK & International (UK&I) exited lines as of the closing date.

Weighted-average number of common shares outstanding on a daily basis during a specific period.

The number of vehicles in personal automobile insurance and the number of premises in personal property insurance written for a specific period. Written insured risks exclude pet insurance given its low value.