ICPEI Holdings Inc. Reports Strong 2021 Fourth Quarter and Full Year Results

TORONTO, March 3, 2022 /CNW/ - ICPEI Holdings Inc. (the "Company") (TSXV: ICPH) which operates in the property and casualty insurance industry in Canada, today reported net income of $6.7 million for the year and $2.4 million in Q4 ended December 31, 2021 compared to $4.9 million, excluding discontinued operations, and $0.5 million in the same period of 2020.

Serge Lavoie, Chief Executive Officer, commented "We had a very impressive year with premium growth of 54% over last year and a combined ratio of 85.7% for 2021. We plan to continue our growth in the rest of Canada as we have received our license in Ontario and applied for license in Alberta."

Highlights

• Premium written grew 54% for 2021 and 61% for Q4 2021. The growth is in line with our strategy to expand geographically in Quebec and to focus more on the commercial line of business.
  
  
• Underwriting income of $7.6 million for 2021 and $2.7 million for Q4 2021, increased by 205% and 429%, respectively, compared to the same periods in 2020. Our growth in commercial business is contributing the majority of our underwriting income.
  
  
• EPS $0.45 for 2021 and $0.16 for Q4 2021, increase of 29% and 700%, respectively, compared to the same periods in 2020.
  
  
• ROE of 27.5% for 2021 and BVPS growth of 16% to $1.84 in 2021
  
  
• Net income from continued operations of $6.7 million for 2021 compared to $4.9 million for 2020 and $2.4 million in Q4 2021 compared to $0.5 million in Q4 2020.
  
  
• Combined ratio of 85.7% in 2021 improved from 93.2% in 2020 and 82.7% in Q4 2021 improved from 94.9% in Q4 2020.

Quarter and year ended December 31, 2021 compared to quarter and year ended December 31, 2020
	3 months ended December 31		12 months ended December 31
	2021	2020	2021	2020
Direct written and assumed premiums	18,753	11,619	66,676	43,188
Net earned premiums	15,891	10,141	53,448	37,012
Net claims incurred	6,826	5,423	24,281	19,913
Net acquisition costs	4,114	2,428	13,790	8,918
Operating expenses^(1)	2,209	1,772	7,742	5,675
Corporate expense^(1)	316	558	1,149	1,365
Underwriting  income  ^(2)	2,742	518	7,635	2,506
Investment  income	798	783	2,561	4,795
Impact of change in discount rate on claims	121	(241)	186	(342)
Net  income before income taxes	3,345	502	9,233	5,594
	3 months ended December 31		12 months ended December 31
	2021	2020	2021	2020
Income tax expense	928	33	2,558	698
Net  income on continued operations	2,417	469	6,675	4,896
Net  loss on discontinued operations	-	-	-	(5,866)
Net income (loss)	2,417	469	6,675	(970)
Net  income (loss) attributed to:
Shareholders of the Company – continued operations	2,417	272	6,359	4,149
Shareholders of the Company – discontinued operations	-	-	-	(5,866)
Non-controlling interest	-	197	316	747
Earnings per share (EPS)
Continued operations
Basic	$0.16	$0.02	$0.45	$0.35
Diluted	$0.16	$0.02	$0.45	$0.35
Discontinued operations
Basic	-	-	-	$(0.49)
Diluted	-	-	-	$(0.49)
Book value per share (BVPS)^(3)			$1.84	$1.59
Return on Equity (ROE)^(4)			27.5%	7.6%

^(1)	Sum of Operating expenses and Corporate expense equal Operating Costs on Consolidated Statements of Income and Comprehensive Income.
^(2)	Underwriting income is defined as net earned premiums less net claims incurred, net acquisition costs, operating expenses, and excludes any impact of change in discount rate on claims and corporate expenses.
^(3)	Book value per share is calculated by dividing total equity by the number of common shares outstanding.
^(4)	Return on Equity is net income on continued operations divided by average total equity.

Underwriting Results:

	3 months ended December 31		12 months ended December 31
Underwriting Income (loss) $000s	2021	2020	2021	2020
Personal Lines	1,458	1,256	2,571	2,952
Commercial Lines	1,284	(738)	5,064	(446)
Key Ratios
Loss Ratio	42.9%	53.5%	45.4%	53.8%
Expense Ratio	39.8%	41.4%	40.3%	39.4%
Combined Ratio	82.7%	94.9%	85.7%	93.2%
Loss Ratios
Personal Lines	45.2%	41.2%	50.0%	49.5%
Commercial Lines	40.0%	78.9%	39.2%	63.4%

Capital Management

The Minimum Capital Test ("MCT") ratio of the Company's subsidiary, Insurance Company of Prince Edward Island (ICPEI) as at December 31, 2021 was 328%, which comfortably exceeds the supervisory target of 150%.

The Company entered into a bank credit facility consisting of $3 million Term Loan and $2 million revolving credit and drew on the $3 million Term Loan on April 1, 2021.  Repayment of $0.23 million was made to the bank in the year.

COVID-19 Pandemic Update

Due to the strict restrictions on activity in early spring of 2021 combined with rapid gains in vaccinations, the numbers of COVID-19 cases gradually decreased and we saw the gradual re-opening of the Canadian economy in the second half of 2021. However, with the highly contagious Delta variant and the discovery of a new variant, Omicron, the risk for increased COVID cases across Canada remains high. Currently, COVID-19 did not have any significant impact on the premiums, collections, investments or other operational activities of the Company, but the impact remains uncertain as the pandemic continues to evolve.

Non-IFRS Financial Measures

The Company uses both IFRS and certain non-IFRS measures to assess performance. Securities regulators require that companies caution readers about non-IFRS measures that do not have a standardized meaning under IFRS and are unlikely to be comparable to similar measures used by other companies. The Company analyzes performance based on underwriting income and underwriting ratios such as combined, expense and loss ratios, which are non-IFRS measures. Underwriting income is defined as net earned premiums less net claims incurred, net acquisition costs, operating expenses, and excludes any impact of change in discount rate on claims and corporate expenses. Loss ratio is net claims incurred divided by net earned premiums. Expense ratio is net acquisition costs plus operating expenses divided by net earned premiums. Combined ratio is the sum of loss ratio and expense ratio. Return on Equity is based on net income on continued operations divided by average total equity.

Forward-looking Information

This news release contains forward-looking information based on current expectations. This information includes, but is not limited to, statements about the operations, business, financial condition, priorities, targets, ongoing objectives, strategies, litigation outcomes and outlook of the Company. These statements, which appear in this press release generally can be identified by the use of forward-looking words such as "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "plan", "would", "should", "could", "trend", "predict", "likely", "potential" or "continue" or the negative thereof and similar variations.

This information is based upon certain material factors or assumptions that were applied in drawing a conclusion or making a projection as reflected in the forward-looking information. By its nature, this information is subject to inherent risks and uncertainties that may be general or specific. A variety of material factors, many of which are beyond the Company's control, affect the operations, performance and results of its business and could cause actual results to differ materially from the expectations expressed in any of this forward-looking information.

About ICPEI Holdings Inc.

Founded in 1998, ICPEI Holdings Inc. operates in the Canadian property and casualty insurance industry through its wholly owned subsidiary The Insurance Company of Prince Edward Island (ICPEI). ICPEI provides commercial and personal lines of insurance products exclusively through the broker channel.

The Company's name was changed from EFH Holdings Inc. to ICPEI Holdings Inc. after receiving approval from shareholders on July 15, 2021. It trades on the TSX Venture Exchange under the symbol ICPH effective August 20, 2021 and prior to December 23, 2020 it traded on the Toronto Stock Exchange.  

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE ICPEI Holdings Inc.

For more information, please visit www.icpeiholdings.ca or contact Investor Relations at 905-602-2150 or [email protected]