Intact Financial Corporation reports Q3-2022 results

(in Canadian dollars except as otherwise noted)

TORONTO, Nov. 8, 2022 /CNW/ - (TSX: IFC)  

Highlights

• Net operating income per share¹ decreased 6% to $2.70, reflecting a slight increase in operating combined ratio, offset in part by higher investment and distribution income
• Operating DPW² grew 2% as continued solid growth in specialty lines was partially offset by profitability actions, including strategic exits
• Operating combined ratio¹ was robust at 92.6%, with very strong results in commercial lines and Canada personal auto performing as expected
• EPS increased 26% to $2.02 with solid operating and non-operating performance, while last year's results were impacted by an impairment charge on an investment
• OROE¹ and ROE¹ were strong at 15.0% and 19.1%, respectively, reflecting continued strong performance
• BVPS was stable year-over-year, as strong earnings were offset by significant mark-to-market losses on investments

Charles Brindamour, Chief Executive Officer, said:

"We achieved solid operating performance across the platform despite active weather and ongoing cost pressures. Our people are working hard to get customers back on track after the devastation caused by recent hurricanes. At the same time, our balance sheet remains resilient in the context of volatile capital market conditions which we continue to monitor closely. Finally, we continued to make progress on the integration of RSA, with synergies tracking towards our recently increased target of a $350 million run-rate in 2024."

Consolidated Highlights^1
(in millions of Canadian dollars except as otherwise noted)	Q3-2022	Q3-2021	Change		YTD-2022		YTD-2021		Change
Operating direct premiums written^1,2	5,443	5,447	2 %		15,928		12,266		31 %
Direct premiums written^2	5,796	5,719	4 %		17,127		12,676		37 %
Operating combined ratio^1	92.6 %	91.3 %	1.3 pts		91.7 %		89.3 %		2.4 pts
Underwriting income^1	362	426	(15) %		1,199		1,187		1 %
Operating net investment income^1	232	191	21 %		648		486		33 %
Distribution income^1	111	105	6 %		344		285		21 %
Net operating income attributable to common shareholders^1	473	505	(6) %		1,501		1,351		11 %
Net income	370	300	23 %		2,001		1,387		44 %
Per share measures (in dollars)
Net operating income per share (NOIPS)^1	$2.70	$2.87	(6) %		$8.54		$8.56		- %
Earnings per share (EPS)	$2.02	$1.60	26 %		$11.20		$8.46		32 %
Return on equity for the last 12 months
Operating ROE^1	15.0 %	18.3 %	(3.3) pts
ROE^1	19.1 %	16.5 %	2.6 pts
Book value per share (in dollars)	$78.90	$79.21	- %
Total capital margin	2,490	2,693	(203)
Adjusted debt-to-total-capital ratio^1	22.5 %	23.9 %	(1.4) pts

	______________________________________
^1	This press release contains non-GAAP financial measures and Non-GAAP ratios (each as defined in National Instrument 52-112 "Non-GAAP and Other Financial Measures Disclosure". Refer to Section 23 – Non-GAAP and other financial measures in the Q3-2022 Management's Discussion and Analysis for further details.
^2	DPW change (growth) is presented in constant currency

Common Share Dividend

• The Board of Directors approved the quarterly dividend of $1.00 per share on the Company's issued and outstanding common shares. The dividend is payable on December 30, 2022, to all shareholders of record as at December 15, 2022.

Normal Course Issuer Bid

• As at September 30, 2022, the Company had repurchased and cancelled 817,790 common shares for approximately $149 million under its normal course issuer bid ("NCIB") program. The NCIB program allows the Company to purchase for cancellation up to 5,282,458 common shares until February 15, 2023, representing approximately 3% of the Company's issued and outstanding common shares as at February 8, 2022.

12-Month Industry Outlook

• Over the next twelve months, we expect firm-to-hard insurance market conditions to continue in most lines of business, driven by inflation and climate change.
  
  
• In Canada, we expect firm market conditions to continue in personal property. Personal auto premium growth is expected to be in the mid-single-digit range over the next 12 months, to reflect inflation and evolving driving patterns.
  
  
• In commercial and specialty lines across all geographies, hard market conditions are expected to continue.
  
  
• In the UK&I, we expect the personal property market to firm as it reacts to inflationary pressures and adapts to reform measures. Personal motor has begun to firm and we anticipate this to increase over time.

Segment Results

(in millions of Canadian dollars except as otherwise noted)	Q3-2022	Q3-2021	Change	YTD-2022	YTD-2021	Change
Operating direct premiums written^2
Canada	3,664	3,564	3 %	10,620	8,740	22 %
UK&I	1,071	1,264	(4) %	3,527	1,264	nm
US	708	619	10 %	1,781	1,528	14 %
Corporate and Other (RSA – June 2021)	n/a	n/a	nm	n/a	734	nm
Total	5,443	5,447	2 %	15,928	12,266	31 %
Operating combined ratio
Canada	92.7 %	89.2 %	3.5 pts	91.2 %	87.6 %	3.6 pts
UK&I	93.5 %	93.9 %	(0.4) pts	94.6 %	93.9 %	nm
US	90.5 %	92.8 %	(2.3) pts	89.5 %	93.0 %	(3.5) pts
Corporate and Other (RSA – June 2021)	n/a	n/a	nm	n/a	90.7 %	nm
Total	92.6 %	91.3 %	1.3 pts	91.7 %	89.3 %	2.4 pts
Underwriting income
Canada	249	356	(107)	882	1,012	(130)
UK&I	64	72	(8)	165	72	nm
US	45	30	15	138	81	57
Corporate and Other	4	(32)	36	14	(35)	49
RSA – June 2021	n/a	n/a	nm	n/a	57	nm
Total	362	426	(64)	1,199	1,187	12

Q3-2022 Insurance Business Performance

• Excluding strategic exits, operating DPW grew 4% on a constant currency basis, reflecting solid rate increases and strong growth in specialty lines, tempered by the impact of pricing discipline and footprint optimization in the UK&I.
  
  
• Operating combined ratio of 92.6% was 1.3 points higher than last year. The operating combined ratio in Canada was 92.7%, 3.5 points above last year, mainly owing to inflation and higher claims frequency in personal auto. In the UK&I, the operating combined ratio was down 0.4 points to 93.5%, with strong performance in commercial lines. In the US, the operating combined ratio improved 2.3 points to 90.5%, in line with expectations.

Lines of Business P&C Canada

• Personal auto premiums decreased 1% from the prior year. This reflected new business pressures from reduced policy shopping in a muted rate environment, and rate actions taken ahead of competitors. The operating combined ratio of 93.0% was 7.9 points higher than last year, due to inflation and higher claims frequency. We expect to deliver a sub-95 combined ratio in the next 12 months as a result of our ongoing rate and underwriting actions.
  
  
• Personal property premiums grew by 7% in firm market conditions. The operating combined ratio of 98.4% was 4.9 points higher than last year, primarily due to higher weather-related losses, compared to a particularly strong quarter last year.
  
  
• Commercial lines premium growth of 4% reflected robust rate actions in hard market conditions. The operating combined ratio was a strong 87.9%, reflecting a robust underlying performance.
  
  
• Distribution income grew 6% to $111 million, driven by the addition of Highland Insurance Solutions to our portfolio, partially offset by lower variable commission revenues compared to an elevated amount in the prior-year quarter.

P&C UK&I

• Personal lines premiums declined 13% on a constant currency basis, almost 8 points of which was due to the sale of our Middle East business. We remained disciplined in competitive market conditions, with pricing reforms impacting UK home and motor. The operating combined ratio of 105.5% was up 7.6 points from the prior year, and higher than expectations. This was largely due to elevated subsidence claims, driven by unusually dry conditions in the UK, and additional reserves to reflect the latest inflation expectations.
  
  
• Commercial lines premiums grew 3% on a constant currency basis. Excluding impacts from the sale of our Middle East business and the optimization of our delegated portfolio, top line grew 9%, reflecting hard market conditions and strong retention levels. The operating combined ratio was 85.0%, due to profitability actions over the past 12 months, as well catastrophe losses in line with expectations.

P&C US

• US Commercial premiums grew 10% on a constant currency basis. Excluding the impact of strategic exits, growth was 14%, driven by new business, increased exposures, and rate increases in favourable market conditions. The operating combined ratio improved 2.3 points to 90.5%, due to our profitability actions, including the exit from Public Entities.

Investments

• Operating net investment income of $232 million for the quarter increased 21% year-over-year, mainly driven by higher reinvestment yields.
  
  
• Net losses excluding FVTPL bonds of $2 million, included losses on common shares, partially offset by net foreign currency gains in UK&I.

Net Operating Income, EPS and ROE

• Net operating income attributable to common shareholders of $473 million fell 6% from Q3-2021, reflecting inflation pressures and higher weather-related losses in personal lines, partially offset by strong investment and distribution results.
  
  
• Earnings per share of $2.02 was 26% higher than last year, reflecting solid operating and non-operating performances, while last year's results were impacted by an impairment on a venture investment.
  
  
• Operating ROE of 15.0% and ROE of 19.1% for the 12 months to September 30, 2022 reflected strong performance across the business.

Balance Sheet

• The Company ended the quarter in a strong financial position, with a total capital margin of $2.5 billion and solid regulatory capital ratios in all jurisdictions, despite challenging capital markets.
  
  
• The adjusted debt-to-total capital ratio increased temporarily to 22.5% as at September 30, 2022, mainly reflecting the issuance of the Series 14 unsecured medium-term notes in USD as well as the impact of volatile capital markets. The net proceeds from this offering will be used to repay the principal amount of debt maturing subsequent to quarter-end. On a pro-forma basis, this reimbursement will decrease our adjusted debt-to-total capital ratio by 1.5 points.
  
  
• IFC's book value per share (BVPS) was $78.90 at September 30, 2022, largely unchanged from prior year. Strong earnings were offset by mark-to-market losses on our investments due to the increase in interest rates and the recent volatility in capital markets.

RSA Acquisition

• RSA contributed approximately 15% accretion to NOIPS for the sixteen-month period since closing.
  
  
• We are on track to realize at least $350 million of pre-tax annual run-rate synergies in 2024. As at September 30, 2022 we estimate that we delivered $235 million in annualized run-rate synergies.
  
  
• Integration activities are progressing well. In Q3, we started the conversion of Johnson's retail policies to belairdirect. To date, over 95% of policies outside of Johnson and specialty lines have converted to Intact systems. Retention continues to be aligned with, or better than, historical RSA experience.
  
  
• On July 7, 2022 we completed the sale of our 50% stake in RSA Middle East B.S.C. (c) (the "Sale of Middle East") to National Life & General Insurance Company (NLGIC), majority owned by Oman International Development and Investment Co. (OMINVEST) for proceeds of $175 million (USD135 million).

Preferred Share Dividends

• The Board of Directors also approved a quarterly dividend of 21.225 cents per share on the Company's Class A Series 1 preferred shares, 21.60625 cents per share on the Class A Series 3 preferred shares, 32.50 cents per share on the Class A Series 5 preferred shares, 33.125 cents per share on the Class A Series 6 preferred shares, 30.625 cents per share on the Class A Series 7 preferred shares, 33.75 cents per share on the Class A Series 9 preferred shares, and 32.8125 cents per share on the Class A Series 11 preferred shares. These dividends are payable on December 31, 2022, to shareholders of record as at December 15, 2022.

Analysts' Estimates

• The average estimates of earnings per share and net operating income per share for the quarter among the analysts who follow the Company were $2.60 and $2.76, respectively.

Management's Discussion and Analysis (MD&A) and Consolidated Financial Statements

This Press Release, which was approved by the Company's Board of Directors on the Audit Committee's recommendation, should be read in conjunction with the Q3-2022 MD&A as well as the Q3-2022 Interim Consolidated Financial Statements, which are available on the Company's website at www.intactfc.com and later today on SEDAR at www.sedar.com.

For the definitions of measures and other insurance-related terms used in this Press Release, please refer to the MD&A and to the glossary available in the "Investors" section of the Company's website at www.intactfc.com.

Conference Call Details

Intact Financial Corporation will host a conference call to review its earnings results tomorrow at 11:00 a.m. ET. To listen to the call via live audio webcast and to view the Company's Financial Statements, MD&A, presentation slides, Supplementary financial information and other information not included in this press release, visit the Company's website at www.intactfc.com and link to "Investors". The conference call is also available by dialing 416-764-8659 or 1-888-664-6392 (toll-free in North America). Please call 10 minutes before the start of the call. A replay of the call will be available on November 9, 2022 at 2:00 p.m. ET until midnight on November 16, 2022. To listen to the replay, call 416-764-8677 or 1-888-390-0541 (toll-free in North America), entry code 663122 . A transcript of the call will also be made available on Intact Financial Corporation's website.

About Intact Financial Corporation

Intact Financial Corporation (TSX: IFC) is the largest provider of property and casualty (P&C) insurance in Canada, a leading provider of global specialty insurance, and, with RSA, a leader in the U.K. and Ireland. Our business has grown organically and through acquisitions to over $20 billion of total annual premiums.

In Canada, Intact distributes insurance under the Intact Insurance brand through a wide network of brokers, including its wholly-owned subsidiary BrokerLink, and directly to consumers through belairdirect. Intact also provides affinity insurance solutions through the Johnson Affinity Groups.

In the US, Intact Insurance Specialty Solutions provides a range of specialty insurance products and services through independent agencies, regional and national brokers, and wholesalers and managing general agencies.

Outside of North America, the Company provides personal, commercial and specialty insurance solutions across the U.K., Ireland, and Europe through the RSA brands.

Non-GAAP and other financial measures

Non-GAAP financial measures and Non-GAAP ratios (which are calculated using Non-GAAP financial measures) do not have standardized meanings prescribed by IFRS (or GAAP) and may not be comparable to similar measures used by other companies in our industry. Non-GAAP and other financial measures are used by management and financial analysts to assess our performance. Further, they provide users with an enhanced understanding of our financial results and related trends, and increase transparency and clarity into the core results of the business.

Non-GAAP financial measures and Non-GAAP ratios used in this Press Release and the Company's financial reports include measures related to our consolidated performance, our underwriting performance and our financial strength.

For more information about these supplementary financial measures, Non-GAAP financial measures, and Non-GAAP ratios, including definitions and explanations of how these measures provide useful information, refer to Section 23 – Non-GAAP and other financial measures in the Q3-2022 MD&A dated November 8, 2022, which is available on our website at www.intactfc.com and on SEDAR at www.sedar.com.

Table 1   Reconciliation of NOI, NOIPS and OROE to Net income attributable to shareholders, as reported under IFRS

	Q3-2022	Q3-2021	YTD 2022	YTD 2021
Net income attributable to shareholders, as reported under IFRS	370	295	2,012	1,375
Remove: pre-tax non-operating results	150	265	(547)	87
Remove: non-operating tax expense (benefit)	(32)	(41)	104	(71)
Remove: non-operating component of NCI	-	-	(24)	-
NOI	488	519	1,545	1,391
Remove: preferred share dividends	(15)	(14)	(44)	(40)
NOI attributable to common shareholders	473	505	1,501	1,351
Divided by weighted-average number of common shares (in millions)	175.4	176.1	175.7	157.8
NOIPS, basic and diluted (in dollars)	2.70	2.87	8.54	8.56
NOI to common shareholders for the last 12 months	2,167	1,805
Adjusted average common shareholders' equity, excluding AOCI	14,415	9,840
OROE for the last 12 months	15.0 %	18.3 %

Table 2   Reconciliation of Operating DPW to DPW

	Q3-2022	Q3-2021	YTD 2022	YTD 2021
DPW, as reported under IFRS	5,796	5,719	17,127	12,676
Remove: impact of industry pools and fronting	(309)	(212)	(894)	(345)
Remove: DPW from exited lines	(56)	(84)	(346)	(91)
Add: impact of the normalization for multi-year policies	12	24	41	26
Operating DPW, as reported in the MD&A	5,443	5,447	15,928	12,266
Operating DPW growth	- %	67 %	30 %	34 %
Operating DPW growth (in constant currency)	2 %	68 %	31 %	35 %

Table 3   Reconciliation of Underwriting income to Underwriting income as reported under IFRS

	Q3-2022	Q3-2021	YTD 2022	YTD 2021
Net earned premiums, as reported under IFRS	4,945	4,950	14,738	11,235
Other underwriting revenues, as reported under IFRS	78	77	229	157
Net claims incurred, as reported under IFRS	(2,767)	(2,883)	(7,899)	(6,171)
Underwriting expenses, as reported under IFRS	(1,653)	(1,718)	(4,890)	(3,946)
Underwriting income (loss), as calculated under IFRS	603	426	2,178	1,275
Remove: impact of MYA on underwriting results	(291)	(37)	(1,120)	(154)
Remove: non-operating pension expense	15	16	42	48
Remove: underwriting loss (income) from exited lines	35	21	99	18
Underwriting income (loss), as reported in the MD&A	362	426	1,199	1,187
Operating NEP	4,880	4,871	14,380	11,112
Operating combined ratio	92.6 %	91.3 %	91.7 %	89.3 %

Table 4   Reconciliation of Operating net claims to Net claims incurred, as reported under IFRS

	Q3-2022	Q3-2021	YTD 2022	YTD 2021
Net claims incurred, as reported under IFRS	2,767	2,883	7,899	6,171
Remove: positive (negative) impact of MYA on underwriting results	291	37	1,120	154
Remove: adjustment for non-operating pension expense	(6)	(6)	(16)	(18)
Remove: net claims from exited lines	(74)	(63)	(307)	(89)
Net with: other underwriting revenues	(10)	(18)	(31)	(18)
Operating net claims, as reported in the MD&A	2,968	2,833	8,665	6,200
Remove: net current year CAT losses	(229)	(365)	(659)	(490)
Remove: favourable (unfavourable) PYD	143	148	545	434
Operating net claims excluding current year CAT losses and PYD	2,882	2,616	8,551	6,144
Operating NEP	4,880	4,871	14,380	11,112
Remove: reinstatement premiums ceded (recovered)	4	-	7	1
Operating NEP before reinstatement premiums	4,884	4,871	14,387	11,113
Underlying current year loss ratio^1	58.9 %	53.7 %	59.5 %	55.3 %
CAT loss ratio (including reinstatement premiums)^1	4.8 %	7.5 %	4.6 %	4.4 %
(Favourable) unfavourable PYD ratio^2	(2.9) %	(3.0) %	(3.8) %	(3.9) %
Claims ratio^2	60.8 %	58.2 %	60.3 %	55.8 %

^1	Calculated using Operating NEP before reinstatement premiums.
^2	Calculated using Operating NEP.

Table 5   Reconciliation of Operating net underwriting expenses to Underwriting expenses as reported under IFRS

	Q3-2022	Q3-2021	YTD 2022	YTD 2021
Underwriting expenses, as reported under IFRS	1,653	1,718	4,890	3,946
Net with: other underwriting revenues	(68)	(59)	(198)	(139)
Remove: adjustment for non-operating pension expense	(9)	(10)	(26)	(30)
Remove: underwriting expenses from exited lines	(26)	(37)	(150)	(52)
Operating net underwriting expenses, as reported in the MD&A	1,550	1,612	4,516	3,725
Commissions	828	901	2,356	2,056
General expenses	588	576	1,760	1,323
Premium taxes	134	135	400	346
Operating NEP	4,880	4,871	14,380	11,112
Commissions ratio	17.0 %	18.5 %	16.4 %	18.5 %
General expenses ratio	12.1 %	11.8 %	12.2 %	11.9 %
Premium taxes ratio	2.7 %	2.8 %	2.8 %	3.1 %
Expense ratio	31.8 %	33.1 %	31.4 %	33.5 %

  Table 6   Reconciliation of ROE to Net income attributable to shareholders, as reported under IFRS

	Q3-2022	Q3-2021	YTD 2022	YTD 2021
Net income attributable to shareholders	370	295	2,012	1,375
Remove: preferred share dividends	(15)	(14)	(44)	(40)
Net income attributable to common shareholders	355	281	1,968	1,335
Divided by weighted-average number of common shares (in millions)	175.4	176.1	175.7	157.8
EPS, basic and diluted (in dollars)	2.02	1.60	11.20	8.46
Net income attributable to common shareholders for the last 12 months	2,647	1,700
Adjusted average common shareholders' equity	13,888	10,279
ROE for the last 12 months	19.1 %	16.5 %

Table 7   Reconciliation of consolidated results on a MD&A basis with the interim Consolidated financial statements

	MD&A captions						Pre-tax
As presented in the Financial statements		Distribution income	Total finance costs	Other operating income (expense)^1	Operating net investment income	Total income taxes	Non- operating results	Underwriting income	Total F/S caption
For the quarter ended September 30, 2022
Underwriting income^1		-	-	-	-	-	241	362	603
Investment income		-	-	-	240	-	-	-	240
Investment expenses		-	-	-	(8)	-	-	-	(8)
Other revenues		120	-	4	-	-	-	-	124
Net gains (losses)		-	-	-	-	-	(229)	-	(229)
Gain on sale of business		-	-	-	-	-	-	-	-
Share of profits from investments in    associates and joint ventures		37	(3)	-	-	(8)	(3)	-	23
Finance costs		-	(43)	-	-	-	-	-	(43)
Acquisition, integration and restructuring costs		-	-	-	-	-	(102)	-	(102)
Other expenses		(46)	-	(49)	-	-	(57)	-	(152)
Income tax benefit (expense)		-	-	-	-	(86)	-	-	(86)
Total, as reported in MD&A		111	(46)	(45)	232	(94)	(150)	362
For the quarter ended September 30, 2021
Underwriting income^1		-	-	-	-	-	-	426	426
Investment income		-	-	-	202	-	-	-	202
Investment expenses		-	-	-	(11)	-	-	-	(11)
Other revenues		110	-	6	-	-	-	-	116
Net gains (losses)		-	-	-	-	-	(88)	-	(88)
Gain on the RSA Acquisition		-	-	-	-	-	4	-	4
Share of profits from investments in associates    and joint ventures		36	(2)	-	-	(8)	(4)	-	22
Finance costs		-	(45)	-	-	-	-	-	(45)
Acquisition, integration and restructuring costs		-	-	-	-	-	(115)	-	(115)
Other expenses		(41)	-	(17)	-	-	(62)	-	(120)
Income tax benefit (expense)		-	-	-	-	(91)	-	-	(91)
								-
Total, as reported in MD&A		105	(47)	(11)	191	(99)	(265)	426

 

Table 8   Reconciliation of consolidated results on a MD&A basis with the interim Consolidated financial statements

	MD&A captions						Pre-tax
As presented in the Financial statements		Distribution income	Total finance costs	Other operating income (expense)^1	Operating net investment income	Total income taxes	Non- operating results	Underwriting income	Total F/S caption
For the nine-month period ended September 30, 2022
Underwriting income^1		-	-	-	-	-	979	1,199	2,178
Investment income		-	-	-	673	-	4	-	677
Investment expenses		-	-	-	(25)	-	-	-	(25)
Other revenues		388	-	8	-	-	-	-	396
Net gains (losses)		-	-	-	-	-	(402)	-	(402)
Gain on sale of business		-	-	-	-	-	423	-	423
Share of profits from investments in    associates and joint ventures		134	(7)	-	-	(30)	(12)	-	85
Finance costs		-	(127)	-	-	-	-	-	(127)
Acquisition, integration and restructuring costs		-	-	-	-	-	(269)	-	(269)
Other expenses		(178)	-	(115)	-	-	(176)	-	(469)
Income tax benefit (expense)		-	-	-	-	(466)	-	-	(466)
Total, as reported in MD&A		344	(134)	(107)	648	(496)	547	1,199
For the nine-month period ended September 30, 2021
Underwriting income^1		-	-	-	-	-	88	1,187	1,275
Investment income		-	-	-	509	-	-	-	509
Investment expenses		-	-	-	(23)	-	-	-	(23)
Other revenues		291	-	22	-	-	-	-	313
Net gains (losses)		-	-	-	-	-	55	-	55
Gain on the RSA Acquisition		-	-	-	-	-	204	-	204
Share of profits from investments in associates    and joint ventures		119	(8)	-	-	(26)	(14)	-	71
Finance costs		-	(111)	-	-	-	-	-	(111)
Acquisition, integration and restructuring costs		-	-	-	-	-	(296)	-	(296)
Other expenses		(125)	-	(51)	-	-	(124)	-	(300)
Income tax benefit (expense)		-	-	-	-	(310)	-	-	(310)
Total, as reported in MD&A		285	(119)	(29)	486	(336)	(87)	1,187

1	Comprised of the following captions in the Consolidated statements of income: Net earned premiums, Other underwriting revenues, Net claims incurred and Underwriting expenses.

Table 9   Calculation of BVPS and BVPS (excluding AOCI)

As at September 30,	2022	2021
Equity attributable to shareholders, as reported under IFRS	15,150	15,123
Remove: Preferred shares, as reported under IFRS	(1,322)	(1,175)
Common shareholders' equity	13,828	13,948
Remove: AOCI, as reported under IFRS	1,629	(575)
Common shareholders' equity (excluding AOCI)	15,457	13,373
Number of common shares outstanding at the same date (in millions)	175.3	176.1
BVPS	78.90	79.21
BVPS (excluding AOCI)	88.19	75.95

Table 10  Adjusted average common shareholders' equity and Adjusted average common shareholders' equity (excluding AOCI)

As at September 30,		2022	2021
	Ending common shareholders' equity	13,828	13,948
	Remove: common shares issued during the period	-	(4,311)
	Ending common shareholders' equity, excluding common shares issued during the period	13,828	9,637
	Beginning common shareholders' equity	13,948	8,040
	Average common shareholders' equity, excluding common shares issued during the period	13,888	8,838
	Weighted impact of June 1, 2021 common shares issuance	-	1,441
	Adjusted average common shareholders' equity	13,888	10,279
	Ending common shareholders' equity (excluding AOCI)	15,457	13,373
	Remove: common shares issued during the period	-	(4,311)
	Ending common shareholders' equity, excluding AOCI and common shares issued during the period	15,457	9,062
	Beginning common shareholders' equity, excluding AOCI	13,373	7,736
	Average common shareholders' equity, excluding AOCI and common shares issued during the period	14,415	8,399
	Weighted impact of June 1, 2021 common shares issuance	-	1,441
	Adjusted average common shareholders' equity, excluding AOCI	14,415	9,840

Table 11 Reconciliation of Debt outstanding (excluding hybrid debt) and Adjusted total capital to Debt outstanding, Equity attributable to shareholders and Equity attributable to NCI, as reported under IFRS

As at	Sept. 30 2022	June 30 2022	Dec. 31 2021
Debt outstanding, as reported under IFRS	4,796	4,345	5,229
Remove: hybrid subordinated notes	(247)	(247)	(247)
Debt outstanding (excluding hybrid debt)	4,549	4,098	4,982
Debt outstanding, as reported under IFRS	4,796	4,345	5,229
Equity attributable to shareholders, as reported under IFRS	15,150	15,515	15,674
Equity attributable to NCI, as reported under IFRS
Include: RSA Insurance Group plc, as reported under IFRS Tier 1 notes	-	-	510
Preferred shares	285	285	285
Adjusted total capital	20,231	20,145	21,698
Debt outstanding (excluding hybrid debt)	4,549	4,098	4,982
Adjusted total capital	20,231	20,145	21,698
Adjusted debt-to-total capital ratio	22.5 %	20.3 %	23.0 %
Debt outstanding, as reported under IFRS	4,796	4,345	5,229
Preferred shares, as reported under IFRS	1,322	1,322	1,175
Equity attributable to NCI: RSA Insurance Group plc, as reported under IFRS Tier 1 notes	-	-	510
Preferred shares	285	285	285
Debt outstanding and preferred shares (including NCI)	6,403	5,952	7,199
Adjusted total capital	20,231	20,145	21,698
Total leverage ratio	31.7 %	29.5 %	33.2 %
Adjusted debt-to-total capital ratio	22.5 %	20.3 %	23.0 %
Preferred shares and hybrids	9.2 %	9.2 %	10.2 %

Forward Looking Statements

Certain statements made in this news release are forward-looking statements. These forward-looking statements include, without limitation, statements relating to the outlook for the property and casualty insurance industry in Canada, the US and the UK, the Company's business outlook, the Company's growth prospects, the impact on the Company in relation to the occurrence of and in response to the coronavirus (COVID-19) pandemic and ensuing events, the acquisition and integration of RSA Insurance Group PLC ("RSA"), the sale of the Company's 50% stake in RSA Middle East B.S.C. (c) to National Life & General Insurance Company (NLGIC) (the "Sale of Middle East"), and the realization of expected strategic, financial and other benefits of the Sale of Middle East. All such forward-looking statements are made pursuant to the 'safe harbour' provisions of applicable Canadian securities laws.

Forward-looking statements, by their very nature, are subject to inherent risks and uncertainties and are based on several assumptions, both general and specific, which give rise to the possibility that actual results or events could differ materially from our expectations expressed in or implied by such forward-looking statements as a result of various factors, including those discussed in the Company's most recently filed Annual Information Form dated February 8, 2022 and available on SEDAR at www.sedar.com. As a result, we cannot guarantee that any forward-looking statement will materialize and we caution you against relying on any of these forward-looking statements. Except as may be required by Canadian securities laws, we do not undertake any obligation to update or revise any forward-looking statements contained in this news release, whether as a result of new information, future events or otherwise. Please read the cautionary note at the beginning of the Q3-2022 MD&A.

SOURCE Intact Financial Corporation

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