Financial Performance and Risk Management Overview
SIGNIFICANT FINANCIAL FLEXIBILITY
UNLEVERED BALANCE SHEET WITH SIGNIFICANT EXCESS CAPITAL
We have over $800 million in financial capacity (1) to fund our strategic growth initiatives
for the coming years (2)
Credit facility set to automatically increase from $150M to $700M upon the continuance
of Definity under the Canada Business Corporations Act (the "Continuance"), which is
subject to government approval (2)
Definity Insurance Company credit rating: "A (low) positive trend" from DBRS, financial
strength rating: "A- (Excellent) stable outlook" from AM Best
• Future optimization of capital structure expected to support improvements in Operating
ROE(1) over time(4)
FINANCIAL CAPACITY
ICA (2)
CBCA (3)
Consolidated Excess Capital at 190% MCT:
- Definity Insurance Company
$196
$196
Definity Financial Corporation
$358
$358
Total Excess Capital
$554
$554
Leverage Capacity (1,3)
Financial Capacity (1) as at Q1-2023
$292
$878
$846
$1,432
STRATEGIC FOCUS ON CONSISTENTLY DEMONSTRATING DISCIPLINED FINANCIAL MANAGEMENT
Organic
Growth
Common
Shareholder
Dividends (5)
Inorganic
Growth
Share
Buybacks
2
22
Note: Figures in millions, unless otherwise noted.
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 advisory and Section 12 - Supplementary financial measures and non-GAAP financial
measures and ratios in the Q1-2023 MD&A for further details.
2. Definity is subject to leverage restrictions under the Insurance Companies Act (Canada) (the "ICA"), which provide that its total debt cannot exceed 2.5% of its total assets. Under the ICA, property and casualty insurance companies must maintain adequate capital and appropriate
forms of liquidity. The Office of the Superintendent of Financial Institutions ("OSFI"), has published the Minimum Capital Test guideline which provides the framework within which OSFI assesses whether a property and casualty insurance company maintains adequate capital for
purposes of the ICA.
3. Assumes Definity proceeds with the Continuance and establishes financial leverage levels at 20% debt and 5% preferred or hybrids. The Continuance is subject to government approval.
4.
Expectation subject to certain factors and assumptions. See "Advisory Regarding Forward-Looking Information".
5. Declaration of dividends is subject to Board discretion.
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