Definity Financial (DFY) investor relations material

Executive summary

• Q3 GWP rose 36.2% to CAD 1,672.7M; the combined ratio was 100.6%, including 12.8 catastrophe points, and operating EPS was CAD 0.36.

• Net loss attributable to common shareholders was CAD 32.4M versus net income of CAD 193.1M a year earlier, reflecting investment valuation losses, lower common-stock gains and higher catastrophe losses.

• Travelers’ Canadian P&C acquisition closed in January 2026 for ~CAD 3.3B cash; integration remained on track, with more than one-third of the acquired portfolio converted by Q3.

• Management reiterated its objective of sustainable mid-teens operating ROE, supported by integration synergies, organic growth and disciplined portfolio management.

Financial highlights

• Q3 insurance revenue increased 52.2% to CAD 1.80B; net underwriting revenue rose 38.1% to CAD 1,483.6M, while underwriting results swung to a loss of CAD 8.8M from income of CAD 113.6M.

• Operating income was CAD 56.8M versus CAD 167.8M; operating net loss was CAD 17.2M versus income of CAD 43.9M, and operating EPS was CAD 0.36 versus CAD 1.03.

• Net investment income rose 46.6% to CAD 79.3M; YTD income was CAD 238.7M versus CAD 154.6M, supported by a larger portfolio and investment in higher-yielding assets.

• Broker operating income rose 10.2% to CAD 29.3M in Q3 and 17.6% YTD; the platform remained on track for ~20% FY growth, including programmatic acquisitions.

Outlook and guidance

• FY GWP guidance remained CAD 6.5B; management targeted at least one-third of the CAD 125M annual run-rate synergy objective in 2026.

• Integration costs were estimated at CAD 150M–CAD 170M, with the majority in the first integration year; policy conversions across product lines and geographies were expected to finish by Q4 2027.

• FY 2026 net investment income was expected to exceed CAD 320M, with Q4 expected to be the year's highest quarter; higher investment income contribution was anticipated next year.

• Alberta’s Jan. 1, 2027 auto reforms were expected to reduce average premiums in the mid-teens, with an immediate, slightly positive bottom-line effect and a corresponding liability reduction.

• Management remained confident in its sustainable mid-teens operating ROE objective, with Travelers synergies expected to build into earnings over the next two years.