(TSX: DFY)
(in Canadian dollars except as otherwise noted)
TORONTO, May 7, 2026 /CNW/ -
Highlights
-- Closed the transformative $3.3 billion Travelers Transaction2 ahead of
our expectations on January 2nd, elevating Definity to a top-5 position
in the Canadian P&C insurance market
-- Integration is progressing ahead of expectations, with policy
conversions already underway; we have achieved $36 million in run-rate
expense synergies in Q1 2026, ahead of our initial schedule to reach our
$100 million target
-- Gross written premium1 growth of 35.4% in Q1 2026 was driven by the
successful onboarding and strong retention of the acquired business,
complemented by continued solid organic growth; on track to achieve our
full-year target of $6.5 billion
-- Combined ratio1 of 92.9% in Q1 2026 reflected strong performance across
the portfolio in the first quarter inclusive of results from the acquired
business
-- Operating net income1 of $118.1 million in Q1 2026 compared to $75.9
million in Q1 2025, resulting in operating EPS1 of $0.97; trailing 12
month operating ROE1 improved to 13.0%
-- Financial position remained strong with book value per share1 of $33.85,
14.7% higher than a year ago, and a debt-to-capital ratio of 26.8%
approaching our long-term target level of 25%
Executive Messages
"Our first quarter results reflect our new position as a top-5 P&C insurer in Canada, following the closing of the Travelers Transaction on January 2(nd) . Integration of the acquired business is progressing very well, and our conviction in the strategic benefits of the deal has only increased, underscored by a strong start on our synergy plan, achieving an annual run-rate of $36 million by quarter-end. While this initial pace of synergy capture will moderate, it puts us in an excellent position to deliver on our three-year $100 million target. Our top-line growth of 35.4% is consistent with our expectations, providing a solid start towards our $6.5 billion full-year premium target. Our overall profitability is also evident, delivering a combined ratio of 92.9% - a significant result as we absorbed the initial impact of the acquisition ahead of realizing planned synergies. This early success across all fronts is a testament to our combined talent and aligned cultures, and it positions us for sustained outperformance."
-- Rowan Saunders, President & CEO
"The diversified earnings power of the combined business was clearly evident this quarter, with strong performance from all our profit drivers. For the first time in our history, we delivered over $100 million of underwriting income in a first quarter, a direct result of the strong underlying performance of our business. Our broker distribution platform also showed excellent momentum, with broker operating income growing 24.9% year-over-year. Net investment income grew over 60% to $79.9 million, driven by the acquired assets and our proactive portfolio management. The combined power of these three profit streams generated operating EPS of $0.97 and an impressive operating ROE of 13.0%. Our balance sheet is robust, with a debt-to-capital ratio of 26.8% and financial capacity of over $1.1 billion within three months of closing our transformational acquisition. Our book value per share increased to $33.85, up 14.7% from a year ago, underscoring our disciplined approach to creating shareholder value."
-- Philip Mather, EVP & CFO
Consolidated Results
(in millions of dollars, except as Q1 2026 Q1 2025 Change
otherwise noted)
Insurance revenue 1,823.9 1,111.9 64.0 %
Gross written premiums(1) 1,394.6 1,030.1 35.4 %
Net underwriting revenue(1) 1,414.4 1,001.8 41.2 %
Claims ratio(1) 62.4 % 64.2 % (1.8) pts
Expense ratio(1) 30.5 % 30.3 % 0.2 pts
Combined ratio(1) 92.9 % 94.5 % (1.6) pts
(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 in this news release, and Section 12 --
Supplementary financial measures and non-GAAP financial
measures and ratios in the Q1 2026 Management's Discussion
and Analysis dated May 7, 2026 for further details,
which is hereby incorporated by reference and is available
on the Company's website at www.definity.com and on
SEDAR+ at www.sedarplus.ca.
(2) Please refer to the Company's May 27, 2025 news release
announcing its agreement with St. Paul Fire and Marine
Insurance Company and Travelers Casualty and Surety
Company (collectively, "Travelers") to acquire Travelers'
Canadian P&C insurance operations, excluding its Canadian
surety business and certain select business lines
retained by Travelers, for cash consideration of approximately
$3.3 billion (the "Travelers Transaction").
(in millions of dollars, except as Q1 2026 Q1 2025 Change
otherwise noted)
Insurance service result 191.9 123.3 68.6
Underwriting income(1) 100.1 55.0 45.1
Net investment income 79.9 49.8 30.1
Distribution income(1) 11.2 11.0 0.2
Net income attributable to common
shareholders 63.9 92.0 (28.1)
Operating net income(1) 118.1 75.9 42.2
Per share measures (in dollars)
Diluted earnings per share 0.52 0.79 (34.2 %)
Operating earnings per share(1) 0.97 0.65 49.2 %
Book value per share(1) 33.85 29.52 14.7 %
Return on equity
Return on equity ("ROE")(1) 10.6 % 13.4 % (2.8) pts
Operating ROE(1) 13.0 % 10.3 % 2.7 pts
-- Gross written premiums ("GWP") for Q1 2026 increased by $364.5 million or
35.4% compared to Q1 2025, reflective of the Travelers Transaction.
Personal lines GWP were up 36.1%, driven by acquired premiums as well as
organic unit growth, and rate increases. Commercial lines GWP increased
34.0%, driven by acquired premiums, as well as pricing increases and
ongoing market share gains in small business and specialty lines.
-- Underwriting income for Q1 2026 was $100.1 million and the combined ratio
improved to 92.9%, a result achieved despite the inclusion of the
acquired business. The performance was driven by the strength of our
underlying operations, supplemented by a reduction in catastrophe losses
from the elevated levels in Q1 2025.
-- Net investment income was $79.9 million in Q1 2026 compared to $49.8
million in Q1 2025. The increase was driven by the larger investment
portfolio arising from the acquired business and proactive trading into
higher prevailing market yields.
-- Distribution income was $11.2 million in Q1 2026 compared to $11.0
million in Q1 2025. When combining distribution income and the impact of
the commission offset, broker operating income increased by $4.2 million
in Q1 2026 (24.9% increase). Distribution income benefitted from business
growth related to acquisitions and solid underlying organic growth.
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 in this news release, and Section 12 --
Supplementary financial measures and non-GAAP financial
measures and ratios in the Q1 2026 Management's Discussion
and Analysis dated May 7, 2026 for further details,
which is hereby incorporated by reference and is available
on the Company's website at www.definity.com and on
SEDAR+ at www.sedarplus.ca.
Net Income and Operating Net Income
-- Net income attributable to common shareholders was $63.9 million in Q1
2026 compared to $92.0 million in Q1 2025. Higher underwriting income and
net investment income were more than offset by acquisition-related
expenses, integration expenses, and interest expense, as well as
unrealized losses on bonds.
-- Operating net income was $118.1 million in Q1 2026 compared to $75.9
million in Q1 2025, driven by an increase in underwriting income and net
investment income, partially offset by higher interest expense.
-- Operating ROE was 13.0% for the twelve-month period ended March 31, 2026
compared to 10.3% for the twelve-month period ended March 31, 2025. The
increase in operating ROE was driven by an increase in operating net
income, partially offset by the significant growth in average adjusted
equity.
Line of Business Results
(in millions of dollars, except as Q1 2026 Q1 2025 Change otherwise noted) Personal insurance Gross written premiums(1) Auto 593.8 438.8 35.3 % Property 350.2 255.0 37.3 % Total 944.0 693.8 36.1 % Combined ratio(1) Auto 97.5 % 97.5 % - pts Property 85.0 % 94.1 % (9.1) pts Total 92.5 % 96.1 % (3.6) pts Commercial insurance Gross written premiums(1) 450.6 336.3 34.0 % Combined ratio(1) 93.9 % 90.5 % 3.4 pts
Personal Insurance
-- Personal lines GWP increased 36.1% in Q1 2026 bolstered by the acquired
premiums, with strong growth in our broker channel. Direct channel GWP
increased by 2.0% in Q1 2026.
-- Personal auto GWP increased 35.3% in Q1 2026 due primarily to the
acquired premiums and continued rate achievement. The combined ratio was
97.5% in Q1 2026 consistent with the combined ratio of 97.5% in Q1 2025,
as we absorbed the temporary and expected impact of the acquired business
prior to realizing synergy benefits.
-- Personal property GWP increased 37.3% in Q1 2026 due primarily to the
acquired premiums and continued rate achievement. The combined ratio in
Q1 2026 was robust at 85.0% compared to 94.1% in Q1 2025. The improvement
in the combined ratio was driven by a decrease in catastrophe losses,
which were largely in line with expectations in Q1 2026, compared to
elevated levels in Q1 2025, and a decrease in the core accident year
claims ratio.
Commercial Insurance
-- Commercial lines GWP increased 34.0% in Q1 2026 bolstered by the acquired
premiums, as well as pricing increases and ongoing market share gains in
small business and specialty lines.
-- Commercial lines continued to benefit from our focus on underwriting
execution and rate adequacy. As expected, the combined ratio of 93.9% in
Q1 2026 increased compared to 90.5% in Q1 2025. This resulted from the
inclusion of the acquired business and its associated expenses, which we
expect will temporarily increase the claims and expense ratios prior to
the benefit of future planned synergies.
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 in this news release, and Section 12 --
Supplementary financial measures and non-GAAP financial
measures and ratios in the Q1 2026 Management's Discussion
and Analysis dated May 7, 2026 for further details,
which is hereby incorporated by reference and is available
on the Company's website at www.definity.com and on
SEDAR+ at www.sedarplus.ca.
Financial Position
(in millions of dollars) As atMarch 31, As atDecember 31, Change
2026 2025
Financial position
Equity attributable to common
shareholders 4,069.8 4,049.7 20.1
Financial capacity(1) 1,147.4 2,892.0 (1,744.6)
-- Our capital position as of March 31, 2026 remains strong and well in
excess of our capital targets.
-- Equity attributable to common shareholders increased by $20.1 million, or
0.5%, as at March 31, 2026, driven by operating net income generated in
the first quarter of 2026. This was partially offset by
acquisition-related expenses, integration expenses, and interest expense,
as well as unrealized losses on bonds.
-- The decrease in financial capacity as at March 31, 2026 was due to
deployment of capital for the Travelers Transaction and external
dividends, partially offset by capital generated from operating
performance, and a reduction in required regulatory capital due to the
alignment of reinsurance structures to our risk appetite and a reduction
of equity weights in the investment portfolio.
Dividend
-- On May 7, 2026, our Board of Directors declared a $0.215 per share
dividend, payable on June 23, 2026 to shareholders of record at the close
of business on June 11, 2026.
Conference Call
Definity will host a conference call to review information included in this news release and related matters at 11:00 a.m. ET on May 8, 2026. The conference call will be available simultaneously and in its entirety to all interested investors and the news media at www.definity.com. A transcript will be made available on Definity's website within two business days.
About Definity Financial Corporation
Definity Financial Corporation ("Definity", which includes its subsidiaries where the context so requires) is one of the leading property and casualty insurers in Canada, with approximately $6.3 billion in gross written premiums (pro forma with the Travelers Transaction) for the 12 months ended March 31, 2026 and approximately $4.1 billion in equity attributable to common shareholders as at March 31, 2026.
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 in this news release, and Section 12 --
Supplementary financial measures and non-GAAP financial
measures and ratios in the Q1 2026 Management's Discussion
and Analysis dated May 7, 2026 for further details,
which is hereby incorporated by reference and is available
on the Company's website at www.definity.com and on
SEDAR+ at www.sedarplus.ca.
Cautionary Note Regarding Forward-Looking Information
This news release contains "forward-looking information" within the meaning of applicable securities laws in Canada. Forward-looking information may relate to our future business, financial outlook and anticipated events or results and may include information regarding our financial position, business strategy, growth strategies, addressable markets, budgets, operations, financial results, taxes, dividend policy, plans and objectives. Particularly, information regarding our expectations of future results, performance, achievements, prospects or opportunities or the markets in which we operate is forward-looking information. In some cases, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "aims", "targets", "expects" or "does not expect", "is expected", "an opportunity exists", "budget", "scheduled", "estimates", "forecasts", "projection", "prospects", "strategy", "intends", "anticipates", "does not anticipate", "believes", or variations of such words and phrases or statements that certain actions, events or results "can", "may", "could", "would", "might", "will", "will be taken", "occur" or "be achieved". In addition, any statements that refer to expectations, intentions, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts, but instead represent management's expectations, estimates and projections regarding possible future events or circumstances. This news release contains forward-looking statements with respect to the Travelers Transaction.
Estimates and assumptions have been made regarding, among other things, the realization of the expected strategic, financial, and other benefits of the Travelers Transaction, and the implications of the economic, political and geopolitical environments and industry conditions during the integration period. There can be no assurance that the strategic, financial, and other benefits expected to result from the Travelers Transaction will be realized.
Forward-looking information in this news release is based on our opinions, estimates and assumptions in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors that we currently believe are appropriate and reasonable in the circumstances. Despite a careful process to prepare and review the forward-looking information, there can be no assurance that the underlying opinions, estimates and assumptions will prove to be correct. Forward-looking information is necessarily based on a number of opinions, estimates and assumptions that we considered appropriate and reasonable as at the date such statements are made, and are subject to many factors that could cause our actual results, performance or achievements, or other future events or developments, to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, the following factors:
-- Definity's ability to continue to offer competitive pricing or product
features or services that are attractive to customers;
-- Definity's ability to appropriately price its insurance products to
produce an acceptable return, particularly in provinces where the
regulatory environment requires auto insurance rate increases to be
approved or that otherwise impose regulatory constraints on auto
insurance rates;
-- Definity's ability to accurately assess the risks associated with the
insurance policies that it writes;
-- Definity's ability to assess and pay claims in accordance with its
insurance policies;
-- Definity's ability to obtain adequate reinsurance coverage to manage
risk;
-- Definity's ability to accurately predict future claims frequency or
severity, including the frequency and severity of weather-related events
and the impact of climate change;
-- Definity's ability to address inflationary cost pressures through pricing,
supply chain, or cost management actions;
-- the occurrence of unpredictable catastrophe events;
-- litigation and regulatory actions, including potential claims in relation
to demutualization and our IPO and unclaimed demutualization benefits and
the tax treatment of related amounts transferred to the Company, and
COVID-19-related class-action lawsuits that have arisen and which may
arise, together with associated legal costs;
-- Definity's ability to successfully identify, complete, integrate and
realize the benefits of acquisitions or manage the associated risks;
-- Definity's ability to improve its combined ratio, retain and attract new
business, retain key employees, achieve synergies, and maintain market
position during and after the integration of the Travelers Transaction;
-- Definity's ability to complete the integration of the Travelers
Transaction within anticipated time periods and at the expected cost;
-- estimates and expectations in relation to future economic and business
conditions and other factors in relation to the Travelers Transaction and
any resulting impacts on growth and accretion in various financial
metrics;
-- unfavourable capital market developments, interest rate movements,
changes to dividend policies or other factors which may affect our
investments or the market price of our common shares;
-- changes associated with the transition to a low-carbon economy, including
reputational and business implications from stakeholders' views of our
climate change approach or of our environmental or climate change-related
representations (i.e. "greenwashing"), those of our industry, or those of
our customers;
-- Definity's ability to successfully manage credit risk from its
counterparties;
-- foreign currency fluctuations;
-- Definity's ability to meet payment obligations as they become due;
-- Definity's ability to maintain its financial strength rating or credit
ratings;
-- Definity's dependence on key people;
-- Definity's ability to attract, develop, motivate, and retain an
appropriate number of employees with the necessary skills, capabilities,
and knowledge;
-- Definity's ability to appropriately collect, store, transfer, and dispose
of information;
-- Definity's reliance on information technology systems, software, internet,
network, data centre, voice or data communications services and the
potential disruption or failure of those systems or services, including
disruption as a result of cyber security risk or of a third-party service
provider;
-- failure of key service providers or vendors to provide services or
supplies as expected, or comply with contractual or business terms;
-- Definity's ability to obtain, maintain and protect its intellectual
property rights and proprietary information or prevent third parties from
making unauthorized use of our technology;
-- Definity's ability to effectively govern the use of, and extract value
from models, artificial intelligence, generative AI, and agentic AI
technologies;
-- compliance with and changes in legislation or its interpretation or
application, or supervisory expectations or requirements, including
changes in the scope of regulatory oversight, effective income tax rates,
risk-based capital guidelines, accounting standards, and generally
accepted actuarial techniques;
-- changes in domestic or foreign government policies, such as cross-border
tariffs, trade policies, or trade agreements may negatively impact the
Canadian economy and the P&C insurance industry and/or exacerbate other
risks to Definity;
-- failure to design, implement and maintain effective controls over
financial reporting and disclosure which could have a material adverse
effect on our business;
-- deceptive or illegal acts undertaken by an employee or a third party,
including fraud in the course of underwriting insurance or administering
insurance claims;
-- Definity's ability to respond to events impacting its ability to conduct
business as normal;
-- Definity's ability to implement its strategy or operate its business as
management currently expects;
-- general business, economic, financial, political, geopolitical, and
social conditions, particularly those in Canada;
-- the emergence or continuation of widespread health emergencies or
communicable disease, and their impact on local, national, or
international economies, as well as their heightening of certain risks
that may affect our business or future results;
-- the competitive market environment and cyclical nature of the P&C
insurance industry;
-- the introduction of advanced technologies including AI and agentic AI,
disruptive innovation or alternative business models by current market
participants or new market entrants;
-- distribution channel risk, including Definity's reliance on brokers to
sell its products;
-- Definity's dividend payments being subject to the discretion of the Board
and dependent on a variety of factors and conditions existing from time
to time;
-- Definity's dependence on the results of operations of its subsidiaries
and the ability of the subsidiaries to pay dividends;
-- Definity's ability to manage and access capital and liquidity
effectively;
-- management's estimates and judgments in respect of IFRS 17 and its impact
on various financial metrics;
-- periodic negative publicity regarding the insurance industry, Definity,
or Definity Insurance Foundation; and
-- management's estimates and expectations in relation to interests in the
broker distribution channel and the resulting impact on growth, income,
and accretion in various financial metrics.
If any of these risks or uncertainties materialize, or if the opinions, estimates or assumptions underlying the forward-looking information prove incorrect, actual results might vary materially from those anticipated in the forward-looking information. The opinions, estimates or assumptions referred to above and described in greater detail in the "12 -- Risk Management and Corporate Governance" section of the Management's Discussion and Analysis for the year ended December 31, 2025 should be considered carefully by readers.
Although we have attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, the factors above are not intended to represent a complete list and there may be other factors not currently known to us or that we currently believe are not material that could also cause actual results or future events to differ materially from those expressed in such forward-looking information. There can be no assurance that such forward-looking information will prove to be accurate, as actual results could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information, which speaks only as at the date made. The forward-looking information contained in this news release represents our expectations as at the date of this news release (or as at the date they are otherwise stated to be made) and are subject to change after such date. However, we disclaim any intention, obligation, or undertaking to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable securities laws in Canada.
All of the forward-looking information contained in this news release is expressly qualified by the foregoing cautionary statements.
Supplementary Financial Measures and Non-GAAP Financial Measures and Ratios
We measure and evaluate performance of our business using a number of financial measures. Among these measures are the "supplementary financial measures", "non-GAAP financial measures", and "non-GAAP ratios" (as such terms are defined under Canadian Securities Administrators' National Instrument 52-112 -- Non-GAAP and Other Financial Measures Disclosure), and in each case are not standardized financial measures under GAAP. The supplementary financial measures, non-GAAP financial measures, and non-GAAP ratios in this news release may not be comparable to similar measures presented by other companies. These measures should not be considered in isolation or as a substitute for analysis of our financial information reported under GAAP. These measures are used by financial analysts and others in the P&C insurance industry and facilitate management's comparisons to our historical operating results in assessing our results and strategic and operational decision-making. For more information about these supplementary financial measures, non-GAAP financial measures, and non-GAAP ratios, including (where applicable) definitions and explanations of how these measures provide useful information, refer to Section 12 -- Supplementary financial measures and non-GAAP financial measures and ratios in the Q1 2026 Management's Discussion and Analysis dated May 7, 2026, which is available on our website at www.definity.com and on SEDAR+ at www.sedarplus.ca.
Below are quantitative reconciliations of non-GAAP measures for the three months ended March 31, 2026 and 2025:
Net underwriting revenue
(in millions of dollars) Q1 2026 Q1 2025
Insurance revenue 1,823.9 1,111.9
Earned reinsurance premiums(1) (153.3) (102.0)
Remove: net impact of applying GMM for claims
acquired
in a business combination (255.3) -
Remove: impact of exited lines (0.9) (8.1)
Net underwriting revenue 1,414.4 1,001.8
(1) Included in Net expenses from reinsurance contracts
held in our interim consolidated financial statements.
Net claims and adjustment expenses
(in millions of dollars) Q1 2026 Q1 2025
Claims and adjustment expenses(1,2) 1,224.0 714.3
Impact of onerous insurance contracts(3) - (6.2)
Claims recoverable from reinsurers for incurred
claims(2,4) (88.6) (56.7)
Remove: net impact of applying GMM for claims
acquired
in a business combination (251.3) -
Remove: impact of exited lines (1.9) (8.2)
Net claims and adjustment expenses 882.2 643.2
(1) Included in Insurance service expenses and Other expenses
in our interim consolidated financial statements.
(2) Excludes the impact of discounting and risk adjustment.
(3) Onerous insurance contracts accounted for under the
premium allocation approach included in Insurance
service expenses.
(4) Included in Net expenses from reinsurance contracts
held in our interim consolidated financial statements.
Prior year claims development
(in millions of dollars) Q1 2026 Q1 2025
Changes in fulfilment cash flows relating to the
liabilities
for incurred claims(1) (16.3) (21.4)
Changes to amounts recoverable for incurred claims(2) (1.7) (0.8)
Remove: discounting included above(3) (15.1) (14.5)
Remove: risk adjustment included above(3) 15.7 16.0
Remove: net impact of applying GMM for claims acquired
in a business combination (3.2) -
Remove: impact of exited lines - (0.1)
Prior year claims development (20.6) (20.8)
(1) Included in Insurance service expenses in our interim
consolidated financial statements.
(2) Included in Net expenses from reinsurance contracts
held in our interim consolidated financial statements.
(3) Included in Changes in fulfilment cash flows relating
to the liabilities for incurred claims and Changes
to amounts recoverable for incurred claims.
Net underwriting expenses
(in millions of dollars) Q1 2026 Q1 2025 Net commissions 205.1 147.2 Net operating expenses 174.2 118.8 Net premium taxes 52.8 37.6 Net underwriting expenses 432.1 303.6
Net commissions
(in millions of dollars) Q1 2026 Q1 2025
Commissions(1) 229.0 165.0
Commissions earned on ceded reinsurance(2) (23.9) (18.6)
Remove: impact of exited lines - 0.8
Net commissions 205.1 147.2
(1) Included in Insurance service expenses in our interim
consolidated financial statements.
(2) Included in Net expenses from reinsurance contracts
held in our interim consolidated financial statements.
Net operating expenses
(in millions of dollars) Q1 2026 Q1 2025
Operating expenses(1) 174.2 121.7
Remove: impact of exited lines - (2.9)
Net operating expenses 174.2 118.8
(1) Included in Insurance service expenses in our interim
consolidated financial statements.
Net premium taxes
(in millions of dollars) Q1 2026 Q1 2025
Premium taxes(1) 52.8 38.0
Remove: impact of exited lines - (0.4)
Net premium taxes 52.8 37.6
(1) Included in Insurance service expenses in our interim
consolidated financial statements.
Underwriting income
(in millions of dollars) Q1 2026 Q1 2025 Net underwriting revenue 1,414.4 1,001.8 Less: Net claims and adjustment expenses 882.2 643.2 Net commissions 205.1 147.2 Net operating expenses 174.2 118.8 Net premium taxes 52.8 37.6 Underwriting income 100.1 55.0
Operating net income, Operating income, Non-operating (losses) gains
Net income attributable to common shareholders is the most directly comparable GAAP financial measure disclosed in our interim consolidated financial statements to operating net income, operating income, and non-operating (losses) gains, which are considered non-GAAP financial measures.
(in millions of dollars) Q1 2026 Q1 2025
Net income attributable to common shareholders 63.9 92.0
Remove: income tax expense 26.3 30.3
Income before income taxes 90.2 122.3
Remove: non-operating (losses) gains
Recognized (losses) gains on FVTPL investments (36.7) 52.2
Discounting(1) 42.1 31.2
Risk adjustment(1) (8.0) (1.2)
Finance expenses from insurance contracts issued (29.2) (57.3)
Finance income from reinsurance contracts held 2.5 5.9
Net impact of applying GMM for claims acquired in
a business combination(2) 4.0 -
Underwriting loss from exited lines (1.0) (2.6)
Demutualization-related expenses, less interest on
restricted cash(3) - (1.8)
Amortization of intangible assets recognized in
business
combinations(3) (13.4) (6.5)
Acquisition-related expenses(3) (16.5) (1.5)
Integration expenses(3) (16.6) -
Other(3,4) 5.5 3.4
Non-operating (losses) gains (67.3) 21.8
Operating income 157.5 100.5
Operating income tax expense (39.4) (24.6)
Operating net income 118.1 75.9
(1) Included in Insurance service expenses and Net expenses
from reinsurance contracts held in our interim consolidated
financial statements.
(2) Excludes GMM impact on discounting, risk adjustment,
finance expenses from insurance contracts issued,
and finance income from reinsurance contracts held.
(3) Included in Other expenses in our interim consolidated
financial statements.
(4) Other represents miscellaneous expenses or revenues
that in the view of management are not part of our
insurance operations and are individually and in the
aggregate not material, such as gains or losses pertaining
to fintech venture capital funds.
Distribution income
(in millions of dollars) Q1 2026 Q1 2025
Distribution revenues(1) 55.6 49.0
Distribution business expenses(2) (44.4) (38.0)
Distribution income 11.2 11.0
(1) Distribution revenues includes commissions on policies
underwritten by external insurance companies.
(2) Included in Other expenses in our interim consolidated
financial statements. These amounts exclude amortization
of intangible assets recognized in business combinations
and acquisition-related expenses.
Below are quantitative reconciliations of non-GAAP ratios for the periods ended March 31, 2026 and 2025:
ROE
March 31,
(in millions of dollars, except as otherwise noted) 2026 2025
Net income attributable to common shareholders for
the last 12 months 390.1 417.1
Equity attributable to common shareholders(1) 4,069.8 3,368.3
Adjustment for the return of restricted cash(2) - (88.7)
Adjustment for the issuance of common shares(3) (73.8) -
Adjusted equity attributable to common shareholders(4) 3,996.0 3,279.6
Average adjusted equity attributable to common
shareholders(5) 3,682.1 3,103.1
ROE for the last 12 months 10.6 % 13.4 %
(1) Equity attributable to common shareholders is as at
March 31, 2026 and 2025.
(2) In 2025, the return of restricted cash was prorated
for the 206 days prior to October 23, 2024.
(3) The issuance of common shares was prorated for the
71 days prior to June 11, 2025.
(4) Adjusted equity attributable to common shareholders
is equity attributable to common shareholders as shown
on our interim consolidated balance sheets, adjusted
for significant capital transactions or other unusual
adjustments to equity, if applicable.
(5) Average adjusted equity attributable to common shareholders
is the average of adjusted equity attributable to
common shareholders at the end of the period and the
end of the preceding 12-month period. Equity attributable
to common shareholders and adjusted equity attributable
to common shareholders as at March 31, 2024 was $2,926.7
million.
Operating ROE
March 31,
(in millions of dollars, except as otherwise noted) 2026 2025
Operating net income for the last 12 months 462.9 310.0
Equity attributable to common shareholders, excluding
AOCI(1) 4,055.0 3,370.1
Adjustment for unrealized gains on FVTPL equity instruments (160.6) (75.5)
Adjustment for the return of restricted cash(2) - (88.7)
Adjustment for the issuance of common shares(3) (73.8) -
Adjusted equity attributable to common shareholders,
excluding AOCI(4) 3,820.6 3,205.9
Average adjusted equity attributable to common shareholders,
excluding AOCI(5) 3,557.6 3,022.1
Operating ROE for the last 12 months 13.0 % 10.3 %
(1) Equity attributable to common shareholders, excluding
AOCI is as at March 31, 2026 and 2025.
(2) In 2025, the return of restricted cash was prorated
for the 206 days prior to October 23, 2024.
(3) The issuance of common shares was prorated for the
71 days prior to June 11, 2025.
(4) Adjusted equity attributable to common shareholders,
excluding AOCI, is equity attributable to common shareholders
and AOCI each as shown on our interim consolidated
balance sheets, adjusted for significant capital transactions
or other unusual adjustments to equity, if applicable,
and excluding unrealized gains or losses on FVTPL
equity instruments.
(5) Average adjusted equity attributable to common shareholders,
excluding AOCI, is the average of adjusted equity
attributable to common shareholders, excluding AOCI
at the end of the period and the end of the preceding
12-month period. Adjusted equity attributable to common
shareholders, excluding AOCI, as at March 31, 2024
was $2,838.4 million.
SOURCE Definity Financial Corporation
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Copyright CNW Group 2026
(END) Dow Jones Newswires
May 07, 2026 17:01 ET (21:01 GMT)
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