Definity Financial (DFY) Scotiabank’s 27th Annual Financials Summit summary

Strategic acquisitions and integration progress

• Successfully closed and integrated the Travelers Canada acquisition, elevating market position to fourth largest in the sector and accelerating commercial strategy by five years.

• Achieved CAD 125 million in annualized cost synergies, a 25% increase from initial targets, driven by scalable platforms and efficient integration.

• Retention of talent and business exceeded expectations, with higher retention ratios post-acquisition and strong broker support.

• Integration costs and funding were lower than anticipated, with no major surprises in liabilities or balance sheet quality.

• The integration is on track, with conversion to core systems progressing smoothly and expected to further improve loss ratios.

Financial performance and outlook

• Revenue guidance remains at CAD 6.5 billion with a 35% growth rate, and combined ratio guidance is stable at around 95, including the acquired business.

• Weather-related claims were heavier in Q3 but overall catastrophe losses are in line with expectations and do not impact the full-year outlook.

• Organic levers for ROE improvement include scaling Sonnet to profitability, operational leverage, and claims transformation, with mid-teens ROE targeted by the end of the integration period.

• Underlying organic growth is strong, with 25% from the Travelers portfolio and 10% from core business.

Market conditions and future strategy

• Personal auto and property lines are stable with adequate pricing and margins, while commercial lines are competitive, especially in large accounts, but exposure is limited.

• Technology and digital capabilities are driving growth in personal and small commercial lines, enhancing broker experience and retention.

• M&A focus will prioritize commercial and specialty lines, with ongoing programmatic broker acquisitions and readiness for further large-scale deals.

• Competitive edge in acquisitions comes from relationship-driven deals, scalable platforms, and proven integration capabilities.

• Strategic plan aims to become a top three player in Canada, triple company value over ten years, and expand digital direct-to-consumer offerings.