Q3 2025 Intact Financial Corp Earnings Call

Following the presentation, we will conduct a question and answer session and if at any time. During this call you'll require immediate assistance. Please press star zero for the operator also note that this call is being recorded on November five 2025.

And then I would like to turn the conference over to Geoff Kwan Chief Investor Relations Officer. Please go ahead Sir.

Thank you Sylvie Hello, everyone and thank you for joining our call to discuss our third quarter financial results are linked to our live webcast and materials for this call have been posted on our website website at intact FC Dot com under the investors tab before we start please refer to slide two for a disclaimer regarding.

Speaker #3: Good morning , ladies and gentlemen , and welcome to the Intact Financial Corporation . Q3 2025 results conference call . At this time , all lines are in the listen only mode .

Speaker #3: Following the presentation , we will conduct a question and answer session . And if at any time during this call , you require immediate assistance , please press star zero for the operator .

The use of forward looking statements, which form part of this morning's remarks and slide three for a note on the use of non-GAAP financial measures.

Speaker #3: Also note that this call is being recorded on November 5th , 2025 , and I now would like to turn the conference over to Geoff Kwan Chief Investor Relations Officer .

And other terms used in this presentation.

First the results today I have with me, our CEO, Charles Bridgeman Tomorrow, our CFO and Anderson.

Speaker #3: Please go ahead , sir .

Charles Brindamour: It hasn't changed this quarter, but it certainly took place this spring. We're just watching where that's going. It's really happening more at the top end of the market and in larger accounts than at the bottom end of the market. Our job here is to basically make sure that we grow in the SME and mid-market space, where conditions are quite constructive, and then use our toolbox in pricing, risk selection, and our broad product range that we can export from market to market to basically find ways to grow even in large accounts, where I think we've got an excellent value proposition compared to many of our competitors. We're not calling a different cycle, or this time it'll be different. The difference between now and, say, 10 or 15 years ago is we have way more tools to navigate the environment in which we operate.

Speaker #4: Thank you . Sylvie . Hello everyone , and thank you for joining the call to discuss our third quarter financial results . I'll link to our live webcast and materials for this call have been posted on our website website at Intact Financial under the investors tab .

Patrick by Bowe, our Chief operating officer, and beyond let me senior Vice President of personal lines will begin with prepared remarks, followed by Q&A and with that I will turn the call over to Terry.

And good morning, everyone. Thank you for joining us today.

Speaker #4: Before we start , please refer to slide two for a disclaimer regarding the use of forward looking statements which form part of this morning's remarks .

I am very pleased with the quarterly results, we reported yesterday evening.

Speaker #4: And slide three . For a note on the use of non-GAAP financial measures and other terms used in this presentation . To discuss our results today , I have with me our CEO Charles Brindamour , our CFO , Ken Anderson , Patrick Barbeau , our chief operating officer , and Guillaume Lamy , senior vice president .

Net operating income per share of $4 46 was the result of strong underwriting performance across all geographies and lines of business.

Topline growth increased 6% in the quarter, while we delivered another sub 90 combined ratio.

Speaker #4: Personal lines . We will begin with prepared remarks , followed by Q&A . And with that , I will turn the call over to Charlie .

This highlights our ability to grow while not compromising our margins.

Speaker #4: Well , good morning , everyone . Thank you . for joining us today . I'm very pleased with the quarterly results we reported yesterday evening .

Our operating ROE is outperforming across all regions.

It has improved in the last year by four points to 20%.

Speaker #4: Net operating income per share of $4.46 was the result of strong underwriting performance across all geographies and lines of business .

The industry environment.

Charles Brindamour: With regards to PL, which is in a whole different zone in a hard market, I'll ask Guillaume to give a perspective on the market. I think your question is also about why is it different, or is it different than what's happening in the US. We think it is. Go ahead, Guillaume. Yeah. In personal auto, yes, there's been lots of rates, but when we look at the industry, it remains unprofitable with a combined ratio above 100% both last year and this year. The industry needs to continue to take rates. We expect hard market conditions to persist, and our growth momentum to flow into 2026. As you pointed out, it's a contrast with the US where the industry has reached profitability with Keeplayer posting pretty strong year-to-date results.

Is constructive in every market, where we operate we're gaining market share in personal lines.

In commercial and specialty lines we.

Speaker #5: Top line growth . increased 6% in the quarter . While we delivered another sub 90 combined ratio . This highlights our ability to grow while not compromising our margins .

We benefit from being predominantly exposed to the SME and mid market space.

And logic tells where we continued to see elevated competition.

Our sophistication in pricing and risk selection as well as more than 20 specialty verticals.

Speaker #5: Our operating ROE is outperforming across all regions and has improved in the last year by four points to 20% . The industry environment is constructive and every market where we operate , we're gaining market share in personal lines .

Enable us to choose where we play.

This environment.

Really plays to our strengths.

The quality of this quarters performance gives me a lot of confidence about the future whether it's next quarter.

Speaker #5: In commercial and specialty lines . We benefit from being predominantly exposed to the SME and mid-market space in large accounts where we continue to see elevated competition .

Next year or next decade.

Now let me provide some color on the results and outlook by line of business, starting with Canada.

In Canada are.

Charles Brindamour: We need to understand there's key differences between Canadian and US market and personal auto. Canada product is more heavily weighted towards liability coverage, so the cost equation is quite different. Secondly, regulatory framework in Canada and the US are different, with Canada generally being more stringent. Both those factors are driving very different competitive dynamics. Maybe coming back to Canada, we're really at that point in the cycle where we're outperforming on both top line and bottom line, and that's currently true in every region. Our growth was in the double digit for the eighth quarter in a row at 11%. That's fueled by three points of unit growth, an increase over Q2, and really, every metric is painting a positive picture. Retention is the highest it's been in two years, and quotes are up double digit from increased marketing investments.

Speaker #5: Our sophistication in pricing and risk selection , as well as more than 20 specialty verticals , enable us to choose where we play .

Our business is firing on all cylinders.

Our outperformance has never been stronger we closed two points on growth and 10 points on combined ratio.

Speaker #5: This environment really plays to our strengths . The quality of this quarter's performance gives me a lot of confidence about the future , whether it's next quarter , next year , or next decade .

And keep in mind. This is two thirds of our business globally.

Personal auto premiums grew 11% in the quarter, including a 3% increase in units.

Speaker #5: Now , let me provide some color on the results and outlook by line of business . Starting with Canada . In Canada , our business is firing on all cylinders .

As profitability for the industry remains challenged.

We expect hard market conditions to persist.

Our underlying loss ratio improved one six points year over year.

Speaker #5: Our outperformance has never been stronger . With two points on growth and ten points on combined ratio . And keep in mind , this is two thirds of our business globally .

Contributing to an overall combined ratio of 91, 5%. This is <unk>.

A strong result.

And we're positioned to continue to deliver a sub 95 combined ratio.

In line with our objectives.

Speaker #5: In personal auto premiums grew 11% in the quarter , including a 3% increase in units . As profitability for the industry remains challenged .

Charles Brindamour: Our competitive position is improving with competitors still catching up. The net result is that our new business sales are up 15% year over year. Thank you. We're also touching on personal property. We do expect hard market conditions to persist in property as the industry is pricing in the weather trends. Despite 2025 being a milder year so far, cat activity was well in excess of expectation in the last two years. When it comes to pricing, cats are expected to be volatile from one year to the next. It's crucial to look at really deeper and longer-term trends. The market in Canada is behaving quite rationally. We expect industry to continue to reflect those long-term trends in pricing, and the market to remain constructive, even if we were to have a few good cat years in a row.

Moving to personal property premium growth was 10% in the quarter.

Supported by a 2% increase in units.

Speaker #5: We expect hard market conditions to persist . Our underlying loss ratio improved 1.6 points year over year , contributing to an overall combined ratio of 91.5% .

Given the elevated level of weather and climate related claims over the past few years.

We expect current hard market conditions to persist.

The combined ratio was healthy at 92, four and we are well positioned to maintain a sub 95 combined ratio even with severe weather.

Speaker #5: This is a strong result . Our positioned to continue to deliver a sub 95 combined ratio in line with our objective . Moving to personal property premium growth was 10% in the quarter , supported by a 2% increase in units .

Overall in personal lines, which is nearly half of our business.

We continue to see industry growth in the high single digit to low double digit range over the next 12 months with.

With strong absolute and relative performance in the first half of the year.

Speaker #5: Given the elevated level of weather and climate related claims over the past few years , we expect current hard market conditions to persist .

We're really well placed to sustain growth and combined ratios going forward.

Charles Brindamour: Here again, I'd say both our absolute and relative performance is strong, and we maintain a positive outlook on this product. Yeah. Doug, if we go back to Bart's earlier question, which is how do you grind an improvement here, the first thing I said was to stay on top of inflation. I think in personal lines, let alone that we're on third-generation machine learning models in the field. Us dealing with inflation, both from a pricing and a supply chain management, it's made a huge difference here. I'll take you back just two years, where we shrank our units in personal automobile by 0.5%, thinking that the industry was not seeing the inflation that was coming. Fast forward today, outperformance, massive in personal lines from a bottom-line point of view, and we're making the most from a top-line point of view in this environment.

In commercial lines.

Speaker #5: The combined ratio was healthy at 92.4 , and we're well positioned to maintain a sub 95 combined ratio even with severe weather . Overall , in personal lines , which is nearly half of our business , we continue to see industry growth in the high single digit to low double digit range over the next 12 months , with strong absolute and relative performance in the first half of the year .

Premium growth increased 3% in the quarter.

A clear sign that our growth initiatives are gaining traction.

We see overall market conditions as constructed.

With industry premium growth in the mid single digit range over the next 12 months.

With 85% of our business and SME and mid market, where pricing is favorable <unk>.

There is significant opportunity for us further improved top line growth.

Speaker #5: We're really well placed to sustain growth and combined ratios going forward . In commercial lines , premium growth increased to 3% in the quarter .

That's in addition to our ability to choose where we grew four large accounts and in specialty lines.

Okay.

Profitability remains very strong with a combined ratio of 82, 8%.

Speaker #5: A clear sign that our growth initiatives are gaining traction . We see overall market conditions as constructive with industry premium growth in the mid-single digit range over the next 12 months , with 85% of our business in SME and mid-market , where pricing is favorable , there is significant opportunity for us to further improve top line growth .

Reflecting continued underwriting discipline.

Emerging AI benefits and prudent reserving.

We remain well positioned to deliver a low ninety's or better combined ratio go.

Charles Brindamour: I think it really plays to our strength. Kudos to Guillaume and his team who have navigated this so well. Appreciate all the color. It's quite helpful. Thank you. Good. Question will be from James Lloyd at National Bank Capital Markets. Please go ahead. Morning, James. Yeah, thanks. Good morning. First question related to Canada commercial lines and the commentary that some of the gross initiatives are starting to take hold. Growth at 3% is still below the industry. I look at some of the commentary in the MD&A around AI and machine learning and the new broker platform. Is the view that these new initiatives, which are maybe gaining traction now, will allow Intact to outperform the mid-single-digit industry growth rate that you're expecting? I think clearly all these initiatives help us outperform from a bottom-line point of view by a big margin.

Going forward.

Moving now to our U K business premium in the quarter were 5% lower year over year.

Speaker #5: That's in addition to our ability to choose where we grow for large accounts and in specialty lines . Profitability remains very strong , with a combined ratio of 82.8% , reflecting continued underwriting discipline .

Remediation efforts within the <unk> portfolio continue to temper topline growth, but driving improvement in the combined ratio.

As remediation tapers off towards the end of 'twenty five.

I expect growth to move in positive territory.

Our teams in the U K are focused on integrating our products raising the bar on service and expanding our distribution relationships.

Speaker #5: Emerging AI benefits , and prudent reserving . We remain well positioned to deliver a low 90s or better combined ratio going forward . Moving now to our U.K.

The fruits of their efforts will become more visible in the new year.

Speaker #5: and IE business premium in the quarter were 5% lower year over year . Remediation efforts within the DLG portfolio continue to temper top line growth , but driving improvement in the combined ratio as remediation tapers off towards the end of 25 .

When it comes to the industry, we see premium growth in the UK in the low to mid single digit range over the next 12 months.

The combined ratio of 95 five was solid.

As it included three points of access cats.

Speaker #5: I expect growth to move in positive territory . Our teams in the UK are focused on integrating our products , raising the bar on service and expanding our distribution relationships .

Our pricing and risk selection actions are gaining traction.

We remain focused on evolving our UK dye combined ratio towards 90% <unk>.

By the end of 2006.

In the U S premiums.

Speaker #5: The fruits of their effort will become more visible in the new year . When it comes to the industry , we see premium growth in the UK in the low to mid single digit range over the next 12 months .

Premiums were up 8% year over year with our growth initiatives, leading to higher new business and improved retention.

Charles Brindamour: I'd say one portion of the headwind is mixed. You look at our growth in commercial lines in Canada, 3% in Q3. Right there, you had a point drag of mix, and this has fluctuated this year between 1 and 3 points. It's a function of uneven competition across the board. Look, we're not forecasting outperformance on growth on a 12-month horizon compared to the industry, but we have lots in the toolbox to generate more growth without compromising margins. Just leveraging specialty lines across our distribution channel is one of those initiatives. The other one is we're in the process of deploying our technology, the broadest technology from a product and from a transaction point of view, to brokers in the field, in addition to working on the funnel, which shows that we're also growing in units at the moment.

And this growth is driven by our strategy to grow in our most profitable lines.

Speaker #5: The combined ratio of 95.5 was solid as it included three points of excess cash . Our pricing and risk selection actions are gaining traction and we remain focused on evolving our UK and combined ratio towards 90% by the end of 26 .

Indeed, the fastest growing segments are those that grew by more than 20%.

Are the ones that I've sustainable low <unk> combined ratio.

That's the beauty of specialty lines.

You can choose where you grow regardless of the environment in which you operate.

In the U S. We see industry premium growth.

Speaker #5: In the US , premiums were up 8% year over year , with our growth initiatives leading to higher new business and improved retention .

In the mid single digit over the next 12 months.

The combined ratio of 83, 6% in the quarter improved by four points year over year.

Speaker #5: And this growth is driven by our strategy to grow in our most profitable lines . Indeed , the fastest growing segments or those that grew by more than 20% , are the ones that have sustainable low 80s combined ratio .

Our steady deployment of predictive models and pricing and underwriting allows us to grow while not compromising our margin.

This was the ninth quarter in a row with a sub 90 combined ratio and the business is built to maintain this performance going forward.

Speaker #5: That's the beauty of specialty lines . You can choose where you grow regardless of the environment in which you operate . In the US , we see

Our team also continued to execute on our strategic priorities in the quarter.

Speaker #1: Office .

Speaker #2: On the back of our technology and entertainment products . Having successfully grown in Canada from the US . We've recently added life sciences in Canada .

Let me highlight a few achievements.

In global specialty lines, our team is making good progress on our growth agenda.

Charles Brindamour: It's hard to tell whether we'll outperform from a growth point of view the Canadian industry. I don't know. Ken, do you have anything additional you want to add? Well, just to add a bit of context, I guess. At an industry level, when we look at MSA, the data at Q2, we have seen at an industry level growth tempering in the second quarter relative to the first quarter in commercial P&C. I think that's aligned with the large account pressure at an industry level. At the same time, we've moved the 3% growth from a 1% growth from Q2 to Q3, and that's where our trajectory is moving in a different direction to the industry overall. That's what we've observed at the second quarter, clearly, and we're using all the tools we have in the toolbox. We don't do that at the expense of margin. Okay. Understood.

We're both expanding our distribution footprint and deepening our existing broker relationships.

Speaker #2: There are many of these growth opportunities that we're pursuing . Marine renewable energy . Surety and trade credit are all examples of cross-border opportunities that we've launched for our working on the sandbox .

Additionally, our teams are collaborating to export product expertise in verticals across geographies.

On the back of our technology and entertainment products, adding successfully grown.

Speaker #2: We play is ten times larger than it was a decade ago, and there's a lot of opportunities for growth. Investments we have made in AI over the past decade are currently generating more than $150 million in annual recurring benefits.

In Canada from the U S.

We've recently added life Sciences in Canada.

There are many of these growth opportunities that we're pursuing.

Green renewable energy surety and trade credit are all examples upfront.

Cross border a fortunate fees that we've launched or are working on.

Speaker #2: We've accomplished this primarily from optimizing our pricing risk selection , and how we leverage data . Recently , we completed the rollout of our third generation machine learning models and personal property and commercial fleet .

Our sandbox we played.

Is 10 times larger than it was a decade ago.

There's a lot of unfortunate piece for growth.

Speaker #2: Our AI investments are also helping us to grow our top line faster. The recent expansion of our underwriting advisor from Canadian Commercial into one of our specialty lines has already resulted in our ability to quote 20% more than before due to faster data ingestion and processing.

The investments we've made in AI over the past decade, our turnkey generating more than $150 million in annual recurring benefits.

Charles Brindamour: In the US, obviously, a good result of 8%. It sounds like there are certain segments that are really driving that growth at plus 20%. Can you give us a little bit more color as to what segments those are that are driving that extra or excess growth rate? In terms of winning new business, what are some of the factors that are allowing Intact to win that new business? Is it just new products, or is it something else within existing lines? I think in the US, we have a very good business. It's outperforming, but it's small in relationship with the opportunities that exist in this market. Distribution management is one big lever of growth. Investing in the lines that are most profitable is another big lever of growth, whether it is people or technology.

We've accomplished this primarily from optimizing our pricing Bruce.

Bruce selection and how we leverage data.

Recently, we completed the rollout of our third generation machine learning models and personal property.

Speaker #2: We expect this level to significantly increase over time. This quarter, we officially rebranded RSA Nig and Pharmweb to Intact Insurance across the UK, Ireland, and Europe.

And commercial fleet.

Our AI investments are also helping us to grow our top line faster.

The recent expansion of our underwriting adviser.

From Canadian commercial into one of our specialty lines that has already resulted in our ability to call 20% more than.

Speaker #2: This unites our global operations under one brand . It significant milestone for intact 15 years after its birth . The reaction of brokers , partners and employees across our markets was exceptional .

Then before due to faster data ingestion and processing.

We expect this level to significantly increase over time.

Speaker #2: And so when combined with raising the bar on service , broadening our product range and expanding our distribution relationships , this will drive profitable commercial growth and support our ambition of becoming the leading commercial and specialty lines insurer in the UK .

This quarter, we officially rebranded RSC.

And farm web two impact insurance across the U K, Ireland and Europe.

This unites our global operations under one brand a significant milestone for impact 15 years after its mark.

Speaker #2: Our most recent employee engagement survey has again placed our Canadian and US businesses as best employers for the 10th and seventh years in a row , respectively .

The reaction of brokers partners and employees across our markets.

Was exceptional.

And so when combined with raising the bar on service broadening our product range and expanding our distribution relationships.

Charles Brindamour: In a number of our segments, we're adding products, and that is making a difference. We're a big push on, for instance, cargo and our marine units. There's lots of levers we're pulling at the moment to make sure that we're capturing the growth opportunities that exist in this market. Patrick, do you want to highlight maybe some of the areas of growth in the US? Yeah, and it will also highlight what you were describing, Charles, earlier on, how the mix in specialty in particular helps the bottom line. If you take the top three or four lines that are growing the fastest right now in the US, examples of that would be surety, cyber, and some of the accident and health. Overall, that's about 40% of the book of business. It's growing north of 20% in the quarter, and it has produced a combined ratio.

Speaker #2: We've also made huge gains in the UK and Europe , placing in the top quartile of employers within short distance of Best Employer status .

This will drive profitable commercial growth and support our ambition of becoming the leading commercial and specialty lines insurer in the U K.

Speaker #2: No doubt this is where our teams are going in both the UK and Europe . Engage employees are crucial to delivering superior experiences for our customers and brokers .

Our most recent employee engagement survey as again placed our Canadian and U S businesses as best employers for the 10th and seventh year scenario perspective.

Speaker #2: The strong performance we're posting again this quarter is the result of their contributions , and I want to thank all of our employees for that .

We've also made huge gains in the UK and Europe, placing in the top quartile of employers within short distance of best employer status.

Speaker #2: I also want to highlight the tremendous efforts our people have made , supporting communities in Atlantic Canada that were impacted by wildfires this quarter .

No doubt.

This is where our teams are going in both UK and Europe.

Engaged employees are crucial to delivering superior experiences for our customers and brokers.

Speaker #2: It really was impressive to watch many regions mobilize together , including our teams at on site in tax responsiveness is a demonstration of our values being put into action and the strong employee engagement we foster as an organization .

The strong performance, we're posting again this quarter.

As a result of their contributions.

And I want to thank all of our employees for that.

Charles Brindamour: In the 80% to 82% range over the past three years on average, good for momentum on growth while also sustaining very good profitability on the book overall due to mix change. Just on how you're winning new business, just a quick comment on that. Yeah, how we're winning new business. First, we're expanding the reach to the number of brokers we're dealing with. Second, we're leveraging more verticals per broker within their operation. Third, we're adding products on the shelves. Fourth, we've also bought a number of MGAs, and we're interested in deploying capital in the US. That expands, so to speak, the shelf on which we can put our products, and that's really how we're winning new business in the US. Thank you. Next question comes from John Aiken at Jefferies. Please go ahead. Just wanted to drill down. Good morning.

I also want to highlight the tremendous efforts our people have made supporting communities in Atlantic, Canada, that's where impacted by wildfires this quarter.

Speaker #2: The engines driving our outperformance have never been better operating ROE has clearly shifted into a higher zone , and it's been above 16% for the past four quarters .

It really was impressive to watch many regions mobilized together.

Including our teams out on site.

Speaker #2: We view this shift as sustainable, as it is underpinned by our competitive advantages in pricing, risk selection, and claims. But it's also supported by our mix shift towards commercial and specialty lines and our growth in distribution, coupled with very strong capital management.

<unk> responsiveness is a demonstration of our values being put into action.

And the strong employee engagement, we cluster as an organization.

The engine driving our outperformance I've never been better.

Operating ROE security shifted into a higher zone.

And it's been above 16% for the past four quarters.

Speaker #2: As we look ahead , we're well positioned to achieve both our key financial objectives of outperforming the industry , ROE by at least 500 basis points every year , but also delivering Lloyds growth of 10% annually on that , I'll turn the call over to our CFO , Ken Anderson .

We view this shift as sustainable.

As it is underpinned by our competitive advantages in pricing.

Risk selection and claims but it's also supported by.

By our mix shift towards commercial.

In specialty lines and our growth.

And distribution, coupled with very strong capital management.

Speaker #2: Thanks , Charles , and good morning , everyone . This quarter again underscored the earnings power of our business . Net operating income per share for the third quarter reached $4.46 , which was $3.45 .

As we look ahead, we are well positioned to achieve both our key financial objectives.

Outperforming the industry ROE by at least 500 basis points every year.

Speaker #3: Higher than last year . Both our top line growth and our bottom line underwriting performance were strong . We delivered double digit earnings growth in our distribution business and our investment portfolio continued to provide healthy and consistent returns .

But also delivering noise growth of 10% annually.

Charles Brindamour: I just wanted to drill down a little bit more on the US. If you take a look at the reported claims ratio or the underlying current year loss ratio for the quarter, exceptional. I get the commentary that you're talking about product mix. Was there anything unusual that was driving the lower combined claims ratio this quarter? I guess the flip to that is, how sustainable is this moving forward in terms of, do you think that you're going to be able to continue to outpace growth in these higher profitable lines? Well, that's certainly the plan. Let's just keep in mind that when growth was a little more tepid in the US, it's because we were into meaningful remediation efforts. As I said last quarter, I expected that the.

On that I'll turn the call over to our CFO.

Anderson.

Thanks, Charles and good morning, everyone.

This quarter again underscore the earnings power of our business.

Speaker #3: Our operating ROE at 20% highlights our ability to successfully navigate market cycles and continue to compound earnings growth . Let me add some color on the third quarter results .

Net operating income per share for the third quarter reached $4 and 46%, which.

Which was $3 45 higher than last year.

Both our top line growth on our bottom line underwriting performance was strong we.

Speaker #3: We reported a strong underlying loss ratio of 54% , one point better than last year , with improvement in all regions and lines of business .

We delivered double digit earnings growth in our distribution business and our investment portfolio continued to provide healthy and consistent returns.

Speaker #3: This is a testament to our rigorous focus on growing our competitive advantages in pricing , risk selection and claims catastrophes in the quarter totaled $394 million , primarily due to the wildfires in Newfoundland .

Our operating ROE at 20% highlights our ability to successfully navigate market cycles and continue to compound earnings growth.

Let me add some color on the third quarter results.

Speaker #3: Weather events in Canada and some large commercial fires in both the US and the UK . And I . While this quarter wasn't as heavily impacted as last year , catastrophe losses were broadly in line with third quarter expectations favorable prior year development was solid at 5.2% in the quarter .

We reported a strong underlying loss ratio of 54% one point better than last year with improvement in all regions and lines of business.

Charles Brindamour: Tempering effect of this remediation would slow down in the second half of this year. That's what we're seeing in Q3. I expect that to continue into next year. Remediation, to keep in mind, is something that you continually should do, but sometimes there's more than others. I think in the last year, year and a half, there was, and therefore, we're seeing now the potential of the business emerge more clearly without that noise. Thanks, Charles. When we talk about remediation, are you as excited about the prospects with remediation falling off in the UK as what we saw this quarter in the US? Yeah. I think the UK is a different ball game from the perspective that we're integrating the NIG portfolio, which we've acquired in 2024. What it means in practice is we're trying to improve its performance, which we have.

This is a testament to our rigorous focus on growing our competitive advantages and pricing risk selection and claims.

Catastrophes in the quarter totaled $394 million.

Speaker #3: This aligns with our near-term expectation of being around the upper end of the 2 to 4% range , and continues to reflect prudent reserving across all segments .

Primarily due to the wildfires in Newfoundland weather events in Canada, and some large commercial fire in both the U S and the UK ni.

But this quarter wasn't as heavily impacted this last year catastrophe losses were broadly in line with third quarter expectation.

Speaker #3: The consolidated expense ratio was 34.2% for the quarter, a 1.7% increase versus last year. This was largely driven by increases in variable broker commissions and employee incentive compensation, reflecting our improved profitability and increased outperformance versus the industry overall.

Favorable prior year development was solid at five 2% in the quarter.

This aligns with our near term expectation of being around the upper end of the 2% to 4% range and continues to reflect prudent reserving across all segments.

Speaker #3: The year to date expense ratio at 34% remains in line with full year expectations . Operating net investment income increased 2% to $402 million in the quarter .

The consolidated expense ratio was 34, 2% for the quarter a one seven point increase versus last year. This was largely driven by increases in variable broker commissions and employee incentive compensation, reflecting our improved profitability and increased outperformed.

Charles Brindamour: We're bringing segmentation as well. I do expect that the impact of the integration, which is almost a full five points this quarter, will taper off as we enter into 2026 and towards the end of this year and as we enter into 2026. In the UK, we're investing massively in technology, in our regional presence. We're broadening our footprint. I do expect that this will be a growth engine for us over time. It's a meaningful transformation at the moment. Thanks, Charles. I'll require you. Thank you. Next question will be from Paul Holden at CIBC. Please go ahead. Good morning, Paul. Thank you. Good morning. Maybe sort of a follow-up to that, Charles, on the UK business. Some good color around the DLG integration. Maybe you can talk about the business X, the DLG, and how that's growing and the profitability there. Yeah.

Speaker #3: This reflected higher invested assets . Our reinvestment yields are broadly in line with book yields , and we remain on track to deliver approximately $1.6 billion of net investment income for the full year .

<unk> versus the industry.

Overall, the year to date expense ratio of 34% remains in line with full year expectations.

Speaker #3: Distribution income continues to grow at a healthy pace , increasing 11% to $147 million . This reflected higher variable commissions , as well as the benefits from our continued capital deployment .

Operating net investment income increased 2% to $402 million in the quarter.

This reflected higher invested assets.

Speaker #3: On that note , I'm proud to highlight that the broker link , that broker link outpaced its year end goal by reaching 5 billion in annual premiums during the third quarter , with over 200 locations nationwide .

Our reinvestment yields are broadly in line with book yields and we.

<unk> on track to deliver approximately $1 6 billion.

Net investment income for the full year.

Distribution income continues to grow at a healthy pace, increasing 11% to $147 million.

Speaker #3: Broker link continues to build scale and distribution through both organic and inorganic growth in personal and commercial lines . This positions us to grow distribution income by 10% on an annual basis .

This reflected higher variable commissions as well as the benefits from our continued capital deployment on that note I am.

I want to highlight that the broker link appropriately outpaced its year end goal by reaching $5 billion in annual premiums during the third quarter with over 200 locations nationwide broker link continues to build scale in distribution through both organic and inorganic growth and <unk>.

Speaker #3: Nonoperating gains totaled 83 million in the quarter , and our ROE increased to 17.3% in the 12 months to September 30th . This fueled a 5% sequential growth and a 14% year over year growth .

Charles Brindamour: The business X. DLG. is doing well. I would say the area that's still in remediation in the UK is what we call the delegated authority business, where we're shrinking that footprint a bit to make sure that it's our price, our product, and our claims that we're using to the greatest extent possible in that segment of the market. That is creating a bit of a drag. Otherwise, the rest of the business would be in the low single-digit range. We haven't really seen the impact of expanded distribution. That takes a while, and I'm confident we'll start seeing that in 2026. We haven't really seen the full impact of broadening our product range, specialties in particular, across a much broader distribution channel in the UK than we had before the NIG transaction.

Speaker #3: In our book, value per share has increased to $103.16 over the last decade. Our book value per share has compounded at an annualized rate of 11%.

And the commercial lines.

This positions us to grow distribution income by 10% on an annual basis.

Nonoperating gains totaled $83 million in the quarter and our ROE increased to 17, 3% in the 12 months to September 30th.

Speaker #3: Our financial position continues to be strong , with total capital margin of $3.3 billion and solid regulatory capital ratios in all jurisdictions . Our capital management framework is robust .

This fueled a 5% sequential growth and a 14% year over year growth in our book value per share to a $103 16.

Speaker #3: We have positioned our balance sheet to deal with any external shocks that arise , while also maintaining significant capacity to capture growth opportunities .

Over the last decade, our book value per share of compounded at an annualized rate of 11%.

Speaker #3: Our profitability profile means capital generation is also very strong, and this will continue to provide fuel for M&A, be it distribution or manufacturing.

Our financial position continues to be strong with total capital margin of three 3 billion.

And solid regulatory capital ratios in all jurisdictions, our capital management framework is robust.

Speaker #3: Given the level of capital generation , we will utilize our open share buyback program opportunistically when we see our shares are significantly undervalued .

We have positioned our balance sheet to deal with any external shocks that may arise, while also maintaining significant capacity actual growth opportunities.

Speaker #3: This past quarter , we deployed $145 million to repurchase 535,000 shares . Even after these repurchases , our debt to capital ratio was 17.9% , well below our 20% target .

Our profitability profile means capital generation is also very strong and this will continue to provide fuel for M&A be a distribution or manufacturing.

Charles Brindamour: In the UK, if I take you back three, four years, RSA was focused on tens of brokers. Following the NIG integration, we're dealing with over 1,000 brokers. We're deepening the relationship by about 100 brokers a year. Anyway, this year, the idea is to deepen the relationship with 100 brokers with whom we didn't have a deep relationship before. You just get a sense of the scale of opportunity that this can bring. You layer over that a broader range of product, whether it is distributing marine, financial lines, etc., across those distributions. There's a fair bit of upside there. I don't know, Patrick, if there's anything you want to add. No, there's some good momentum also in specialty lines, and the combination of the DLG and existing RSA products, to your point, as we get into.

Speaker #3: We're positioned to continue to pursue inorganic growth opportunities . In conclusion , Charles mentioned that our operating ROE has moved into a higher zone .

Given the level of capital generation, we will utilize our open share buyback program Opportunistically. When we see our shares are significantly undervalued. This past quarter, we deployed $145 million to repurchase 535000 shares.

Speaker #3: This will support us maintaining or even beating our impressive track record of 650 basis points of annual ROE outperformance over the past decade .

Even after these repurchases our debt to capital ratio was 17, 9% well below our 20% targets, we're positioned to continue to pursue inorganic growth opportunities.

Speaker #3: It will also support our delivery on our other key financial objectives . The compound Net operating income per share growth by 10% annually over time , and the pillars of growth are strong .

In conclusion.

Charles mentioned that our operating ROE has moved into a higher though this will support of maintaining or even beating our impressive track record of 650 basis points of annual ROE outperformance over the past decade.

Speaker #3: Our top line initiatives across personal , commercial and specialty lines platforms are gaining traction . We continue to invest in our competitive advantages in data , AI and claims , and this will drive further margin expansion and strong capital generation will continue to provide fuel for growth opportunities .

We'll also supports our delivery on our other key financial objectives. The compound net operating income per share growth by 10% annually over time.

Speaker #3: We're in a great position to deliver on both financial objectives for our stakeholders in the years ahead . With that , I'll give it back to Jeff .

Charles Brindamour: Q4 and early Q1 will also expand the offer through the brokers. RSA broker getting some of the offers that were only offered by DLG and vice versa. Yeah. I guess the second part of that question was also with respect to margin. If you suggest that DLG is roughly a five-point drag on margin, it suggests you're getting your low 90s in that RSA book. Is that correct? Ken. Well, yeah. I think if you look at the quarter, performance at 95.5, firstly, you would. There's three points of excess cap losses in there, eight points of caps in the quarter. You strip out the three, I think you're back to a low 90s performance, which right now, that's where we would expect to be. I think the continued, as that remediation tapers off, it will start to earn through into 2026 and 2027.

The pillars of Nike's growth are strong.

Our top line initiatives across personal commercial and specialty lines platforms are gaining traction we continue to invest in our competitive advantages and data AI and claims and this will drive further margin expansion and strong capital generation will continue to provide fuel for growth opportunities.

Speaker #2: Thank you . Ken . In order to give everyone a chance to participate in .

Speaker #4: The Q&A , we would ask that you limit yourself to two questions per person . You can certainly requeue for follow ups , and we'll do our best to accommodate if there's time at the end .

Speaker #4: So , Sylvie , we're ready to take questions now .

Speaker #5: Thank you sir . Ladies and gentlemen , if you would like to ask a question , please press star , followed by one on your touch tone phone .

<unk>.

We're in a great position to deliver on both financial objectives for our stakeholders in the years ahead.

Speaker #5: You will hear a prompt acknowledging your requests . And if you would like to withdraw from the question queue , please press star followed by two .

With that I'll give it back to Jeff.

Thank you Ken in order to give everyone a chance to participate in the Q&A. We would ask that you limit two questions per person you can certainly re queue for follow ups and we'll do our best to accommodate if there's time at the end of the sales team, we're ready to take questions now.

Speaker #5: And if you're using a speakerphone , please lift the handset first before pressing any keys . One moment please , for your first question .

Speaker #5: First , we will hear from Bart Zarski at RBC Capital Markets . Please go ahead . Bart .

Thank you, Sir ladies and gentlemen, if you would like to ask a question. Please press star followed by one on your Touchtone phone.

Speaker #2: Morning .

Speaker #6: Good morning . Morning . I wanted to ask around the the core loss ratio . So I'm thinking current accident year plus PYD .

You'll hear a prompt acknowledging your request and if you would.

I'd like to withdraw from the question queue. Please press star followed by two and if you're using a speaker phone. Please lift the handset first before pressing any teams.

Charles Brindamour: That's the further improvement that you'll see emerging in the, if you like, underlying combined ratio for the UK and I over the next 12 to 18 months. Yeah, got it. The second question for me is just going back to Canada and personal auto. Good growth in written and shared risks. It seems like, I mean, you are building some momentum there. We can see it's a quarter over quarter over quarter. What should we expect for the next few quarters? My impression is you're saying competitors are still catching up to where you are in pricing. That would suggest, if anything, and you seem to like the margin. If anything, maybe we can assume that written and shared risk growth accelerates from here. Is that a reasonable expectation? Yeah, I think when we look at personal auto and our rates.

Speaker #6: It's come in really strong . It's sub 49% . And when I look at the LTM kind of run rate , like there's been sequential improvement in that number for eight quarters running .

One moment. Please for your first question.

First we will hear from Dr. <unk> at RBC capital markets. Please go ahead Bart.

Speaker #6: So wondering sort of at the top of the house what are some of the key drivers there in terms of that strong performance .

Speaker #6: And then how you're thinking about the sustainability of that ?

Good morning.

Good morning.

Wanted to ask around the core loss ratio, so I'm thinking current accident year plus I'd.

Speaker #2: Yeah . So , you know , broadly speaking , because I think your your question is , is on the overall performance . I think the first order of business , for us is to make sure that we stay on top of inflation .

It's coming in really strong it's up 49% and.

When I look at the LTM kind of run rate, there's been sequential improvement in that number for eight quarters running so wondering sort of at the top of the house what are some of the key drivers there in terms of that strong performance and then how are you thinking about the sustainability of that.

Speaker #2: We do that in we're very focused on that , tend to move before the market moves . Second , Ken talked about the ROE outperformance track record .

Yes.

Uh huh.

So.

Broadly speaking because I think your question is on the overall performance.

Speaker #2: This is not something we take for granted . And at all times we have multiple initiatives to expand the outperformance . And that goes straight to the underlying loss ratio .

Charles Brindamour: Inflation is stabilizing in the mid-single digit. Our rates are also stabilizing, I would say, just below 7%. We expect to stay in that range in the foreseeable future, as we're pricing for the inflation that we're observing. When you look at the industry, that still has some catch-up to do. I think we're very comfortable in our competitive position. We've seen that improve, we've seen our retention improve, and we expect to stay in a kind of market share growth going forward. Will it keep increasing from 3%? I think time will tell, but we're certainly expecting the current momentum to continue into the next 12 months. Yeah. Yeah. I think, Paul, rent, the direct channel, the digital channel, these are all levers that we're pushing really hard in this environment. Nothing to do with rates, everything to do with.

Performance.

I think the first order of business for US is to make sure that we stay on top of inflation and we do that.

We're very focused on that tend to move before the market groups second.

Speaker #2: You know , whether it is AI , whether it is insourcing claims management . And so on . And so that feeds straight into into that .

Ken talked about the ROE outperformance track record.

Speaker #2: In my mind . Thirdly , it is about footprint . And so we have a sophisticated view of where margins are beyond cost of capital .

This is not something we take for granted and at all times, we have multiple initiatives.

To expand the outperformance.

And that goes straight to the underlying loss ratio, whether it is AI, whether it is in sourcing claims.

Speaker #2: We equip the field with that information and our growth is overindexed towards areas where we feel that we're more than , well rewarded for the risk .

Instrument and so on.

And so that feeds straight into into that in my mind.

Speaker #2: And I'd say , Bart , this is the sum of those three things that lead us to see an improvement in the underlying performance .

Thirdly, it is about footprint and so.

Yeah.

Our sophisticated view.

Speaker #2: It's uneven across the board , but it's certainly , you know , it's very deliberate game plan to continue to grind out performance and hopefully absolute performance .

Our margins are beyond cost of capital, we equipped the field with that information and our growth is over indexed.

Charles Brindamour: Building on those margins to gain market share where we can. Understood. Okay. Thank you. Next question will be from Tom MacKinnon at BMO Capital Markets. Please go ahead. Yeah. Thanks. Good morning. Charles, when we look back at your investor day, you talked about how you could accelerate your NOI per share growth without any strategic capital deployment, and that was 2% NOI per share CAGR. With strategic capital deployment, we get up to 4%. What's interesting is sort of without any M&A, it would have just been 1% through distribution income, which I assume is just augmenting that with some bolt-on distribution acquisitions, smaller ones. Then it also said 1% through share buyback capacity. The last 10 years, you added 1% growth to NOI per share through share buybacks. If I annualize what you did in the quarter, 0.3% of your shares you bought back in the quarter, so that's over 1%.

Towards areas, where we feel.

Speaker #2: And on the footprint point , I want to point out that if you look at the shift in mix of business over the past 5 or 6 years , there's a bigger portion of our business that is in a sustainable , low 90s sub 90 zone than it was before .

We're more than well rewarded for the risk and I'd say this is the sum of those three things that lead us to see an improvement in the underlying performance, it's uneven across the board.

Certainly.

Yes.

A very deliberate game plan.

We continue to grind outperformance and hopefully ups and performance.

Speaker #2: So when you look at our overall performance in aggregate , the growth in those segments will also lead to an overall improvement in performance .

Yes.

And on the footprint point.

I want to point out.

If you looked at.

The shift in mix of business over the past five six years.

Speaker #6: Great . That's very helpful . Thanks , Charles . And just one , one other one for me is we're hearing lots on this sort of AI infrastructure , thematic around the CapEx that's needed .

There is a bigger portion of our business that is in a sustainable low ninety's sub 90 zone than it was before so when you look at.

Speaker #6: Is there an opportunity for insurance to play a role here ? Like could you guys could this be a new source of sort of premium growth opportunities as we see the build out in other sectors ?

Our overall performance in aggregate the growth in those segments.

We will also lead to an overall improvement in performance.

Speaker #2: Yes , it is . And it's primarily true , our specialty lines segment in the construction and engineering segments , in particular , there are opportunities in the energy segments .

Great that's very helpful. Thanks Charles.

Then just one other one for me is we're hearing lots on this sort of AI infrastructure thematic around the required capex. That's needed is there an opportunity for insurance to play a role here like could you guys.

Charles Brindamour: Annualized right there. Is this sort of the base case? Or should we sort of think about, hey, if you don't see anything major on the M&A front, that a 1% share buyback that you've demonstrated in this quarter would kind of be, I mean, it seems to be consistent with what you laid out in your investor day earlier this year, and consistent with what you've done in the past. Any comments around that? Thanks. Thanks, Tom. I'll ask Ken maybe to share his perspective on that. Yeah. Well, I would say, firstly, Tom, in relation to the capital deployment component of the NOI per share growth compounding ambition, when it comes to distribution, yes, certainly, we feel with regular ongoing distribution capital deployment, that will generate one point. I would say in an adverse.

Speaker #2: We have very strong verticals , whether it's traditional or renewable energy , and our teams in those verticals are focused on finding opportunities where we feel that we can achieve strong performance .

Could this be a new source of sort of premium growth opportunities as we see the build out in other sectors.

Yes, it is and it's primarily true our specialty lines.

Speaker #2: And that's clearly an area of growth .

Segment, and the construction and engineering.

Speaker #6: Great . Thanks so much .

Speaker #7: Thanks , Bart .

<unk> in particular are unfortunate Ts.

Speaker #5: Next question will be from Doug Young at Desjardins Capital Markets . Please go ahead .

Energy segments, we have very strong verticals, whether its traditional or renewable energy and our teams in those verticals are focused on finding opportunities, where we feel that we've got to achieve.

Speaker #8: Hi . Yeah . Good morning .

Speaker #2: Good morning . .

Speaker #7: Doug .

Speaker #8: Good morning . Wanted to dig a little bit into the pricing cycle and did the that we're kind of seeing . And I get your comments around commercial and that you're more SM focused and personal is hardening .

Our strong performance and that security in the area.

<unk> growth.

Great. Thanks, so much.

Thanks Bart.

Speaker #8: Hoping to dig a little bit further into you . What you're seeing , you know , why is this time potentially different . And I know it's been a long time since we've seen a turn in the cycle , but you know , why would it be different this time around versus the last time ?

Next question will be from Doug Young at those nonbank capital markets. Please go ahead.

Hi, good morning.

Charles Brindamour: If you like, scenario where we didn't do M&A, that was the scenario where we were just, I think, demonstrating that share buybacks are a tool in the toolbox to deliver a 1% NOI per share growth. To be clear, that's in a scenario where there are no M&A opportunities, and that's not the scenario we're in today, to be clear. The earnings power and earnings growth is really strong. I think what we did this quarter was, we're opportunistic in deploying $145 million to buy back a little over half a million shares. You will have seen that the capital margin has grown from $3.1 to 3.3 billion. The debt-to-capital ratio has come down. The dry powder has increased in the quarter in terms of what's available to deploy on M&A opportunities. It's in that context that we're very happy to have the dry powder that we do.

Doug I wanted.

I wanted to dig a little bit into the pricing cycle.

The acceleration that we're kind of seen and I get your comments around commercial.

Speaker #8: And I guess specifically in the personal side , you know , we're seeing softening in the US . And I know the US market is very different than Canada .

And that you are more SME focused in personal is hardening.

Speaker #8: On the personal property and in auto . But why wouldn't we start to see some softening after many years of really hardening pricing and personal , auto and personal property ?

<unk> to dig a little bit further into what you are seeing.

Why is this time potentially different and I know, it's been a long time since we've seen a turn in the cycle, but why would it be different this time around versus last time.

Speaker #8: So I know it's a big question . I know there's lots in there , and I promise this will be my only question , but I'm just hoping to get a little more detail .

Speaker #7: Yeah , sure .

I guess, specifically on the personnel side, we're seeing.

Speaker #2: Let's see how we take your four questions that no , seriously , I think we're not saying this cycle in commercial lines will be different than previous cycles .

Softening in the U S and I know in the U S market is very different in Canada on the personal property.

But why wouldn't we start to see.

Some softening.

After many years of really hardening pricing in personal auto and personal property I know its a big question I know theres lots in there.

Speaker #2: I mean , all cycles are are different , but , Doug , you've been following our story for a long time . You know that we're pretty stable throughout cycles , actually .

And I promise this will be my only question, but I was just hoping to get a little more detail.

Yes sure.

Speaker #2: And that includes in commercial lines . And I don't see this being very different this time around . Just to put things in perspective .

Let's see how we can take your report questions.

Okay.

No seriously I think.

We're not saying this cycle.

Charles Brindamour: Yeah, I think the point I made at the investor's day was that the denominator is much bigger than it was a decade ago. We proved to ourselves that we have the earnings power to grow at that clip prospectively. I think the point we made is organically, we'd get in the zone. When you look at capital deployment opportunities, we would comfortably, we think, be north of 10%. When you look at the landscape from an M&A point of view, the first thing that matters to us as a firm is where do you outperform? Frankly, today, we outperform everywhere we operate, which therefore means that the sandbox for capital deployment is 10 times bigger than what it was a decade ago. Within that, there are manufacturing opportunities in Canada, in global specialty lines, and in the UK.

Speaker #2: And I think we're highlighting that more than 70% globally of of our portfolio and CL and SL is in the SME and mid-market space , it tends to be a more stable space .

In commercial lines will be different than previous cycles, I mean, all cycles.

<unk> are.

Are different but Doug you've been following our story for a long time, you know that we're pretty stable throughout.

Speaker #2: And that's an advantage we have as a firm , not just because of the cycle , but because the law of large numbers works in the small midsize business .

Cycles are.

Actually embedding tubes.

In commercial lines and I don't see this being very different.

<unk> just to put things in perspective, and I think.

Speaker #2: And therefore our pricing acumen can be put to work . That makes it even better to navigate those cycles . You know , we've been flagging for well over a year that large accounts initially we said cyber and financial lines were softer , and that's been true for the last year , year and a half .

We're highlighting that more than 70% globally of our portfolio and <unk> is in the SME and mid market space it tends to be.

A more stable space.

Space and that's an advantage we have as the FERC.

Not just because of the cycle, but because the law of large numbers works.

The small mid size business and therefore, our pricing acumen can be put to work that makes it.

Speaker #2: We've seen earlier this year an acceleration in large property schedule. That is still true; it hasn't changed this quarter, but it certainly took place this spring.

Even better to navigate those.

Those cycle.

We've been flagging for <unk>.

Well over a year.

That's.

Speaker #2: And we're just watching where that's going . But it's really happening more at the top end of the market and in larger accounts than at the bottom end of the market .

Large accounts.

Initially we said cyber.

Charles Brindamour: There are distribution investment opportunities, in particular in North America. For me, the M&A landscape is actually quite good. The sandbox is much bigger. Timing matters. We have very clear financial objectives, and that drives timing for us. Okay, thanks for the color. Next question will be from Mario Mendonca at TD Securities. Please go ahead. Good morning. This might be a request that you put a finer point on some of the things you've already said on this call. Charles and Ken, you talked about this higher new level of ROE. Now, this quarter was special in some respects. The trailing 12-month increased significantly because the Q3 2024 cats fell off, and a more modest level of cats fell into the trailing 12 months.

And financial lines.

Were softer.

And that's been true for the last year year and a.

Speaker #2: And so our job here is to basically make sure that we grow in the SME and mid-market space , we're conducting conditions are quite constructive .

<unk>.

We have seen earlier this year and acceleration in large property schedule that is still true and I have one change this quarter, but it certainly took place this spring and we're just watching where that's going but it's really happened.

Speaker #2: And then use our toolbox and pricing risk selection . Our broad product range that we can export from market to market to , to basically find ways to grow , even in large accounts where I think we've got an excellent value proposition compared to many of our competitors .

More at the top end of the market and larger accounts than at the bottom end.

Of the market and so our job here.

Is to basically make sure that we grow in the SME and mid market space, where conduct emissions are quite constructive.

Speaker #2: So we're not calling a different cycle or this time it'll be different . The difference between now and say , ten , 15 years ago is we have way more tools to navigate the environment in which we operate .

And then use our toolbox and pricing risk selection.

Our broad product range that we can export from market to market.

Speaker #2: With regards to RPL , which isn't a whole different zone in a hard market . I'll ask Guillaume to give a perspective on the market , but I think your question is also about why is it different or is it different than what's happening in the And we think it is so go ahead .

Two to basically find ways to grow even.

Charles Brindamour: What I'm asking is, when you say this higher level of ROE is sustainable, are you talking about the 19, nearly 20% plus this quarter, or are you referring more to what you've historically referred to around the 17% range? Well, I think what we're saying, well, what we are saying, Mario, is that we've moved into a zone above mid-teens. Yes, Q3 was close to 20%, but as Charles mentioned in his remarks, it's been above 16% for the last four quarters. I think that's what we were referring to. We view that as sustainable in the context of the continued investments that we're making in the competitive advantages, pricing, risk selection, and claims. As Charles has also pointed out, the tilt of our business towards commercial and specialty lines gives us more room, and coupled with the potential growth now, not just.

In large accounts, where I think we've got an excellent value proposition compared to many of our competitors. So we're not calling a different cycle or this time it'll be different the difference between now and say 10 15 years ago, we have way more tools.

Speaker #9: Yeah . So in personal auto , yes , there's been lots of rates . But when we look at the industry it remains unprofitable with a combined ratio above 100% .

The environment in which we operate.

With regards to T L.

Which is in a whole different.

Zone.

Speaker #9: Both last year and this year . So the industry needs to take continue to take rates . So we expect our market conditions to persist and our growth momentum to flow into 26 .

A hard market.

I'll ask <unk> to give a perspective on the market, but I think your question is also about why is it different or is it different than what's happening in the U S. We think it is so.

Speaker #9: As you pointed out , it's a contrast with the US where the industry has reached profitability with key player posting pretty strong year to date results .

Go ahead Neil.

Yes, so in personal auto, yes, theres been lots of rates, but when we look at the industry. It remains unprofitable when it combined ratio above 100% both last year and this year.

Speaker #9: We need to understand our key differences between Canadian and US markets and personal auto . So Canada product is more heavily weighted towards liability coverage .

So the industry needs to take continue to take rates. So we expect market conditions to persist and our growth momentum to flow into 'twenty six.

Speaker #9: So the cost equation is quite different . Secondly , regulatory framework and Canada and the US are different with Canada generally being more stringent .

Charles Brindamour: From manufacturing, but also from distribution, we feel we're very well positioned to sustain above mid-teens. Yeah. Beyond the drive to expand the ROE outperformance in the business in which we operate, you've got two structural changes. If you look forward 10 years compared to the last decade, the first one is distribution income is bigger, more stable, and contributes positively to our forward ROE. Second, and that's very important, is the mix of business has pushed us in zones where we can earn meaningfully higher ROE than what we were able to earn a decade ago. As you know, Mario, I never pinpoint a specific ROE. This is an industry with a certain degree of volatility. What's clear to me is that we're in a different zone.

As you pointed out it's a contrast with the U S where the industry is reach profitability.

Speaker #9: So both those factors are driving very different competitive dynamics . Maybe coming back to Canada , we're really at that point in the cycle where we're outperforming on both top line and bottom line , and that's currently true in every region .

With keep layer posting pretty strong year to date results, we need to understand there is key differences between Canadian and U S market in personal auto So Canada product is more heavily weighted towards in liability coverage. So the cost equation.

Speaker #9: So our growth was in the double digits for the eighth quarter in a row at 11% . That's fueled by three points of unit growth , an increase over Q2 .

It's quite different secondly, regulatory framework in Canada, and the U S are different with Canada generally being more stringent.

Speaker #9: And really every metric is painting a positive picture . Retention is the highest it's been in two years . Quotes are up double digit from increased marketing investments .

Both those factors.

Our driving very different competitive dynamics.

Maybe coming back to Canada, we're really at that point in the cycle, where we're outperforming on both topline and Bottomline.

Speaker #9: And our competitive position is improving with competitors still catching up . So the net results is that our new business sales are up 15% year over year .

And Thats currently true in every region, so our growth within the double digits for the eighth quarter in a row at 11% that's fueled by three points of unit growth and increase over Q2.

Charles Brindamour: In a decade from now, when we look back 10 years, it'll be a better ROE than when we look back 10 years today. Understood. That sort of brings me to the next question. When you're talking mix, I suspect you're talking about global specialty markets. It sounds to me like this business really suits you looking forward. Is there something about the business that makes growth through acquisition more challenging? Is it such a relationship-driven business that acquisitions generally don't work, and this has to be done organically? Or can this business grow through acquisition? This business can grow through acquisition, Mario. We've entered the US in specialty lines through an acquisition. We've kept all our teams, all of our people, but we've taken the combined ratio from 100% to something that starts with an 8. How have we done that? Well, that's the old recipe.

Speaker #9: Thank you all . So touching . On personal property . We do expect our market conditions to persist in property as the industry is pricing in the weather trends .

And really every metric is painting a positive picture.

Speaker #9: So despite 2025 being a milder year so far , Cat activity was well in excess of expectation in the last two years . So when it comes to pricing , cats are expected to be volatile from one year to the next , and it's crucial to look at really deeper and longer term trends .

Retention is the highest it's been in two years quotes are up double digit from increased marketing investments.

<unk> position is improving with competitors still catching up so the net result is that our new business sales are up.

15% year over year.

Thank you we're also touching on personal property.

Speaker #9: So the market in Canada is behaving quite rationally . So we expect industry to continue to reflect those long term trends and pricing .

We do expect hard market conditions to persist in property as the industry's pricing into winter trends. So despite 2025 being a milder year. So far connectivity was well in excess of expectation in the last two years.

Speaker #9: And the market to remain constructive , even if we were to have a few good cat years in a row . So here again , I'd say both are absolute and relative .

Speaker #9: Performance is strong and we maintain a positive outlook on this product .

So when it comes to pricing caps are expected to be volatile from one year to the next and it's crucial to look at really deeper and longer term trends. So the market in Canada is behaving quite rationally. So we expect our industry to continue to reflect those long term trends in pricing and the market to remain constructive even if.

Speaker #7: Yeah . And and .

Speaker #2: Doug , if we go back to Bart's earlier question , you know , which is how do you grind an improvement here . The first thing I said was to stay on top of inflation .

Speaker #2: And I think in first line . Let alone that we're on third generation machine learning models in the field , us dealing with inflation , both from a pricing and a supply chain management .

Charles Brindamour: Define success well, make sure the values are in place, and then it's about pricing sophistication, strong governance in the field, insourcing of claims, and good capital management. We then, in 2021, did the same exact thing as we acquired RSA, which had a pretty big specialty lines business, both in Canada, in the London market, as well as in Europe. We've taken the playbook, and we've done the same thing. I think there are meaningful M&A opportunities in global specialty lines, whether it is manufacturing or distribution, and we're very focused on those. You know how we define success when it comes to an acquisition. This needs to generate at least 15% IRR at the long-term capital structure, and it's an area that we're active in finding opportunities. My last question is about the 10% annual NOI per share growth that you've described over the years.

We werent to add a few.

Good cat Sears in a row, so era again, I'd say, both our absolute and relative performance is strong and we maintain a positive outlook on this product.

Speaker #2: It's made a huge difference here . And I'll take you back just two years where we shrank our units in personal automobile by 0.5% .

Doug if we go back to Mark's earlier question, which is how do you grind and improvement here first thing I said was above inflation.

Speaker #2: Thinking that the industry was not seeing the inflation that was coming. Fast forward to today, our performance is massive in first lines from a bottom line point of view.

I think in first lines, let alone that's where on third generation machine learning models in the field.

As dealing with inflation.

From a pricing and a supply chain management has made a huge difference here and I'll take you back just two years.

Speaker #2: And we're making the most from a top line point of view in this environment . And I think it really plays to our strength .

Where we shrank.

Speaker #2: And kudos to Guillaume and his team to have navigated this so well .

Our units and personal automobile by <unk>, 5%.

Thinking that the industry was not seeing inflation that was coming.

Speaker #8: Appreciate all the color . It's quite helpful . Thank you .

Speaker #7: Okay .

Fast forward today.

Speaker #5: Question will be from Jane Gloyn at National Bank Capital Markets . Please go ahead .

Outperformance.

NASA and per slides.

Speaker #7: Good morning Jim . Yeah thanks .

From a bottom line point of view, we're making the most from a topline point of view in this environment.

Speaker #8: Good morning . First question .

Speaker #10: Related to Canada commercial lines and the commentary that , you know , some of the gross initiatives are starting to take hold . But growth at 3% is still below the industry .

I think it really plays to our strengths and kudos to Gill and his team who have navigated this well.

Charles Brindamour: What I'm trying to figure out here is whether that actually applies to 2026. I'm asking about 2026 specifically because there are a couple of reasons why it wouldn't apply. There are potential declines in reserve development, potentially higher cat losses against a rather low year. The question is this: does the 10 apply each year, and does it apply to 2026, or is that more of a medium-term objective? To be clear, the objective is to grow at a compound of 10% annually over time. It will, by virtue of catastrophe losses, etc., have some lumpiness. Also, M&A, when it comes, can tend to shift your ROE into a new zone. The objective, to be clear, is over time. I think if you look at 2025 specifically, Mario, obviously, we'll see where the year ends.

I appreciate all the color it's quite helpful. Thank you.

Speaker #10: And so , you know , I look at some of the commentary in the media around AI and machine learning and the new broker platform is the view that these new initiatives , which are maybe gaining traction now , will allow Intacct to outperform the mid-single digit industry growth rate that you're expecting .

Okay.

Question will be from James <unk> at National Bank Capital markets. Please go ahead.

Good morning, Jami thanks good.

Good morning.

First question related to Canada commercial lines and.

The commentary that Sir.

Some of the growth initiatives are starting to take hold.

But growth at 3% is still below the industry and so.

Speaker #7: I think .

Speaker #2: Clearly all these initiatives .

I look at some of the commentary in the MD&A around AI and machine learning and the new broker platform is the view that these new initiatives, which are maybe gaining traction now will allow intact to outperform the mid single digit industry growth rate that you're expecting.

Speaker #7: Help us .

Speaker #2: Outperform from a bottom line point of view by a big margin , I'd say one portion of the headwind is mix . You look at our growth in commercial lines in Canada , 3% in Q3 .

Charles Brindamour: At the nine months, the cat losses are a little below our expectation on a year-to-date basis. I think that would be the one item that would contextualize how you would think about 2026. That's clear. Thank you. Thanks, Mario. Question will be from Steven Boland at Raymond James. Please go ahead. I guess good afternoon now. Thanks for taking my question. Just one question. I don't want to delay this. Have you had any preliminary conversations with your reinsurance partners with renewal coming up? I'm just curious the outlook, if pricing is going to be rational, if there's going to be softness. Yeah. I would say in relation to the 1-1 renewal, reinsurers have had strong profitability since 2022 when the market hardened. That was the result of some structural changes and decisions taken, higher retentions, and pricing levels have gone up since then.

Okay.

I think.

Speaker #2: You know , you right there , you at a point drag of mix . And this has fluctuated this year between 1 and 3 points .

Nearly.

All of these initiatives.

Help us outperform from a bottom line point of view by a big margin.

Speaker #2: And it's a function of uneven competition across the board . So I look I'm . We're not forecasting outperformance on growth on a 12 month horizon compared to the the industry .

I'd say one portion of the headwind is.

It's mix.

If you look at our growth in commercial lines in Canada, 3% in Q3.

You right there you at a point drag of mix and this has fluctuated this year between one entry points.

Speaker #2: But we have lots in the toolbox to generate more growth without compromising margins . And just leveraging specialty lines across our distribution channel .

And it's a function of uneven competition.

Across the board.

So I look at him.

Speaker #2: It's one of those initiatives . The other one is we're in the process of deploying our technology . The broadest technology from a product and from a transaction point of view to brokers in the field .

We're not forecasting.

Outperformance on growth on a 12 month horizon compared to the.

The industry, but we have lots in the toolbox.

Speaker #2: In addition to working on the funnel , which shows that we're also growing in units at the moment , it's hard to tell .

To generate more growth without compromising margins.

Just leveraging specialty lines across our distribution channel. It's one of those initiatives. The other one is we're in the process of deploying.

Speaker #2: You know , whether we'll outperform from a growth point of view . The Canadian industry , I don't know , can you have anything additional ?

Charles Brindamour: We would expect reinsurer capacity will exceed demand across the business as we head into the renewal. I would say favorable conditions from our perspective as we head into the renewal cycle. I think it should be a favorable renewal cycle. We manage our risk very tightly. This gives us an edge when it comes to buying reinsurance. We're not huge buyers of reinsurance. Also, we do that pretty much for tail risk purposes. This should be a good renewal season for us. Okay. Charles, just I'll sneak one in. I know we're late, but have you ever considered a stock split? The price has been elevated now for a while. I don't think you've ever done one. Is that something you'd consider? Yeah. I would say if those hit the radar from time to time, we evaluate it. But.

Speaker #3: You just add a bit of context , I guess , you know , that as an industry level , you know , when we look at MSA , the data at Q2 , we we have seen as an industry level , you know , growth tempering in the second quarter relative to the first quarter in commercial PNC , I think that's in line with the large account pressure at an industry level .

Our technology, the broadest technology from a product and from a transaction point of view to brokers in the field. In addition to working on the funnel which shows that.

We're also growing in units at the moment.

It's hard to tell whether we will outperform from a growth point of view the Canadian industry I don't know Ken do you have anything additional you will start a bit of context I guess.

Speaker #3: At the same time , we've moved to 3% growth from a 1% growth in from Q2 to Q3 , and that's where our trajectory is moving in a different direction to the industry overall , as as what we've observed at the second quarter .

I have an industry level.

We look at.

MSA.

Lisa.

Q2.

We have seen as an industry level.

Temporary.

In the second quarter relative to the first quarter in commercial P&C I think thats in line with the large account pressure at an industry level.

Speaker #2: Clearly . And we're using all the tools we have in the toolbox . We don't do that at the expense of margins .

At the same time, we moved.

Charles Brindamour: We haven't acted on it to date on the basis that, in substance, it's not really changing anything in substance. I think that was the conclusion that we've reached. Yeah, it's debated from time to time. I mean, if you guys think this is something we should seriously consider, we'll look at it. I'm of the view that I don't know if it's a needle mover, and therefore we concentrate on other things, but we're open to feedback. Okay, thanks very much. Thank you. Ladies and gentlemen, this is all the time we have today. I would now like to turn the call back over to Geoff Kwan. Thank you, everyone, for joining us today. Following the call, a telephone replay will be available for one week, and the webcast will be archived on our website for one year.

Speaker #10: Okay , understood . And then in in the US , you know , obviously a good result up 8% . And it sounds like there are certain segments that are really driving that that growth at plus 20% .

The 3% growth from a 1% growth.

From Q2 to Q3, and that's where our trajectory is moving in a different direction too.

The industry overall.

That's what we've observed at the second quarter of security and we are using all the tools we have in the toolbox, we don't do that at the expense of margin.

Speaker #10: Can you , can you give us a little bit more color as to what segments those are that are driving that or excess growth rates ?

Speaker #10: And then in terms of winning new business , you know , what are some of the factors that are allowing intact to win that new business ?

Okay understood and then.

In the U S.

Speaker #10: Is it just new products or is it , you know , something else within existing lines ?

Obviously, a good result up 8% and it sounds like there are certain segments that are really driving.

Speaker #2: I think in the US . You know , we have a very good business . It's outperforming , but it's small in relationship with the opportunities that exist in this market .

That that growth at plus 20%.

Can you can you give us a little bit more color as to what segments. Those are that are driving that.

Extra or excess growth rates and then in terms of winning new business.

Speaker #2: And so, distribution management is one big lever of growth. Investing in the lines that are most profitable is another big lever of growth.

Charles Brindamour: A transcript will also be available on our website in the financial report section. Of note, our 2025 fourth-quarter results are scheduled to be released after market close on Tuesday, 10 February 2026, with the earnings call starting at 11:00AM Eastern Time the following day. Thank you again, and this concludes our call. Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. At this time, we do ask that you please disconnect your line.

What are some of the factors that are allowing intact to win that new business is it just new products or is it.

Something else within existing lives.

I think in the U S.

Speaker #2: Whether it is people or technology in a number of our segments , we're adding products and that is making a difference . We're big push on , for instance , cargo and our marine unit and and there's lots of levers we're pulling at the moment to make sure that we're we're capturing the growth opportunities that exist in this market .

You know we have a very good business it's outperforming.

But it's small and relationship with the opportunities that exist.

In this market.

And so distribution management is one big lever of growth.

Investing in the lines that are most profitable.

As another big lever of growth.

Whether that's people or technology.

And a number of our segments, we're adding products.

Speaker #2: Patrick, do you want to highlight maybe some of the areas of growth in the U.S.? Yeah.

And that is making a difference where big push on Florida.

Speaker #3: And it will also highlight what you were describing , Charles ,

Speaker #11: Earlier on on how the mix in specialty in particular help us for the bottom line . But if you take the top 3 or 4 lines that are growing the fastest right now in the US and examples of that would be Shirty , cyber and some of the accident and health overall .

Argo and our marine units.

And.

And there's lots of levers we're pulling.

At the moment to make sure that.

Where we're capturing the grown unfortunate is that exist in this market.

Rick do you want to highlight maybe.

Speaker #11: That's about 40% of the book of business . It's growing north of 20% in the quarter , and it has produced a combined ratio in the 80 to 82% range over the past three years in average .

All of the areas of growth in the U S.

Yeah and it will also highlight what you are describing Charles on your on on how the mix in specialty in particular also on the bottom line, but if you take care.

Speaker #11: So good for momentum on growth, but also sustaining a very good profitability on the book overall due to mix change.

Three or four lines that are growing the fastest right now in the U S and examples of that would be surety.

Cyber and some of the accident and health overall, that's about 40% of the book of business, it's growing north of 20%.

Speaker #10: And just on how you're winning new business is just a quick comment on that .

Water and it has produced a combined ratio.

Speaker #2: Yeah . How we're winning new business . First is we're expanding the reach to the number of brokers we're dealing with . Second , we're leveraging more verticals per brokers within within their operation .

And the 80% to 82% range or in the past three years on average so good for momentum on on growth.

While also sustaining.

Alright, good profitability on the book overall due to mix change.

And just on how you are winning new business.

Speaker #2: Third , we're adding products on the shelves and fourth , we've also bought a number of mgas . And , you know , we're interested in deploying capital in the US and and that expand , so to speak , the shelf on which we can put our products .

Just a quick comment on that.

Yes, how we're winning new business.

Yeah.

First is we're expanding the reach.

Two the number of brokers, we're dealing with.

Second.

We're leveraging more verticals for brokers.

Speaker #2: And that's really how we're winning new business in the U.S.

Within.

Within their operation.

Speaker #12: Thank you .

Third we're adding products.

Speaker #5: Next question comes from John Aiken at Jefferies . Please go ahead .

On the shelves.

Fourth we've also bought a number of <unk> and you know we're interested in deploying capital in the U S.

Speaker #13: Just want to get your gun . Good morning . I just wanted to drill down a little bit more on the US . You know , if you take a look at the reported claims ratio or the underlying current , your loss ratio for the quarter exceptional .

And that expense so to speak the shelf all of which we can put our products. So that's really how we're winning new business in the U S.

Speaker #13: And I get the commentary that that you're talking about . Product mix . But was there anything unusual that was driving the lower combined claims ratio this quarter ?

Thank you.

Your next question comes from John Aiken of Jefferies. Please go ahead.

Speaker #13: And I guess the flip to that is how sustainable is this moving forward in terms of do you think that you're going to be able to continue to outpace growth in these higher profitable lines ?

Just wondering.

Good morning, I, just wanted to drill down a little bit more on the U S.

If you take a look at.

The reported claims ratio, where the underlying currently on your loss ratio for the quarter are exceptional and I get the commentary that that youre talking about product mix, but was there anything unusual that was driving the lower combined claims ratio this quarter and I guess the flip to that is how sustainable is this movie.

Speaker #2: Well, it's certainly the plan, but let's just keep in mind that when growth was a little more tepid in the U.S., it was because we were into meaningful remediation efforts.

Speaker #2: And as I said last quarter , I expected that the tempering effect of this remediation would slow down in the second half of this year .

Forward in terms of do you think that youre going to be able to continue to outpace growth in these higher profitable ones.

Well it certainly.

Speaker #2: And that's what we're seeing in Q3 . And I expect that to continue into next year . You know , remediation to keep in mind is something that you continually should do .

The plan.

But.

Let's just keep in mind that when growth was a little more tepid in the U S.

It's because we were into meaningful remediation efforts.

Speaker #2: But sometimes there's more than others. And I think in the last year, year and a half, there was; and therefore, we're seeing now the potential of the business emerge more clearly.

And as I said last quarter.

The tempering effect of.

This remediation would slow down in the second half.

Speaker #2: Without that noise .

Of this year and that's what we're seeing in Q3 and I expect that to continue.

Speaker #13: Thanks , Charles . And , you know , when we talk about remediation , are you as excited about the prospects with remediation falling off in the UK as what we saw this quarter in the US ?

Into next year <unk>.

Remediation to keep in mind is something that you continually should do but sometimes theres more than others and I think over the last.

Speaker #2: Yeah , I think the UK is a different ballgame from the perspective that we're integrating the Nig portfolio , which we've acquired in 24 , and what it means in practice is we're trying to improve its performance , which which we have we're bringing segmentation as well .

Year on year enough.

There was.

And therefore, we're seeing now the potential of the business emerge more carry without that noise.

Thanks Charles.

When we talk with remediation are you as excited about the prospects with remediation falling off in the U K is what we saw this quarter in the U S.

Speaker #2: And I do expect that the impact of the integration , which is almost a full five points , this quarter , will taper off as we enter into 2026 .

Yeah, I think the UK is a different ball game from the perspective that we're integrating.

The NIH portfolio, which we've acquired in 'twenty four.

Speaker #2: And towards the end of this year , and as we enter into 2026 , in the UK , we're investing massively in technology in our regional presence .

And what it means in practice is we're trying to improve its performance, which which we have we're bringing segmentation.

As well and I do expect that the impact of the integration, which is almost a full five points.

Speaker #2: Where broadening our footprint and and I do expect that this will be a growth engine for us over time . But it's in meaningful transformation at the moment .

This quarter.

We will taper off as we enter into 2026 and towards the end of this year.

Speaker #13: Thanks , Charles . I'll requeue .

We enter into 2026.

Speaker #2: Thank you .

<unk>.

Speaker #5: Next question will be from Paul Holden at CIBC . Please go ahead .

In the UK, we're investing massively in technology.

In our regional presence, we're broadening our footprint.

Speaker #14: Thank you . Good morning . Maybe sort of a follow up to that , Charles , on the on the UK business . So some good color around the DLG integration .

And I do expect that this will be a growth engine for us over time, but it's a meaningful transformation at the moment.

Speaker #14: Maybe you can talk about the business ex the DLG and how how that's growing and the profitability there .

Thanks, Charles I'll requeue.

Speaker #2: Yeah . So the business ex DLG . Is doing well I would say the area that's still in remediation in the UK is what we call the .

Thank you.

Next question will be from Paul Holden CIBC. Please go ahead good morning.

Thank you.

Good morning, maybe.

Maybe.

Sort of a follow up to that Charles on the on the UK business saw some good color around the <unk>.

Integration, maybe you could talk about the business.

Speaker #2: Delegated authority business . Where where we're shrinking that footprint a bit to make sure that it's hard price our product and our claims that we're using to the greatest extent possible in that segment of the market .

How how thats growing and the profitability there.

Yes.

Yeah.

So the business ex <unk>.

LG.

Speaker #2: That is creating a bit of a drag . Otherwise , the rest of the business would be in the low single digit range and we haven't really seen the impact of expanded distribution .

It's doing well I would say the area that is still in remediation.

In the U K is what we call.

The delegated authority business, where where we're shrinking that footprint a bit to make sure that it's hard to price our product.

Speaker #2: That takes a while, and I'm confident we'll start seeing that in 2026. We haven't really seen the full impact of broadening our product range.

Our claims that were using for the greatest success possible and that segment of the market that is creating a bit of a drag.

Otherwise the rest of the business would be in the low single digit.

Speaker #2: Specialties in particular across a much broader distribution channel in the UK than we had before . The Nig transaction . You know , in the UK , if I take you back 3 or 4 years , RSA was focused on tens of brokers following the Nig integration , were dealing with over a thousand brokers .

Range.

And.

We haven't really seen.

The impact of expanded distribution that takes a while.

I'm confident we'll start seeing that in 2026.

Yes.

And we haven't really seen the full impact of broadening our product range specialties in particular across a much broader distribution channel in the UK.

Speaker #2: Our deepening the relationship by about 100 brokers a year . Anyways , this year the idea is to deepen the relationship with 100 brokers with whom we didn't have a deep relationship before .

Than we had before the <unk> transaction.

In the U K, if I take you back three four years.

Speaker #2: You just get a sense of the scale of opportunity that this can bring , and you layer over that a broader range of products , you know , whether it is distributing marine financial lines , etc.

RSA was focused on tens of brokers.

Following the <unk> integration, we're dealing with over a 1000 brokers.

Our deepening the relationship by about 100 brokers.

Speaker #2: , across those distributions . So there's a fair bit of upside there . I don't know , Patrick , if there's anything you you want to add .

Year anyway. This year the idea is to deepen the relationship with 100 brokers, which who we didn't have the deep relationship before you just get a sense of the scale.

Speaker #11: No , there's some good momentum also in specialty lines . And the combination of the DLG and existing RSA products . To your point , as we get into Q4 and early Q1 will also expand the offer through the broker .

The opportunity that this can bring and you layer over that.

A broader range of product whether it is distributing.

Marine.

Financial lines et cetera across those distributions, so theres a fair bit of upside there I don't know Patrick.

Speaker #11: So , you know , RSA getting RSA broker , getting some of the offers that were only offered by DLG and vice versa .

Speaker #11: So yeah .

<unk> you want to add.

Speaker #14: And I guess the second part of that question was also with respect to margins. So, if you suggested DLG is roughly a 55.

No. There is some good momentum also in specialty lines and the combination of DMG.

Speaker #14: drag on margin , it suggests you're getting your low 90s in that RSA book . Is that correct ?

And the existing RFC products to your point as we get into Q.

Q4, and early Q1 will also expand the offered through the broker.

Speaker #2: Ken ?

Speaker #3: Well , yeah , I think , you know , if you look at the quarter performance at 95.5 , firstly you would , you know , there's three points of excess cap losses in there , eight points of caps in the quarter .

The RSA, giving honestly broker getting some of the offers that we're on the offered by DLT and vice versa.

Yes.

I guess the second part of that question was also with respect to margins. So a few if you suggested EOG is roughly a five five point drag on margin. It suggests you're getting your low ninety's and that RSA.

Speaker #3: So if you strip out the three I think you're back to a low 90s . You know , performance , which right now that's where we would expect to be .

That's correct.

Speaker #3: I think the continued , you know with that remediation tapers off . It will start to earn through into 26 and 27 . And that's the further improvement that you'll see emerging in the if you like , underlying combined ratio for the UK .

Ken.

Yes, I think if you look at the quarter.

Performance at 95 five firstly.

There's three points of excess cap losses in their eight points of cats in the quarter. So you strip out the three I think they are back to a low nineties.

Speaker #3: And I over the next 12 to 18 months . Yeah .

Performance, which right now.

Speaker #14: Got it . And then and then the second question for me is just going back to to Canada and personal auto . So good growth in written assured risks .

However, we would expect to be I think the continued.

Is that remediation tapers off it will start to earn through.

Speaker #14: It seems like I mean you are building some momentum there . We can see at the quarter over quarter , over quarter . What should we expect over the next few quarters ?

In 2006.

<unk> thousand seven and Thats, the further improvements that youll see emerging in the.

Speaker #14: It's my impression is you're saying , you know , competitors are still catching up to where you are in pricing . So that would suggest , if anything , and you seem to like the margins .

Underlying combined ratio for the UK ni.

Over the next 12 to 18 months.

Speaker #14: So if anything , maybe we can assume that that that written assured risk growth accelerates from here is that is that a reasonable expectation ?

Got it.

And then the second question from me is just going back to Canada and personal auto.

So good growth in written insured risks. It seems like you are building some momentum there we can see at the quarter over quarter over quarter.

Speaker #15: Yeah .

Speaker #9: Yeah . So I think when we look at at . Personal Auto and our rates , inflation is stabilizing in the mid single digit , our rates are also stabilizing .

What should we expect over the next few quarters.

My impression is you are saying you know competitors are still catching up to where you are in pricing. So that would suggest if anything and you seem to like the margin. So if anything maybe we can assume that.

Speaker #9: I would say just below 7% . And we expect to stay that in that range in the foreseeable future . As we're pricing for for the inflation that we're observing .

That got written insured risks growth accelerates from here is that a reasonable expectation.

Yes.

Yes.

Yes, so I think when we look at.

Speaker #9: So, when you look at the industry that has some catch-up to do, I think we're very comfortable in our competitive position.

Personal auto in our rates.

Inflation is stabilizing in the mid single digit or rates are also stabilizing I would say just below.

Speaker #9: We've seen that improve . We're seeing our retention improve . So so we expect to stay in kind of market share growth going forward .

<unk>, 7% and we expect to stay that frame in that range in the foreseeable future.

Speaker #9: So will it keep increasing from from 3% ? I think time will tell . But we're certainly expecting the current momentum to continue .

We're pricing for for the inflation.

That's we're observing so when you look at the industry, that's still as some catch up to do.

Speaker #9: Into the next 12 months .

We're very comfortable in our competitive position, we've seen that improve we've seen our retention improve.

Speaker #2: Yeah . Yeah . And I think Paul Brent . The direct channel , the digital channel , these are all levers that we're pushing really hard in this environment .

So we expect to stay in.

End of market share growth.

Going forward.

Speaker #2: Nothing to do with rates , everything to do with building on those margins to gain market share where we can . .

Will it keep increasing from 3% I think time will tell but we're certainly expecting that momentum to continue and to the next 12 months.

Speaker #14: Understood . Okay . Thank you .

And I think.

Paul.

Brent.

The direct channel the digital channel these.

These are all levers that we're pushing really hard in this environment nothing to do with rates.

Anything to do with.

Building on those margins to gain market share where we can.

Understood. Okay. Thank you.

Our next question will be from Tom Mackinnon with BMO capital markets. Please go ahead.

Yes, thanks, good morning.

Charles when we look back at your Investor Day.

You talked about.

How you could accelerate your noise growth without any without any strategic capital deployment and that was 2%.

No it CAGR and with.

Capital deployment will get up to four.

But what's interesting is sort of without any M&A. It would have just been 1% through distribution income I assume just augmenting that with some.

Bolt on distribution.

Acquisitions smaller ones and then it also said 1% through share buyback capacity.

The last 10 years, you added 1% growth.

Through share buybacks.

If I annualize what you did in the quarter three.

3% of your shares you bought back in the quarter. So that's over 1% annualized rate. There is this sort of the base case or should we sort of think about hey, if you don't see anything major on the M&A front that a 1% share buyback that you've demonstrated in this quarter would kind of be.

Yeah. Thanks. Good morning. Um, Charles when we look back at your investor day, um, you talked about, uh, um, how you could accelerate your noise growth without any, without any strategic Capital deployment, and that was, uh, 2%, uh, no kegger, and with strategic Capital deployment, we get up to 4.

It seems to be consistent with what you.

Laid out in your Investor day earlier, this year and consistent with what with what you've done in the past.

So any comments around that thanks.

Thanks, Tom I'll ask Ken maybe to share his perspective of that yes, what I would say firstly, Tom in relation to the capital deployment components.

But what's interesting is sort of, without any m&a, it would have just been 1% through distribution income, which I assume just augmenting that with some uh uh, bolt-on distribution. Uh, Acquisitions smaller ones. And then it also said 1% through share buyback capacity. Uh, you know, the last 10 years, you added 1% growth to noises through, share BuyBacks. Uh, if I annualize what you did in the quarter,

The noise.

Growth compounding.

<unk>.

When it comes to distribution.

Yes, certainly we feel with regular ongoing distribution.

The deployment that will generally one point.

I'd say in an adverse.

If you like scenario, where we didn't do M&A that was the scenario, where we were just I think demonstrating that share buybacks are a tool in the toolbox to deliver.

.3% of your shares you bought back in the quarter, so that's over 1% annualized right there. Um, is this sort of the base case or should we sort of think about, uh, hey, if you don't see anything major on the M&A front, that a 1% share buyback that you've demonstrated in this quarter would kind of be... I mean, it seems to be consistent with what you have laid out in your Investor Day earlier this year and consistent with what you've done in the past. So any comments around that? Thanks.

A 1% noise growth.

But to be here, but in the scenario, where there are no M&A.

Thanks Tom. I'll ask uh, Ken maybe to share his perspective on that. Yeah, well I would say firstly Tom, in relation to the capital deployment component uh of of the notes, uh, growth, uh compounding, uh ambition.

<unk>.

It's not the scenario we're in today to be clear the earnings power.

When it comes to the distribution, uh,

On the earnings growth.

Really strong I think what we did this quarter was.

We're opportunistic in.

In deploying $145 million to buyback.

Over half a million shares, but you will have seen but the cap. The margin has grown from three 1% to $3 3 billion of debt to capital ratio has come down at the dry powder has increased in the quarter in terms of what's available.

Billable to deploy on M&A opportunities.

And it's in that context.

We're very happy to have the dry powder that we do.

And I think.

The point I made at the investors day was.

The den emanate or is much bigger than it was a decade ago. So we proved to ourselves that.

We have the earnings power to grow at that clip.

Prospectively.

I think the point, we made is organically we get into the zone.

But then when you look at capital deployment opportunities.

Wood.

That was the scenario where we were just I think demonstrating that share BuyBacks are a tool in the toolbox to deliver. Uh, ah, ah, 1% noise growth. Um, but to be clear that's in the scenario where there are no, uh, m&a, uh, opportunities. And, and that's not the scenario, we're in today, uh, to be clear. You know, the earnings power, uh, and, and earnings growth, uh, is really strong. I think what we did this quarter was, you know, we're opportunistic, uh, in deploying, 145 million, uh, to buy back a little over, half a million shares but you will have seen that the capital margin has grown from 3.1 to 3.3 billion. The debt to Capital ratio has come down, uh, the dry powder has increased, uh, in the quarter, in terms of, uh, what the available to deploy on m&.

Uh huh.

Comfortably, we think be north of 10% and so when you look at the landscape from an M&A point of view.

Uh, opportunities, um, and it's in that context, uh, that we're very happy to have the dry powder that we do.

The first thing that matters to us as a firm is where do you outperform.

Yeah, and I think the point I made at the investors' day was...

And frankly today, we outperformed everywhere we operate.

What <unk> means that the sandbox for capital deployment.

That the denominator is much bigger than it was a decade ago. So we proved to ourselves that

It's 10 times bigger.

You know, we have the yearning's power to grow at that clip, uh, perspective.

And then what it was.

A decade ago.

I think the point we made is that organically, we’d get in the zone.

And within that there are.

Manufacturing opportunities.

In Canada.

Global specialty lines and in the U K.

And our distribution investment unfortunate piece in particular.

But then, when you look at capital deployment opportunities, you know, we would comfortably think we would be north of 10%. So when you look at the landscape from an M&A point of view,

In North America, and so for me.

The M&A landscape is actually quite good.

The first thing that matters to us as a firm is where do you outperform?

The sandbox, it's much bigger but.

You and frankly today, we outperform everywhere we operate.

Timing matters.

Very clear financial objectives.

But therefore means that the sandbox for capital deployment.

And.

Is 10 times bigger.

And that drives timing for us.

Than what it was.

A decade ago.

Okay. Thanks for the color.

and within that there are

manufacturing opportunities.

Next question will be from Mario Mendonca at TD Securities. Please go ahead.

In Canada.

And Global Specialty Lines, and in the UK.

Good morning, this might be.

A request that you put a finer point on some of the things you've already said on this call it Charles and Ken you talked about.

And our distribution investment opportunities, in particular.

This higher new level of ROE This quarter was special and in some respects.

In North America. And so for me the uh, Mna landscape is actually quite good.

Trailing 12 month increase significantly because the Q3 24 cats fell off in March.

More modest level of cash fell into the trailing 12 months. So what I'm asking is when you say this higher level of ROE is sustainable or are you talking about the 19, nearly 20% plus this quarter are you referring more to that what you have historically referred to around the 17% range.

The sandbox is much bigger, but you know timing matters. We have very clear financial objectives.

And um, and that drives timing for us.

Okay, thanks for the color.

Next question will be from Mario Manta at

Please go ahead.

And well.

Good morning. This is my might be.

I think what we're saying what we are seeing Mario is that we've moved into a zone above mid teens.

A request that you put a finer point on some of the things you've already said on this call. Charles, and can you talk about

Yes, Q3 was close to 20%, but as Charles mentioned in his remarks.

It's been above 16 for the last four quarters and I think that's.

What we were referring to.

We view that as sustainable in the context of the continued investments that we're making in our competitive advantages pricing risk selection.

Claims and a startup is also pointed out the 10th of our business.

This higher new level of ROE. Now, this quarter was special in some respects; the trailing 12-month increase significantly because the Q3 2024 caps fell off, and a more modest level of caps fell into the trailing 12 months. So, what I'm asking is, when you say this higher level of ROE is sustainable, are you talking about the 19% plus this quarter? Are you referring more to what you've historically referred to around the 17% range?

Towards commercial.

<unk> designs.

Is this gives us more room.

And coupled with the <unk>.

<unk> growth now not just.

From.

Manufacturing, but also from distribution we.

We're very well positioned to sustain.

Mid teens, yes, so beyond the drive to expand ROE outperformance from the business in which we operate <unk> got two structural changes.

Look forward 10 years compared to the last decade. The first one is distribution income is bigger more stable and contributes positively to our forward ROE second and that's very important.

Is the mix of business as.

As pushed us in zones, where we can earn.

Meaningfully higher Roe.

Then what we were able to earn.

A decade ago. So as you know Mario I never pinpoint a specific ROE. This is an industry was certain degree of volatility.

And well, I think what we're saying, well, what we are seeing Mario, is that, we've moved into a Zone above mid teams. Um, you know, yes, Q3 was close to 20% but as Charles mentioned in his remarks, you know, it's been above 16 for the last 4 quarters. And I think that's, uh, that's what we were, uh, referring to. And, you know, we view that as sustainable in the context of the continued Investments that we're making in the competitive advantages pricing with selection, uh, and claims. And as Charles is also pointed out, you know, the tilt of our business. Um, and towards commercial, um, and Specialty lines, um, is this gives us more room, um, and couples with, you know, the potential growth. Now, not just, um, from manufacturing but also from distribution, uh, we feel we're we're very well positioned, uh, to sustain.

But what's clear to me is that we're in a different zone and in a decade from now when we look back 10 years.

Above mid-teens. Yeah, so beyond the drive to expand DRW outperformance in the business in which we operate, you've got two structural changes.

It'll be a better Roe.

Then when we look back 10 years today.

Thanks, Dan.

That sort of brings me to the next question.

When you when you were talking mix I suspect.

Last decade. The first 1 is distribution. Income is bigger. More stable and contributes positively, to our forward, or we in second, and that's very important.

Is the mix of business.

Talking about global global specialty markets.

Alright.

As pushed us in zones where we can earn.

It sounds to me like.

This business really suits you looking forward.

Is there something about the business that makes.

Growth through acquisition more challenging is it such a relationship driven business that acquisitions generally don't work and this has to be done organically or can this business grow through acquisition.

You know, meaningfully higher Roi than what we were able to earn a decade ago. So as you know, Mario I never pinpoint a specific Roe. This is an industry with a certain degree of volatility.

But what's clear to me is that we're in a different zone, and in a decade from now, when we look back 10 years,

This business and grow through acquisition or RVO.

We've entered the U S and specialty lines through an acquisition.

it'll be a better Roe then when we look back 10 years today,

We get all our teams all of our people, but we've taken the combined ratio from 100% to something that starts with an eight.

Understand but that that sort of brings me to the next question you you've when you're when you're talking mix, I I suspect just just you're talking about global global specialty markets.

Um, all right.

And how we've done that well that's the old recipe.

It sounds to me like this business really suits you looking forward.

<unk> success, well make sure the values are in place and Dennis about pricing sophistication strong governance in the field in sourcing of claims and good capital management.

Is there something about the business that makes?

Then in 2021 did the same exact thing as we acquired RSA, which had a pretty big specialty lines business, both in Canada, and the London market as well as in Europe, we've taken that playbook.

Um, is growth through acquisition more challenging? Is it such a relationship-driven business that acquisitions generally don't work? Should this be done organically, or can this business grow through acquisition?

This business can grow through acquisition, Mario.

We've entered the U.S. in specialty lines through an acquisition.

We've done the same thing.

I think there are meaningful.

And then El portrait these and global specialty lines, whether it is manufacturing.

Uh, we kept all our teams, all of our people, but we've taken the combined ratio from 100% to something that starts with an 8,

uh, and how we done that. Well, that's the old recipe.

Or distribution and we're very focused on dose but.

You know how we define success when it comes to an acquisition this needs to generate at least 15% IRR at the long term capital structure.

To find success, make sure the values are in place; then it's about pricing sophistication. Strong governance in the field, insourcing of claims, and good capital management are essential.

And it's an area that we're active in finding opportunities.

My last question is.

It's about the 10% annual <unk> growth that you've described over the years.

What im trying to figure out here is whether that actually applies to 2026 and I'm asking about 2026, specifically because there are a couple of reasons why it wouldn't apply there are.

<unk> declines in reserve development, potentially higher cat losses against a rather low year.

So the question is does it apply each year and does it apply to 2026 or is that more of a medium term objective.

So to be clear.

We then, in 2021 did the same exact thing as we acquired RSA with chatty, pretty big specialty, lines business, both in Canada, in London markets as well. As in Europe, we've taken the Playbook and we've done the same thing. Uh, I think there are meaningful uh, M&L opportunities in global specialty lines, whether it is manufacturing, uh, or distribution and we're very focused on those. But, you know, you know how we define success. When it comes to an acquisition, this needs to generate at least, 15% irr at the long-term capital structure and, uh, and it's an area that we're active in finding opportunities.

The objective is to grow at a compounded 10% annually over time.

Oh, yes.

It will.

My last question, uh, is about the 10% annual notes growth that you've described over the years.

By virtue of catastrophe losses et cetera, there will be some lumpiness also M&A when it comes contend to shift your ROE into a new zone, but over time. The objective here is overtime I think if you look at 2025.

what I'm trying to figure out here is whether that actually applies to 2026 and I'm asking about 2026 specifically, because

Specifically, Mario obviously, we'll see where the year ends at the nine months the cat losses are a little below.

There are a couple of reasons why it it wouldn't apply. There are potential declines and Reserve development potentially higher cat losses against a rather low year. So the question is, this does does the 10 app each year and does it apply to 2026 or is that more of a medium-term objective?

R R.

Our expectation on a year to date basis.

And so I think that would be the one item that would.

So, to be clear, the objective is to grow at a compounded 10% annually over time.

Contextualize, how we should think about us.

2026.

Okay.

That's clear thank you.

Thanks Mario.

Question will be from Stephen Boland of Raymond James. Please go ahead.

I guess good afternoon now thanks for taking my question.

But just one question I don't want the latest have.

Have you had any preliminary conversations with your reinsurance partners.

With renewal coming up I'm, just curious the outlook if pricing is good.

As there is gonna be softness.

Yes so.

I would say in relation to the one one renewal.

You know, over you it will, you know, by virtue of catastrophe losses. Uh, Etc. There will be some lumpiness also m&a when it comes and tend to shift your your Roi into a new Zone. But over time, the objective be clear is over time. I think if you look at 2025 uh specifically Mario, you know obviously we'll see where where the year ends uh at the 9 months the cat losses are a little below um or you know our expectation on the year to date basis. Um so I think that would be the 1 item. That would contextualize how you would think about 2026.

Reinsurers have had strong profitability.

That's clear. Thank you.

2022, when the market hardens.

Thanks Mario.

That was the result of some structural changes.

Question will be from Steven Bolan at Raymond James. Please go ahead.

Students taken.

Our retentions.

And pricing levels have gone up since then.

But we would expect reinsurer capacity will exceed demand.

Across the business as we head into the renewal so I would say favorable conditions.

I guess, uh, good afternoon now. Um, thanks for taking my question. Um, just one question. I don't want to delay this. Have you had any preliminary conversations with your reinsurance partners, with the renewal coming up? I'm just curious about the outlook—if pricing is going to be rational, or if there's going to be softness.

From our perspective, as we head into the renewals yet I think should.

Yeah. So

It should be a favorable renewal cycle.

We manage our risk very tightly this gives us an edge when it comes to buying reinsurance we're not huge buyers of reinsurance also.

We do that pretty much for tail risk purposes, but this should be a good renewal season for us.

Okay.

Charles just I'll sneak one in on onboard late but.

Have you ever considered a stock split the prices.

Elevated now for a while I don't think you've ever done one is that something you'd consider.

Yes, I would say.

If those hit the radar from time to time, we evaluate it but.

Hardened. Um, you know, that was as a result of some structural changes, uh, and Seasons taken higher retention, um, and pricing levels have gone up since then, um, but we would expect reinsure of capacity will exceed demand, um, you know, across the business as we head into the renewal. So I would say favorable conditions, uh, from our perspective as we head into the renewal system. I I think it should be a fairly renewal cycle.

We'd have to knock the dumbest todays on the basis that.

In substance.

It's not.

Really changing anything in subsequent thought I think that would upset.

<unk> is that.

Yes.

It's debated from time to time I mean, if you guys think this is something we should seriously consider.

Uh, we manage our risk, you know, very tightly. This gives us an edge. When it comes to buying reinsurance, we're not huge buyers of reinsurance also. Uh, we do that pretty much for tail risk purposes, but this should be a good renewal season for us.

We'll look at it.

I am off the view that.

I don't know if it's a needle mover and therefore, we concentrate on other things.

Okay, and and Charles just I'll speak 1 in. I know I'm really late but, uh, have you ever considered a stock split? You know, the price is been elevated. Now for a while, I don't think you've ever done. 1. Is that something you'd consider?

But we're open to feedback.

Okay. Thanks very much.

Thank you.

Yeah, I would say it. It does hit the radar from time to time, we evaluate it, but

Ladies and gentlemen, this is all the time, we have today I would now like to turn the call back over to Geoff Kwan.

we have an active on this today's on the basis, that

in substance, it's not

It's not.

Thank you everyone for joining us today following the call a telephone replay will be available for one week and the webcast will be archived on our website for one year. A transcript will also be available on our website in the financial reports section and of note. Our 2025 fourth quarter results are scheduled to be released after market close.

Really changing anything in substance. And I think that that was that was the conclusion is that we we've reached. Yeah it it's it's it's debated from time to time. I mean if you guys think this is something, we should seriously consider. Uh we'll look at it. I'm I'm off the view that uh

On Tuesday February 10, 2026, with the earnings call starting at 11 <unk> Eastern time, the following day.

I don't know if it's a needle mover, and therefore we concentrate on other things.

But we're open to feedback.

Again, and this concludes our call.

Okay, thanks very much.

Thank you.

Thank you Sir.

Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending and at this time, we do ask that you. Please disconnect your lines.

Ladies and gentlemen, this is all the time we have today. I would now like to turn the call back over to Geoff Kwan.

Thank you everyone for joining us today. Following the call a telephone replay will be available for 1 week and the webcast will be archived on our website for 1 year.

The transcript will also be available on our website in the financial report section. And of note our 2025 fourth quarter results are scheduled to be released after market close on Tuesday, February 10th, 2026 with the earnings call starting at 11:00 Eastern time the following day

Thank you again, and this concludes our call.

Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. At this time, we do ask.

Please disconnect your lines.