Annual Information Form (for the year ended December 31, 2021)
Make
itIntact
ANNUAL INFORMATION FORM 2021
Our Purpose
and Core
Belief
We are here to help people, businesses and society
prosper in good times and be resilient in bad times.
People are at the heart of our organization - and of our success.
How we do things is just as important as what we achieve. We are a purpose-driven company based on values and a belief that insurance is about people, not things.
1
Our Values
Guide Us
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Integrity |
Respect |
Customer-driven |
Excellence |
Generosity |
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Be honest, open |
Be kind |
Listen to our customers |
Act with discipline and |
Help others |
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and fair |
See diversity as a |
Make it easy, |
drive to outperform |
Protect the |
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Set high standards |
strength |
find solutions |
Embrace change, |
environment |
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Stand up for |
Be inclusive and |
Deliver second-to-none |
improve every day |
Make our communities |
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what is right |
collaborate |
experiences |
Celebrate success, yet |
more resilient |
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remain humble |
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What we aim to achieve
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Our customers are |
Our people are |
Our company is one of the |
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our ADVOCATES |
ENGAGED |
MOST RESPECTED |
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3 out of 4 customers |
We are a best |
3 out of 4 stakeholders recognize |
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are our advocates |
employer |
us as leaders in building resilient |
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4 out of 5 brokers |
Our employees |
communities |
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value our specialized |
and leaders are |
Achieve Net Zero by 2050, |
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expertise |
representative of |
and halve our operations emissions |
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the communities we |
by 2030 |
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serve |
Exceed industry ROE by 5pts |
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Grow NOIPS 10% yearly over time
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2 |
Table of Contents
and list of information incorporated by reference
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Page reference |
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Business Acquisition |
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Report dated |
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Annual |
MD&A for the year ended |
Statements for the year |
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Information |
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ended |
(Incorporated by |
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Form |
(Incorporated by Reference) |
(Incorporated by Reference) |
Reference) |
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Cautionary Note Regarding Forward-Looking Statements |
4 |
72-97 |
37-44,48-50 |
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Corporate Structure |
6 |
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6 |
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Intercorporate Relationships |
6 |
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7 |
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Three-Year History |
7 |
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Reorganizations |
9 |
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Description of our Business |
10 |
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10 |
6, 12-25 |
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Distribution Methods |
10 |
12-25 |
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Pricing and Underwriting |
10 |
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Claims Management |
10 |
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Innovation |
11 |
44, 45 |
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Risk-Sharing Industry Pools |
11 |
47 |
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Regulatory Matters |
11 |
62-70, 86, 87 |
66, 67 |
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Competitive Conditions |
12 |
7, 30-36, 82 |
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Cycles and Seasonality |
12 |
42 |
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Group Reinsurance, Corporate and Other |
13 |
25, 45, 46, 54-57,62-70 |
51-53 |
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Environmental, Social and Governance Activities |
14 |
44, 48-52 |
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Risk Factors |
15 |
72-97 |
37-44,48-50 |
Schedule D |
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Description of Capital Structure |
16 |
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Common Shares |
16 |
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Class A Shares |
16 |
62-64 |
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Restrictions on Ownership and Transfers of Shares |
17 |
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18 |
59-62 |
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Shareholder Rights Plan |
19 |
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Ratings |
19 |
67, 94, 95 |
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Dividends |
21 |
95 |
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Common Share Dividend Increases |
21 |
67 |
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Market for Securities |
22 |
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Trading Price and Volume |
22 |
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Directors and Executive Officers |
24 |
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Directors of the Company |
24 |
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Executive Officers of the Company |
25 |
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Committees of the Board of Directors |
26 |
73 |
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Shareholdings of Directors and Executive Officers |
27 |
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Cease |
27 |
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Conflicts of Interest |
27 |
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Legal Proceedings and Regulatory Actions |
28 |
93 |
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Interest of Management and Others in Material Transactions |
29 |
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Transfer Agent and Registrar |
30 |
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Material Contracts |
31 |
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Interests of Experts |
33 |
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Additional Information |
34 |
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Glossary of Terms |
35 |
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Schedule A - Intercorporate Relationships |
37 |
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Schedule B - Summary of Amended and Restated Rights Plan |
38 |
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Schedule C - Education and Experience of the |
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Members of the Audit Committee |
41 |
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Schedule D - Mandate of the Audit Committee |
43 |
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3
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Table of contents |
Cautionary Note Regarding |
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Forward-Looking Statements |
Cautionary Note Regarding Forward-Looking Statements
Certain of the statements included or incorporated by reference in this AIF about the Company's current and future plans, expectations and intentions, results, levels of activity, performance, goals or achievements or any other future events or developments constitute forward-looking statements. The words "may", "will", "would", "should", "could", "expects", "plans", "intends", "trends", "indications", "anticipates", "believes", "estimates", "predicts", "likely", "potential" or the negative or other variations of these words, or other similar or comparable words or phrases, are intended to identify forward-looking statements. Unless otherwise indicated, all forward-looking statements directly included in this AIF are made as at February 8, 2022, and all forward-looking statements incorporated by reference are made as at February 8, 2022 and are subject to change after these dates. This AIF also contains forward-looking statements with respect to the acquisition (the "RSA Acquisition") and integration of
Forward-looking statements are based on estimates and assumptions made by management based on management's experience and perception of historical trends, current conditions and expected future developments, as well as other factors that management believes are appropriate
in the circumstances. In addition to other estimates and assumptions which may be identified herein, estimates and assumptions have been made regarding, among other things, the realization of the expected strategic, financial and other benefits of the RSA Acquisition, the Separation and the Sale, and economic and political environments and industry conditions. However, the completion of the Sale is subject to customary closing conditions, termination rights and other risks and uncertainties, including, without limitation, the Separation, regulatory approvals and clearances, and there can be no assurance that the Sale will be completed in a timely manner, or at all. There can also be no assurance that the strategic and financial benefits expected to result from the RSA Acquisition, the Separation or the Sale will be realized. Many factors could cause the Company's actual results, performance or achievements or future events or developments to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, the following factors:
- expected regulatory processes and outcomes in connection with its business;
- government regulations designed to protect policyholders and creditors rather than investors;
- the occurrence and frequency of catastrophe events, including a major earthquake;
- catastrophe losses caused by severe weather and other weather- related losses, as well as the impact of climate change;
- intense competition and disruption;
- unfavourable capital market developments or other factors, including the impact of the COVID-19 pandemic and related economic conditions, which may affect the Company's investments, floating rate securities and funding obligations under its pension plans;
- the Company's ability to implement its strategy or operate its business as management currently expects;
- its ability to accurately assess the risks associated with the insurance policies that the Company writes;
- the Company's ability to otherwise complete the integration of the business acquired within anticipated time periods and at expected cost levels, as well as its ability to operate in new jurisdictions relating to the RSA Acquisition;
- the Company's ability to achieve synergies arising from successful integration plans relating to acquisitions;
- the Company's reliance on information technology and telecommunications systems and potential failure of or disruption to those systems, including in the context of the impact on the ability of our workforce to perform necessary business functions remotely, as well as in the context of evolving cybersecurity risk;
- the impact of developments in technology and use of data on the Company's products and distribution;
- the Company's ability to contain fraud and/or abuse;
- periodic negative publicity regarding the insurance industry;
- the Company's reliance on brokers and third parties to sell its products to clients and provide services to the Company and the impact of COVID-19 and related economic conditions on such brokers and third parties;
- the occurrence of and response to public health crises including epidemics, pandemics or outbreaks of new infectious diseases, including, most recently, the COVID-19 pandemic and ensuing events;
- the volatility of the stock market and other factors affecting the trading prices of the Company's securities, including in the context of the COVID-19 crisis;
- litigation and regulatory actions, including with respect to the COVID-19 pandemic;
- changes in laws or regulations, including those adopted in response to COVID-19 that would, for example, require insurers to cover business interruption claims irrespective of terms after policies have been issued, and could result in an unexpected increase in the number of claims and have a material adverse impact on the Company's results;
- COVID-19related coverage issues and claims, including certain class actions and related defence costs, could negatively impact our claims reserves;
- terrorist attacks and ensuing events;
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4 |
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