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Financial Risk Management (Tables)
 12 Months Ended
Dec. 31, 2018
Disclosure of nature and extent of risks arising from financial instruments [abstract]  
Concentration of risk by region and line of business based on gross premiums written
The table below shows the company's concentration of insurance risk by region and line of business based on gross premiums written prior to giving effect to ceded reinsurance premiums. The company's exposure to general insurance risk varies by geographic region and may change over time. Premiums ceded to reinsurers (including retrocessions) in 2018 by line of business amounted to $1,267.2 for property (2017 - $992.3), $1,443.4 for casualty (2017 - $916.3) and $386.7 for specialty (2017 - $315.4).
 
 
Canada 
 
United States 
 
Asia(1)
 
International(2) 
 
Total 
For the years ended December 31
2018

 
2017

 
2018

 
2017

 
2018

 
2017

 
2018

 
2017

 
2018

 
2017

Property
732.6

 
646.8

 
2,704.3

 
1,878.6

 
634.5

 
586.5

 
1,495.8

 
995.7

 
5,567.2

 
4,107.6

Casualty
695.4

 
602.6

 
6,082.3

 
4,899.4

 
384.5

 
400.8

 
1,210.8

 
805.0

 
8,373.0

 
6,707.8

Specialty
164.6

 
143.4

 
619.8

 
548.8

 
215.3

 
275.1

 
588.4

 
424.8

 
1,588.1

 
1,392.1

Total
1,592.6

 
1,392.8

 
9,406.4

 
7,326.8

 
1,234.3

 
1,262.4

 
3,295.0

 
2,225.5

 
15,528.3

 
12,207.5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Insurance
1,492.5

 
1,295.3

 
7,439.7

 
5,855.4

 
692.4

 
684.9

 
2,270.4

 
1,494.3

 
11,895.0

 
9,329.9

Reinsurance
100.1

 
97.5

 
1,966.7

 
1,471.4

 
541.9

 
577.5

 
1,024.6

 
731.2

 
3,633.3

 
2,877.6

 
1,592.6

 
1,392.8

 
9,406.4

 
7,326.8

 
1,234.3

 
1,262.4

 
3,295.0

 
2,225.5

 
15,528.3

 
12,207.5

(1)
The Asia geographic segment comprises countries located throughout Asia, including China, India, Sri Lanka, Malaysia, Singapore, Indonesia and Thailand, and the Middle East.
(2)
The International geographic segment comprises Australia and countries located in Africa, Europe and South America.
Schedule of aggregate gross credit risk exposure
The company's gross credit risk exposure at December 31, 2018 (without consideration of amounts held by the company as collateral) was comprised as follows:
 
 
December 31, 2018
 
 
December 31, 2017
 
Cash and short term investments
 
7,361.3

 
 
19,198.8

Investments in debt instruments:
 
 
 
 
 
U.S. sovereign government(1)
 
10,464.0

 
 
1,779.3

Other sovereign government rated AA/Aa or higher(1)(2)
 
1,368.1

 
 
615.4

All other sovereign government(3)
 
1,189.9

 
 
1,268.4

Canadian provincials
 
51.9

 
 
93.8

U.S. states and municipalities
 
363.2

 
 
2,452.1

Corporate and other
 
7,124.4

 
 
4,081.8

Receivable from counterparties to derivative contracts
 
168.2

 
 
126.7

Insurance contract receivables
 
5,110.7

 
 
4,686.9

Recoverable from reinsurers
 
8,400.9

 
 
7,812.5

Other assets
 
1,159.6

 
 
1,708.9

Total gross credit risk exposure
 
42,762.2

 
 
43,824.6

(1)
Representing together 30.5% of the company's total investment portfolio at December 31, 2018 (December 31, 2017 - 6.1%) and considered by the company to have nominal credit risk.
(2)
Comprised primarily of bonds issued by the governments of Canada, Australia, Germany, and the U.K with fair values at December 31, 2018 of $964.7, $93.6, $49.1 and $33.2 respectively (December 31, 2017 - $84.4, $97.9, $105.3, and $90.9).
(3)
Comprised primarily of bonds issued by the governments of India, Spain and Poland with fair values at December 31, 2018 of $527.5, $210.6 and $127.4 respectively (December 31, 2017 - $734.7, nil and $125.1).
Schedule of fixed income portfolio according to credit rating
The composition of the company's investments in debt instruments classified according to the higher of each security's respective S&P and Moody's issuer credit rating is presented in the table that follows:
 
 
December 31, 2018
 
December 31, 2017
Issuer Credit Rating 
 
Amortized cost

 
Fair value 

 
%
 
Amortized cost

 
Fair value 

 
%
AAA/Aaa
 
11,931.0

 
11,920.5

 
58.1
 
2,476.3

 
2,432.0

 
23.7
AA/Aa
 
1,107.6

 
1,115.3

 
5.4
 
2,149.5

 
2,408.8

 
23.4
A/A
 
2,214.0

 
2,184.7

 
10.6
 
823.1

 
819.8

 
8.0
BBB/Baa
 
2,583.1

 
2,641.8

 
12.8
 
1,617.1

 
1,764.8

 
17.1
BB/Ba
 
125.0

 
131.8

 
0.6
 
151.1

 
154.0

 
1.5
B/B
 
87.8

 
79.7

 
0.4
 
448.7

 
447.6

 
4.3
Lower than B/B
 
27.6

 
27.5

 
0.1
 
554.1

 
432.7

 
4.2
Unrated(1)
 
2,412.4

 
2,460.2

 
12.0
 
1,594.4

 
1,831.1

 
17.8
Total
 
20,488.5

 
20,561.5

 
100.0
 
9,814.3

 
10,290.8

 
100.0
(1)
Comprised primarily of the fair value of the company's investments in Blackberry Limited of $512.4 (December 31, 2017 - $663.6), EXCO Resources, Inc. of $504.6 (previously rated B/B at December 31, 2017 - $402.0), Sanmar Chemicals Group of $392.8 (December 31, 2017 - $333.2), Seaspan Corporation of $242.9 (December 31, 2017 - nil) and Chorus Aviation Inc. of $138.6 (December 31, 2017 - $155.2).
Schedule of credit risk related to derivative contract counterparties
The following table sets out the company's credit risk related to derivative contract counterparties, assuming all such counterparties are simultaneously in default:
 
December 31, 2018
 
 
December 31, 2017
 
Total derivative assets(1)
 
168.2

 
 
126.7

Obligations that may be offset under net settlement arrangements
 
(83.4
)
 
 
(38.6
)
Fair value of collateral deposited for the benefit of the company(2)
 
(17.9
)
 
 
(39.1
)
Excess collateral pledged by the company in favour of counterparties
 
26.1

 
 
9.0

Initial margin not held in segregated third party custodian accounts
 
2.0

 
 
8.2

Net derivative counterparty exposure after net settlement and collateral arrangements
 
95.0

 
 
66.2

(1)
Excludes equity warrants, equity warrant forward contracts, equity call options and other derivatives which are not subject to counterparty risk.
(2)
Excludes excess collateral pledged by counterparties of $1.5 at December 31, 2018 (December 31, 2017 - $0.4).
Schedule of gross reinsurance recoverable by reinsurer financial strength rating
The following table presents the gross recoverable from reinsurers classified according to the financial strength ratings of the reinsurers. Pools and associations are generally government or similar insurance funds with limited credit risk.
 
December 31, 2018
 
December 31, 2017
A.M. Best Rating
(or S&P equivalent)
Gross
recoverable
from reinsurers
 
 
Outstanding
balances for
which security 
is held
 
 
Net unsecured
recoverable
from reinsurers
 
 
Gross
recoverable
from reinsurers
 
 
Outstanding
balances for
which security 
is held
 
 
Net unsecured
recoverable
from reinsurers
 
A++
 
369.8

 
 
28.9

 
 
340.9

 
 
429.6

 
 
31.9

 
 
397.7

A+
 
4,225.2

 
 
264.8

 
 
3,960.4

 
 
3,878.4

 
 
267.2

 
 
3,611.2

A
 
2,255.2

 
 
85.5

 
 
2,169.7

 
 
2,311.9

 
 
95.4

 
 
2,216.5

A-
 
247.9

 
 
9.6

 
 
238.3

 
 
245.5

 
 
15.1

 
 
230.4

B++
 
32.4

 
 
10.5

 
 
21.9

 
 
22.2

 
 
1.2

 
 
21.0

B+
 
1.5

 
 
0.3

 
 
1.2

 
 
3.1

 
 
0.8

 
 
2.3

B or lower
 
10.3

 
 
1.8

 
 
8.5

 
 
5.4

 
 
3.0

 
 
2.4

Not rated
 
1,139.6

 
 
673.4

 
 
466.2

 
 
948.2

 
 
493.8

 
 
454.4

Pools and associations
 
283.8

 
 
3.7

 
 
280.1

 
 
134.6

 
 
4.5

 
 
130.1

 
 
8,565.7

 
 
1,078.5

 
 
7,487.2

 
 
7,978.9

 
 
912.9

 
 
7,066.0

Provision for uncollectible reinsurance
 
(164.8
)
 
 
 

 
 
(164.8
)
 
 
(166.4
)
 
 
 

 
 
(166.4
)
Recoverable from reinsurers
 
8,400.9

 
 
 

 
 
7,322.4

 
 
7,812.5

 
 
 

 
 
6,899.6
Disclosure of maturity analysis for non-derivative financial liabilities
The following tables set out the maturity profile of the company's financial liabilities based on the expected undiscounted cash flows from the balance sheet date to the contractual maturity date or the settlement date:
 
 
December 31, 2018
 
Less than
3 months

 
3 months
to 1 year

 
1 - 3 years

 
3 - 5 years

 
More than
5 years

 
Total

Accounts payable and accrued liabilities(1)
1,712.1

 
809.6

 
569.5

 
103.4

 
123.2

 
3,317.8

Funds withheld payable to reinsurers
142.3

 
417.1

 
44.5

 
—

 
70.4

 
674.3

Provision for losses and loss adjustment expenses
2,385.8

 
5,428.5

 
8,292.1

 
4,578.1

 
8,397.2

 
29,081.7

Borrowings - holding company and insurance and reinsurance companies:
 
 
 
 
 
 
 
 
 
 
 
Principal
0.1

 
8.1

 
380.2

 
620.0

 
3,868.3

 
4,876.7

Interest
53.5

 
177.7

 
451.4

 
391.4

 
783.2

 
1,857.2

Borrowings - non-insurance companies:
 
 
 
 
 
 
 
 
 
 
 
Principal
159.5

 
866.7

 
356.0

 
157.9

 
89.6

 
1,629.7

Interest
20.1

 
39.3

 
43.7

 
22.1

 
63.5

 
188.7

 
4,473.4

 
7,747.0

 
10,137.4

 
5,872.9

 
13,395.4

 
41,626.1

 
December 31, 2017
 
Less than
3 months

 
3 months
to 1 year

 
1 - 3 years

 
3 - 5 years

 
More than
5 years

 
Total

Accounts payable and accrued liabilities(1)
1,518.9

 
558.4

 
458.7

 
215.9

 
92.1

 
2,844.0

Funds withheld payable to reinsurers
186.6

 
553.2

 
41.9

 
1.4

 
67.1

 
850.2

Provision for losses and loss adjustment expenses
2,108.8

 
5,344.5

 
8,272.0

 
4,557.3

 
8,328.2

 
28,610.8

Borrowings - holding company and insurance and reinsurance companies:
 
 
 
 
 
 
 
 
 
 
 
Principal
—

 
149.2

 
558.3

 
1,264.9

 
2,856.4

 
4,828.8

Interest
28.4

 
225.1

 
488.5

 
355.1

 
672.9

 
1,770.0

Borrowings - non-insurance companies:
 
 
 
 
 
 
 
 
 
 
 
Principal
47.1

 
808.8

 
319.2

 
291.9

 
101.1

 
1,568.1

Interest
17.2

 
45.0

 
54.4

 
26.4

 
72.7

 
215.7

 
3,907.0

 
7,684.2

 
10,193.0

 
6,712.9

 
12,190.5

 
40,687.6

(1)
Excludes pension and post retirement liabilities, ceded deferred premium acquisition costs, deferred gift card, hospitality and other revenue, and accrued interest. Operating lease commitments are described in note 22.
Disclosure of maturity analysis for derivative financial liabilities
The following table provides a maturity profile of the company's short sale and derivative obligations based on the expected undiscounted cash flows from the balance sheet date to the contractual maturity date or the settlement date:
 
December 31, 2018
 
December 31, 2017
 
Less than
3 months

 
3 months
to 1 year

 
More than 1 year

 
Total

 
Less than
3 months

 
3 months
to 1 year

 
Total

Equity total return swaps - short positions
13.4

 
—

 
—

 
13.4

 
12.1

 
—

 
12.1

Equity total return swaps - long positions
51.7

 
—

 
—

 
51.7

 
15.6

 
—

 
15.6

Foreign exchange forward contracts
45.7

 
8.0

 
—

 
53.7

 
58.1

 
11.6

 
69.7

U.S. treasury bond forwards
30.4

 
—

 
—

 
30.4

 
28.8

 
—

 
28.8

Other derivative contracts
—

 
—

 
0.3

 
0.3

 
—

 
—

 
—

 
141.2

 
8.0

 
0.3

 
149.5

 
114.6

 
11.6

 
126.2
Schedule of potential impact of changes in interest rates on fixed asset portfolio
The table below displays the potential impact of changes in interest rates on the company's fixed income portfolio based on parallel 200 basis point shifts up and down, in 100 basis point increments. This analysis was performed on each individual security to determine the hypothetical effect on net earnings.
 
 
December 31, 2018
 
 
December 31, 2017
 
Fair value of 
fixed income 
portfolio
 
 
 
Hypothetical 
change in net earnings(1)

 
Hypothetical 
% change 
in fair value(1)
 
 
Fair value of
fixed income
portfolio
 
 
 
Hypothetical 
change in net earnings(1)

 
Hypothetical 
% change 
in fair value(1)
 
Change in interest rates
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
200 basis point increase
 
19,902.5

 
 
(541.1
)
 
 
(3.2
)
 
 
9,897.4

 
 
(306.2
)
 
 
(3.8
)
100 basis point increase
 
20,227.4

 
 
(274.3
)
 
 
(1.6
)
 
 
10,090.1

 
 
(155.6
)
 
 
(2.0
)
No change
 
20,561.5

 
 
—

 
 
—

 
 
10,290.8

 
 
—

 
 
—

100 basis point decrease
 
20,915.6

 
 
290.4

 
 
1.7

 
 
10,498.6

 
 
161.3

 
 
2.0

200 basis point decrease
 
21,282.1

 
 
590.6

 
 
3.5

 
 
10,720.5

 
 
332.0

 
 
4.2

(1)
Includes the impact of forward contracts to sell long dated U.S. treasury bonds with a notional amount of $471.9 at December 31, 2018 (December 31, 2017 - $1,693.8).
Schedule of impact of equity and equity related holdings on the financial position
The following table summarizes the net effect of the company's equity and equity-related holdings (long exposures net of short exposures) on the company's financial position as at December 31, 2018 and 2017 and results of operations for the years then ended. The company considers the fair value of $4,522.4 (December 31, 2017 – $3,846.2) of its non-insurance investments in associates (see note 6) as a component of its equity and equity-related holdings when assessing its net equity exposures.
 
December 31, 2018
 
 
December 31, 2017
 
Year ended December 31, 2018
 
Year ended December 31, 2017
 
Exposure/Notional
amount

 
Carrying
value

 
 
Exposure/Notional
amount

 
Carrying
value

 
Pre-tax earnings
(loss)
 
 
Pre-tax earnings (loss)
 
Long equity exposures:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common stocks(1)
5,148.2

 
5,148.2

 
 
5,578.1

 
5,578.1

 
 
(386.2
)
 
 
707.8

Preferred stocks – convertible
107.9

 
107.9

 
 
68.1

 
68.1

 
 
2.9

 
 
(1.6
)
Bonds – convertible
595.6

 
595.6

 
 
833.8

 
833.8

 
 
(171.3
)
 
 
233.1

Investments in associates(2)(3)
4,522.4

 
4,309.0

 
 
3,846.2

 
2,945.3

 
 
1,028.8

 
 
69.8

Derivatives and other invested assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity total return swaps – long positions
390.3

 
(46.9
)
 
 
697.8

 
2.2

 
 
(86.3
)
 
 
19.6

Equity warrant forward contracts(4)
316.6

 
38.4

 
 
—

 
—

 
 
113.9

 
 
—

Equity warrants and call options(4)
79.8

 
79.8

 
 
77.6

 
77.6

 
 
(69.9
)
 
 
38.3

Total equity and equity related holdings
11,160.8

 
10,232.0

 
 
11,101.6

 
9,505.1

 
 
431.9

 
 
1,067.0

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Short equity exposures:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivatives and other invested assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity total return swaps – short positions
(414.4
)
 
8.9

 
 
(892.5
)
 
(0.3
)
 
 
(33.9
)
 
 
(408.7
)
Equity index total return swaps – short positions
—

 
—

 
 
(52.6
)
 
0.4

 
 
(4.3
)
 
 
(9.2
)
 
(414.4
)
 
8.9

 
 
(945.1
)
 
0.1

 
 
(38.2
)
 
 
(417.9
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net equity exposures and financial effects
10,746.4

 
 
 
 
10,156.5

 
 
 
 
393.7

 
 
649.1

(1)
The company excludes other funds that are invested principally in fixed income securities with a carrying value of $150.3 at December 31, 2018 (December 31, 2017 - $90.9) when measuring its equity and equity-related exposure.
(2)
Excludes the company’s insurance and reinsurance investments in associates which are considered long term strategic holdings. See note 6 for details.
(3)
On March 1, 2018 Thomas Cook India entered into a strategic agreement with the founder of Quess that resulted in Quess becoming an associate of Thomas Cook India whereas it was previously a consolidated subsidiary. Accordingly, the company re-measured the carrying value of Quess to its fair value of $1,109.5, recognized a non-cash gain of $889.9 and commenced applying the equity method of accounting.
(4)
Includes the Seaspan warrants and forward contracts described in note 6.
Schedule of potential impact of changes in the fair value of equity and equity related holdings
The table that follows illustrates the potential impact on net earnings of changes in the fair value of the company's equity and equity-related holdings (long exposures net of short exposures) as a result of changes in global equity markets at December 31, 2018 and 2017. The analysis assumes variations of 5% and 10% which the company believes to be reasonably possible based on analysis of the return on various equity indexes and management's knowledge of global equity markets.
 
 
December 31, 2018
 
 
December 31, 2017
 
Fair value of
equity and equity-related holdings
 
 
Hypothetical 
$ change effect 
on net earnings
 
 
Hypothetical 
% change 
in fair value
 
 
Fair value of
equity and equity-related holdings
 
 
Hypothetical
$ change effect
on net earnings
 
 
Hypothetical
% change
in fair value
 
Change in global equity markets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10% increase
 
6,807.2

 
 
498.3

 
 
9.4

 
 
6,887.9

 
 
479.9

 
 
9.2

5% increase
 
6,510.9

 
 
244.9

 
 
4.6

 
 
6,597.9

 
 
239.0

 
 
4.6

No change
 
6,224.0

 
 
—

 
 
—

 
 
6,310.3

 
 
—

 
 
—

5% decrease
 
5,929.9

 
 
(251.3
)
 
 
(4.7
)
 
 
6,023.0

 
 
(238.5
)
 
 
(4.6
)
10% decrease
 
5,645.7

 
 
(493.8
)
 
 
(9.3
)
 
 
5,738.1

 
 
(475.0
)
 
 
(9.1
)
Schedule of pre-tax foreign currency effect
The pre-tax foreign exchange effect on certain line items in the company's consolidated financial statements for the years ended December 31 follows:
 
2018

 
2017

Net gains (losses) on investments:
 
 
 
Investing activities
(171.3
)
 
88.8

Underwriting activities
31.6

 
(74.9
)
Foreign currency forward contracts
7.9

 
(11.1
)
Foreign currency net gains (losses) included in pre-tax earnings (loss)
(131.8
)
 
2.8
Schedule of effect of currency appreciation
The table below shows the approximate effect of a 10% appreciation of the U.S. dollar against each of the Canadian dollar, euro, British pound sterling, Indian rupee and all other currencies, respectively, on pre-tax earnings (loss), net earnings (loss), pre-tax other comprehensive income (loss) and other comprehensive income (loss). Certain shortcomings are inherent in the method of analysis presented, including the assumption that the 10% appreciation of the U.S. dollar occurred at December 31, 2018 with all other variables held constant.
 
 
Canadian dollar
 
Euro
 
British
pound sterling
 
Indian rupee
 
All other currencies
 
Total
 
 
2018

 
2017

 
2018

 
2017

 
2018

 
2017

 
2018

 
2017

 
2018

 
2017

 
2018

 
2017

Pre-tax earnings (loss)
 
0.1

 
65.1

 
37.8

 
12.5

 
15.6

 
11.5

 
(105.8
)
 
(129.5
)
 
(96.9
)
 
(111.8
)
 
(149.2
)

(152.2
)
Net earnings (loss)
 
(1.3
)
 
48.7

 
31.8

 
10.0

 
12.6

 
10.9

 
(95.0
)
 
(114.6
)
 
(74.3
)
 
(91.1
)
 
(126.2
)

(136.1
)
Pre-tax other comprehensive income (loss)
 
(130.5
)
 
(150.5
)
 
(13.8
)
 
(121.6
)
 
(98.5
)
 
(67.2
)
 
(308.7
)
 
(257.1
)
 
(99.5
)
 
(108.5
)
 
(651.0
)

(704.9
)
Other comprehensive income (loss)
 
(128.2
)
 
(147.7
)
 
(4.9
)
 
(109.2
)
 
(98.1
)
 
(66.8
)
 
(305.7
)
 
(253.7
)
 
(93.4
)
 
(101.6
)
 
(630.3
)

(679.0
)
Schedule of capital management, financial measurements
The company manages its capital based on the following financial measurements and ratios to provide an indication of the company's ability to issue and service debt without impacting the operating companies or their portfolio investments:
 
Consolidated
 
Excluding consolidated non-insurance companies
 
 
December 31, 2018

 
December 31, 2017

 
December 31, 2018

 
December 31, 2017

 
Holding company cash and investments (net of short sale and derivative obligations)
1,550.6

 
2,356.9

 
1,550.6

 
2,356.9

 
 
 
 
 
 
 
 
 
 
Borrowings – holding company
3,859.5

 
3,475.1

 
3,859.5

 
3,475.1

 
Borrowings – insurance and reinsurance companies
995.7

 
1,373.0

 
995.7

 
1,373.0

 
Borrowings – non-insurance companies
1,625.2

 
1,566.0

 
—

 
—

 
Total debt
6,480.4

 
6,414.1

 
4,855.2

 
4,848.1

 
Net debt(1)
4,929.8

 
4,057.2

 
3,304.6

 
2,491.2

 
 
 
 
 
 
 
 
 
 
Common shareholders’ equity
11,779.3

 
12,475.6

 
11,779.3

 
12,475.6

 
Preferred stock
1,335.5

 
1,335.5

 
1,335.5

 
1,335.5

 
Non-controlling interests
4,250.4

 
4,600.9

 
1,437.1

 
1,725.9

 
Total equity
17,365.2

 
18,412.0

 
14,551.9

 
15,537.0

 
 
 
 
 
 
 
 
 
 
Net debt/total equity
28.4
%
 
22.0
%
 
22.7
%
 
16.0
%
 
Net debt/net total capital(2)     
22.1
%
 
18.1
%
 
18.5
%
 
13.8
%
 
Total debt/total capital(3)     
27.2
%
 
25.8
%
 
25.0
%
 
23.8
%
 
Interest coverage(4)     
3.5x

 
7.1x

 
3.2x

(6) 
8.0x

(6) 
Interest and preferred share dividend distribution coverage(5)    
3.0x

 
6.0x

 
2.6x

(6) 
6.5x

(6) 
(1)
Net debt is calculated by the company as total debt less holding company cash and investments (net of short sale and derivative obligations).
(2)
Net total capital is calculated by the company as the sum of total equity and net debt.
(3)
Total capital is calculated by the company as the sum of total equity and total debt.
(4)
Interest coverage is calculated by the company as the sum of earnings (loss) before income taxes and interest expense divided by interest expense.
(5)
Interest and preferred share dividend distribution coverage is calculated by the company as the sum of earnings (loss) before income taxes and interest expense divided by interest expense and preferred share dividend distributions adjusted to a pre-tax equivalent at the company’s Canadian statutory income tax rate.
(6)
Excludes earnings (loss) before income taxes, and interest expense, of consolidated non-insurance companies. The ratios for the year ended December 31, 2018 include the non-cash gain of $889.9 from the deconsolidation of Quess (note 23).