Ia Financial Corporation Inc. · TSX:IAG
Ia Financial — Scotiabank Financials Summit 2023
34 slides from Ia Financial's conference presentation, September 2023
Slide 1: Inspired to Grow Together, Now
INSPIRED TO GROW TOGETHER, NOW Investor presentation
Slide 2: Forward-looking statements
Forward-looking statements This document may contain statements relating to strategies used by iA Financial Group or statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as “may”, “will”, “could”, “should”, “would”, “suspect”,
Slide 3: Non-IFRS and Additional Financial Measures
Non-IFRS and Additional Financial Measures iA Financial Corporation and iA Insurance report their financial results and statements in accordance with International Financial Reporting Standards (“IFRS”). They also publish certain financial measures or ratios that are not based on IFRS (“non-IFRS”).
Slide 4: Table of contents
Table of contents 2 Forward-looking statements APPENDICES 3 Non-IFRS and add. measures 22 Book value growth 5 iA Financial Group overview 23 Share price growth 6 Business segments 24 Dividend 7 Awards and distinctions 25 Investment portfolio 8 Shareholder value creation 26 Bond portfolio 27 Real est
Slide 5: The Group Today
Our mission iA Financial Group is one of the largest insurance and To ensure the financial wellbeing of our clients by offering wealth management groups in Canada, with operations them personal insurance coverage and investment in the United States. solutions to help them achieve their personal goal
Slide 6: Business Segments
BUSINESS SEGMENT INSURANCE, WEALTH US CANADA MANAGEMENT OPERATIONS Three • Individual insurance • Individual wealth • Individual insurance operational • Group insurance management • Dealer services business • Dealer services • Group savings and segments • iA Auto and Home retirement • Retail distrib
Slide 7: Excelling as a Group
#1 Number of individual insurance policies issued in Canada1 #1 Gross and net sales of segregated funds in Canada2 EXCELLING AS A GROUP #1 Wealth distribution (non-bank assets including seg. funds)3 #2 Dealer satisfaction at iA Auto Finance (car loans)4 8 Leading the 2023 US Dealers’ Choice Awards,
Slide 8: Shareholder Value Creation
SHAREHOLDER VALUE CREATION Industry leading share price and book value1 growth since IPO From sound management approach and long-term vision $83.89 Aug. 23, 2023 IAG Share Price Historical CAGR: 11% $65.39 June 30, 2023 $8.44 Book Value Per Share1 $7.875 Historical CAGR: 9% IPO2 1 Book value per com
Slide 9: H1/2023 Profitability and Financial Strength
H1/2023 PROFITABILITY AND FINANCIAL STRENGTH H1/2023 H1/20221 YoY HIGHLIGHTS Profitability Solid core earnings of $464M in H1/23 Core EPS $4.47 $4.26 +5% • 11% YoY growth in expected insurance earnings • 10% YoY growth in core insurance service result Core earnings $464M $460M +1% • 11% YoY growth i
Slide 10: Solid and Steady Growth of Earnings Power
SOLID AND STEADY Medium-term target of GROWTH OF Net income attributed to common shareholders 10%+ growth for core EPS on EARNINGS POWER Core earnings ($EPS) average per year 8.85 Strong correlation between 7.65 reported and core earnings 4.48 4.47 4.21 3.57 12% CAGR 2015-2022 for reported and core
Slide 11: Expanding Core ROE
EXPANDING CORE ROE While adding 25+ acquisitions since 20151 15%+ iA’s core ROE2 14.5% 14.5% 11.5% 2015-2022 core ROE always in-line or above guidance 2 2015 2016 2017 2018 2019 2020 2021 2022 2023 MEDIUM- TERM PPI TARGET Key strategic Hollis CTL and IAS Surex acquisitions Wealth DAC 1 Since introdu
Slide 12: Very Robust Capital Position
VERY ROBUST CAPITAL POSITION Flexible balance sheet Solvency ratio3 Robust solvency ratio Solvency ratio is one of the most significant well above operating target measures of a company’s financial strength + (end of period) Financial flexibility 149% 154% with low debt ratio of 14.7%1,2 134% + 126%
Slide 13: Strong and Ongoing Organic Capital Generation
STRONG AND ONGOING ORGANIC CAPITAL GENERATION A comprehensive KPI Organic Capital Generation Organic capital generation 2023 TARGET (~$M) $600M+3 = 550 490 Core Capital Organic Earnings Net of + CSM Growth2 – Required for Organic Dividend1 Growth H1/23: 280 $275M Before iA’s management 250 245 actio
Slide 14: Substantial Excess Capital Position $1.8B
SUBSTANTIAL EXCESS CAPITAL POSITION To support growth-driven strategy focused on strong shareholder value creation Capital available Capital deployment $1.8B for deployment (June 30, 2023) priorities 1 Profitable organic growth Investing in digital evolution to propel growth 2 RECENT INITIATIVES Dis
Slide 15: H1/2023 Sales – Continued Business Growth Momentum
H1/2023 SALES – CONTINUED BUSINESS GROWTH MOMEMTUM Year-to-date at June 30 SALES ($M, unless otherwise indicated) 2023 2022 Variation INSURANCE, CANADA Individual Insurance1 178 199 (11%) ▪ Strong sales for Individual Insurance in Canada (H1/23 result is up 36% from Group Insurance 211 166 27% H1/21
Slide 16: Proven Growth Strategy with a Strong Track Record
PROVEN GROWTH STRATEGY WITH A STRONG TRACK RECORD Growth of premiums and deposits† Growth in assets is a key long-term ORGANIC GROWTH from new sales and strong retention profitability driver iA’s strong and steady organic growth is of in-force business Assets under management (AUM) and supported by
Slide 17: Medium-Term Guidance
Core EPS growth 10%+ (medium-term) annual average MEDIUM-TERM Core ROE 15%+ (medium-term) GUIDANCE Solvency ratio 120% operating target Organic capital generation $600M+ (2023) Dividend 25% to 35% payout ratio† of core earnings † This item is a non-IFRS measure; see the “Non-IFRS and Additional Fina
Slide 18: Appendices
APPENDICES iA@ Financial Group
Slide 19: Industry Leader for Book Value Growth
INDUSTRY LEADER FOR IFRS 9 and 17 transition BOOK VALUE GROWTH iA’s book value maintained as a result of a sound management approach and long-term vision IAG Book value per share1 IAG book value per +73% and dividends paid share CAGR2 (at year-end) 5-year +7% Since 2000 +9% Peers3 +44% 0% 2017 2018
Slide 20: Industry Leader for Share Price Growth
INDUSTRY LEADER FOR SHARE PRICE GROWTH Total return (Share price growth with dividend reinvested, at year-end) +1,714% Best performance of Canadian lifecos +13% Compound Annual Growth Rate since IPO1 vs. +10% for peers2 Aug. 23, 2023 0% IPO1 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 201
Slide 21: Dividend to Common Shareholders
DIVIDEND TO COMMON SHAREHOLDERS $0.80 Dividend per share of $0.75 to 76.5¢ payable in $0.70 Q3/2023 $0.65 $0.60 $0.55 $0.50 $0.45 $0.40 Largest dividend increase (+29%) $0.35 among Canadian lifecos $0.30 following the lifting of regulatory restrictions in November 2021 $0.25 Steady increases $0.20 e
Slide 22: $41.7B Investment Portfolio
$41.7B INVESTMENT PORTFOLIO Resilient portfolio composed of high-quality assets and diversified exposures Bonds - Corporates - BB and lower: 1% Fixed income ALM1-oriented portfolio Investment properties: 4% ▪ Portfolio comprised of 69% in bonds with average credit rating between A and A+ Bonds - Cor
Slide 23: $28.5B Bond Portfolio
$28.5B BOND PORTFOLIO High-quality and conservative portfolio BOND PORTFOLIO EXPERIENCE IN Q2 • No defaults • Favourable credit rating changes, with more upgrades than downgrades BOND PORTFOLIO IS 69% OF TOTAL PORTFOLIO • 65% are corporate bonds and 35% are government & municipalities bonds Distribu
Slide 24: High Quality Investment Properties & Mortgages Portfolios
HIGH QUALITY INVESTMENT PROPERTIES & MORTGAGES PORTFOLIOS $1.8B INVESTMENT PROPERTIES $1.5B MORTGAGES ▪ Capital-efficient investment properties ▪ Disciplined underwriting process ▪ Average lease terms remaining of ~9 years1 ▪ Large portion rented to governments Combined portfolios ▪ 71% of mortgages
Slide 25: Strategic Growth Axes and Ambition
STRATEGIC GROWTH AXES AND AMBITION BUILDING FOR THE LONG TERM iA’s strategic plan is based on four strategic axes, each with its own ambition. ESG is another essential component of our development, referring to environmental, social and governance considerations.1 OUR STRATEGIC AXES OUR AMBITION To
Slide 26: Main Growth Drivers
MAIN GROWTH DRIVERS SALES EARNINGS Our key actions for success Remain at the Leverage full range Build on our Optimize synergies leading edge of of products to extensive between business digital tools meet clients’ relationships with units needs distributors Maintain Continue growing Digital and Lea
Slide 27: Shaping iA's Digital Ecosystem to Support Growth
SHAPING iA’S DIGITAL ECOSYSTEM TO SUPPORT GROWTH Growth Digital initiatives to contribute to 1%+ of annual core EPS growth Continuity of digital strategy goes beyond IT: An integrated approach based on our four strategic axes 360 client view – Deployment in progress Client — Enhanced client insight
Slide 28: Our Sustainability Approach
OUR SUSTAINABILITY APPROACH In order to be a company that contributes to sustainable growth and wellbeing for its clients, employees, partners, investors and communities, iA Financial Group makes sustainable development a priority 28
Slide 29: What We Do at iA
What we do atiA Data as at December 31, 2022 ENVIRONMENT :% aie me SOCIAL GOUVERNANCE ‘ . 0, For all iA Financial : Initial strategy: Reduce continu Gie=Hig 5 0 % Group Senior . negation Gi am@racnitensly7 GHG emissions Soe Leadership Positions? Integration of TCFD sustainable (scopes 1 and 2) as “
Slide 30: Credit Ratings
CREDIT RATINGS The company and its subsidiaries receive credit ratings from three independent rating agencies: Standard & Poor’s, DBRS and A.M. Best. These ratings, presented in the table below, confirm the financial strength of the company and its subsidiaries and their ability to meet their commit
Slide 31: Glossary
GLOSSARY Acronym Term Additional information ACL Allowance for credit losses Amount defined by IFRS 9 that adjusts the carrying amount of an asset for estimated future credit losses. AMF Autorité des marchés financiers Body mandated by the Government of Quebec to regulate Quebec insurers, including
Slide 32: Glossary (cont.)
GLOSSARY (cont.) Acronym Term Additional information IFRS International Financial Reporting Standards Set of accounting standards mandatory for Canadian publicly-owned companies. MD&A Management’s Discussion and Analysis - NCIB Normal course issuer bid - NFI Non-fixed income Asset class notably incl
Slide 33: Investor Relations
INVESTOR RELATIONS Contact Marie-Annick Bonneau Tel.: 418-931-0142 Marie-Annick.Bonneau@ia.ca Next Reporting Dates Q3/2023 - November 7, 2023 after market close Conference call on November 8, 2023 at 11AM Q4/2023 - February 20, 2024 after market close Conference call on February 21, 2024 Q1/2024 - M
Slide 34: iA Financial Group is a business name and trademark
iA Financial Group is a business name and trademark of iA Financial Corporation Inc. and Industrial Alliance Insurance and Financial Services Inc.
iA Financial Group — Scotiabank Financials Summit 2023 on 6ix