Ia Financial Corporation Inc. · TSX:IAG
Ia Financial — Scotiabank Financials Summit 2021
33 slides from Ia Financial's conference presentation, Sep 9, 2021
Slide 1: Guiding to solid growth
Guiding to solid growth Scotiabank Financials Summit September 9, 2021 PRESENT AND STRONG. More than ever.
Slide 2: iA Financial Group at a glance: purpose and mission
iA Financial Group Foundation $7.9B market is one of the largest insurance 1892 cap. and wealth management groups in Canada, with operations in the United States IAG on TSX $73.42 IPO in 2000 stock price OUR PURPOSE To assure that our clients feel confident and secure about their future 4M+ $76.23 a
Slide 3: Table of Contents
4 Solid growth targets Appendices TABLE 5 Earnings targets 18 Share price growth OF 6 Road to reach earnings targets 19 Book value vs. peers CONTENTS 7 Growth drivers 20 H1/2021 key results 8 Ecosystem of the future 21 H1/2021 results vs. guidance 9 Diversified business mix 22 Distinctive market pro
Slide 4: Staying on course with our long-term vision
Staying on course with our long-term vision • Vision based on four strategic axes Solid growth • Diversified business mix and strategic investment in digital targets STRATEGY • Strong core results in 2020: EPS up 9% YoY and ROE of 13.3% Committed to 10%+ core EPS EARNINGS • Impressive H1/2021: Core
Slide 5: Strong earnings targets built on solid track record
Strong earnings targets built on solid track record Core EPS Core ROE (diluted) (diluted) 2023 target 10%+ 13%-15% growth on 2021 target average 12.5%-14% per year 13.6% 13.1% 13.3% MID- GUIDANCE $7.90 MID- $7.12 GUIDANCE $6.55 TRACK RECORD TRACK RECORD 10.4% 12.8% 2015-2020 2016-2020 5-year 5-year
Slide 6: The road to reach earnings targets
THE ROAD TO REACH EARNINGS TARGETS Organic growth 6% A strong base from expected profit on in-force and business diversification + 2%+ Organic growth initiatives Supported by digital initiatives1 ≥ 10%+ + Distribution Core EPS growth on average 1%+ Supported by digital initiatives1 per year + Capita
Slide 7: Main growth drivers
MAIN GROWTH DRIVERS Our key actions for success SALES Leverage full Build on our Optimize Remain at the range of products extensive synergies leading edge of to meet relationships between digital tools clients’ needs with distributors business units EARNINGS Continue growing Digital and Lean Acceler
Slide 8: Shaping the iA ecosystem of the future
Shaping the iA ecosystem of the future Digital initiatives to contribute Continuity of digital strategy goes beyond IT: Growth to 1%+ of annual core EPS growth An integrated approach based on our four strategic axes Deepening a 360 client view Client • Provide a high-level client/advisor experience
Slide 9: Diversified business mix
Diversified business mix driven by Shared purpose / Strong vision / High ambition Businesses at the Businesses targeted foundation for strong of iA’s operations Individual Retail expansion Insurance distribution (Canada) ▪ iA is already a leader and seeks ▪ iA is seeking to become a leader to streng
Slide 10: Becoming a leader in businesses targeted for strong expansion
Already a leader in foundation businesses Expansion businesses Becoming a leader in businesses targeted Individual • Insurance #1 in number of policies sold for strong expansion Retail (Canada) • Targeting mid/mass market distribution • #1 in gross and net seg fund sales Individual Individual Wealth
Slide 11: US Dealer Services guiding to solid growth
US Dealer Services guiding to solid growth Sales ($US) • Growth through new dealer enrolment and increased sales from existing accounts Well-balanced business mix: ~50/50 between new and used cars • IAS integration is progressing well Starting to reap the benefits of the synergies between IAS and DA
Slide 12: Individual Wealth Management
▪ #1 in the industry for gross and net sales Segregated Wealth funds ▪ High-performance digital tools, complete product line Individual Wealth Management and extensive distribution networks management businesses ▪ Continued sales momentum with solid net fund entries Mutual funds ▪ H1/2021 gross sale
Slide 13: Strong and flexible balance sheet
Strong and flexible balance sheet Solvency ratio of 130%, comfortably above iA’s target level of 110% to 116% Ratios Leverage ratio of 23.6%, providing financial flexibility (June 30, 2021) Coverage ratio of 14.8x Distinctive Embedded in reserving process, iA’s distinctive market protection decrease
Slide 14: Strong, improved and ongoing organic capital generation
Strong, improved and ongoing organic capital generation resulting from our reduced risk profile 325 Organic capital generation ($M) H1/2021: ~$190M = Core net income to common shareholders ~ 280 − Dividends paid to common shareholders Expecting to exceed 2021 target − Required capital increase in no
Slide 15: Capital allocation
CAPITAL ALLOCATION Focused on growth Organic growth Investing in digital evolution to propel growth Acquisitions Ready to conclude bolt-on acquisitions to strengthen strategic positioning Dividends Increases to resume within our target range, when permitted by regulators NCIB $ To resume when permit
Slide 16: Senior management recent appointments
Senior management recent appointments to execute our growth strategy PHILIPPE SARFATI, Executive Vice-President and Chief Risk Officer ▪ Leader of risk management practice improvement ▪ Assures that our clients feel confident and secure about their future when doing business with iA ▪ 30 years of ex
Slide 17: Appendices
Appendices Financial
Slide 18: Industry leader for share price growth
Industry leader for share price growth +1,400% Total return July 31, (Share price growth 2021 with dividend reinvested, at year-end) Best performance of Canadian lifecos 0% IPO1 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 18 1 Feb. 3, 2000
Slide 19: Strong and steady record of value creation
Strong and steady record of value creation IAG Book value per share IAG book value +439% and dividends paid per share CAGR1 (at year-end) 1-year +11% 5-year +9% 10-year +9% Best performance Since 2000 +10% Peers of Canadian lifecos +239% 0% June 30, June 30, 2004 2005 2006 2007 2008 2009 2010 2011 2
Slide 20: H1/2021 key results
H1/2021 Sustained growth momentum Strong results from all sectors, KEY RESULTS most notably iAAH, US Dealer Services and car loans Core EPS Core ROE P&D $4.08 14.2% $8.4B +28% YoY Above guidance +34% YoY AUM/AUA Solvency ratio Book value $210.5B 130% $59.02 +16% YoY Above target +11% YoY 20 This sli
Slide 21: H1/2021 results vs. guidance
H1/2021 results vs. guidance Results compare favourably with guidance 2021 guidance H1/2021 results Core EPS $3.65 to $3.95 in H1 $4.08 Core ROE (trailing 12 months) 12.5% to 14.0% 14.2% Impact of new business (strain) -5% to 10% 2% Solvency ratio 110% to 116% 130% Capital generation $275M to $325M
Slide 22: iA's distinctive financial market protection
iA’s distinctive financial market protection Available capital Differentiator (solvency ratio) PROTECTIONS • Protection of ~$650M after-tax Additional stock market protection ▪ Worth more than 9 percentage points of solvency ratio in actuarial reserves ▪ In the form of a margin, it increases/decreas
Slide 23: Solvency ratio market-related sensitivity at Dec. 31, 2020
Solvency ratio market-related sensitivity at Dec. 31, 2020 Sensitivity continues to be low Equity market variation1 (30%) (20%) (10%) +10% +20% +30% ► Impact on solvency ratio Dec. 31, 2020 +1% +2% +1% 0% 0% +2% (in percentage points) Interest rate variation2 (50 bps) (25 bps) +25 bps +50 bps ► Impa
Slide 24: Additional protections in reserves for pandemic uncertainty
Additional protections in reserves for pandemic uncertainty Canada: Q2 mortality slightly above expectations (1¢ EPS experience loss) US: Q2 mortality better than expected (2¢ EPS excess provision carried forward) (amounts in millions of dollars Intitial value Current value are expressed before taxe
Slide 25: Solid long-term business growth
Solid long-term business growth Net premiums, premium AUM/AUA equivalents and deposits (Assets under management and administration, end of period, $B) ($B) +13% 14.1 +11% 197.5 +8% 5-year +11% 5-year 10-year CAGR CAGR 10-year CAGR CAGR 6.8 69.3 25
Slide 26: Improved risk profile acknowledged by credit rating agencies
Improved risk profile acknowledged by credit rating agencies iA Financial Industrial Alliance Credit rating Corporation Inc. Insurance and agency Financial Services Inc. Outlook ISSUER RATING FINANCIAL STRENGTH Standard & Poor’s A AA- Stable Upgraded in 2019 DBRS Morningstar A AA (low) Stable Upgrad
Slide 27: ESG ambition
ESG ambition To contribute to sustainable growth and wellbeing for our ENVI Reduction of our GHG emissions RON clients, employees, partners, investors and communities MENT by 20% per employee by 2025 Now and in the future, achieve increased gender equity of SO between 40% and 60% CIAL in iA Financia
Slide 28: ESG - A cohesive, mobilizing vision
ESG − A cohesive, mobilizing vision • Carbon neutral since the beginning of 2020 ENVI • Focused on initiatives aimed at reducing our GHG emissions RON • $80.5 million of new investments in renewable energy in 2020 MENT • Majority of our 40+ properties in Canada are BOMA BEST or LEED certified • Part
Slide 29: Investor Relations
Investor Relations Contact Marie-Annick Bonneau Tel.: 418-684-5000, ext. 104287 Marie-Annick.Bonneau@ia.ca Next Reporting Dates Q3/2021 - November 3, 2021 Q4/2021 - February 17, 2022 For information on our earnings releases, conference calls and related disclosure documents, consult the Investor Rel
Slide 30: Non-IFRS financial information
Non-IFRS financial information iA Financial Corporation reports its financial results and statements in accordance with International Financial Reporting Standards (IFRS). It also publishes certain financial measures that are not based on IFRS (non-IFRS). A financial measure is considered a non-IFRS
Slide 31: Non-IFRS financial information (cont.)
Non-IFRS financial information (cont.) Core earnings (loss) and financial measures based on core earnings (loss), including core EPS and core ROE, are non-IFRS financial measures used to better understand the capacity of the Company to generate sustainable earnings. Core earnings (loss) remove from
Slide 32: Forward-looking statements
Forward-looking statements This presentation may contain statements relating to strategies used by iA Financial Corporation or statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as “may,” “could,” “should,” “would,” “suspect
Slide 33: Financial Group
Financial Group
iA Financial Group — Scotiabank Financials Summit 2021 on 6ix