Slide 1: Second Quarter 2024 Conference Call
Second Quarter 2024 Conference Call Presenters: Denis Ricard, President and CEO Éric Jobin, EVP, CFO and Chief Actuary August 7, 2024
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 (hereinafter referred to individually in this section as the “Company”) report their financial results and statements in accordance with International Financial Reporting Standards (“IFRS”). They also publish certai
Slide 4: Table of Contents
TABLE OF CONTENTS 2 Forward-looking statements APPENDICES 3 Non-IFRS and add. measures 21 Book value 32 Insurance, Canada 8 Q2/2024 key results 22 Dividend 33 Insurance, Canada (cont.) 9 Sales - Insurance, Canada 23 Operational efficiency initiatives 34 Wealth Management 10 Sales - Wealth Management
Slide 5: Agenda
AGENDA ▪ Key results Denis Ricard ▪ Business growth President and CEO ▪ Financial targets ▪ Profitability Éric Jobin ▪ Financial strength EVP, CFO and Chief Actuary ▪ Questions & Answers 5
Slide 6: Denis Ricard
Denis Ricard President and CEO 6
Slide 7: Present on the Call
PRESENT ON THE CALL Denis Ricard Éric Jobin President and CEO EVP, Chief Financial Officer and Chief Actuary Alain Bergeron Stephan Bourbonnais EVP, Chief Investment Officer EVP, Wealth Management Renée Laflamme Pierre Miron EVP, Individual Insurance, EVP, Chief Growth Officer Savings and Retirement
Slide 8: Q2/2024 – A Solid Quarter
Q2/2024 – A SOLID QUARTER $2.75 Core EPS† 15% YoY growth Sustained business growth momentum 15.0% Core ROE1,2,† Meeting the 15%+ medium-term target Strong sales in Canada and the US † Premiums and deposits Record core EPS up 15% YoY +15% YoY AUM/AUA† 12% YoY growth Core ROE meeting the medium-term t
Slide 9: Q2/2024 Business Growth – Insurance, Canada
Q2/2024 BUSINESS GROWTH – Insurance, Canada HIGHLIGHTS INDIVIDUAL INSURANCE GROUP INSURANCE (sales† in $M) Employee Plans and Special Markets Individual Insurance (premiums and deposits2,† in $M) • Solid results reflecting the strength of all our distribution networks, the high performance of our 51
Slide 10: Q2/2024 Business Growth – Wealth Management
Q2/2024 BUSINESS GROWTH – Wealth Management INDIVIDUAL SEGREGATED FUNDS INDIVIDUAL MUTUAL FUNDS † (gross sales in $M) (gross sales† in $M) 1,270 HIGHLIGHTS 468 829 370 Individual Wealth +53% +26% • Solid seg. fund inflows of $608M for Q2 YoY YoY reflecting the strength of our distribution networks a
Slide 11: Q2/2024 Business Growth – US Operations
Q2/2024 BUSINESS GROWTH – US Operations HIGHLIGHTS INDIVIDUAL INSURANCE DEALER SERVICES Individual Insurance † (sales in US$M) (sales† in US$M) • Record sales for a quarter from the good performance in all our markets further 279 confirming our strong growth potential in the 49 246 U.S. life insuran
Slide 12: Financial Targets Summary
FINANCIAL TARGETS SUMMARY 1 Medium-term 2022 2023 H1/24 guidance Core EPS YoY growth 6.5% 5.2% 16.1% 10%+ annual average growth 2 Core ROE 14.2% 14.4% 15.0% 15%+ Solvency ratio3 126% 145% 141% 120% operating target $550M $600M $600M+ Organic capital generation (H1/22: $260M) (H1/23: $275M) $305M in
Slide 13: Capital Deployment Priorities
GROWTH-DRIVEN STRATEGY – FOCUSED ON SHAREHOLDER VALUE Capital deployment priorities Recent initiatives 1 Profitable organic growth • Supporting strong business growth and digital transformation Investing in digital evolution • New sales generating ROE above 15% $1.1B to propel growth 2 30+ acquisiti
Slide 14: Éric Jobin
Éric Jobin EVP, Chief Financial Officer and Chief Actuary 14
Slide 15: Q2/2024 Profitability and Financial Strength
Q2/2024 PROFITABILITY AND FINANCIAL STRENGTH Q2/2024 Q2/2023 YoY HIGHLIGHTS Profitability Core EPS up 15% YoY and core ROE1 of 15.0% • Expected insurance earnings: +11% YoY Core EPS $2.75 $2.39 +15% • Core insurance service result: +14% YoY Core earnings $267M $247M +8% • Core insurance experience:
Slide 16: Q2/2024 Performance – Operating business segments
Q2/2024 PERFORMANCE – Operating business segments INSURANCE, WEALTH US CANADA MANAGEMENT OPERATIONS Core earnings ($M) Core earnings ($M) Core earnings ($M) 26 106 +16% 98 +29% 22 +16% 91 19 QoQ YoY 76 YoY -15% YoY Q2/23 Q2/24 Q2/23 Q2/24 Q2/23 Q1/24 Q2/24 Core insurance service result up 18% YoY Se
Slide 17: Q2/2024 Performance – Investment and Corporate
Q2/2024 PERFORMANCE – Investment and Corporate INVESTMENT CORE EARNINGS RECONCILIATION Core earnings ($M) Core net investment result of $108M pre-tax (core earnings before taxes and other expenses) ($M, unless otherwise indicated) Q2/2024 Q2/2023 91 86 Expected investment earnings of $113M pre-tax C
Slide 18: Robust Capital Position
ROBUST CAPITAL POSITION Supported by ongoing organic capital generation Capital available Q2/2024 MOVEMENTS Solvency ratio1 for deployment2 Solvency ratio1 (end of period) Beginning of quarter 142% $1.5B Core earnings net of dividends 2.5% $188M 145% 142% 141% Organic CSM growth (excl. seg funds) 1.
Slide 19: Question & Answer Session
Question & Answer Session tan rou
Slide 20: Appendices
APPENDICES DO tO
Slide 21: Book Value per Share
BOOK VALUE PER SHARE $69.92 at June 30, 2024 P/BV ratio of 1.23 at June 30, 2024 CAGR 1-year +7% 9.3% YoY growth 5-year +7% excluding the impact of share buybacks (NCIB) IFRS 4 IFRS 17 10-year +8% IFRS 9 Since 2000 +9% March 31, 20001 $8.44 IPO 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Slide 22: Dividend to Common Shareholders
DIVIDEND TO COMMON SHAREHOLDERS Dividend of 82¢ per share $0.80 payable in Q3/2024 $0.70 $0.60 $0.50 $0.40 Largest dividend increase (+29%) among Canadian lifecos $0.30 following the lifting of regulatory restrictions in November 2021 $0.20 Steady increases every 3 quarters First lifeco in Canada to
Slide 23: Operational Efficiency Initiatives
OPERATIONAL Q2/24 corporate expenses on target EFFICIENCY INITIATIVES Corporate core other expenses ($M pre-tax) 2022+ In-depth top-down review of projects 72 70 66 64 62 2023-2024 57 Expecting 2024 corporate expenses Completion of regulatory projects (IFRS transition and to remain at the 2023 level
Slide 24: Core Reconciliation
Q2/2024 CORE DOE AND CORE RECONCILIATION BY SEGMENT Insurance, Wealth ($M, unless otherwise indicated) US Operations Investment Corporate TOTAL Canada Management YoY Expected insurance earnings 148 86 40 — — 274 11% Impact of new insurance business (9) — (4) — — (13) DRIVERS OF EARNINGS + Core insur
Slide 25: Q2/2024 Drivers of Earnings
Q2/2024 DRIVERS OF EARNINGS† Second quarter Year-to-date at June 30 ($M, unless otherwise indicated) 2024 2023 YoY 2024 2023 YoY DRIVERS OF EARNINGS - CORE - CONSOLIDATED Core insurance service result Risk adjustment release 67 59 14% 133 118 13% CSM recognized for services provided 170 153 11% 334
Slide 26: Market-Related Impacts
MARKET-RELATED IMPACTS METHODOLOGY1 Quarterly non-core market-related impacts are the difference between: Reported net investment result, which is the actual IFRS result, and Core net investment result, which is based on management expectations MANAGEMENT EXPECTATIONS FOR CORE NET INVESTMENT RESULT
Slide 27: Investment Portfolio
INVESTMENT PORTFOLIO Resilient portfolio composed of high-quality assets and diversified exposures Bonds - Corporates - BB and lower: 0.4% Investment properties: 4% Mortgages - Insured: 2% ü Fixed income ALM1-oriented portfolio ▪ see further details on slide 28 Mortgages - Uninsured: 1% Bonds - Corp
Slide 28: Bond Portfolio
$29.7B BOND PORTFOLIO High-quality and conservative portfolio Distribution by industry sector Distribution by category of issuer (Corporate bonds) BOND PORTFOLIO IS 70% OF TOTAL PORTFOLIO Financial services 19.3% Governments 27.7% • 69% are corporate bonds and 31% are government & Utilities 25.6% mu
Slide 29: High-Quality Investment Properties & Mortgages Portfolios
HIGH-QUALITY INVESTMENT PROPERTIES & MORTGAGES PORTFOLIOS $1.6B INVESTMENT PROPERTIES $1.3B MORTGAGES ▪ Capital-efficient investment properties ▪ Disciplined underwriting process 1 ▪ Average lease terms remaining of ~9 years Combined portfolios ▪ Large portion rented to governments ▪ 66% of mortgage
Slide 30: Immediate Sensitivities
IMMEDIATE SENSITIVITIES For more information on sensitivities, please refer to IMMEDIATE IMPACT the quarterly and annual Management’s Discussion and Analysis (MD&A) Equity Equity Net income1 OCI3 and Solvency ratio CSM OCI only3 as at June 30, 2024 net income Percentage $M post-tax $M post-tax $M po
Slide 31: Core Earnings Sensitivities
CORE EARNINGS SENSITIVITIES REVENUES & EXPENSES DIRECTLY IMPACTED BY THE LEVEL OF EQUITY MARKETS AND INTEREST RATES IMPACT ON FUTURE QUARTER as at June 30, 2024 Variation CORE EARNINGS1 Description of shock ▪ Expected return on non-fixed income (NFI) asset investments $M post-tax ▪ CSM recognition i
Slide 32: Insurance, Canada
INSURANCE, CANADA Second quarter Year-to-date at June 30 ($M, unless otherwise indicated) 2024 2023 Variation 2024 2023 Variation Individual Insurance Sales1 Minimum premiums2 87 79 10% 167 161 4% Excess premiums3 11 10 10% 20 17 18% Total 98 89 10% 187 178 5% Gross premiums 659 616 7% 1,294 1,209 7
Slide 33: Insurance, Canada (cont.)
INSURANCE, CANADA (cont.) Second quarter Year-to-date at June 30 ($M, unless otherwise indicated) 2024 2023 Variation 2024 2023 Variation Group Insurance Employee Plans Sales - New business during the year 25 13 92% 55 34 62% Net premiums 351 326 8% 690 651 6% Premium equivalents and deposits 67 60
Slide 34: Wealth Management
WEALTH MANAGEMENT Second quarter Year-to-date at June 30 ($M, unless otherwise indicated) 2024 2023 Variation 2024 2023 Variation Individual Wealth Management Sales - Gross sales Segregated funds 1,270 829 53% 2,548 1,862 37% Mutual funds† 468 370 26% 954 849 12% Insured annuities and other savings
Slide 35: Wealth Management (cont.)
WEALTH MANAGEMENT (cont.) Second quarter Year-to-date at June 30 ($M, unless otherwise indicated) 2024 2023 Variation 2024 2023 Variation Group Savings and Retirement Sales - Gross sales Accumulation contracts† Other accumulation contracts 54 19 184% 83 37 124% Segregated funds 524 407 29% 1,298 935
Slide 36: US Operations
US OPERATIONS Second quarter Year-to-date at June 30 ($M, unless otherwise indicated) 2024 2023 Variation 2024 2023 Variation Individual Insurance† Sales ($US) 49 43 14% 91 84 8% Sales ($CAN) 68 57 19% 124 113 10% Net premiums ($CAN) 179 158 13% 352 312 13% Dealer Services† Sales ($US) 279 246 13% 5
Slide 37: Premiums and Deposits
PREMIUMS AND DEPOSITS Net premiums, premium equivalents and deposits† ($M, unless otherwise indicated) Q2/2024 YoY ($B) Insurance, Canada 16.6 16.8 Individual Insurance 532 8% 15.4 Group Insurance 510 10% 14.0 4.2 4.1 4.0 Dealer Services 171 4% 11.4 3.9 iA Auto and Home 184 16% 10.4 4.1 3.9 9.7 Q4 3
Slide 38: Asset Growth
ASSET GROWTH AUM/AUA (assets under management and administration†, end of period, $B) 235.4 Assets under management and administration 221.2 218.9 June 30 197.5 197.4 ($B, unless otherwise indicated) QoQ YoY 189.4 2024 117.2 Assets under management 109.7 108.3 95.8 97.7 General fund1 53.9 3% 8% AUA
Slide 39: CSM Movement Analysis
CSM MOVEMENT ANALYSIS† ($M, unless otherwise indicated) Q2/2024 Q2/2023 YoY Q2/2024 highlights CSM - Beginning of period 6,159 5,756 Organic CSM1 increase of $108M, up 44% YoY Organic CSM movement1 • Strong 14% increase of impact of new insurance business Impact of new insurance business 167 147 +14
Slide 40: 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 41: 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 42: Investor Relations
INVESTOR RELATIONS Contact Marie-Annick Bonneau Tel.: 418-931-0142 VP-Investor-Relations@ia.ca Next Reporting Dates Q3/2024 - November 5, 2024 after market close Conference call on November 6, 2024 Q4/2024 - February 18, 2025 after market close Conference call on February 19, 2025 Q1/2025 - May 8, 2
Slide 43: 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.