Ia Financial Corporation Inc. · TSX:IAG
Ia Financial — Investor Presentation (March 2024)
38 slides from Ia Financial's investor presentation, March 2024
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 (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 24 Dividend 5 iA Financial Group overview 25 Investment portfolio 6 Shareholder value creation 26 Bond portfolio 7 Business segments 27 Real estate & mortgages 8 2024 outlook 28 Main growth drivers 9 Earnings powe
Slide 5: The Group Today
Our ambition iA Financial Group is one of the largest insurance and wealth management groups in Canada, with operations To be the leading financial institution that best combines the human and digital experience. in the United States. Founded in 1892, it is an important Canadian public Our purpose c
Slide 6: Shareholder Value Creation
SHAREHOLDER VALUE CREATION Industry leading share price and book value1 growth since IPO From sound management approach and long-term vision IAG Share Price Historical CAGR: 10% $86.64 Mar. 15, 2024 $66.90 Dec. 31, 2023 IFRS 17 & IFRS 9 transition $8.44 Book value maintained at transition $7.875 Boo
Slide 7: Business Structure Tailored for Long-Term Value Creation
BUSINESS STRUCTURE TAILORED FOR LONG-TERM VALUE CREATION THREE BUSINESS TWO SUPPORTING SEGMENTS SEGMENTS Insurance, Canada Wealth Management US Operations Investment Corporate – Individual Insurance – Individual Wealth – Individual Insurance Total Portfolio Management Streamlined corporate – Group I
Slide 8: 2024 Outlook
2024 OUTLOOK INSURANCE, CANADA ▪ Sales: Momentum from leadership position, high-performing distribution networks and digital tools ▪ Earnings: Expecting strong growth from sales, well-positioned assumptions and pricing WEALTH MANAGEMENT ▪ AUM: Maintain seg fund leadership and leverage very strong sa
Slide 9: Growing Reported and Core Earnings Over Time
GROWING REPORTED AND CORE EARNINGS OVER TIME 9.31 Reported EPS 8.85 1 Core EPS 7.65 7.51 Medium-term 10%+ target of 4.21 growth for core 3.57 EPS on average per year 10% CAGR 2015-2023 for reported and core earnings1 2015 2016 2017 2018 2019 2020 2021 2022 2023 IFRS 4 IFRS 17 9 1 Core earnings metri
Slide 10: Expanding Core ROE
EXPANDING CORE ROE While adding 25+ acquisitions since 20151 15%+ 14.2% 14.4% iA’s core ROE 11.5% 2015-2023 core ROE always in-line or above guidance 2015 2016 2017 2018 2019 2020 2021 2022 2023 MEDIUM-TERM TARGET PPI Key strategic Hollis CTL and IAS Surex Vericity2 acquisitions Wealth DAC 1 Since i
Slide 11: 2023 Sales – Continued Strong Sales Growth Momentum
2023 SALES – CONTINUED STRONG SALES GROWTH MOMENTUM Year-to-date at December 31 SALES† ($M, unless otherwise indicated) 2023 2022 Variation HIGHLIGHTS INSURANCE, CANADA ▪ Sales continued to be elevated in Individual Insurance1 369 387 (5%) 2023 for Individual Insurance, Canada Group Insurance 417 36
Slide 12: 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 Strong and steady growth, supported by: of in-force business Assets under management (AUM) and – vast distri
Slide 13: Robust Capital Position
ROBUST CAPITAL POSITION Flexible balance sheet Solvency ratio3 Robust solvency ratio Solvency ratio is a measure of a company’s well above operating target financial strength FOCUS ON CAPITAL + (end of period) • Accounting choices guided Financial flexibility 145% 4 by capital optimization with low
Slide 14: Strong and Ongoing Organic Capital Generation
STRONG AND ONGOING ORGANIC CAPITAL GENERATION A comprehensive KPI Organic $600M+ Capital TARGET3 Generation Organic capital generation (~$M) = 600 550 490 Core Capital Organic Earnings Net of + CSM Growth2 – Required for Organic Dividend1 Growth Before iA’s management 280 actions and risk profile 25
Slide 15: Growth-Driven Strategy Focused on Strong Shareholder Value
GROWTH-DRIVEN STRATEGY FOCUSED ON STRONG SHAREHOLDER VALUE Capital deployment priorities RECENT INITIATIVES $1.6B 1 Profitable organic growth • Digital transformation progressing well on many levels Investing in digital evolution • Support of sales growth for all business units to propel growth 2 Ca
Slide 16: Leveraging Our Know-How for a Successful US Expansion
LEVERAGING OUR KNOW-HOW FOR A SUCCESSFUL US EXPANSION Both organically and through acquisitions US Individual Insurance Sales (CAD$M) US Dealer Services Sales (CAD$M) ---- US new and used vehicle sales1 (M units) 231 1,283 ü Acquisitions prove to deliver sustained growth over time ü High-performing
Slide 17: Excellence Recognition in Strategic Execution
#1 Number of individual insurance policies issued in Canada1 #1 2023 gross and net sales of segregated funds in Canada2 EXCELLENCE RECOGNITION #1 Wealth distribution (non-bank assets including seg. funds)3 IN STRATEGIC EXECUTION #1 Distinction Awards - Mental Health and Wellness Large Service Compan
Slide 18: Medium-Term Guidance
Core EPS growth 10%+ (medium-term) annual average MEDIUM-TERM Core ROE 15%+ GUIDANCE (medium-term) Solvency ratio 120% operating target Organic capital generation $600M+ (2024) Dividend 25% to 35% payout ratio† of core earnings † This item is a non-IFRS measure; see the “Non-IFRS and Additional Fina
Slide 19: Relative Performance
RELATIVE PERFORMANCE 19
Slide 20: Industry Leader for Share Price Growth
INDUSTRY LEADER FOR SHARE PRICE GROWTH Total return +1,834% (Share price growth with dividend reinvested, at year-end) Best performance of Canadian lifecos 13% Compound Annual Growth Rate since IPO1 vs. 10% for peers2 0% IPO1 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 Mar 15, 2024 2
Slide 21: Industry Leader for Book Value Growth
INDUSTRY LEADER FOR Since its IPO, iA Financial Group has experienced substantial and sustained growth in book value per BOOK VALUE GROWTH share, reflecting the Company’s relentless focus on creating enduring value for our shareholders over time 1 IAG Book value per share IAG book value per +79% and
Slide 22: Evolution of iA Stock Multiple vs. Peers
1 EVOLUTION OF iA STOCK MULTIPLE VS. PEERS Volatility in the context of the IFRS 17 and IFRS 9 transition IAG 2014-2023 - 10-year average Premium (discount) = (14%) Price-to-book = 1.22x March 15, at Dec. 31 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Premium (Discount) (13%) (20%) (
Slide 23: Appendices
APPENDICES 23
Slide 24: Dividend to Common Shareholders
DIVIDEND TO COMMON SHAREHOLDERS Dividend increased $0.80 by 7% to 82¢ per share payable in Q1/2024 $0.70 $0.60 $0.50 $0.40 Largest dividend increase (+29%) among Canadian lifecos $0.30 following the lifting of regulatory restrictions in Steady increases November 2021 $0.20 every 3 quarters First lif
Slide 25: Investment Portfolio
INVESTMENT PORTFOLIO Resilient portfolio composed of high-quality assets and diversified exposures Bonds - Corporates - BB and lower: 0.5% Investment properties: 4% Mortgages - Insured: 3% ü Fixed income ALM1-oriented portfolio ▪ see further details on slide 27 Bonds - Corporates - Mortgages - Unins
Slide 26: $29.9B Bond Portfolio
$29.9B 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 20% Governments 30% • 67% are corporate bonds and 33% are government & Utilities 28% municipa
Slide 27: High-Quality Investment Properties & Mortgages Portfolios
HIGH-QUALITY INVESTMENT PROPERTIES & MORTGAGES PORTFOLIOS $1.6B INVESTMENT PROPERTIES $1.4B MORTGAGES ▪ Capital-efficient investment properties ▪ Disciplined underwriting process 1 ▪ Average lease terms remaining of ~9 years Combined portfolios ▪ Large portion rented to governments ▪ 68% of mortgage
Slide 28: 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 meet extensive between business digital tools clients’ needs relationships with units distributors Maintain Grow sales and Digital and Lean
Slide 29: Shaping iA's Digital Ecosystem to Support Growth
SHAPING iA’S DIGITAL ECOSYSTEM TO SUPPORT GROWTH Growth Digital initiatives to contribute to 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 à great
Slide 30: 2023 in a Nutshell
2023 IN A NUTSHELL CONTINUED SOLID PROFITABILITY ▪ Seamless transition to IFRS 17 and IFRS 9 – Book value per share and EPS level maintained at transition ▪ 14.4% core ROE – Aligned with medium-term target of 15%+ ▪ Core EPS of $9.31, 4% higher than 2022 result and well positioned for further growth
Slide 31: iA's Sustainability Approach
iA’S SUSTAINABILITY APPROACH To be a company that contributes to sustainable growth and wellbeing for its clients, employees, partners, investors and communities. – Sustainable Bond Framework – 1st Sustainable Bond Issuance – Update of our Sustainable Investment Policy – 1st Sustainable Development
Slide 32: What We Do at iA
WHAT WE DO AT iA -60% -40% 50% For all iA Financial Group Senior Integration of Integration of TCFD sustainable Reduction in GHG of new iA Financial Leadership Positions2, Reduction in carbon recommendations and development in our emission intensity Group Senior we will continue intensity of our pub
Slide 33: Sustainability Progress in 2023
SUSTAINABILITY PROGRESS IN 2023 Commitment to obtain the Completion of materiality Equity, Diversity and Progressive Aboriginal analysis – integrated into the Inclusion (ED&I) program Relations (PAR) certification corporate strategy Voluntary self-identification Phase 1 completed with the Taking int
Slide 34: 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 35: 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 36: 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 37: Investor Relations
INVESTOR RELATIONS Contact Marie-Annick Bonneau Tel.: 418-931-0142 Marie-Annick.Bonneau@ia.ca Next Reporting Dates Q1/2024 - May 9, 2024 Conference call on May 9, 2024 Q2/2024 - August 6, 2024 after market close Conference call on August 7, 2024 Q3/2024 - November 5, 2024 after market close Conferen
Slide 38: iA Financial Group trademark notice
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 — Investor Presentation (March 2024) on 6ix