Ia Financial Corporation Inc. · TSX:IAG
Ia Financial — Q2 2024 Earnings Presentation
35 slides from Ia Financial's earnings presentation, Aug 7, 2024
Slide 1: Inspired to Grow Together, Now
INSPIRED TO GROW TOGETHER, NOW Investor presentation June 2024
Slide 2: Table of Contents
TABLE OF CONTENTS 3 iA Financial Group overview APPENDICES 4 Shareholder value growth 22 Business growth 5 Shareholder return 23 Investment portfolio 6 Earnings power 24 Bond portfolio 7 Core return on equity 25 Investment properties & mortgages 8 Growth strategy 26 Awards and distinctions 9 Busines
Slide 3: The Group Today
THE GROUP TODAY iA Financial Group is one of the largest insurance and wealth management groups in Canada, with operations in the United States. 5 million + Founded in 1892 as a mutual company, iA became a CLIENTS share capital company in 2000 and is listed on the Toronto Stock Exchange under the ti
Slide 4: Delivering Sustained Shareholder Value Growth
IAG – iA Financial Group DELIVERING SUSTAINED SHAREHOLDER VALUE GROWTH FOCUSED VALUE FOR FINANCIAL ON GROWTH SHAREHOLDERS STRENGTH SUSTAINABLE UPWARD EARNINGS INDUSTRY LEADING VALUE CREATION ROBUST CAPITAL POSITION TRAJECTORY • 13% share price CAGR since IPO • Solvency ratio† of 142%, well above • T
Slide 5: Shareholder Value Creation
SHAREHOLDER VALUE CREATION Industry leading share price and book value growth since IPO Reflecting sound management approach and long-term vision $90.12 May 9, 2024 IAG Share Price $68.93 Historical CAGR: 11% Mar. 31, 2024 IFRS 17 & IFRS 9 transition Book value maintained at transition $8.44 Book Va
Slide 6: Growing Reported and Core Earnings Over Time
GROWING REPORTED AND CORE EARNINGS OVER TIME 9.31 Reported EPS ($) Core EPS1,† ($) 7.51 Medium-term core EPS target 10%+ growth on average 4.21 Core EPS per year 3.57 +17% YoY 2.34 2.44 10% 2015-2023 CAGR for reported and core earnings1 2015 2016 2017 2018 2019 2020 2021 2022 2023 Q1 2024 6 1 First
Slide 7: Expanding Core ROE
EXPANDING CORE ROE1 With 25+ acquisitions since 2015 New sales in all business units priced at a ROE higher than 15% 15%+ iA’s core ROE† Compound Annual 1 14.4% 14.6% Growth 11.5% 2023+ progressing toward 2015-2022 core ROE always in-line or above annual guidance medium-term target 2015 2016 2017 20
Slide 8: Proven Growth Strategy with a Strong Track Record
PROVEN GROWTH STRATEGY WITH A STRONG TRACK RECORD Q1/24 RESULTS Growth of premiums and deposits and in assets • P&D†: $4.9B (+8% YoY) Key long-term profitability driver • AUM/AUA†: $229.3B (+11% YoY) • Solid sales in almost all business units Net premiums, premium equivalents Assets under management
Slide 9: Business Mix Tailored for Long-Term Value Creation
BUSINESS MIX TAILORED FOR LONG-TERM VALUE CREATION Benefits of diversification • Many growth synergies • Distinctive distribution breadth Wealth Management Insurance, Canada US Operations THREE OPERATING – Individual Wealth – Individual Insurance – Individual Insurance BUSINESS SEGMENTS – Management
Slide 10: Insurance, Canada
INSURANCE, CANADA Individual Insurance and retail distribution STRONG SALES MOMENTUM • Canadian leader for number of policies sold1 Canadian leader in individual • Diversified, distinctive and broad distribution network Individual Insurance 369 Sales ($M) insurance and dealer services, • Proximity w
Slide 11: Wealth Management
WEALTH MANAGEMENT Individual Wealth Management STRONG SALES MOMENTUM Seg Funds 3.6 • #1 in Canada for gross and net seg fund sales1 Leading seg fund industry, driven • Wide range of retail savings, investments and Gross Sales ($B) by complete range of products, retirement products for individuals, i
Slide 12: US Operations
US OPERATIONS • Proven ability to create growth organically and through acquisitions in a fragmented industry • Strong growth potential in both life insurance and dealer services markets Leveraging Canadian expertise • Leverage our Canadian leadership experience to drive growth • High-performing dis
Slide 13: Financial Strength
FINANCIAL STRENGTH Ongoing organic To support growth strategy capital generation ROBUST CAPITAL POSITION A comprehensive value creation KPI representing the excess capital generated in the normal course of business Solvency ratio of 142%1, well above 120% operating target, highlights the company’s f
Slide 14: Growth-Driven Strategy
GROWTH-DRIVEN STRATEGY FOCUSED ON STRONG SHAREHOLDER VALUE Capital deployment priorities Recent initiatives $1.5B 1 Profitable organic growth • Digital transformation progressing well Investing in digital evolution • Support of sales growth for all business units to propel growth 2 Capital Disciplin
Slide 15: Returning Value to Shareholders
RETURNING VALUE TO SHAREHOLDERS Dividend of 82¢ per share payable in Q2/2024 Steadily increasing dividends $0.80 $0.70 Dividend payout ratio1,† target of 25%-35% $0.60 21% increase since IFRS 17 introduction (from $0.675 in Q4/22) $0.50 $0.40 Largest dividend increase (+29%) among Canadian lifecos $
Slide 16: Medium-Term Guidance
MEDIUM-TERM GUIDANCE Core EPS growth 10%+ (medium-term) annual average Core ROE 15%+ (medium-term) Solvency ratio 120% (operating target) Organic capital generation $600M+ (2024) Dividend payout ratio† 25% to 35% of core earnings 16
Slide 17: Relative Performance
RELATIVE PERFORMANCE Financial Group
Slide 18: Industry Leader for Share Price Growth
INDUSTRY LEADER FOR SHARE PRICE GROWTH IAG Total return +1,912% (Share price growth with dividend reinvested, at year-end) Best performance of Canadian lifecos 13% Compound Annual Growth Rate since IPO1 vs. 10% for peers2 PEERS3 +1,006% 0% IPO1 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021
Slide 19: Industry Leader for Book Value Growth
INDUSTRY LEADER FOR BOOK VALUE GROWTH Book value per share1 Since its IPO, iA Financial Group has experienced substantial growth in book value per share, IAG and dividends paid (at year-end) reflecting the Company’s relentless focus on creating +86% enduring value for our shareholders over time IAG
Slide 20: Price-to-Book Ratio
PRICE-TO-BOOK RATIO Trading at a 25% discount1, significantly higher than last 10-year average Volatility in the context of the IFRS 17 and IFRS 9 transition IAG 2014-2023 - 10-year average Premium (discount) = (14%) Price-to-book = 1.22x May 9, at Dec. 31 2013 2014 2015 2016 2017 2018 2019 2020 202
Slide 21: Appendices
APPENDICES Qa na rou
Slide 22: Q1/2024 Sales – Continued Strong Growth Momentum
Q1/2024 SALES – CONTINUED STRONG GROWTH MOMENTUM SALES† ($M, unless otherwise indicated) Q1/2024 Q1/2023 Variation HIGHLIGHTS INSURANCE, CANADA ▪ Solid Q1 sales for Individual Individual Insurance 89 89 — Insurance, Canada similar to a strong result a year earlier Group Insurance 136 112 21% ▪ Good
Slide 23: Investment Portfolio
INVESTMENT PORTFOLIO Resilient portfolio composed of high-quality assets and diversified exposures Bonds - Corporates - BB and lower: 0.4% Investment properties: 4% ü Fixed income ALM1-oriented portfolio Mortgages - Insured: 3% ▪ see further details on slide 24 Bonds - Corporates - Mortgages - Unins
Slide 24: $29.5B Bond Portfolio
$29.5B BOND PORTFOLIO High-quality and conservative portfolio Distribution by category of issuer BOND PORTFOLIO Governments 28% • 69% are corporate bonds and 31% are government & Municipalities 3% municipalities bonds • Bonds with average credit rating of A Corporates - Public issues 50% • No exposu
Slide 25: 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 ▪ 67% of mortgage
Slide 26: Excellence Recognition in Strategic Execution
#1 Number of individual insurance policies issued in Canada1 #1 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 Companies ca
Slide 27: Our Sustainable Journey
OUR SUSTAINABLE JOURNEY – 1st Sustainability Bond Framework – 1st Sustainability Bond Issuance – Publication of our climate performance and our ambition to be, in the future, among the best in our industry in climate – 1st Sustainable Development Policy change in North America – Development of clima
Slide 28: What We Do at iA
WHAT WE DO AT iA -60% -40% 39% 73% First materiality of our Canadian assessment carried Integration of TCFD Reduction in GHG Reduction in carbon women in Senior employees4 took part out with our recommendations and emission intensity intensity of our public from our Canadian corporate bond Leadershi
Slide 29: 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 30: 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 31: 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 32: 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 33: 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 34: Investor Relations
INVESTOR RELATIONS Contact Marie-Annick Bonneau Tel.: 418-931-0142 Marie-Annick.Bonneau@ia.ca Next Reporting Dates Q2/2024 - August 6, 2024 after market close Conference call on August 7, 2024 Q3/2024 - November 5, 2024 after market close Conference call on November 6, 2024 Q4/2024 - February 18, 20
Slide 35: 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.