Ia Financial Corporation Inc. · TSX:IAG
Ia Financial — Q4 2024 Earnings Presentation
49 slides from Ia Financial's earnings presentation, Feb 19, 2025
Slide 1: Fourth Quarter 2024 Conference Call
Fourth Quarter 2024 Conference Call Presenters: Denis Ricard, President and CEO Éric Jobin, EVP, CFO and Chief Actuary February 19, 2025
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 (hereinafter referred to as the “Company”) reports its financial results and statements in accordance with IFRS® Accounting Standards (referred to as “IFRS” in this document). The Company also publishes certain financial measures or
Slide 4: Table of Contents
TABLE OF CONTENTS 2 Forward-looking statements APPENDICES 3 Non-IFRS and add. measures 23 Book value 35 Insurance, Canada 8 Q4/2024 key results 24 Dividend 36 Insurance, Canada (cont.) 9 Sales - Insurance, Canada 25 Capital deployment priorities 37 Wealth Management 10 Sales - Wealth Management 26 O
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: Q4/2024 Profitable Growth Key Results
Q4/2024 — PROFITABLE GROWTH KEY RESULTS 30% YoY growth, meeting $3.04 Core EPS†† medium-term target ROE expansion Q4 annualized core ROE†† of 16.9% Q4 annualized ROE of 12.9% $2.33 EPS Meeting medium-term Continued strong sales performance 15.9% Core ROE3,4,†† target in Canada and the US 13.9% ROE1,
Slide 9: Q4/2024 Business Growth – Insurance, Canada
Q4/2024 BUSINESS GROWTH – Insurance, Canada HIGHLIGHTS INDIVIDUAL INSURANCE GROUP INSURANCE (sales1 in $M) Employee Plans and Special Markets Individual Insurance (premiums and deposits1,2 in $M) • Solid performance reflecting the strength of all our distribution networks, the excellent performance
Slide 10: Q4/2024 Business Growth – Wealth Management
Q4/2024 BUSINESS GROWTH – Wealth Management INDIVIDUAL SEGREGATED FUNDS INDIVIDUAL MUTUAL FUNDS (gross sales in $M) (gross sales in $M) HIGHLIGHTS 1,562 597 393 Individual Wealth 837 +87% +52% • Record high quarterly gross segregated fund YoY YoY sales and strong net sales, reflecting the strength o
Slide 11: Q4/2024 Business Growth – US Operations
Q4/2024 BUSINESS GROWTH – US Operations HIGHLIGHTS INDIVIDUAL INSURANCE DEALER SERVICES Individual Insurance 1 (sales in US$M) (sales in US$M) • Strong results in the final expense and middle/ 68 family markets and the addition of sales from 274 the Vericity acquisition • Customized portfolio of pro
Slide 12: 2024 in a Nutshell
2024 IN A NUTSHELL CONTINUED SOLID PROFITABILITY ▪ Annual records for core earnings† of $1,074M and net income attributed to common shareholders of $942M ▪ Expanding ROE to 13.9% and core ROE†† to 15.9% – Aligned with medium-term target of 15%+ ▪ Core EPS†† of $11.16 is 20% higher than 2023 result –
Slide 13: Market Guidance – Achievement of Targets
MARKET GUIDANCE – Achievement of targets (Financial targets disclosed New market guidance Market at the beginning of 2024) 2024 guidance4 will be presented at the Investor Event to be held on February 24, 2025. Core EPS†† YoY growth 20% 10%+ annual average growth Core ROE††,1 15.9% 15%+ medium-term
Slide 14: Investor Event
INVESTOR EVENT February 24, 2025 8:00 am - 12:00 pm ET Omni King Edward Hotel, Toronto • Deep dive on U.S. operations • Key objectives of the Canadian businesses • Presentation of new market guidance Please visit our website at ia.ca for more details 14
Slide 15: Éric Jobin
Éric Jobin EVP, Chief Financial Officer and Chief Actuary 15
Slide 16: Q4/2024 Profitability and Financial Strength
Q4/2024 PROFITABILITY AND FINANCIAL STRENGTH Q4/2024 Q4/2023 YoY HIGHLIGHTS Profitability ROE expansion Core EPS†† (diluted) $3.04 $2.34 +30% †† • Q4 annualized core ROE of 16.9% EPS (diluted) $2.33 $2.46 (5%) • Q4 annualized ROE of 12.9% † Core earnings $287M $236M +22% Strong increase in insurance
Slide 17: Q4/2024 Performance – Operating Business Segments
Q4/2024 PERFORMANCE – Operating business segments INSURANCE, CANADA WEALTH MANAGEMENT US OPERATIONS Q4/2024 Q4/2024 Q4/2024 ($M) ($M) ($M) 116 112 101 26 0% +49% +19% +23% YoY 41 YoY YoY YoY -5% YoY -13 Net income 1 Core earnings† Net income 1 Core earnings† Net income1 Core earnings† Core earnings
Slide 18: Q4/2024 Performance – Investment and Corporate
Q4/2024 PERFORMANCE – Investment and Corporate INVESTMENT Good performance of high-quality NET INCOME2 AND CORE EARNINGS† RECONCILIATION investment portfolio Q4/2024 ($M) 163 Expected investment earnings: ($M, unless otherwise indicated) Q4/2024 Q4/2023 Very favourable impact of the 127 steepening o
Slide 19: Robust Capital Position
ROBUST CAPITAL POSITION Supported by ongoing organic capital generation Capital available Q4/2024 MOVEMENTS Solvency ratio1 Solvency ratio1 for deployment3 (end of period) Beginning of quarter 140% $1.0B Core earnings† net of dividends 2.5% $203M 145% 142% 141% 140% 139% 4 Organic CSM growth (excl.
Slide 20: Year-End Assumption Review and Management Actions
YEAR-END ASSUMPTION REVIEW AND MANAGEMENT ACTIONS Total favourable economic impact of $17M in 2024 Total Impact on Impact on Impact on ($M pre-tax) impact Main items P&L CSM RA ▪ Mortality assumption review: Unfavourable Mortality & morbidity (34) (17) (11) (6) ▪ Morbidity assumption review: Slightl
Slide 21: Question & Answer Session
Question & Answer Session a ro
Slide 22: Appendices
APPENDICES Sy Cc
Slide 23: Book Value per Share
1 $73.44 BOOK VALUE PER SHARE at December 31, 2024 P/BV ratio of 1.82 at December 31, 2024 CAGR 1-year +10% 5-year +7% IFRS 17 IFRS 4 10-year +8% IFRS 9 Since 2000 +9% March 31, 20002 $8.44 IPO 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2
Slide 24: Dividend to Common Shareholders
DIVIDEND TO COMMON SHAREHOLDERS $0.90 Dividend of 90¢ per share payable in Q1/2025 $0.80 $0.70 $0.60 $0.50 $0.40 Largest dividend increase (+29%) $0.30 among Canadian lifecos following the lifting of regulatory restrictions in November 2021 $0.20 Steady increases every 3 quarters First lifeco in Can
Slide 25: Growth-Driven Strategy – 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 average ROE above target to propel growth $1.4B 2 30
Slide 26: Operational Efficiency Initiatives
OPERATIONAL 2024 corporate expenses1 on target EFFICIENCY INITIATIVES Fourth quarter of 2024 includes a $18M pre-tax charge from higher variable compensation. Excluding this charge, core other expenses are in line with quarterly targeted run rate of $65M ± $5M. 2022+ In-depth top-down review of proj
Slide 27: Core Reconciliation
Q4/2024 RECONCILIATION OF EARNINGS ACCORDING TO THE DOE 1 Insurance, Wealth ($M, unless otherwise indicated) US Operations Investment Corporate TOTAL Canada Management YoY Expected insurance earnings 151 101 54 — — 306 20% Impact of new insurance business (13) (1) (1) — — (15) + Core insurance exper
Slide 28: Q4/2024 Drivers of Earnings
Q4/2024 DRIVERS OF EARNINGS Fourth quarter Year-to-date at December 31 ($M, unless otherwise indicated) 2024 2023 YoY 2024 2023 YoY CORE EARNINGS† ACCORDING TO THE DRIVERS OF EARNINGS1 - CONSOLIDATED Core insurance service result Risk adjustment release 74 61 21% 280 240 17% CSM recognized for servi
Slide 29: 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 30: Investment Portfolio
INVESTMENT PORTFOLIO Resilient portfolio composed of high-quality assets and diversified exposures Bonds - Corporates - BB and lower: 0.5% Investment properties: 3% ü Fixed income ALM1-oriented portfolio ▪ see further details on slide 31 Mortgages - Insured: 2% Bonds - Corporates - BBB and higher: 4
Slide 31: $32.7B Bond Portfolio
$32.7B BOND PORTFOLIO High-quality and conservative portfolio Distribution by industry sector Distribution by category of issuer (Corporate bonds) BOND PORTFOLIO IS 72% OF TOTAL PORTFOLIO Financial services 20.9% Governments 27.8% • 69% are corporate bonds and 31% are government & Utilities 25.7% mu
Slide 32: High-Quality Investment Properties & Mortgages Portfolios
HIGH-QUALITY INVESTMENT PROPERTIES & MORTGAGES PORTFOLIOS $1.5B INVESTMENT PROPERTIES $1.2B MORTGAGES ▪ Capital-efficient investment properties ▪ Disciplined underwriting process ▪ Average lease terms remaining of ~9 years 1 Combined portfolios ▪ Large portion rented to governments ▪ 65% of mortgage
Slide 33: Immediate Sensitivities
IMMEDIATE SENSITIVITIES For more information on sensitivities, please refer to the quarterly and annual Management’s Discussion IMMEDIATE IMPACT and Analysis (MD&A) as well as the “Forward-looking statements” section in this document Equity Equity Net income 1 OCI3 and Solvency ratio CSM OCI only3 a
Slide 34: Core Earnings Sensitivities
CORE EARNINGS SENSITIVITIES † REVENUES & EXPENSES DIRECTLY IMPACT ON IMPACTED BY THE LEVEL OF FUTURE QUARTER as at Dec. 31, 2024 Segment Variation CORE EARNINGS1,† Description of shock EQUITY MARKETS AND INTEREST $M post-tax RATES +5% 0.4 Immediate +5% change in market values Investment ▪ Expected r
Slide 35: Insurance, Canada
INSURANCE, CANADA Fourth quarter Year-to-date at December 31 ($M, unless otherwise indicated) 2024 2023 Variation 2024 2023 Variation Individual Insurance Sales1 Minimum premiums2 91 83 10% 347 328 6% Excess premiums3 11 12 (8%) 45 41 10% Total 102 95 7% 392 369 6% Gross premiums 712 649 10% 2,681 2
Slide 36: Insurance, Canada (cont.)
INSURANCE, CANADA (cont.) Fourth quarter Year-to-date at December 31 ($M, unless otherwise indicated) 2024 2023 Variation 2024 2023 Variation Group Insurance Employee Plans Sales - New business during the year 11 6 83% 84 50 68% Net premiums 355 331 7% 1,403 1,312 7% Premium equivalents and deposits
Slide 37: Wealth Management
WEALTH MANAGEMENT Fourth quarter Year-to-date at December 31 ($M, unless otherwise indicated) 2024 2023 Variation 2024 2023 Variation Individual Wealth Management Sales - Gross sales Segregated funds 1,562 837 87% 5,443 3,581 52% Mutual funds 597 393 52% 1,936 1,531 26% Insured annuities and other s
Slide 38: Wealth Management (cont.)
WEALTH MANAGEMENT (cont.) Fourth quarter Year-to-date at December 31 ($M, unless otherwise indicated) 2024 2023 Variation 2024 2023 Variation Group Savings and Retirement Sales - Gross sales Accumulation contracts Other accumulation contracts 40 23 74% 153 83 84% Segregated funds 661 482 37% 2,518 1
Slide 39: US Operations
US OPERATIONS Fourth quarter Year-to-date at December 31 ($M, unless otherwise indicated) 2024 2023 Variation 2024 2023 Variation Individual Insurance Sales ($US) 68 44 55% 227 172 32% Sales ($CAN) 95 60 58% 311 231 35% Net premiums ($CAN) 248 169 47% 866 642 35% Dealer Services Sales ($US) 274 227
Slide 40: Net Premiums, Premium Equivalents and Deposits
NET PREMIUMS, PREMIUM EQUIVALENTS AND DEPOSITS Net premiums, premium equivalents and deposits ($M, unless otherwise indicated) Q4/2024 YoY ($B) 20.4 Insurance, Canada Individual Insurance 569 11% 16.6 16.8 5.7 Group Insurance 524 8% 15.4 Dealer Services 154 13% 14.0 4.2 4.1 4.0 iA Auto and Home 135
Slide 41: Asset Growth
ASSET GROWTH Total AUM and AUA (assets under management and assets under administration, end of period, $B) Assets under management and assets under administration 259.4 December 31 ($B, unless otherwise indicated) QoQ YoY 2024 221.2 218.9 Assets under management 197.5 197.4 189.4 130.6 General fund
Slide 42: CSM Movement Analysis
1 CSM MOVEMENT ANALYSIS ($M, unless otherwise indicated) Q4/2024 Q4/2023 YoY CSM - Beginning of period 6,675 5,781 Q4/2024 highlights Organic CSM movement Impact of new insurance business 194 148 31% Organic CSM increase of $112M Organic financial growth 89 63 41% Insurance experience gains (losses)
Slide 43: 2024 CSM and Risk Adjustment Movement Analysis
2024 CSM AND RISK ADJUSTMENT MOVEMENT ANALYSIS Insurance, Wealth US Insurance, Wealth US Total ($M, unless otherwise indicated) Total Total Canada Management Operations Canada Management Operations CSM+RA CSM RISK ADJUSTMENT CSM and Risk Adjustment - Beginning of period 3,094 2,346 485 5,925 1,796 5
Slide 44: Investor Relations
INVESTOR RELATIONS Contact Caroline Drouin Tel.: 418-684-5000, ext. 103281 VP-Investor-Relations@ia.ca Next Reporting Dates Q1/2025 - May 8, 2025 Conference call on May 8, 2025 Q2/2025 - August 5, 2025 after market close Conference call on August 6, 2025 Q3/2025 - November 4, 2025 after market close
Slide 45: Footnotes for Slides 8 and 12
Footnotes for slide 8 on Key Results 1 Capital available for deployment, ROE, organic capital generation, net premiums, premium equivalents and deposits and assets under management and assets under administration represent supplementary financial measures. Refer to the “Non-IFRS and Additional Finan
Slide 46: Footnotes for Slides 16 and 19
Footnotes for slide 16 on Q4/2024 Profitability and financial strength 1 Presented on a trailing 12-month basis. 2 End of period. 3 As at December 31, 2024, the solvency ratio was 133% on a pro forma basis, taking into account the impact of the AMF-revised CARLI Guideline on January 1, 2025, the acq
Slide 47: Acronyms
ACRONYMS 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 48: Acronyms (cont.)
ACRONYMS (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 49: Trademark notice
iA Financial Group is a business name and trademark of iA Financial Corporation Inc. and Industrial Alliance Insurance and Financial Services Inc.