Ia Financial Corporation Inc. · TSX:IAG
Ia Financial — Investor Presentation (November 2023)
36 slides from Ia Financial's investor presentation, November 2023
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 20 Book value growth 5 iA Financial Group overview 21 Share price growth 6 Business segments 22 Dividend 7 Awards and distinctions 23 Investment portfolio 8 Shareholder value creation 24 Bond portfolio 25 Real est
Slide 5: The Group Today
Our mission iA Financial Group is one of the largest insurance and To ensure the financial wellbeing of our clients by offering wealth management groups in Canada, with operations them personal insurance coverage and investment in the United States. solutions to help them achieve their personal goal
Slide 6: Business Segments
BUSINESS SEGMENTS INSURANCE, WEALTH US CANADA MANAGEMENT OPERATIONS Three • Individual Insurance • Individual Wealth • Individual Insurance operating • Group Insurance Management • Dealer Services business • Dealer Services • Group Savings and segments • iA Auto and Home Retirement • Retail distribu
Slide 7: Excelling as a Group
#1 Number of individual insurance policies issued in Canada1 #1 Overall company rating in the Advisor Perception Survey2 EXCELLING AS A GROUP #1 Gross and net sales of segregated funds in Canada3 #1 Wealth distribution (non-bank assets including seg. funds)4 Distinction Awards - Mental Health and We
Slide 8: Shareholder Value Creation
SHAREHOLDER VALUE CREATION Industry leading share price and book value1 growth since IPO From sound management approach and long-term vision $87.68 Nov. 15, 2023 IAG Share Price Historical CAGR: 11% $65.25 Sept. 30, 2023 $8.44 Book Value Per Share1 $7.875 Historical CAGR: 9% IPO2 1 Book value per co
Slide 9: 9M/2023 Profitability and Financial Strength
9M/2023 PROFITABILITY AND FINANCIAL STRENGTH 9M/2023 9M/20221 YoY HIGHLIGHTS Profitability Solid core earnings of $720M in 9M/2023 Core EPS $6.97 $6.53 6 +7% • 11% YoY growth in expected insurance earnings • 10% YoY growth in core insurance service result Core earnings $720M $701M +3% • 8% YoY growt
Slide 10: Growing Both Reported and Core Earnings
GROWING BOTH Medium-term target of 10%+ growth REPORTED AND Reported EPS for core EPS on Core EPS1 average per year CORE EARNINGS 8.85 OVER TIME 7.65 6.97 5.04 4.21 3.57 12% CAGR 2015-2022 for reported and core earnings1 2015 2016 2017 2018 2019 2020 2021 2022 9M/23 IFRS 4 IFRS 17 10 1 Core earnings
Slide 11: Robust Capital Position
ROBUST CAPITAL POSITION Flexible balance sheet Solvency ratio2 Robust solvency ratio Solvency ratio is one of the most significant well above operating target measures of a company’s financial strength + (end of period) Financial flexibility 145% 3 with low debt ratio of 14.7%1 134% + 126% Solid bal
Slide 12: Strong and Ongoing Organic Capital Generation
STRONG AND ONGOING ORGANIC CAPITAL GENERATION A comprehensive KPI Organic Capital Generation Organic capital generation 2023 TARGET (~$M) $600M+3 = 550 490 9M/23: Core Capital $440M Organic Earnings Net of + CSM Growth2 – Required for Organic Dividend1 Growth Before iA’s management 280 250 245 actio
Slide 13: Expanding Core ROE
EXPANDING CORE ROE While adding 25+ acquisitions since 20151 15.4%3 Q3/23 4 15%+ iA’s core ROE2 14.5% 14.8% 11.5% 2015-2022 core ROE always in-line or above guidance 2015 2016 2017 2018 2019 2020 2021 2022 2023 MEDIUM- TERM PPI TARGET Key strategic Hollis CTL and IAS Surex Vericity5 acquisitions Wea
Slide 14: Growth-Driven Strategy Focused on Strong Shareholder Value
GROWTH-DRIVEN STRATEGY FOCUSED ON STRONG SHAREHOLDER VALUE Capital available Capital deployment $1.6B for deployment1 (September 30, 2023) priorities 1 Profitable organic growth Investing in digital evolution to propel growth 2 Disciplined acquisitions RECENT INITIATIVES To strengthen strategic posi
Slide 15: 9M/2023 Sales – Continued Strong Sales Growth Momentum
9M/2023 SALES – CONTINUED STRONG SALES GROWTH MOMENTUM Year-to-date at September 30 SALES† ($M, unless otherwise indicated) 2023 2022 Variation INSURANCE, CANADA ▪ Solid sales for Individual Insurance in Individual Insurance1 274 292 (6%) Canada: 9M/23 result is up 38% Group Insurance 306 248 23% fr
Slide 16: 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 17: Leveraging Our Know-How for a Successful US Expansion
LEVERAGING OUR KNOW-HOW FOR A SUCCESSFUL US EXPANSION Both organically and through acquisitions ü Acquisitions prove to deliver sustained growth over time ü High-performing distribution channels and portfolio of products US Operations 139 ü Strong growth potential in the US life insurance market Ope
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+ (2023) 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: Appendices
APPENDICES iA@ Financial Group
Slide 20: Industry Leader for Book Value Growth
INDUSTRY LEADER FOR IFRS 9 and 17 transition iA’s book value maintained as a result of a sound BOOK VALUE GROWTH management approach and long-term vision 1 IAG Book value per share IAG book value per +74% and dividends paid share CAGR2 (at year-end) 5-year +8% Since 2000 +9% Peers3 +51% 0% 2017 2018
Slide 21: Industry Leader for Share Price Growth
INDUSTRY LEADER FOR SHARE PRICE GROWTH Total return +1,811% (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 Nov. 15, 2023 0% IPO1 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 201
Slide 22: Dividend to Common Shareholders
DIVIDEND TO COMMON SHAREHOLDERS $0.80 Dividend per share of $0.75 to 76.5¢ payable in $0.70 Q4/2023 $0.65 $0.60 $0.55 $0.50 $0.45 $0.40 Largest dividend increase (+29%) $0.35 among Canadian lifecos $0.30 following the lifting of regulatory $0.25 restrictions in November 2021 $0.20 Steady increases e
Slide 23: Investment Portfolio
INVESTMENT PORTFOLIO Resilient portfolio composed of high-quality assets and diversified exposures Bonds - Corporates - BB and lower: 0.5% Investment properties: 4% ü Fixed income ALM1-oriented portfolio ▪ see further details on slide 24 Mortgages - Insured: 3% Mortgages - Uninsured: 1% ü Prudent ex
Slide 24: $27.1B Bond Portfolio
$27.1B BOND PORTFOLIO High-quality and conservative portfolio Distribution by industry sector Distribution by category of issuer (Corporate bonds) Financial services 21% BOND PORTFOLIO IS 69% OF TOTAL PORTFOLIO Governments 31% Utilities 31% • 66% are corporate bonds and 34% are government & Municipa
Slide 25: High-Quality Investment Properties & Mortgages Portfolios
HIGH-QUALITY INVESTMENT PROPERTIES & MORTGAGES PORTFOLIOS $1.7B INVESTMENT PROPERTIES $1.5B MORTGAGES ▪ Capital-efficient investment properties ▪ Disciplined underwriting process 1 ▪ Average lease terms remaining of ~9 years Combined portfolios ▪ Large portion rented to governments ▪ 70% of mortgage
Slide 26: Market-Related Impacts
MARKET-RELATED IMPACTS METHODOLOGY 1 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: Strategic Growth Axes and Ambition
STRATEGIC GROWTH AXES AND AMBITION BUILDING FOR THE LONG TERM iA’s strategic plan is based on four strategic axes, each with its own ambition. ESG is another essential component of our development, referring to environmental, social and governance considerations.1 OUR STRATEGIC AXES OUR AMBITION To
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 Continue growing Digital and Lea
Slide 29: Shaping iA's Digital Ecosystem to Support Growth
SHAPING iA’S DIGITAL ECOSYSTEM TO SUPPORT GROWTH Growth Digital initiatives to contribute to 1%+ of 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
Slide 30: iA's Sustainability Approach
iA’S SUSTAINABILITY APPROACH In order to be a company that contributes to sustainable growth and wellbeing for its clients, employees, partners, investors and communities, iA Financial Group makes sustainable development a priority. • Sustainable bond framework • 1st sustainable bond issuance • 1st
Slide 31: ESG – What We Do at iA
ESG–- WHAT ESG WhatWE weDO doAT atiAiA Initial strategy: Reduce Continue offsetting 50% For all iA Financial Group Senior Integration of our GHG emissions by GHG emissions Integration of TCFD sustainable of new iA Financial Leadership Positions2, (scope 1 and 2) recommendations and development in ou
Slide 32: 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 33: 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 34: 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 35: Investor Relations
INVESTOR RELATIONS Contact Marie-Annick Bonneau Tel.: 418-931-0142 Marie-Annick.Bonneau@ia.ca Next Reporting Dates Q4/2023 - February 20, 2024 after market close Conference call on February 21, 2024 Q1/2024 - May 9, 2024 Conference call on May 9, 2024 Q2/2024 - August 6, 2024 after market close Conf
Slide 36: 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.
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