April 17, 2018 09:45
Photo : Alain Castonguay
The CEO of two insurers have indicated, during a debate on the future of the insurance industry, organized by the Cercle finance du Québec, it will need to be ingenious to increase the profits. The new accounting standards on the capitalisation of insurers may pose concerns for businesses here.
Yvon Charest, president and chief executive officer ofiA Group’s financial, noted that, when the whole world is working hard in the business, there is great potential to grow the profits and value of the company of approximately 5 % per year. “Our ambition is to climb to 10 %. This is what we managed to do that since we became a public company, ” he says.
Launch of new products
The other 5 % comes from the growth obtained by introducing new products into new territories. On the american market, ai has begun to analyze acquisition opportunities as early as 2005, but he had to wait to 2010 to find the right company to acquire. Five years later, after having managed the first acquisition, ai has started to analyze the market and made a second acquisition in 2018.
The canadian market in insurance of persons is already quite consolidated, ” added Mr. Charest. Foreign insurers are parties. To increase the yield obtained on the domestic market, it must continue to improve productivity.
Analyze all of the options
In The Capital, the insurer analyzes all the options to maintain growth, ” says Jean St-Gelais. We can only hope for a 10% increase in the volume of business only by organic growth.
“Is it that you want to be a competitor with all the world in all the products, and cope with Manulife, Great West, Sun Life and iA ? Or choose to be the best in a niche, more targeted ? “, he said.
The insurer may also consider making alliances with brokers and general agents to strengthen its distribution network, or make acquisitions in the medium term. The status of mutual Capital so that it is more difficult to raise capital compared to a public company, he notes.
He also added that the new rules of IFRS 17 will force the insurance companies to hire many specialists in the field of financial analysis. An issue that Yvon Charest judge also of concern, said the latter.