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Net income up 25 % : iA financial Group exceeds its expectations

by

Alain Thériault

August 3, 2018 09:45

Photo : Freepik

Due to significant organic growth and an acquisition strategy that bears fruit, iA financial Group has delivered a net profit that exceeds his / her expectations towards the second quarter of 2018.

The insurer of Quebec has achieved a net income attributed to common shareholders of 159,1 million dollars ($M) in the second quarter of 2018, an increase of 25 % compared to the second quarter of 2017. The insurer displays a solvency ratio of 122 %, under the capital adequacy test of life insurance companies. It targeted a ratio of 112% to 116 %.

The insurer has benefited from a very positive experience on the side of the policyholders in its insurance operations, individual and collective, ” says James Potvin, executive vice president, chief financial officer and chief actuary. “We have also obtained good results with our subsidiary, home and auto insurance during the quarter. The capital remains well positioned and, in accordance with our payout ratio the target dividend, we increased the dividend on our common shares by 9%, ” said Mr. Potvin.

Acquisitions and organic growth

“Our activities have continued on their momentum in the second quarter and have remained strong,” commented Denis Ricard, chairman and chief executive officer designated to take over to Yvon Charest, on the 1st of September. Mr. Charest has announced that he will be retiring and will remain for the transition until January 1, 2019.

“In the United States, we benefited for the first time the contribution of the company’s DAC was acquired in the beginning of the year, during a full quarter, whereas in Canada, the divisions of employee Plans and Solutions for special markets have both achieved organic growth significant,” reveals Mr. Ricard. Acquired the 23 January 2018, the DAC has contributed to the sector car dealers, in the amount totalling $ 102.9 MILLION US$.

The new CEO believes that the acquisitions have played an important role in the strategy of ai. It aims to expand its geographic footprint, gain access to new areas of activity or to simply grow a sector that is already existing, ” he recalls. “As was the case under the leadership of Yvon Charest, we remain committed to maintaining the long-term growth and the creation of value for shareholders, whether organically or by acquisitions,” said Mr Ricard.

Group insurance is distinguished

The insurance sector collective has recorded the best growth of the business iA financial Group. Its total sales of 291,2 M$ representing an increase of 16 % in the second quarter, compared to the same quarter a year earlier. The main engine of this growth, sales of employee plans reached$ 56.4 Million, representing a growth of 95 % in the second quarter. Solutions sales for special markets (among other death and accidental dismemberment, critical illness and travel) amounted to 56.8 Million$ in the second quarter, 31% more than in the same quarter of the previous year.

The division of dealer services, for its part, achieved sales of 71.4 Million$ in insurance, property and casualty, and 106.6 Million, respectively, in the second quarter of 2018. These two results are similar to those recorded in the second quarter of 2017. This division, however, saw a growth of 41 % in its emissions of auto loans, non-preferential, which reached 82.6 Million during the second quarter of 2018.

The sector of savings and collective pension has been less happy. Its sales totalled$ 370 Million in the second quarter, 13 % lower than the same quarter last year.

The individual sector stable

The total sales of individual life insurance remained stable in the second quarter of 2018, compared to the second quarter of 2017, amounting to 47.4 M$. In the sector of american business, the sales in individual insurance totalled$ 21.5 Million in the second quarter of 2018, or 8% more than in the same quarter last year.

In iA Auto and home premiums written during the second quarter rose 2 %, to $ 104,8$M.

The fund mishandled

The gross sales of segregated funds increased by 2 % between the second quarters of 2018 and 2017, to reach to 2 %. By contrast, net sales of segregated funds decreased from$ 130 Million in the second quarter of 2017 to 63.4 Million during the second quarter of 2018. “These results reflect the general conditions of markets and of the consumer preference for guaranteed products over the quarter. According to the data of the latest industry, the company continues to occupy the first place in Canada in terms of net sales of segregated funds and the third in terms of assets “, one can read in the financial results for the second quarter published.

Gross sales of mutual funds declined slightly, as they reached 543,9 Million,$ – million in the second quarter of 2018, compared to a profit of 560.1 metric M$ in the second quarter of 2017. The net outflows have totaled$ 3.2 Million in the second quarter, compared to inflows of 76.9 Million$ a year earlier. The insurer reports that during the second quarter, the canadian mutual fund sales were a net negative.

 

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