iA Financial Group reports net income of $159.1 million for the second quarter

iA Financial Group has reported net income attributable to common shareholders of $159.1 million for the second quarter of 2018, up from $125.5 million for the same quarter last year.

Return on shareholders' equity (ROE) for the last twelve months was 12.0 per cent. The company’s solvency ratio stood at 122 per cent on June 30, exceeding its target of 112-116 per cent.

Solid momentum

"The momentum in our operations continued to be solid in the second quarter," stated Denis Ricard, Incoming President and CEO of iA Financial Group. "In the US, we had our first full-quarter contribution from the DAC acquisition and in Canada, our Employee Plans and Special Markets segments delivered outstanding organic growth. In addition, our retail insurance and wealth operations in Canada continue to deliver solid top-line results while adapting their strategies to benefit from technological and regulatory changes in the industry."

"Our second quarter earnings exceeded management expectations," added Jacques Potvin, EVP, CFO and Chief Actuary. "Along with solid growth in expected profit, we benefitted from very favourable policyholder experience in our individual and group insurance operations. We also note the good results from our auto and home subsidiary this quarter. Capital remains well positioned and, in line with our target payout ratio, we are increasing our dividend to common shareholders by 9 per cent."

Retail insurance sector

In Q2 2018, the retail insurance sector in Canada reported total sales of $47.4 million, comparable to the same quarter of 2017. “Minimum premiums of $44.3 million grew by 3 per cent but excess premiums, or savings, were down,” said the company.

In retail wealth management, gross sales of segregated funds amounted to $445.9 million, up two per cent. Net sales stood at $63.4 million down from $130.0 million a year earlier. “These results reflect general market conditions and consumer preference for guaranteed products during the quarter,” stated the company.

Mutual fund sales down

In the second quarter, iA reported gross sales of mutual funds of $543.9 million compared with $560.1 million a year ago. Net outflows stood at $3.2 million compared with inflows of $76.9 million a year earlier. “During the second quarter, the mutual fund industry in Canada was in net redemptions,” observed the company.

Group insurance sector

The group insurance sector reported total sales of $291.2 million, up 16 per cent compared to the same quarter a year ago. Employee Plans reported sales of $56.4 million, up 95 per cent and Special Markets Solutions had sales of $56.8 million, up 31 per cent.

In the group wealth sector, total sales amounted to $370.0 million, a decline of 13 per cent compared to the second quarter last year.