Industrial Alliance reports net income of $132.8 million in fourth quarterBy The IJ Staff | February 15 2018 01:30PM
Industrial Alliance Insurance and Financial Services Inc. has reported net income of $132.8 million for the fourth quarter of 2017, down 14 per cent compared to net income of $155.0 million for Q4 2016. For the year 2017, the company posted net income of $515.5 million, down four per cent from $537.2 million in 2016.
Return on equity (ROE) for the last twelve months was 11.4 per cent compared to 13.2 per cent for 2016.
"Our 2017 results reflect our strategy to grow our organization organically and through acquisitions," said Yvon Charest, President and Chief Executive Officer in a Feb. 15 announcement. "As well as maintaining leading market shares in key business segments, we completed two important acquisitions – HollisWealth and DAC – that added significant distribution capacity, increased our footprint in the Canadian and U.S. markets and beginning in 2018 are expected to make a sizeable contribution to our bottom line. In addition, last week we announced our intention to create a corporate structure that will give us the flexibility to support our future growth ambitions."
Adverse lapse experience
"All lines of business reported favourable results in the fourth quarter, particularly Employee Plans that delivered a solid performance throughout the year," said René Chabot, EVP, CFO and Chief Actuary. "Market growth provided gains in our retail wealth and insurance operations, which were mostly offset by adverse lapse in our Individual Insurance business and HollisWealth integration costs. Considering our unfavourable lapse experience throughout the year, we repositioned our lapse assumption at year-end.”
Chabot added that in 2018 the company expects improved results from its auto and home insurance operations and “a significant contribution” from its HollisWealth and DAC (Dealers Assurance Company and Southwest Reinsure) acquisitions.
Retail sales in Canada and the U.S.
The insurer reported total Q4 retail insurance sector sales of $74.9 million for Canada and the U.S., a decline of 20 per cent. “In Canada, results reflect the impact of the new tax legislation effective January 1, 2017 that stimulated sales in the fourth quarter of 2016,” says the company. U.S., sales were slowed by changes to a temporary life product, pricing updates as well as the impact of hurricanes.
For the full year, total retail insurance sales in Canada and the U.S. amounted to $288.1 million, a decline of six per cent.