UV Insurance reported net income of $6.6 million in 2024, down 43% from the $11.5 million reported for the year ended Dec. 31, 2023.
UV Insurance's solvency ratio stood at 172% in 2024, compared with 162% in 2023.
In an interview with the Insurance Portal, Pierre Parenteau, UV Insurance’s Senior Vice-President, Actuarial and Finance, explained the decline in net income.
Parenteau points out that in 2023, the ultimate discount rate in the calculation of insurance contract liabilities was updated, following a revision of the method used to determine the ultimate rate, published on July 12, 2023 by the Canadian Institute of Actuaries. “Without this change in assumption, net income after tax for 2023 would have been $5.3 million (instead of $11.5 million). Generally speaking, when the discount rate rises, liabilities fall, which will have a positive impact on net income,” he says.
We don't expect any further changes in the ultimate rate in the next few years - Pierre Parenteau
Such a change in method is not common, according to Pierre Parenteau. “In 2024, there was no change in the ultimate discount rate assumption, and our net income reflects only our operations and sales. We don't expect any further changes in the ultimate rate in the next few years,” he says.
The ultimate rate is used to estimate the present value of life insurance benefits that will later have to be paid out to policyholders' beneficiaries.
Investments in technology
UV Insurance's 2025 Annual Report notes that 2024 marks the end of a major conversion of the insurer's group insurance administrative systems. “We have completed the migration of our entire group to a modern, high-performance member and administrator portal,” it reads.
“We also completed significant technological projects, allowing us to implement new systems in group insurance and drive substantial growth in individual insurance. Our data migration efforts, aimed at transitioning to new platforms, are progressing smoothly and are expected to be completed by the end of 2026 for all our insurance activities,” stated Chairman Alain Bédard in the annual report’s introductory message.
Christian Mercier, Chief Executive Officer of UV Insurance, noted that UV Insurance has achieved its growth objectives in group insurance, and will continue its efforts in 2025 to strengthen its position in this segment.
As for the migration work in progress, Pierre Parenteau explains that it concerns UV Insurance's in-force individual insurance business. “In individual insurance, new business has been administered using new technology for several years now. The project to migrate all in-force business is underway and should be completed by early 2026,” said Parenteau. By that time, the major technological transformation projects will have been completed, and UV Assurance will be operating its entire business on new technology. Technological investments in 2024 amounted to $6.5 million.”
On the subject of individual life insurance, Alain Bédard stated in the annual report that the aim of the technological and human resources advancements made in recent years was to position this sector advantageously. They are bearing fruit with “remarkable results, allowing us to achieve our objectives nearly three years ahead of schedule,” stated Bédard. For his part, Parenteau would not divulge what this progress means in terms of premiums.
Mutualist vocation
In his CEO’s message in the report, Christian Mercier emphasized the Drummondville mutual's commitment to the community. “In 2024, we reinvested over 10% of our net profit into the community, prioritizing initiatives focused on education, health, and social exclusion,” he explained.
Pierre Parenteau also emphasized the nearly $30 million increase in mutualist equity between 2023 and 2024. UV Insurance has more than 330,000 mutualist members. According to its financial results, mutualists’ equity will rise from $226.3 million in 2023 to $256.4 million in 2024. This represents growth of 13.3%.
Parenteau explains that it is the increase in the market value of preferred shares that has boosted mutualist equity. “Preferred shares held in UV Insurance investments increased in value significantly in 2024. Given their inherent volatility, we apply an accounting treatment that neutralizes changes in the market value of preferred shares against our net income after tax, whether they are upward or downward. Instead, this volatility is reflected in the statement of financial position (balance sheet). As a result, the volatility of preferred shares affects mutualists' equity,” he explained.
