Following the publication of its financial results for the first quarter of 2025, iA Financial Group held its annual general meeting of shareholders in Quebec City on May 8.

"We've been the best since demutualization. We've proven it," said President and CEO Denis Ricard in an interview with the Insurance Portal, held a few minutes after the end of the event.

In February 2025, iA celebrated the 25th anniversary of its demutualization and listing on the Toronto Stock Exchange. At the company’s Investor Day held in Toronto on February 24, Denis Ricard pointed out that the company had managed to outperform the stock markets and its main competitors in life and health insurance over the past quarter century. 

“In 2000, if you invested $100 in the TSX index, your investment was worth $278.25 years later, representing a 4% annual return,” he reiterated in the interview.

"If you had invested $100 in the average share price of my three competitors (editor's note: Sun Life, Great-West and Manulife), you now have $1,337, a return of almost 11% per year. That's very good.

However, the same $100 invested at the time of demutualization is now worth $3,047. “This represents an annual return of 14.7%,” says Denis Ricard. "We've outperformed our peers. Over a 25-year horizon, that means we've achieved 4% more return per year, which is no mean feat."

In favor of merging Quebec’s two Chambres  

Earlier at the meeting, a shareholder asked him if the volume of regulation being imposed on the company seemed adequate. “It's true that there could be more harmonization between the provinces, without it necessarily being total, but there needs to be a bit of consistency in the industry between the different jurisdictions,” said Ricard. 

"Very recently,” he added, “the Quebec government took an interesting step by merging the Chambre de la sécurité financière and the Chambre de l'assurance de dommages. We support this move, as it simplifies regulation.”

Segregated funds  

In the first quarter of 2025, ended March 31, iA’s Wealth management segment posted record sales and continued to rank first in Canada. Gross sales for this segment increased by 52% over the same period in 2024, reaching $1.9 billion in the first quarter of 2025. For the same period, net sales of segregated funds, which reached $1.2 billion, were up 111%.

Performance was similar for this product line throughout 2024. What explains iA's success in this niche? 

It's not complicated," said Ricard. “Segregated funds are sold by advisors who have an insurance license. We focus on the family market, which is better suited to segregated funds, diversified segregated funds. Everything is sold through our insurance distribution networks, complementing the rest."

The company has trained its advisors to offer segregated funds, and that's part of the sales strategy, added Ricard.

Acquisitions  

As of March 31, 2025, the company has capital available for deployment valued at $1.4 billion. Aside from the redemption of $400 million in subordinated debentures in the first quarter, and the ongoing share buyback, what does the company intend to do with this capital?

"For every (acquisition) transaction we do, we have to analyze about twenty. The ones I'm looking at are a little bigger than before. It's just as much work to do a small one as it is to do a bigger one," explains Ricard.

For the moment, the acquisition opportunities are greatest in the United States, where the life and health insurance market is much more fragmented than in Canada, much like the banking system. “There are thousands of companies, and most of them are not in good shape,” he said. 

In 2024, iA Financial Group made acquisitions in the United States, purchasing portfolios belonging to Prosperity Life, an Arizona-based insurer. In July 2024, the company also completed the Vericity transaction announced in October 2023, acquired through its subsidiary iA American Holdings. In both cases, “it's paying off and we're growing,” said Ricard.

In the first quarter of 2025, iA expanded its offering in the dealer services market by acquiring London, Ontario-based Global Warranty. The firm offers mechanical warranties on used vehicles. "There are two major players in Canada in dealer services. There's an Alberta company called First Canadian Insurance and us," he says.

The acquisition enables iA to expand its offering in Ontario and Western Canada.

“This transaction brings us geographical diversification, but it's above all based on our desire for growth,” he adds.

Since demutualization, the company has completed some 70 transactions. “Every time, we work to achieve growth,” said Ricard, indicating that he can think of only one case where an acquisition did not bear fruit.

He cites, as an example, the success achieved following the purchase of insurer American Amicable in 2010. The company was unprofitable at the time of purchase, but Ricard knew he had the conditions in place to improve the balance sheet. "Firstly, their financial skills were ordinary. Secondly, the shareholders didn't want to invest to grow the business."

The company needed four years to turn things around. Annual sales rose from US$26 million in 2010 to $201 million in 2024. “We have profitability that exceeds many of our Canadian lines of business,” he says. 

U.S. business 

First with analysts, then when speaking to the company's shareholders, Denis Ricard was asked about the impact of the trade battle launched by US President Donald Trump. Are dealer services activities, both in the US and Canada, under threat? "This sector depends on car sales. It also depends somewhat on the price of cars and parts," he said.

Mechanical warranties are offered when a vehicle is sold, and the proceeds are used up if the customer makes a claim. Depending on the value of the parts at the time of replacement, if the insurer hasn't properly assessed the cost, this will have an impact on profitability, he explained.

"In the United States, 75% of parts inflation risk is assumed by the dealer. We take the difference. If our inflation assumptions aren't right, if parts prices go up more, it costs us more, we make less profit. That's the analysts' concern," he added. The situation is the same for warranties offered in Canada.

Economic activity 

The turbulence arising from the Trump administration's decisions doesn't worry Ricard too much. He's been with iA for 40 years, and the company has seen a lot of upheaval in that time.

Certainly, the impact on economic activity and inflation, as well as disruptions to supply chains, are likely to disrupt profitability on the dealer services side. "No matter who's president, people will continue to buy vehicles. Maybe they'll buy cheaper vehicles, or more used vehicles. And we're able to adjust the product premium," says Ricard.

He underlined that the company is diversified, and is able to offset losses in one segment with earnings growth in other activities. "Our horizon is not one year, three years, five years or 10 years. It's 20, 30, 50 years. We have a very long-term vision." 

With respect to ongoing market volatility, Ricard says the company can deal with it. "We have long-term return assumptions for non-fixed securities. Yes, there will be short-term fluctuations due to stock market volatility, but we have the capital to absorb these deviations."

*Interview conducted with Serge Therrien.