Pandemic hammers iA Financial’s first quarter results
The impact of the COVID-19 pandemic on first quarter earnings per share at iA Financial Group was substantial in the first quarter of 2020.
Released May 7, the company’s first quarter results include net income attributed to common shareholders of $39.1-million, down from $151.1-million reported in the first quarter of 2019. Diluted earnings per common share fell to $0.36, down from $1.40 reported during the first quarter of 2019.
The company says the pandemic’s impact on earnings per share totaled $1.12 during the quarter. “If this impact were excluded, reported earnings per share for the first quarter would have been $1.48,” iA said in a statement.
The company’s solvency ratio was 137 per cent at March 31, 2020, up from 133 per cent at December 31, 2019 and 124 per cent at March 31, 2019.
Premiums and deposits of over $3.5-billion were up 19 per cent, compared with the same quarter last year, mainly thanks to contributions from the company’s individual wealth management business. Assets under management and administration of $175.7-billion were down three per cent year-over-year, and seven per cent, quarter-over-quarter, primarily due to equity market declines.
Individual insurance sales
Individual insurance ended the quarter with total sales of $45.2-million, while individual wealth management guaranteed product sales increased 88 per cent to $205.7-million. Gross segregated fund sales were up 43 per cent, year-over-year, to $872.3-million.
Net sales of mutual funds were also up significantly to $423.8-million, compared with $145.2-million reported a year earlier. The company says gross mutual fund sales were up 27 per cent, year-over-year at $693-million. “Net sales were positive through early March, but significant redemptions later in the month, amid economic uncertainty from COVID-19, led to net outflows of $99.2-million.” In group savings and retirement, total first quarter sales amounted to $658.9-million, compared to $675.5-million a year earlier, due to lower sales in insured annuities.
Solvency ratio declines
Breaking out the results separately for iA Insurance, the company says iA Insurance recorded net income attributed to iA Financial Corporation of $40.6-million, compared to $151.3-million reported a year earlier. The company’s solvency ratio was 116 per cent at March 31, compared to 126 per cent and the end of December 2019 and 123 per cent reported at March 31, 2019.
iA Financial Corporation’s board of directors also announced the payment of a quarterly dividend of $0.485 per common share, payable June 15, 2020 to shareholders of record at the close of business on May 22, 2020. Industrial Alliance Insurance and Financial Services Inc., preferred share dividends ranging between $0.24 and $0.30 will also be paid June 30, to preferred shareholders of record as of May 29, 2020.