INDUSTRIAL ALLIANCE INSUR. & FIN. SER. 1
Fourth Quarter 2016 Conference Call Presenters: Yvon Charest, President and CEO René Chabot, EVP, CFO and Chief ActuaryFebruary 16, 2017
Q4/2016 Year ends on a solid noteProfit
Business Growth
Financial Strength
2
► Reported EPS of $1.48: 23% above top of guidance ($1.10-$1.20 EPS)
► Core EPS of $1.16, within guidance and +10% YoY
► Favourable policyholder experience (+$0.05 EPS) and favourable strain ratio of 5% (+$0.01 EPS)
► $0.02 market-related gain: UL policies (+$0.03 EPS) and hedging (-$0.01 EPS)
► Exceptional items: Reserve release (+$0.22 EPS), tax gain (+$0.06 EPS) and higher financing costs (-$0.03 EPS)
► Strong momentum continues in Individual Insurance sales (+27% YoY)
► Positive net sales for mutual funds
► iA seg funds continue to lead industry for net sales (3rd for assets)
► Record level of premiums and deposits (+12% YoY) driven by retail sectors
► Solvency ratio of 225% (less ~14 percentage points after HollisWealth closing in Q3/17)
► Increased interest rate protection: 75 bps for IRR (up from 43 bps) and 20 bps ahead of the prescribed URR
► Book value per share of $40.97: +11% YoY and +6% QoQ
► Dividend increased by 3 cents (+9%) to $0.35 per common share
Sales Highlights Very strong quarter for retail insurance and turnaround in mutual fund net salesFourth quarter | Year-to-date at December 31 | |||||
2016 | 2015 | Variation | 2016 | 2015 | Variation | |
► Individual Insurance | 71.4 22.0 | 52.2 37% 21.5 2% | 212.1 94.6 | 176.9 20% 77.4 22% | ||
Canada United States Total | ||||||
93.4 | 73.7 | 27% | 306.7 | 254.3 21% | ||
► Individual Wealth Management | 74.1 77.2 | 82.3 (247.5) | (8.2) 324.7 | 341.7 (404.4) | 422.4 (995.3) | (80.7) 590.9 |
Segregated funds - net sales Mutual funds - net sales Total - net sales | ||||||
151.3 | (165.2) | 316.5 | (62.7) | (572.9) | 510.2 | |
► Group Insurance | 23.1 129.3 59.8 | 14.5 59% 138.4 (7%) 59.1 1% | 71.4 559.9 194.1 | 68.0 5% 560.7 0% 190.3 2% | ||
Employee Plans Dealer Services (Creditor Insurance & P&C) Special Markets Solutions Total | ||||||
212.2 | 212.0 0% | 825.4 | 819.0 1% | |||
► Group Savings and Retirement | 367.2 | 477.0 | (23%) | 1,481.4 | 1,316.2 | 13% |
► iA Auto and Home | 59.4 | 52.2 | 14% | 278.6 | 247.3 13% | |
($Million, unless otherwise indicated)
3
Q4 Results vs. Guidance A strong end to a strong yearQ4/2016 | 2016 | |||
Guidance | Reported | Guidance | Reported | |
EPS | $1.10 to $1.20 | $1.48 Core: $1.16 | $4.20 to $4.60 | $5.19 Core: $4.77 |
ROE1 | 11.0% to 12.5% | 14.9% Core: 11.6% | 11.0% to 12.5% | 13.2% Core: 12.2% |
Strain | 15% ± 5% | 5% | 15% ± 5% | 11% |
Effective tax rate | 18% to 20% | 17% | 18% to 20% | 18% |
Solvency ratio | 175% to 200% | 225% | 175% to 200% | 225% |
Payout ratio | 25% to 35% (mid-range) | 21% | 25% to 35% (mid-range) | 24% |
4 1 Annualized for the quarter and trailing twelve months for the year to date.
Industrial Alliance Insurance and Financial Services Inc. published this content on 16 February 2017 and is solely responsible for the information contained herein.
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