iA Financial Corporation Inc.

Good morning, ladies and gentlemen, and welcome to IA Financial Corporation 2023 Third Quarter Results Conference Call. At this time, all lines are in a lesson-only mode. Following the presentation, we'll conduct a question and answer session. Instructions will be provided at that time for you to queue up for a question. If anyone has any difficulties hearing the conference, please press star zero for operator assistance at any time. I would like to remind everyone that this call is being recorded on November 8, 2023. I would now like to turn the conference over to Marie-Annick Bonneau. Please go ahead.

Good morning, everyone, and welcome to our 2023 third quarter conference call. All our Q3 documents, including press release, slides for this conference call, MD&A, and supplementary information package are posted in the investor relations section of our website at ia.ca. This conference call is open to the financial community, the media, and the public. I remind you that the question period is reserved for financial analysts. A recording of this call will be available for one week starting this evening. The archived webcast will be available for 90 days, and a transcript will be available on our website in the next week. I draw your attention to the forward-looking statement information on slide two. as well as the non-IFRS and additional financial measures information and the notes regarding 2022 restated results under IFRS 17 and IFRS 9 on slide three. Also, please note that the detailed discussion of the company's risk is provided in our 2022 NDNA available on CDAR and on our website with an update in our Q3 2023 NDNA released yesterday. I will now turn the call over to Denis Ricard, President and CEO.

Good morning, everyone, and thank you for being with us on the call today. As usual, I will start by introducing everyone attending on behalf of IE. First, Eric Jobin, Chief Financial Officer and Chief Actuary. Alain Bergeron, Chief Investment Officer. Stéphane Bourbonnet, responsible for wealth management operations. René Laflamme, in charge of individual insurance and annuities. Pierre Miron, chief growth officer of our Canadian operations and responsible for Dealer Services Canada and IOTO and Home. Sean O'Brien, in charge of our group businesses. And Mike Stickney, chief growth officer of our U.S. operations and co-head of acquisitions. Starting with slide eight for an overview of our third quarter results. Yesterday, we reported a solid core EPS of $2.50, 10% higher than a year earlier, driven by strong profitability in almost all business units. This represents a core ROE quarter annualized of 15.4%, a very strong result which led to a core ROE for the last 12 months of 14.8%, very close to our medium-term target of 15% plus. Our capital position is very solid with a solvency ratio of 145%, and we continue to generate significant organic capital in line with our 2023 target. Sales momentum continued in the third quarter with double-digit growth in many business units. Strong sales along with good retention of in-force business supported the solid 17% year-over-year increase in premiums and deposits, as well as the 7% year-over-year increase in the level of assets under management and administration, a very good result given market conditions. Finally, our book value is $65.25, which represents a 4% increase since the beginning of the year. Turning to slide nine for our year-to-date results relative to mid-term guidance. The core EPS for the first nine months is 7% higher than last year. Core ROE is close to mid-term guidance. The solvency ratio is well above our operating target, and we are well positioned to meet our $600 million organic capital generation objective for 2023. Finally, the due down payout ratio of 32% of core earnings is within the target range. Now to slide 10 to look at Q3 business growth. Starting with individual insurance in Canada, which recorded another solid performance with sales of $96 million during the third quarter. For a third year in a row, we ranked first for overall company rating in the Advisor Perception Survey, confirming our ability to effectively meet our distributors' expectations. In group insurance, net premiums increased by 6% to $407 million as sales and in-force business retention were very good. Sales were also strong. in the dealer services division, reaching $193 million, up 10% over the previous year. Our leading position in Canada, our comprehensive product range and our extensive distribution networks contributed to this very solid result, despite higher financing costs for car buying customers. Finally, at IE Auto and Home, direct written premiums reached $142 million for the quarter, supported by the strong retention of enforced business. This represents a strong increase of 15% compared to the same period last year. Looking now at slide 11 to comment on wealth management sales results, a factor for which the environment continues to be challenging. We performed very well in seg funds, where we remained a leader in both growth and net seg fund sales. with growth sales up 13% year-over-year and net sales of $216 million. While many clients continue to favor cash-equivalent products, mutual fund sales were softer, whereas sales of insurance annuities and other savings products almost doubled year-over-year, reaching $618 million. Finally, in group savings and retirement, sales of $522 million in the third quarter were up 8% year-over-year. This growth performance was mainly supported by sales of accumulation products. Now looking at slide 12 regarding our business growth results in the U.S. In our individual insurance division, strong business growth momentum led to record sales of $44 million U.S., This is a solid 26% increase from a year earlier, a performance driven by our strong distribution channels and our portfolio of products. This division's solid growth story confirms the potential of this market as we continue to strengthen our presence in the U.S., for example, with the recently announced acquisition of Vericity. In the dealer services division, third quarter sales amounted to $248 million U.S. compared to $261 U.S. a year earlier, as higher financing costs for customers continue to have a negative impact on sales. Meanwhile, we are adding dealers and continuing our digital transformation to be ready to seize growth opportunities when the environment will become more favorable. I now want to briefly comment on the acquisition on VeriCity announced at the beginning of October. Please go to slide 13. VeriCity comprises an insurance carrier and a digital agency with synergies in between, both servicing the middle market life insurance space. This medium-sized acquisition with a purchase price of $170 million U.S. presents a strong strategic fit with IE. Among other things, it strengthens our geographic footprint in the US, it complements well our existing activities, and it diversifies our distribution capabilities. We expect this acquisition to be accretive to core EPS starting in year two, to increase core EPS by 10 cents in year three, and to rapidly meet our ROE target. With our strong capital position, while investing in our organic growth, we continue to actively monitor opportunities while making smart choices and staying disciplined. I will now turn it over to Eric, who succeeded Jacques as CFO on August 21st. Eric will comment on Q3 profitability and capital strength, and we will then take questions. Eric.