iA Financial Corporation Inc.

Good morning, ladies and gentlemen, and welcome to the Industrial Alliance 2023 Four Quarter Results Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we'll conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Wednesday, February 22nd, 2024. I would now like to turn the conference over to Marie-Annick Bonneau. Please go ahead.

Good morning and welcome to our 2023 fourth quarter conference call. All our Q4 documents, including press release, slides for this conference call, supplementary information package, and annual MD&A 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 3. Also pleased that the detailed discussion of the company's risk is provided in our 2023 MD&A, available on CEDAW and on our website. 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 TAIE. First, Eric Germain, Chief Financial Officer and Chief Actuary. Alain Bergeron, Chief Investment Officer. Stéphane Bourbonnet, responsible for our wealth management operations. René Laflamme, in charge of individual insurance and annuities. Chief Growth Officer of our Canadian operations and responsible for Dealer Services Canada and IOTO and Home. Sean O'Brien, in charge of the group businesses. And Mike Stickney, Chief Growth Officer of our U.S. operations and Co-Head of Acquisitions. We're here today to present our Q4 results, a quarter which we ended with a robust capital position. and in which almost all business units performed very well in terms of both sales and earnings. Starting with slide A for an overview of our fourth quarter results. Core EPS of $2.34 reflects this good performance, which was, however, negatively affected by the immediate impact of new business and group insurance. Looking ahead, these group insurance contracts are expected to contribute positively to future earnings and overall growth. Our ROE on a trading 12-month basis was 14.4% for 2023, which is aligned with our medium-term target. With a solvency ratio of 145%, our capital position continues to be very solid as it is supported by our good risk management practices and strong organic capital generation. Indeed, in 2023, we generated $600 million of organic capital, reaching our annual target. Business growth was also strong in almost all our business units, and we concluded 2023 with assets under management and administration up by 11% year over year. premiums and deposits increased by 8% year over year. Another measure to which we attach great importance because of its unbiased assessment of the value created for investors is book value. We were therefore very pleased at the start of the year that our book value was not affected by the transition to IFRS 9 and 17, and we're equally pleased to see how it grew over the course of 2023. Indeed, Our book value per share of $66.90 at year-end recorded a substantial increase of more than 6% or 8% if we exclude the impact of share buybacks. Now to slide 9 to look at Q4 business growth for the Insurance Canada segment. Individual insurance in Canada delivered another very good performance with sales of $95 million during the fourth quarter. rounding off a strong year in sales and confirming our leading position in number of policies sold. This result reflects notably the strength and diversification of our distribution networks, as well as the high performance of our digital tools, providing our advisors and clients with simplicity and proximity. In group insurance, premiums and deposits increased by 4% to $487 million, with several renewals of large groups. In the dealer services division, sales continue to be strong, reaching $160 million, up 8% over the previous year. This result brought sales for the full year to $686 million to achieve a solid 12% increase over 2022. Our leading position in Canada, our comprehensive product range and our extensive distribution networks contributed to this very solid result, regardless of the rather challenging macroeconomic environment for car buying consumers. Finally, IOTO and HOME generated solid growth in direct written premiums in the fourth quarter, reaching $115 million, an increase of 15% over the same period last year. This result was supported by the strong retention of Infor's business. Turning to slide 10 to comment on wealth management sales results, where we did quite well despite the difficult environment, particularly in the fund sales industry. Indeed, the company continued to rank first in 2023 in both gross and net SEC fund sales. Gross sales of SEC fund reached $837 million, up 19% year over year, while net outflows were registered during the fourth quarter, although positive for the full year 2023. Mutual fund sales over $393 million were up 12% in the fourth quarter, without close in line with the industry. However, positive combined net sales of $83 million for 2023 were recorded, a very good result in this environment. Meanwhile, clients continued to favor cash-equivalent products and sales of insured annuities and other savings products, increased significantly to reach $711 million, propelling 2023 sales to nearly double last year's level. Finally, in group savings and retirement, good sales of $534 million in the fourth quarter compared to those of a very strong quarter in 2022, when sales had totaled more than a billion dollars following the signing of several large groups. Now, looking at slide 11 regarding our business growth results in the U.S., In our individual insurance division, sales continue to be strong, totaling $44 million U.S. dollar. This is a solid 19% increase from a year earlier, bringing sales for the full year to a record high. This performance is driven, among other things, by our strong distribution channels, and it confirms the growth potential of this market as we continue to strengthen our presence in the U.S. In the VR Services Division, fourth quarter sales amounted to $227 million compared to $241 million a year earlier, as higher financing costs for consumers continued to have a negative impact on sales of F&I products. While we wait for the environment to become more favorable, we're taking action to improve sales and profitability and to be well positioned for the recovery such as expanding our distribution channels. Turning to slide 12 for a comparison between 2023 results and our midterm guidance. Say for the core EPS, which is 4% higher than 2022 restated results, all metrics compare favorably with their respective targets. Core ROE of 14.4% is well aligned with our midterm target of 15% and above, And by deploying our available capital, we will accelerate the achievement of our mid-term profitability targets, including ROE expansion. Our solvency ratio is well above our operating target. Both the dividend payout ratio and organic capital generation are on target. Noteworthy, we expect organic capital generation to remain strong And our target for this metric in 2024 will again be $600 million or more. Now, looking at slide 13 for an overview of the year. We can see that 2023 was a very good year on most fronts. Sales and profitability were very good in almost all business units. Our capital position is robust and supported by strong and ongoing capital generation. Our book value, a metric for which IE has a strong track record, continues to grow very nicely. We're progressing well in our digital transformation. We return value to our shareholders through a 14% dividend increase and the buyback of nearly half a billion dollars worth of shares. and we still have $1.6 billion in capital available for deployment. That brings me to our outlook for 2024 on slide 14. In insurance Canada, we expect our sales momentum and profitable growth to continue at a good pace, driven by our high-performing distribution networks, leading-edge digital tools, and well-positioned assumptions and pricing. In wealth management, we expect our sales momentum and overall strong performance to continue, particularly in SEC funds and in our distribution subsidiaries. In our U.S. insurance division, we intend to build on 2023 record sales and diversity acquisition, while in our dealers division, we're taking action to gradually grow sales and earnings. As for our investments, we will continue to focus on asset liability management while maintaining a very high-quality investment portfolio. Finally, we will continue to invest with discipline in organic growth and digital transformation while growing earnings using the same level of corporate expenses as in 2023, a solid target given inflation. All things considered, we entered 2024 with optimism and confidence in our ability to create value and successfully pursue growth. I will now turn it over to Eric, who will comment on Q4 profitability as capital strength, and we will then take questions. Eric.