iA Financial Corporation Inc.

Good morning, ladies and gentlemen, and welcome to the Industrial Alliance Insurance and Financial Services, Inc. 2024 First 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 0 for the operator. This call is being recorded on Thursday, midnight, 2024. I will now like to turn the conference over to Marie-Annick Bonneau, Head of Investors Relations. Please go ahead.

Good morning and welcome to our 2024 First Quarter Conference Call. All our Q1 documents, including press release, slides for this conference call, supplementary information package, and quarterly 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 statements information on slide 2, as well as the non-IFRS and additional financial measures information on slide three. Also, please note that a detailed discussion of the company's risk is provided in our 2023 MD&A available on CDAR and on our website, with an update in our Q1 MD&A released this morning. 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 IEA. First of all, Eric Jobin, Chief Financial Officer and Chief Actuary. Alain Bergeron, Chief Investment Officer. Stéphane Bourbonnet, responsible for our wealth management operations. René Lafemme, 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. Operation and Co-Head of Acquisitions. This morning, we announced that Mike Stickney will retire in the coming months. Over the years, Mike took on various responsibilities at IE, including as Chief Growth Officer. Most recently, he's been Chief Growth Officer for the U.S. Operations and Co-Head of Acquisitions since August 2023. This is Mike's last earnings call, and I want to congratulate him on his career and thank him for his contribution to IEA's growth over the past 25 years. With Mike's departure, we announced the three changes to the exec committee, which highlight the depth of our management team. First, Sean O'Brien will succeed Mike as Executive VP and Chief Growth Officer of our U.S. operations. And Sean is currently Executive VP of Group Benefits and Retirement Solutions. He's a seasoned executive well-prepared to take on this new role after leading, among other things, our dealer services, Canadian operations for a number of years, as well as our wealth management business. Denis Mercian, who was Co-Head of Acquisition with Mike since August 2023, will be the sole Head of Acquisitions as Executive VP, Strategy, Performance, Merger and Acquisitions. Finally, Louis-Philippe Pouliot will join the Executive Committee as he will be succeeding Sean as Executive VP of Group Benefits and Retirement Solutions. Now to the results. 2024 got off to a strong start in terms of profitability and business growth, demonstrating the dynamism of our business units. Core EPS recorded a strong increase, Sales were generally high, and our capital position continues to be robust. Starting with slide eight for an overview of Q1 results. All our three operating business segments include Insurance Canada, Wealth Management, and U.S. Operations had double-digit core earnings growth, leading to a core EPS of $2.44, up by 17% year-over-year. Our ROE of 14.6% is close to our midterm target of 15% plus. Our business growth also showed strong momentum in Q1, with significant sales growth in almost all business units. As a result, we concluded the quarter with assets under management and administration up 11% year-over-year and premiums and deposits up 8%. Our book value per share of $68.93 on March 31st recorded a healthy increase of more than 8% when we exclude the impact of share buybacks. And our capital position is robust with a solvency ratio of 142%, supported by continued strong organic capital generation and good risk management practices. Now to slide nine to look at Q1 business growth for the Insurance Canada segment. This segment started the year strongly, with all business units posting good sales results. For individual insurance, we continue to be in a leading position in number of policies sold, with sales of $89 million during the first quarter. The strength and diversification of our distribution networks, our close relationship with distributors, as well as the high performance and simplicity of our digital tools, among other things, remain key to our growth strategy. In group insurance, sales increased by 21% year-over-year, leading premiums and deposits along with good retention to $506 million, which is 8% higher than a year ago. In the dealer services division, first quarter sales of $148 million were up 3% year-over-year, a good result given the challenging environment that continues to impact vehicle affordability. Finally, IOTO and HOME direct written premiums in the first quarter reached $114 million, a robust increase of 16% over the same period last year. This result was supported by strong sales and higher premiums. Turning to slide 10 to comment on wealth management sales results, where we reported very solid results. most notably with net fund inflows of more than $400 million. IE continued to rank first in both gross and net SEC fund sales. Gross sales of SEC funds reached nearly $1.3 billion, up 24% year-over-year, and net inflows of $557 million were recorded during the first quarter. Richer fund sales of $486 million were slightly higher than last year, but inflows were lower than outflows as the mutual fund industry continued to be challenged. In addition, while improved financial market performance prompted investors to shift away from guaranteed investments, sales of insured annuities and other savings products remained elevated, reaching $581 million, a very good result, even if lower than last year, which had been a record quarter. Finally, in group savings and retirement, solid sales of $918 million in the first quarter, up by 18% year-over-year, were driven by strong sales of accumulation products. Now looking at slide 11 regarding our business growth results in the U.S. In individual insurance, sales of $42 million were up 2% from a year earlier. Supported by our distribution networks and our product range, The activity remains strong in this business unit as we continue to strengthen our presence and grow organically. However, a temporary timing issue related to the recognition of new sales tempered slightly the growth pace in the first quarter. In dealer services, first quarter sales amounted to $248 million, which is a good 8% increase compared to the same quarter a year earlier. While these results reflect the positive impact of improved inventories and lower vehicle prices, we continue to take actions to ensure that we are well positioned for a full recovery, such as expanding our distribution channels. Turning to slide 12, where our key financial KPIs for the quarter compare favorably with our mid-term targets. Indeed, Core EPS, which is 17% higher than Q1 2023, is well above the targeted 10% plus annual average growth. Core ROE of 14.6% is progressing toward our midterm target of 15% and above. Our solvency ratio is well above our operating target while we continue to invest in growing all our business. Continued organic capital generation of $130 million during the quarter is higher than during the same period last year and is in line with projections to exceed $600 million in 2024. And lastly, the dividend payout ratio for Q1 is near the top end of our guidance, mainly due to the significant dividend increase that was announced in February. As we continue to invest in growing all our businesses, our robust capital position will and strong ongoing organic capital generation allow us to increase from 5% to 8% the maximum number of repurchases authorized under our share buyback program. This gives us the flexibility to create and return value to our shareholders while pursuing acquisition opportunities. We continue to be very active but disciplined in seeking acquisitions to grow our current operating business segments. There are greater opportunities for certain business units, such as our U.S. operations. To conclude, I want to highlight that we have reduced the sensitivity of our core earnings to the interest rate variations, and therefore, in addition to being a better representation of underlying recurring earning power, core earnings should be less volatile going forward. I will now hand it over to Eric, Who will comment on this initiative following his remarks on first quarter profitability and capital strength? Following Eric's comment, we will take questions.