iA Financial Q3 Earnings Call Highlights

Key Points

• iA Financial delivered strong Q3 results: Core earnings were CAD 356 million and core EPS rose 16% year over year to CAD 4.03. The company raised its quarterly dividend 7% to CAD 1.18 per share.
• Wealth management was a key growth driver: Segment core earnings increased 21% to CAD 151 million, while segregated fund gross sales rose 36% and companywide assets under management and administration grew 30% to CAD 375 billion.
• U.S. policy lapse trends remain under review: Executives cited broader weakness in final expense lapse rates and are reviewing products, underwriting and chargeback policies. The company reported a lapse experience loss of less than CAD 5 million for the quarter.

iA Financial TSE: IAG reported higher third-quarter core earnings and increased its quarterly dividend by 7%, as growth in wealth management and insurance helped offset emerging policy lapse pressure in its U.S. life insurance business.

Core earnings reached CAD 356 million, while core earnings per share rose 16% from a year earlier to CAD 4.03. The company’s trailing 12-month core return on equity was 17.6%, meeting its 2026 target of at least 17%. On a quarterly annualized basis, core return on equity was 20%.

The insurer raised its quarterly dividend to CAD 1.18 per share, one quarter earlier than its usual schedule. President and CEO Denis Ricard attributed the decision to organic growth, contributions from recent acquisitions and a strong capital position. He said RF Capital became accretive sooner than expected and Vericity is now accretive.

Wealth management drives growth

Wealth management core earnings rose 21% year over year to CAD 151 million, supported by growth in segregated funds and higher net revenues on assets across investment management, distribution and advisory businesses, CFO and Chief Actuary Éric Jobin said.

Individual segregated fund gross sales increased 36% to more than CAD 2.2 billion, while net sales exceeded CAD 1.3 billion. Ricard said iA remained first in Canada for gross and net segregated fund sales and assets under management, which surpassed CAD 50 billion in September.

Across the company, net premium equivalent and deposits rose 16% to CAD 6.1 billion, while assets under management and administration reached CAD 375 billion, up 30% over 12 months.

Jobin said RF Capital remained on track to contribute at least CAD 0.15 per share to core earnings in 2026. Ricard also said Richardson Wealth intends to become Nobelia Wealth on November 30, subject to regulatory approval, earlier than required under the transition period following its acquisition.

U.S. lapse pressure draws attention

U.S. operations generated CAD 37 million in core earnings, up 16% year over year. Individual insurance sales rose 24% to $97 million, but executives said they were monitoring policy lapses in the final expense business.

Sean O’Brien, chief growth officer for U.S. operations, said a first-quarter lapse issue involved one high-growth agent, but the company has since observed broader weakness in lapse rates in its business and among some competitors. The company is reviewing products, enhancing underwriting and examining chargeback policies for early lapses, he said.

“We expect longer term, you probably won’t see the 20% growth we’ve seen as of late, but very comfortable with our 10% growth,” O’Brien said, emphasizing a focus on business quality.

Jobin said the U.S. lapse experience loss was less than CAD 5 million in the quarter. He will monitor lapse trends as part of the year-end actuarial assumption review, but said he expects the overall impact of assumption changes across current and future profit measures to be neutral to slightly positive.

U.S. dealer services sales rose 4% to $298 million. Executives said a greater weighting toward insurance products affects the timing of earnings: insurance profits emerge over the life of a contract, while most profits on administrative products are recognized at issue. Ricard said improvement in the operation would be gradual.

Capital and Canadian insurance

Insurance Canada core earnings rose 19% to CAD 135 million, including CAD 35 million of insurance experience gains. Jobin attributed the gains mainly to favorable mortality experience and lower auto and home claims following favorable weather. Individual insurance sales in Canada increased 13% to CAD 115 million.

Jobin cautioned that sizable experience gains should not be expected every quarter. He said reserve-setting practices produce a small positive bias over time, but results vary from quarter to quarter.

iA ended the quarter with a 131% solvency ratio and CAD 900 million available for deployment. It generated CAD 180 million of organic capital during the quarter and CAD 515 million for the first nine months, remaining on track for its full-year objective of more than CAD 700 million. The company also spent CAD 189 million on share buybacks during the quarter.

For the first nine months of 2026, core earnings per share grew 11% year over year, in line with the company’s midterm objective of at least 10% annual average growth.

About iA Financial (TSE:IAG)

iA Financial Group is one of the largest insurance and wealth management groups in Canada, with operations in the United States. Founded in 1892, it is an important Canadian public company and is listed on the Toronto Stock Exchange under the ticker symbol IAG (common shares). To learn more about iA Financial Group, you can sign up for our newsletter on our website at ia.ca. iA Financial Group is a business name and trademark of iA Financial Corporation Inc.

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