“We do better in finance in Quebec than in Toronto”.
Having achieved record profitability in 2024, iA Financial Group also performed well in terms of stock market valuation: its shares rose by over 52% during the year, far outstripping the 18% generated by the TSX index on the Toronto Stock Exchange, points out CEO Denis Ricard, who adds that Quebec managers are the best performers in Canada’s financial sector.
Published May 20th
It was on the sidelines of the Quebec-based insurance and savings group’s annual shareholders’ meeting, that two weeks ago I met Denis Ricard, CEO of iA Financial Group, in post since 2018 when he succeeded Yvon Charest, CEO from 2000 to 2018.
“It was Yvon who hired me into the company 40 years ago, but I did warn everyone that I wasn’t going to serve a term as long as Yvon’s,” Denis Ricard insists.
The year 2024 has therefore been a profitable one for the group, with an impressive stock market rebound that the CEO puts into perspective by explaining that it was the entire insurance sector that performed well on the Toronto Stock Exchange last year.
“The price-earnings ratio for insurance companies rose from 9 to 11. Our multiple was 8.4. For a long time, there was a market discount on our stock, as there was on that of National Bank, which had also been a victim in the past. For us, this was corrected last year,” he observes.
The CEO adds to this by humbly pointing out that Quebecers are no armadillos when it comes to financial matters. iA Financial Group is the best-performing life insurance company in Canada over the past 25 years, surpassing Sun Life, Manulife and Canada Life.
Intact Assurance, whose head office is in Toronto, but whose senior management team is almost entirely Quebec-based, is the most successful general insurance company in Canada over the last 20 years.
Finally, National Bank, the long neglected of Canada’s major banks, and whose stock has long traded at a discount, has been Canada’s best-performing banking institution for the past five years.
Acquisition projects in the United States
Denis Ricard notes that iA Financial Group has become a large-cap company. Under Yvon Charest, the group’s market value rose from 600 million in 2020 to 5 billion in 2018. Since Mr. Ricard became CEO, the group’s valuation has risen from 5 to 12.9 billion.
“We have 240 billion in assets under management and administration and we have 1.4 billion in capital available for deployment to make acquisitions, and the opportunities are greatest in the United States, as the market [there] is still very fragmented,” explains the CEO.
In addition to this $1.4 billion war chest, iA Financial Group will generate $650 million this year, which will be added as required.
Last year, the company completed three smaller acquisitions, absorbing Laurentian Bank Securities’ full-service retail brokerage division, with a team of 25 professionals and $2 billion in assets under administration.
The company has acquired two entities in the U.S.: a block of life insurance customers from the Prosperity Group and two divisions of the Vericity company, Fidelity Life and an electronic distribution platform to sell iA products.
“We are in a position to make a major acquisition. Our U.S. activities now account for 10% to 15% of our total profits, and we want the U.S. market to generate 25% of our total profits by 2030,” says Denis Ricard.
iA Financial Group entered the U.S. market in life insurance in 2010, and made its biggest acquisition in 2020 when it acquired a company offering insurance services to car dealerships in a C$1 billion deal.
“We offer these warranty services to dealers in Canada, where there are essentially two players. In the U.S., we sell twice as many warranty products and rank 10th, so there are a lot of players in this sector,” points out the CEO of iA Financial Group.
Today, iA Financial Group has 10,000 employees: over 5,000 in Quebec, 3,500 in the rest of Canada and 1,500 in the United States.
The insurance sector generates over 75% of the group’s revenues, while the distribution of financial products, such as the sale and management of segregated funds – where the group ranks first in Canada – and the distribution of mutual funds from other firms such as Fidelity, represents 25%. The Group counts on a pool of five million customers in its three main markets.
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Image source: PHOTO EDOUARD PLANTE-FRÉCHETTE, LA PRESSE: Denis Ricard, PDG d’iA Groupe financier
