Industrial Alliance Reports Fourth Quarter and 2017 Results

QUEBEC CITY, Feb. 15, 2018

Q4-2017 Highlights

• Reported EPS of $1.24
• Core EPS¹ of $1.27 (+11% YoY)
• Net reserve strengthening of $0.10 EPS
• AUM/AUA of $169.5B (+34% YoY)
• Book value per share of $44.20 (+8% YoY)
• Solvency ratio of 209% (201% post-DAC closing)

QUEBEC CITY, Feb. 15, 2018 /CNW Telbec/ - For the fourth quarter ended December 31, 2017, Industrial Alliance Insurance and Financial Services Inc. (TSX: IAG) reports net income attributed to common shareholders of $132.8 million, diluted earnings per common share (EPS) of $1.24 and return on shareholders' equity (ROE) for the last twelve months of 11.4%. These results include the net impact of the year-end assumption review that reduced earnings by $0.10 per share. A discussion of our full-year 2017 results is provided in the Management Discussion and Analysis filed on SEDAR today.

"Our 2017 results reflect our strategy to grow our organization organically and through acquisitions," said Yvon Charest, President and Chief Executive Officer. "As well as maintaining leading market shares in key business segments, we completed two important acquisitions – HollisWealth and DAC² – that added significant distribution capacity, increased our footprint in the Canadian and U.S. markets and beginning in 2018 are expected to make a sizeable contribution to our bottom line. In addition, last week we announced our intention to create a corporate structure that will give us the flexibility to support our future growth ambitions."

"All lines of business reported favourable results in the fourth quarter, particularly Employee Plans that delivered a solid performance throughout the year," commented René Chabot, EVP, CFO and Chief Actuary. "Market growth provided gains in our retail wealth and insurance operations, which were mostly offset by adverse lapse in our Individual Insurance business and HollisWealth integration costs. Considering our unfavourable lapse experience throughout the year, we repositioned our lapse assumption at year-end. This was completed with minimal impact on fourth-quarter EPS because of positive contributions from the update of other assumptions. On a core basis, our Q4 EPS was up by 11% over the same quarter last year and within the EPS range given to the financial markets for the quarter. For the full year, core earnings of $4.88 per share finished in the middle of our guidance.

"We are introducing our EPS guidance for 2018 that we expect to be in the range of $5.20 to $5.60 per share representing a year‑over‑year increase of 11% at the midpoint," added Mr. Chabot. "Organic growth continues to be an important driver along with profit improvement initiatives in both our insurance and wealth operations. In 2018, we are expecting improved results from our auto and home insurance operations and a significant contribution from our HollisWealth and DAC acquisitions. At year‑end our solvency ratio was 201% post-DAC, and our balance sheet is well‑positioned to execute on future growth opportunities."