1. business and industrial

Investor
Presentation
René Chabot
Executive Vice-President,
Chief Actuary and CFO
Denis Ricard
Executive Vice-President
Business Development
June 4th, 2015
1
Opportunity for More Profitable Growth
Strong execution on business plan
Integration of 30+ acquisitions including 20 in retail wealth management
Continuity of strategy through internal development of management
Building distribution is our world-class skill
Proven ability to develop niche markets
Many businesses at various stages of development
Mostly capital light with ROEs above iA hurdle rate
An appetite for acquisitions
Significant capital available for deployment
Focused on retail wealth and niche businesses
Always looking for new distribution
2
Steady Earnings Growth
Guidance is robust
Diluted EPS ($)
3.97
3.57
Reported
3.22
Guidance
3.10
2.50
2012
3
3.40
3.00
2013
3.80
3.40
2014
4.20
3.80
2015
Guidance increased by
11% annually since 2012
Q1-2015
A solid start to the year
Q1 Guidance
Q1 Reported
EPS1
$0.85 to $0.95
$1.03
ROE1
11.0% to 12.5%
12.7%
Strain
35%
39%
175% to 200%
211%
25% to 35%
27%
Solvency ratio
Payout ratio
4
1 No
reserve strengthening considered in EPS and ROE guidance.
(mid-range)
Trailing
iA’s Value Proposition
Building sustainable value for shareholders
Q1/15
$34.94
Book Value Per Share
(end of period)
Book Value CAGR
$9.36
1-year
+11%
5-year
+8%
Since 2000
+10%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Q1/15
2.2
5
2.2
1.7
1.6
1.8
1.7
1.9
2.0
1.1
1.4
Price/book value per share
1.5
1.0
1.1
1.5
1.3
Our Distribution Network
Managing multi-channel distribution is our world-class skill
Career
35%
Ind. Wealth Mgmt
Individual Insurance
Life Insurance
6
iA Excellence
MGAs in Québec
44%
Career
15%
Career
50%
iA Auto and Home
Career
42%
Seg Funds/GICs
Mutual
Funds
Mutual
Funds
50/50 IIROC/MFDA
Based on 2014 data.
iA Affiliates
(broker- dealers)
23%
Other MGAs
42%
Dedicated MGAs
23%
Strategic
17%
Rest-of-Canada MGAs
41%
Dealer
Services
11%
Dedicated MGAs
20%
iAAH Direct
39%
Other MGAs
38%
Independents
60%
iA Wealth Client-facing Advisors
One of Canada’s largest non-bank advice channels
WEALTH
More than 2,800 advisors
More than $35 billion in AUA
INVESTIA
7
FundEX
iA Securities
T E WEALTH

$14.1B in AUA

$13.6B in AUA

$5.8B in AUA

$3.7B in AUA/AUM

2,000 advisors

600 advisors

240 advisors

40 advisors

MFDA

MFDA

IIROC

HNW planning and
portfolio management
Insurance Businesses – Retail and Group
Still room for profit and ROE improvement
Total net premiums
($M)
Net income
($M)
279
2,950
►
Represent 70% of total profit,
11.6% ROE
►
Two profit initiatives : improve
Employee Plans contribution
and manage strain
►
Could increase EPS by 20¢
►
Could generate 60 bps ROE
expansion
►
Profit growth would outpace
premium growth
2,299
169
2010
8
2014
2010
2014
Insurance Businesses – Retail and Group
Growing each business segment to its full potential
2014
premiums
$1,254M
►
Continuing to build distribution
Individual Disability
$86M
►
Accelerating expansion outside Québec
Life (US)
$155M
►
Building presence in underserved market
Group Insurance
Employee Plans
$915M
►
Bringing back profitability
Dealer Services
$372M
►
Maximizing product penetration
Special Markets
$168M
►
Growing steadily in highest ROE niche
Other
iA Auto & Home
$233M
►
Leveraging iA distribution networks
Retail Insurance
9
Life (Canada)
Strategic Focus
Individual Insurance
A solid performer in a competitive market
Sales1
10/8 withdrawal
(in $M)
216
►
Distribution includes 1,900
career agents and 700
dedicated MGAs
►
Sales growing rapidly in US and
for individual disability product
in Canada
►
Market share of 8.9% for direct
premiums in 2014, 1% higher
than in 2008 (Canada)
187
55
2010
10
1
2011
2012
2013
+16%
YoY
2014 Q1/15
Includes Canada and US life insurance as well as individual adjustable disability.
Growth Strategy
Individual
Insurance – Adjustable Disability
Building a Canada-wide market
Sales
(in $M)
11.2
7.9
►
Leveraging iA distribution
network
►
High potential for growth across
Canada
►
90% of premiums are adjustable
►
Low capital requirements
3.0 +32%
YoY
Rest of Canada
Quebec
11
2010
2011
2012
2013
2014 Q1/15
Individual Insurance – US
Opportunistic in an underserved market
54
Sales1
(in CN$M)
17
16
2010
12
2011
2012
2013
2014
Q1/15
+26%
YoY
►
Strong foothold established
in 2010 with acquisition of
American-Amicable
►
Target segment is growing :
low-to-mid-income clientele
►
Limited number of players in
this segment
Group Insurance – Employee Plans
Goal is to be the leader among the 2nd tier players
Sales
(Direct premiums, in $M)
72
70
15
13
2010
2011
2012
2013
2014
Q1/15
+70%
YoY
►
Continuing our geographic
expansion
►
Currently focused on profit
improvement
►
Traditionally a high-ROE
business for iA
►
Next rendez-vous on recent
initiatives is in Q3
Group Insurance – Dealer Services
One of top 2 players in Canada for creditor insurance and warranties
Sales
($M)
536
261
101
+1%
YoY
►
3,200 exclusive car
dealers across Canada
and growing
►
Focused on one-stop
shopping for dealers:
recently added car loans
►
Provides cross-references
to iA Auto & Home
Creditor Insurance
P&C Warranties
14
2010
2011
2012
2013
2014
Q1/15
Group Insurance – Special Markets Solutions
Market leader with few competitors
Sales1
180
(in $M)
133
48
2010
15
2011
2012
2013
2014 Q1/15
-1%
YoY
►
Over 725 distribution
partners Canada-wide
►
Niche insurance markets
underserved by traditional
group carriers
►
Capital-light, short-term
guarantees
iA Auto and Home
Still room for growth in Canada’s most profitable market
Sales
(Direct premiums, in $M)
233
155
47
16
2010
2011
2012
2013
2014
Q1/15
+4%
YoY
►
Selective competition by
geography: Québec is the
most profitable market in
Canada
►
Leverages iA career network
and Dealer Services
►
Direct selling and lean
philosophy help maintain
competitiveness
iA Wealth – Manufacturing and Distribution
Our goal: Capture a larger piece of the pie
AUM and AUA
($B)
Net Income
($M)
128
72.3
►
Represent 30% of total profit
with 16.2% ROE
►
Canada’s 2nd largest non-bank
advice channel: > 2,800 clientfacing advisors
►
Move AUA to AUM
92
49.2
►
2010
17
2014
2010
2014
►
Affiliates’ AUM currently at
7% vs industry high of ~30%
►
AUM profit ~10x that of AUA
Distribution opportunities with
CRM2
iA Wealth
Key action items to accelerate momentum
Assets at
Dec. 31,
2014
4-year
CAGR
Initiatives
►
Seg funds
$11.8B
+8%
►
AUM
►
►
►
Mutual funds
$11.8B
+11%
►
AUA
►
18
Affiliates
$32.7B
+10%
►
Continue deployment of Canada-wide
wholesaling team
Ready for CRM2 with mutual-fund clone
Product for high-net-worth market in
development
Reverse mutual fund outflows
Be proactive about gaining a larger part of
our affiliates’ business
Review fund line-up to include noncurrency hedging
Leverage strong performance of in-house
seg fund portfolio managers
Continue to expand distribution network
organically and through acquisitions
Trailing ROE: Many Businesses Above Target
Overall 12.7%: Insurance at 11.6% and Wealth at 16.2%
Bubble size = contribution to net income
24%
18%
19%
26%
21%
17%
14%
11%
(4%) (4%)
19
For the last twelve months ended March 31, 2015.
15%
ROE target range: 11.0% to 12.5%
Balance Sheet Flexibility
More than $500M for deployment: Could increase ROE by 50 bps
At
March 31,
2015
Target
Agency
Rating
Outlook
Solvency
ratio
211%
175-200%
S&P
A+
(Strong)
Stable
Leverage
ratio
25%
< 35%
A.M. Best
A+
(Superior)
Stable
Coverage
ratio
8x
> 5x
DBRS
IC-2
Stable
(end of
period)
20
Appetite for Acquisitions
With a preference for capital-light businesses
HIGH
 Retail Wealth - Manufacturing & Distribution
 Dealer Services
 Group Businesses
 US
 Life insurance
 Auto and home insurance
 Institutional Wealth Management
LOW
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Conclusion
Focused long-term value creator for shareholders
• Many business segments exceeding ROE target range
• Still room for profit improvement in Insurance
• Implementing initiatives to accelerate momentum in Wealth
• Further potential for ROE expansion through acquisitions
22
Macroeconomic Protection
Significant capacity to weather market and rate downturns
Interest rates
Stock markets
Intra-year variations don’t matter,
management has time to act
Reserves can sustain a 32%
drop in equity markets
40
bps
43
bps
Next
rendezvous
is at
year-end
2013
23
2014
Note: Data at the end of period.
2015
32%
32%
2014
Q1/15
23%
2013
Investor Relations
Contact
Grace Pollock
Tel. 418-780-5945
[email protected]
Reporting Dates
Q1/15 – May 7, 2015
Q2/15 – July 30, 2015
Q3/15 – November 4, 2015
Q4/15 – February 11, 2016
For information on our earnings releases, conference calls and related disclosure
documents, consult the Investor Relations section of our website at www.ia.ca.
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Non-IFRS Financial Information
Industrial Alliance Insurance and Financial Services Inc. reports its financial results in accordance with
International Financial Reporting Standards (IFRS). It also publishes certain non-IFRS financial measures that
do not have an IFRS equivalent, including sales, value of new business, embedded value and solvency ratio,
or which have an IFRS equivalent such as data on operating profit and income taxes on earnings presented
in the sources of earnings table. The Company also uses non-IFRS adjusted data in relation to net income,
earnings per share and return on equity. These non-IFRS financial measures are always accompanied by and
reconciled with IFRS financial measures.
The Company believes that these non-IFRS financial measures provide investors and analysts with
additional information to better understand the Company’s financial results as well as assess its growth and
earnings potential. Since non-IFRS financial measures do not have a standardized definition, they may differ
from the non-IFRS financial measures used by other institutions. The Company strongly encourages
investors to review its financial statements and other publicly-filed reports in their entirety and not to rely
on any single financial measure.
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Forward-Looking Statements
This document may contain statements relating to strategies used by Industrial Alliance or statements that are predictive
in nature, that depend upon or refer to future events or conditions, or that include words such as “may”, “could”,
“should”, “would”, “suspect”, “expect”, “anticipate”, “intend”, “plan”, “believe”, “estimate”, and “continue” (or the negative
thereof), as well as words such as “objective” or “goal” or other similar words or expressions. Such statements constitute
forward-looking statements within the meaning of securities laws. Forward-looking statements include, but are not
limited to, information concerning the Company’s possible or assumed future operating results. These statements are not
historical facts; they represent only the Company’s expectations, estimates and projections regarding future events.
Although Industrial Alliance believes that the expectations reflected in such forward-looking statements are reasonable,
such statements involve risks and uncertainties, and undue reliance should not be placed on such statements. Certain
material factors or assumptions are applied in making forward-looking statements, and actual results may differ materially
from those expressed or implied in such statements. Factors that could cause actual results to differ materially from
expectations include, but are not limited to: general business and economic conditions; level of competition and
consolidation; changes in laws and regulations including tax laws; liquidity of Industrial Alliance including the availability of
financing to meet existing financial commitments on their expected maturity dates when required; accuracy of
information received from counterparties and the ability of counterparties to meet their obligations; accuracy of
accounting policies and actuarial methods used by Industrial Alliance; insurance risks including mortality, morbidity,
longevity and policyholder behaviour including the occurrence of natural or man-made disasters, pandemic diseases and
acts of terrorism.
Additional information about the material factors that could cause actual results to differ materially from expectations
and about material factors or assumptions applied in making forward-looking statements may be found in the “Risk
Management” section of the Management’s Discussion and Analysis and in the “Management of Risks Associated with
Financial Instruments” note to Industrial Alliance’s consolidated financial statements, and elsewhere in Industrial
Alliance’s filings with Canadian securities regulators, which are available for review at www.sedar.com.
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The forward-looking statements in this document reflect the Company’s expectations as of the date of this document.
Industrial Alliance does not undertake to update or release any revisions to these forward-looking statements to reflect
events or circumstances after the date of this document or to reflect the occurrence of unanticipated events, except as
required by law.
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