iA Financial Group reported core diluted earnings per common share of US$3.49 for the second quarter ended June 30, 2025, up 27% from the same period in 2024 and above its medium‑term annual growth target of more than 10%.
Core return on common shareholders’ equity for the trailing 12 months was 17%, matching the company’s 2027 target. Net income attributed to common shareholders for the quarter was US$321 million, with a 14.7% ROE for the trailing 12 months. The solvency ratio stood at 138% as of June 30.
In the US operations segment, net income attributed to common shareholders was US$55 million, up from US$8 million a year earlier. This included a US$19 million net gain from core earnings adjustments, driven by a US$30 million favourable adjustment to Vericity’s deferred tax assets related to pre‑acquisition tax losses, partly offset by US$10 million in acquisition‑related items and a US$1 million unfavourable tax adjustment.
Core earnings for the segment were US$36 million, compared with US$22 million in the same quarter last year. The increase was supported by a US$28 million rise in the core insurance service result.
Core non‑insurance activities contributed US$1 million more than last year, primarily from Dealer Services, while core other expenses increased following the Vericity acquisition.
Comparatively, in the first quarter of 2025, iA reported C$264 billion in assets under management and administration, up from C$229 billion a year earlier, and core earnings of C$273 million, a 12% increase from C$243 million despite reported net income declining in the period.
President and CEO Denis Ricard (pictured above) said the latest results demonstrate the company’s diversified business model and execution across all operating segments.
“The strong earnings we delivered this quarter translated into record quarterly organic capital generation of US$200 million, further strengthening our capital position and giving us the flexibility to pursue strategic growth opportunities,” he said.
In the Insurance, Canada segment, net income attributed to common shareholders was US$130 million, up from US$97 million in the prior‑year quarter. Core earnings adjustments added US$3 million, mainly from a US$6 million gain tied to assumption changes and management actions, offset by US$5 million in acquisition‑related items, US$3 million in non‑core pension expenses, and a US$1 million reallocation for reporting purposes.
Core earnings were US$133 million, compared with US$106 million in the prior year, driven by an 8% rise in expected insurance earnings, higher Premium Allocation Approach business from iA Auto and Home, and increased risk adjustment release and contractual service margin recognised.
Core insurance experience gains of US$31 million were recorded, reflecting favourable morbidity in employee plans, favourable mortality in Individual Insurance, and lower claims at iA Auto and Home.
The wealth management segment posted net income attributed to common shareholders of US$105 million, up from US$91 million in the prior‑year quarter. Core earnings adjustments totalled US$8 million, primarily related to US$7 million in acquisition‑related costs and US$1 million in non‑core pension expenses.
Core earnings were US$113 million, compared with US$98 million a year earlier. The increase was mainly from higher risk adjustment release and contractual service margin recognised for services provided, supported by strong net segregated fund sales and favourable financial market performance over the past year.
Core non‑insurance activities also rose slightly, reflecting increased net revenue on assets in group savings and retirement and at iA Clarington.
During the quarter, iA also announced a definitive agreement to acquire RF Capital Group Inc. for C$597 million, consisting of C$370 million in fully diluted equity value and C$227 million in liabilities. The transaction, expected to close in the first half of 2026, will add more than C$40 billion in assets under administration and expand iA’s presence in the high‑net‑worth wealth advisory market.
The company also reiterated its medium‑term targets, including annual core EPS growth above 10%, core ROE of at least 17% by 2027, and annual capital deployment of C$300-400 million for growth initiatives and acquisitions.
What are your thoughts on this story? Please feel free to share your comments below.
