Quebec City-based iA Financial Corp. reported lower second-quarter profits than a year ago as volatile markets contributed to losses in its individual insurance and wealth management divisions.
iA reported net income attributed to shareholders of $222 million for the quarter that ended June 30, a 4% decrease from Q2 2021. Profits were up, however, from the $151 million reported in the previous quarter.
In an earnings release on Thursday, the firm attributed losses of $23 million in individual insurance and $9 million in individual wealth management to financial markets. The market selloff had a negative impact on universal life policies and on investment fund income.
Assets under management and administration on June 30 totalled $193.6 billion, down by 8% from a year ago and 9% from the previous quarter, iA said.
However, the firm reported positive sales figures.
“In addition to our continued sales momentum, particularly in individual insurance, the wealth management sector recorded net fund inflows amidst declining financial markets,” said Denis Ricard, president and CEO of iA Financial Group, in a statement.
“Also, the recent increase in long-term interest rates is very positive for iA, especially given our long-term individual insurance block of business.”
The firm’s board approved a quarterly dividend of $0.6750 per common share payable for the third quarter, an increase of 8%.
iA also said implementation of the International Financial Reporting Standards 17 (IFRS 17) next year would have a largely favourable effect on the company.
Earlier this month, the Office of the Superintendent of Financial Institutions released the final guidelines for IFRS 17 implementation on Jan. 1, 2023.
iA said it expects its solvency ratio to increase by more than 20 percentage points at the time of the transition, and that the effect on core earnings per share, return on equity and capital available for deployment would all be favourable.