The Industrial Alliance Annual Meeting Takes Place Under the Theme “Executing the Right Strategy"
"This was another good year for Industrial Alliance. The 2007 results and achievements are in line with, and even build on, the accomplishments of the past few years," said Yvon Charest, President and Chief Executive Officer of Industrial Alliance Insurance and Financial Services Inc. while commenting on the Company’s 2007 achievements before shareholders and participating policyholders who attended the Industrial Alliance annual general meeting.
Main Achievements in 2007
Pleased with the progress that the Company made in 2007, Mr. Charest began by going over last year’s main achievements and main events:
- Increased profitability – Record net income to common shareholders of $242.2 million, up 9% compared to 2006, and a 15.2% return on common shareholders equity, above the 13% to 15% target range.
- Steady business growth – Premiums and deposits reached a high of $5.8 billion, a 17% increase over 2006. This is the sixth consecutive year of double-digit growth for premiums and deposits.
- Record mutual fund sales – Gross mutual fund sales were up 46% in 2007, reaching a high of $1.8 billion, and net sales totalled $799.2 million, almost three times the 2006 amount.
- Increased sales and profit in individual insurance – Active and successful management of sales and profit margins in individual insurance. Sales reached a record $159.0 million, a 4% increase in 2007, and the operating profit was up 41% in 2007. These good results are the fruit of adjustments made to the product line in the last few years.
- Enhanced geographic diversification – Majority of sales in all sectors made outside Quebec, for a second straight year, which is in line with the Company’s desire to expand in all regions of the country.
- Acquisition of Excellence – Highlight of the year from a strategic standpoint: the acquisition of L’Excellence Life Insurance Company. This acquisition will enable the Company to enter a new market segment, namely individual disability and health insurance.
- Increase in the dividend – 27% increase in the dividend in 2007, after a 20% increase in 2006. The payout ratio was 24% of the sustainable earnings per common share. The Company aims to increase its payout ratio to 28% of the sustainable net earnings in 2008.
- Writedown of commercial paper – The only disappointment in 2007 was the 15% writedown on the $104.1 million in non-bank asset-backed commercial paper to which the Company is exposed. This writedown led to a $7.3 million decrease in net income to common shareholders in 2007, or $0.09 per common share. One third of the writedown was absorbed by the provisions for future policy benefits.
Executing the Right Strategy
Mr. Charest continued by stating that, "Our success over the past few years is based on a well-designed, well-articulated and well-executed strategy that is carried out by a highly-skilled and devoted team of individuals with one goal in mind: to create value for the shareholders." This strategy consists of the following six components:
- Develop the wealth management sector.
- Grow the distribution networks.
- Accelerate our geographic diversification.
- Penetrate new market segments.
- Establish the foundations of a solid local presence in the U.S
- Maximize the synergies within the Industrial Alliance group of companies.
"This is the strategy that has brought us to where we are today," declared Mr. Charest. "As I have often had occasion to say, Industrial Alliance has everything it needs to continue to succeed: a solid, well-capitalized, well-diversified company, with good market share in all lines of business, and a well thought-out and well-executed growth strategy. Thank you to everyone who has contributed to this success," concluded Mr. Charest.
About Industrial Alliance
Founded in 1892, Industrial Alliance Insurance and Financial Services Inc. is a life and health insurance company that offers a wide range of life and health insurance products, savings and retirement plans, RRSPs, mutual and segregated funds, securities, auto and home insurance, mortgage loans and other financial products and services. The fifth largest life and health insurance company in Canada, Industrial Alliance is at the head of a large financial group, which has operations across Canada as well as in the Western United States. Industrial Alliance contributes to the financial well-being of over three million Canadians, employs more than 3,100 people and manages and administers over $50 billion in assets. Industrial Alliance stock is listed on the Toronto Stock Exchange under the ticker symbol IAG. Industrial Alliance is among the 100 largest public companies in Canada.
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Vice-President, Investor Relations
Office phone: 418 684-5275