iA Financial (TSE:IAG) posted a strong second quarter for 2026, reporting core earnings of CAD 330 million and net income of CAD 384 million, driven by robust wealth management performance and strategic capital deployment despite ongoing profitability challenges in its U.S. Dealer Services division.
Financial Performance and Capital Strength
The company reported core earnings per share of CAD 3.68, a 5% increase year over year, while reported EPS jumped 25% to CAD 4.28. With a trailing 12-month core return on equity hitting 17.5%, the firm successfully met its 2026 target of at least 17%. President and CEO Denis Ricard emphasized that these gains reflect broad-based contributions across the company’s diverse business segments.
Financial metrics showed significant momentum: net premiums, premium equivalents, and deposits climbed 25% to CAD 6.3 billion. Furthermore, assets under management and administration surged 37% over the past year, bolstered by strong fund inflows and the integration of RF Capital. iA Financial maintains a solid solvency ratio of 137%, with CAD 1.1 billion in capital available for deployment, keeping the firm on track to generate over CAD 700 million in organic capital throughout 2026.
Wealth Management Success
Wealth Management emerged as a standout segment, with core earnings rising 37% to CAD 155 million. CFO Éric Jobin attributed this success to a combination of strong segregated fund inflows, favorable market conditions, and a CAD 13 million contribution from the RF Capital Group acquisition. Individual segregated fund gross sales saw a notable 52% increase, surpassing CAD 2 billion.
Insurance Operations and Market Dynamics
In Canada, the insurance segment generated CAD 128 million in core earnings. While favorable mortality and morbidity trends contributed CAD 19 million, the company remains disciplined in its underwriting approach. Management noted that while policy volumes remain stable, they are maintaining vigilance regarding high-mid and large-case sales to mitigate long-term lapse risks. Meanwhile, special markets faced headwinds due to federal restrictions on international students, an impact expected to persist through the remainder of the year.
Navigating U.S. Dealer Services Challenges
The U.S. segment produced CAD 24 million in core earnings, a decrease from the CAD 36 million recorded in the same period last year. While U.S. individual insurance hit a record US$86 million in sales, the segment faced a one-time experience loss from large mortality claims at Fidelity Life. Management expects Fidelity Life to become accretive to earnings by the second half of 2026.
Regarding U.S. Dealer Services, which saw sales of US$292 million, leadership acknowledged that performance is currently below long-term expectations. To address this, the company has restructured its sales organization, repriced key products, and shifted focus toward agent and dealer channels. CEO Denis Ricard noted that while a recovery in this segment will take time, the company expects U.S. operations to serve as a significant growth tailwind heading into 2027 and 2028.