iA Financial Stock

Thank you for standing by. This is the conference operator. Welcome to the iA Financial Group Second Quarter 2026 Earnings Results Conference Call. [Operator Instructions] The conference is being recorded. [Operator Instructions]

I would now like to turn the conference over to Caroline Drouin, Head of Investor Relations with iA Financial Group. Please go ahead.

Thank you, and good morning, everyone. [Foreign Language] Welcome to iA's Second Quarter 2026 Conference Call. This conference call is open to the financial community, the media and the public. I remind you that the question period is reserved for financial analysts. And before we start, I draw your attention to the forward-looking statements information on Slide 2. Forward-looking statements made today are subject to risks and uncertainties that could cause actual results to differ materially.

These statements are based on certain material factors and assumptions. I also draw your attention to the non-IFRS and additional financial measures on Slide 3. Today's commentary will also include adjusted financial measures, which should be considered as a supplement to IFRS measures. For further details, including those factors and assumptions, please refer to our press release and MD&A. I will start by introducing everyone attending on behalf of iA. Denis Ricard, President and CEO; Eric Jobin, Chief Financial Officer and Chief Actuary; Alain Bergeron, Chief Investment Officer; Denis Berthiaume, Chief Growth Officer for our Canadian operations and responsible for iA Auto and Home;

Stephan Bourbonnais, responsible for our Wealth Management operations; Renee Laflamme, responsible for Individual Insurance, Savings and Retirement; Sean O'Brien, Chief Growth Officer for our U.S. Operations and responsible for Dealer Services; Louis-Philippe Pouliot, in charge of Group Benefits and Retirement Solutions. And with that, I will now turn the call over to Denis Ricard.

Good morning, and thank you for joining us today. We delivered another strong quarter, demonstrating once again the value of our diversified business model. Our ability to generate consistent profitability is supported by multiple source of earnings and solid growth for the organization. At the same time, Wealth Management continues to strengthen its contribution to our results and is becoming an increasingly important driver of growth. Across the organization, our focus remains on disciplined execution and profitable growth. We continue to make deliberate decisions that prioritize long-term value creation, business quality and sustainable returns.

These priorities are clearly reflected in our second quarter results. Turning to Slide 8. The quarter was strong across several dimensions: earnings, ROE, business growth, capital and shareholder value. Importantly, the growth was not concentrated in one area. It reflected the strong activity in our distribution platforms, continued wealth management momentum and disciplined execution across the organization. Let me highlight a few key metrics. Core EPS was $3.68, up 5% year-over-year, and EPS was $4.28, up 25% year-over-year. Our trailing 12 months core ROE reached 17.5%, in line with our 2026 target of 17% or more. Business growth was also strong. Net premiums, premium equivalents and deposits were $6.3 billion, up 25% year-over-year. Assets under management and administration grew 37% over the last 12 months. This growth reflects solid organic growth from fund inflows, favorable markets and the addition of RF capital.

Our financial position remained a clear strength. The solvency ratio stood at 137% at quarter end, and we had $1.1 billion of capital available for deployment. We also generated $188 million (sic) [ $180 million] of organic capital during the quarter. At the same time, we continue to return capital to shareholders during the quarter, in addition to our regular dividend, we deployed $347 million through our share buyback program. Finally, book value per common share reached $80.55, up 6% over the last 12 months.

Overall, these results reinforce our confidence in the trajectory of our business. We are growing, delivering strong profitability and maintaining the balance sheet strength needed to create long-term value.

Turning now to Slide 9. Our Insurance Canada segment delivered a good quarter, supported by the strength of our distribution platforms, the diversity of our businesses and our continued focus on profitable growth. In Individual Insurance, sales totaled $102 million, a result comparable to last year's strong performance. We remain very pleased with the momentum across the business and the strength of our market position. We continue to benefit from our growing distribution network, the effectiveness of our digital tools and our comprehensive product offering. We also maintained our leading position in Canada for the number of policies issued.

The stability of our results reflects our disciplined approach to underwriting and business selection, which supports sustainable profitable growth over time. In group insurance, premium and deposits remained close to the strong level recorded a year ago. Employee plans implemented sales reached $30 million, significantly above the $8 million recorded in the second quarter of 2025. In Special Markets, sales were affected by lower volumes of international student medical insurance following federal government measures limiting the number of international students entering Canada.

We have also taken deliberate actions to optimize the business mix and focus on opportunities that meet our return objectives. This disciplined approach strengthens the quality of future earnings, and we expect the impact of lower international student volumes on sales to remain visible in the second half of the year. Dealer Services sales remained good at $218 million, close to the results for the same period last year, benefiting from our extensive distribution network and comprehensive suite of dealer services products. Finally, at iA Auto and Home, direct written premium increased 5% over a year to $216 million.

This growth was driven by higher policy volumes and the favorable impact of price adjustments implemented over the last 12 months. Overall, our Insurance Canada businesses continue to demonstrate the benefits of scale, the distribution strength and disciplined execution while maintaining a strong focus on profitable growth. Turning to Slide 10. Wealth Management delivered another solid quarter and continues to be an increasingly important contributor to our growth and earnings profile. Momentum remains strong across the platform with gross sales reaching $4.3 billion and combined net inflows of seg. fund and mutual funds of $934 million.

We further strengthened our leadership position in the Canadian seg. fund market, maintaining the #1 position for both growth and net sales. Individual seg fund gross sales increased 52% year-over-year to more than $2 billion, while net sales exceeded $1 billion. This performance reflects the strength of our growing distribution networks, strong adviser engagement and the attractiveness of our product offering. In mutual funds, gross sales increased 46% year-over-year to $644 million, while net outflows of $73 million were recorded. Sales of other individual savings products reached $449 million, up 5% from last year. And finally, in Group Savings and Retirement, total sales exceeded $1.1 billion, up 35% year-over-year, supported by strong momentum in accumulation products.

Total assets under management increased 15% year-over-year. As we continue to build one of the Canada's leading independent wealth franchise, we remain well positioned to benefit from long-term wealth accumulation trends and generate sustainable growth in assets, earnings and shareholder value. Turning now to Slide 11. Our U.S. operations remain an important growth platform and a valuable contributor to the diversification of our business and earnings profile. The quarter once again demonstrated the benefits of our diversified U.S. presence across both individual insurance and dealer services. In Individual Insurance, sales reached a quarterly record of USD 86 million, up 10% from a year ago. This strong performance was driven by continued growth in the final expense and middle market segments, supported by disciplined sales practices, key digital capabilities and strong engagement across our distribution network. In Dealer Services, sales totaled USD 292 million, broadly in line with the same quarter last year despite less favorable U.S. auto market conditions.

The business continues to benefit from the effectiveness and diversity of its distribution channels as well as the quality of our products and service. Our focus remains on strengthening distribution relationship and continuing to enhance business quality and long-term profitability. Turning to Slide 12. Our results continue to demonstrate solid progress toward our financial targets and reinforce our confidence in the outlook for the remainder of the year. Core EPS increased 8% year-over-year in the first 6 months of 2026, reflecting continued profitable growth across the organization.

Our trailing 12-month core ROE stood at 17.5% at June 30, already meeting our 2026 target. This performance reflects disciplined execution, strong fundamentals and our continued focus on sustainable growth and capital efficiency. Organic capital generation remains a key strength of the organization. Year-to-date, we have generated $335 million of organic capital, keeping us well on track toward our objective of generating more than $700 million in 2026. Consistent with historical trends, capital generation is typically stronger in the second half of the year, reinforcing our confidence in achieving this objective.

Finally, our core dividend payout ratio remains within our target range at approximately 30%. With that, I will now hand it over to Eric, who will review our second quarter profitability and capital position in more detail. Eric?

Thank you, Denis, and good morning, everyone. I'm pleased to walk you through our second quarter results, which once again demonstrate the strength of our diversified business model, sustained business momentum and robust capital position. Let me begin with Slide 14, where I'd like to highlight 3 key takeaways before reviewing the segment results. First, we delivered strong profitability. Core earnings reached $330 million and core ROE was 18.5% on a quarterly annualized basis and 17.5% last 12 months. Net income was $384 million, which is higher than core earnings, supported by favorable market-related impacts during the quarter. Second, our earnings mix continues to evolve positively. Wealth Management delivered another strong quarter, driven by strong organic momentum, the increasing scale of our wealth platform, favorable markets and the contribution of RF Capital.

Third, with a solvency ratio of 137% and $1.1 billion of capital available for deployment, our capital position is robust, and we have substantial capacity to invest for growth. Let's now take a look at the second quarter core earnings results by segment by turning to Slide 15 with Insurance Canada. This sector delivered another strong quarter with core earnings of $128 million, demonstrating the stability and profitability of the business. Experience remains favorable, contributing $19 million pretax to earnings through favorable mortality and morbidity experience. While this was below the exceptionally strong experience gain of $31 million recorded a year ago, it reflects continued solid risk management across the portfolio.

Core earnings also benefited from higher combined risk adjustment release and CSM recognized for service provided, particularly in individual insurance and employee plans as well as lower core income taxes during the quarter. These positive factors were partially offset by lower earnings from core noninsurance activities, primarily year-over-year in Dealer Services. Let's now turn to Wealth Management on Slide 16. Wealth Management delivered another strong quarter with core earnings increasing 37% year-over-year to $155 million. This performance was driven by higher combined risk adjustment release and CSM recognized for services provided, benefiting from strong segregated fund inflows and favorable financial markets. In addition, insurance experience gains of $2 million were recorded during the quarter. Core noninsurance activities also contributed meaningfully to earnings growth, supported by higher net revenue on assets, adviser recruitment and the strong contribution from RF Capital Group of $13 million, which continues to perform well and better than expected at time of acquisition.

These positive drivers were partially offset by higher expenses incurred to support business growth and expansion. Overall, Wealth Management continues to enhance the quality and diversity of our earnings base while delivering attractive profitability and strong earnings growth. Turning to Slide 17 for U.S. operations. Second quarter core earnings in our U.S. operations were $24 million compared to $36 million a year ago. In Individual Insurance, the strong earnings growth achieved over recent years continues to be reflected by high levels of risk adjustment release and CSM recognized for services provided.

This quarter, however, growth was moderated by experience loss of $8 million, mainly due to unfavorable mortality at Fidelity Life arising from a small number of large claims, which we view as statistical fluctuation. Before these experience losses, which are expected to be nonrecurring, the combined contribution from Fidelity Life and eFinancial was neutral to core earnings. As a result, we continue to expect the acquisition to be accretive to core earnings in the second half of 2026. In Dealer Services, core earnings continued to reflect the sales mix weighted toward insurance products. While the pace of earnings improvement has been slower than originally anticipated, we continue to implement a series of management actions designed to improve long-term profitability and overall business quality.

As these initiatives are implemented, some earnings variability may occur. We remain confident that the actions we are taking position the business to deliver stronger, more profitable and sustainable growth over time. Now turning to Slide 18 for the results of the Investment segment. Core earnings for the quarter were $79 million compared to $102 million a year ago and $93 million in the first quarter. The year-over-year decrease was mainly driven by higher financing charge on debentures, semiannual dividends on pref shares and higher core income taxes. Core earnings were driven by a core net investment result of $129 million, which is $2 million higher than for the same period last year. This result consists of expected investment earnings of $119 million and favorable credit experience of $10 million, which is attributable to both the fixed income and car loan portfolios. Quarter-over-quarter expected investment earnings benefited from the positive contributions of iA Auto Finance and the capital issued in May. These benefits were offset by a reduction in invested assets, mainly due to the share buyback program. Core earnings adjustment generated a positive impact of $104 million during the quarter, driven by favorable macroeconomic variation in the non-fixed income assets, particularly the strong performance of public equities.

Moving to Slide 19 for the results of the Corporate segment. We continue to demonstrate disciplined expense management during the quarter with core corporate expenses totaling $74 million before taxes compared to $75 million a year ago. This result included core other expenses of $65 million before taxes, which is at the low end of the quarterly target range of $70 million, plus or minus $5 million, as well as $9 million of higher-than-expected provision for variable compensation, reflecting both the company's strong operating performance and share price appreciation during the quarter.

While maintaining a strong focus on expense management and operational efficiency, we continue to invest in strategic priorities, including AI capabilities and future growth initiatives. As a result, we expect core other expenses in the third and fourth quarter to trend toward the midpoint of our target range. Lastly, the consolidated core effective tax rate was 21.2% in the second quarter, benefiting from favorable nonrecurring items. We continue to expect the core effective tax rate for the third quarter and fourth quarter to be positioned towards the upper end of our target range of 21% to 23%. Please turn to Slide 20 to review our robust capital position and financial strength.

As at June 30, 2026, our solvency ratio stood at 137%, and our capital available for deployment was $1.1 billion. The solvency ratio increased by 3 percentage points during the quarter, driven by the favorable impact of the capital issuance completed in May, solid organic capital generation and positive macroeconomic impacts. These favorable items were partly offset by the $347 million deployed through the share buyback program, investment in organic growth initiatives and dividend payments to common shareholders. Overall, our capital position is robust and our deployment capacity provides flexibility to invest in growth opportunities, pursue capital allocation priorities and continue creating value for shareholders. To conclude, in Insurance Canada, favorable insurance experience once again demonstrate the strength of our risk management culture and underwriting discipline. In Wealth Management, we are proud of the success we have achieved and of the sustainable strength of our segregated fund products. In the U.S., we continue to take deliberate management actions to enhance the profitability of Dealer Services. While these actions may affect short-term results, they support long-term profitable growth.

Our Q2 results highlight the strength of our diversified business model, and we are entering the second half of 2026 from a position of strength. Finally, core ROE is well anchored over 17%. With that, I will turn the call back to Denis.

Thank you, Eric. Please turn to Slide 22. As we look back on the second quarter, we're pleased with the strong execution across the organization. While Wealth Management continues to increase its contribution to earnings and growth, the strength of our company remains rooted in our unique diversified business model and the multiple drivers of growth across the organization. The breadth of our platform enables us to generate consistent profitability and create value through a variety of business and market environments. The 25% increase in premiums and deposits, together with the 37% growth in assets over the past year reflects the strength of our distribution capabilities, our ability to attract and support high-quality advisers and the disciplined execution of our growth strategy.

We continue to see strong momentum in Wealth Management, supported by elevated activity across our distribution platforms, strong net inflows and growing assets. At the same time, we remain focused across all of our businesses on generating profitable growth and making deliberate decisions that strengthen the quality and sustainability of future earnings. Returning value to shareholders remain a key priority. During the quarter, we continued to do so through both dividends and share repurchases under our NCIB programs. And with a solvency ratio of 137% and $1.1 billion of capital available for deployment, we remain well positioned to support future growth opportunities while maintaining our disciplined approach to capital allocation.

As we move into the second half of the year, we remain focused on executing our strategy, supporting our distribution networks, delivering profitable growth and creating long-term value for shareholders. Thank you. Operator, we're now ready to take questions.

[Operator Instructions]

The first question is from Doug Young from Desjardins Capital Markets.

Just wanted to maybe dig a little bit deeper on to the U.S. extended vehicle warranty business. It looks like the U.S. and the U.S. PAA line was down, the noninsurance core earnings was down quarter-over-quarter. And I think -- and correct me if I'm wrong, there was reference to the loss of dealers on the admin side. I don't know if that was dealers moving to the insurance side, but just trying to get a little bit more into the depth of what you're seeing there and what your expectations are from that business over the coming year.

Yes, it's Denis here. I'll start and then Eric will follow up on this. Maybe a high-level comment on that business. And as you've seen in terms of the sales, sales are soft in the quarter. There are things that we do control and things that we do not. And there's been some headwind on the car sales that you'll hear from us for sure. But to me, as a CEO, what is important is that from what we control. And there are initiatives that we are -- we have been doing for some time already that are obviously taking a bit of time to have some impact. But we are doing the right thing. That is, I think, what is the important message that you have to keep in mind so that we believe that we're going to get the improvement in our profitability over time in the sales growth as well. But it's not linear. I mean it's not something that is linear and it's just going one way. So sometimes you've got some pause. But Eric, do you want to comment more on this?

Yes. I just want to add, Doug, to your question with respect to the PAA earnings being slightly down quarter-over-quarter. Keep in mind that this is a business on the insurance side that has a bit of seasonality. Remember that I talk about this very often that some of our businesses have seasonality patterns. And for Dealer Services in the U.S., the insurance business has a higher frequency of claims in the second and third quarter. So it's a little bit like iA auto in Insurance Canada that tend to have lower expected earnings in the first quarter. For Dealer Services, it's in the U.S., it's second and third quarter.

Yes. Okay. And then can you maybe just flesh out why are the dealers choosing to go with the insurance versus the admin side? Like is there a structural reason that that's -- like when you look into it, like what do you get back from the dealers why they're choosing to go in that direction?

I will ask Sean just to talk a bit more about our strategy there and the push that we made on the DAC side last year and the success we've got so far and then the initiatives that we're doing on the other side.

Yes. Thanks, Denis. Yes, I mean just to jump back, our 3 main actions we've taken with that business, we started focusing on profitable growth is we've actively repriced all of our products. Good news is now all the sales have an ROE above our expectation. The industry has been fairly price disciplined in the U.S., which is helpful and in Canada. And then we focused on operations. The last part has been the sales structure. And last year, we started with DAC. We saw it as a quick opportunity and DAC is really where we're driving these insurance sales. And you can see those numbers coming forward. So really, it's a separate channel where we're selling that business. And then on the first half of this year, we've restructured the sales team. And now we have the sales leaders in place focused on the agent and dealer channel, and there's a nice pipeline building. And I'm confident we'll definitely see some nice growth ahead later this year and into next.

But as we said, the business is not perfectly linear. The gradual recovery is underway. There is some natural attrition as dealers come and go. And usually, it's related to acquisitions. The dealer gets bought by another group and they have another provider and sometimes you lose stores. And that's the most common reason we see it, but that's not the primary driver. Really, it's just what you're seeing is the focus on DAC that started last year, and you'll start to see the dealer and agent channel building in the quarters ahead.

Okay. And then -- so I appreciate that. And then just, Eric, maybe if we go to Slide 20 and just -- maybe I'm just slow this morning, but it's -- can you help me think through your solvency ratio is up sequentially, but the capital available for deployment is down. And I can see the different kind of points in there and it looks like financing activities is included. Can you just help me think through why that would be? And then what is the binding constraint that helps you define what is available for deployment?

That's a very good question, Doug, because you know that the regulatory regime has many, many constraints in it. One is the solvency ratio, and there are other ones and one has to do with the core ratio as well. And this is where right now that iA is constrained. When we calculate the amount of capital available for deployment, we're constrained by the core ratio. And the biggest driver of the core ratio constraint is negative reserves. So right now, with the growth that we're experiencing in Insurance Canada and the segregated funds, this is what is creating a bit of a challenge in the short term because -- the gains coming from those sales cannot be fully reflected in capital available for deployment. So -- but it will flow out in the future. But in the short-term, this is the constraint that we're binded by.

And for the first part of the question, the capital for deployment already incorporates the potential financing. So when we do go out in the market and we raise capital, it does not change the capital deployment.

Yes, absolutely. The way to look at capital available for deployment, the way we talk about it is to talk about the current excess capital that we have in the books and potential remaining financial flexibility. So what Denis is mentioning, for example, in the first quarter, we said that capital available for deployment was $1.2 billion. So it was a combination of both elements. As you know, we issued sub debt in the second quarter, and it did not change the number. So really, what drove the decrease of about $100 million quarter-over-quarter is the share buyback program. So the financial flexibility was already in there.

The next question is from Tom MacKinnon from BMO.

Question just with respect to Canadian individual insurance sales. 2025 was up nicely 6% over 2024, but you're starting off 2026 here down in the first quarter year-over-year, down in the second quarter year-over-year in terms of new sales. And I think in the first quarter, you might have been up a bit in policies, number of policies issued, but it looks like now you're down year-over-year in terms of number of policies issued. So what's happening here? What can you do to improve this trend going forward?

Thank you, Tom. It's Denis here. Thank you for the question. Renee will answer that question. But first, I just want to make a high-level comment. When you look at the overall growth in the organization for the quarter, we're very pleased, like I said before, 25% grew in terms of net premiums and the AUA AUM grew by 37%. So we're very, very pleased. Obviously, the wealth management business has done a fantastic growth trajectory. But then when you look at some other sectors like individual insurance and special market and you see the -- some kind of pause in terms of growth, but it's really a reflection of some of the initiatives that we made because we want to stay disciplined in underwriting, pricing, risk management and everything. So Renee will go into more details, but you have to keep in mind that sometimes there are pockets of industries that we don't want to play in and it may have some impact.

Thank you, Denis. Thank you, Tom, for your question. First of all, when you look at the number of policies sold, keep in mind that we're the leader in number of policies sold in Canada with 25% of the market share. Thus, it may happen that we have a softer quarter. But again, we see the activity, and we're confident in our ability to continue to grow the number of policies sold. Looking at it from a dollar perspective, sales, we did this quarter $102 million, similar or very slightly lower than the same quarter last year. We're looking at the market with increased vigilance, especially relative to certain sales concept in the high mid large case range. And we're staying disciplined in making sure that we are not taking undue risk. So that would cover -- and I think, Eric, if you want to reinforce on some of our risk management.

Yes. I just want to take this opportunity to reinforce Renee's message and connect -- make a connection with what we mentioned at the investor event to our risk management practices and control. What Renee is mentioning is that we don't want to take undue risk in the books and face lapse issues with aggressive sales concept from 8 to 10 years from now. So we're careful with that and making sure that the business we bring in the books is creating value for the company as well for the client and the adviser. -- not only for the latest 2.

Is there any product set that you're taking the increased vigilance in? Is it par, non-par, term? I don't know, any -- if you can elaborate on that?

Well, as you know, 50% or more of the products sold in the industry is the par product. So obviously, the increased vigilance is mostly on the par product, those products that accumulates value early on. So those are the ones.

The next question is from Gabriel Dechaine from National Bank of Canada.

Quick one on the experience gains in the non-prime auto. What were those? Did you release allowances or were impairments just below expectation? Can you delve into that a little bit?

Remember, Gabriel, that a couple of years ago, we strengthened the underwriting on our credit portfolio for auto loans. And it's just collecting the benefits of that strengthening that happened a little while ago. The experience has just been better than expected in this case. Nothing special to mention about any allowance release or anything. It's just experience based.

No, I understand the repositioning you did a couple of years ago. I'm just from an accounting standpoint, it could come from a variety of noninsurance accounting rather. I just want to get a sense, you have an assumption for a certain amount of impairments and it was a lower number than that. Is that essentially it?

Yes, that's exactly what I referred to when I say it's an experience -- a positive experience gain.

Got it. Okay. And then -- yes, sorry, somebody else?

No, I just wanted to add, it's actual minus expected, Gabriel.

Yes, yes. Okay. Now a bigger picture question for Denis. And I'm starting -- not starting, I'm getting this more frequently, I should say, from investors about all the companies I cover as their stocks are at all-time highs nearly every day. Valuations are getting -- are very unusually high compared to any historical record. If I tie that into your M&A appetite, which you've been very transparent over the course of the time I've covered the company, you're an acquisitive company. You got it in your slides, 30-plus since 2015. Like how does the stock's valuation influence your willingness to do maybe a more transformational transaction than the ones you've done in the past? Like what sort of conditions would you need for Industrial Alliance to issue equity to finance a transaction, let's say?

Well, first of all, the higher the price, as we all know, the cheaper would be to buy an organization. If we need to raise capital, that would be an obvious one. Now with that said, we have plenty of capital right now, $1.1 billion. We're generating $700 million a year. So -- and our buyback strategy, obviously, depends on various criteria. One of it is the -- any potential acquisition that we would do in the near future. So that would be one of the elements that we would take into consideration. So -- and I would say -- I would add to this, I mean, being a $18 billion-plus market cap company, we might target something that is bigger than what we have done in the past. I mean we've done -- the biggest one would be like $1 billion some years ago. So we might go a bit higher than that. But I mean, it has to be really strategic for us to go with a huge acquisition that would be transformational for the organization. We don't bet the farm. It's not part of our DNA. So it is possible that at some point, we might go bigger, but it would have to be a really, really good fit for the organization.

Got it. And then I guess this is a question I can ask any other companies I cover, but I'd start with you.

The next question is from Mario Mendonca from TD Securities.

I want to focus on 2 businesses, one that's functioning at a very high level, your wealth business and one that isn't. First, let's focus on the U.S. business, the business that I think, Denis, you'd agree is currently functioning below its long-term earnings potential. First, you'd agree with that notion that this is significantly below what you expected from this business at this time. Is that true?

That's a closed question. The closed answer is yes.

So the way I'm going with the question then is this, there are things you need to do to fix the business, and you talked about that in response to Doug's question. But what will be interesting to know is the timing. So when you think about your budgeting process, and I suspect industrial is like any other company that has an ongoing iterative budgeting process. Does the U.S. business grow in 2027 and 2028 in that process?

Okay. So from where we are right now, I see the U.S. business as a tailwind. So the answer is yes.

So you do have some growth built in, in the budgeting process in '27, '28.

Yes. Okay. Let me go further in this. I try to be as short as possible. First of all, the U.S. Life business, really, really happy about it. The American-Amicable, I mean, obviously, forget about the lapse for the last quarter, which was a blip in the graph. Very, very pleased, already above our target, and it's growing -- it's grown for 16% CAGR for the last 16 years. Really, really pleased. Vericity, according to the plan right now, I mean, we -- it's going to be accretive at the end of the year and growing further along the way. So those 2 businesses, the answer is yes. I mean there is in our budget process, some incremental growth in that business. Now the U.S. dealer business, the last one, it's been a disappointing business since we bought the organization. I don't want to go through all the history of that. But the team that we have right now, I'm quite confident and I look at the pipeline that is there, I'm quite confident that it's going to gradually improve.

It will take time. It's not going to happen in a few quarters. But when I look at the growth over, let's say, 2027, 2028, it's going to be a tailwind as far as I'm concerned.

Okay. Let's flip over to a business that's at the opposite end of the spectrum, the wealth business. I can appreciate that, and I think anybody can make a convincing argument that the growth in earnings in the wealth segment, this pace of growth is extraordinary, and you'd expect the pace of growth to slow. And I think I can make that argument myself convincingly. But what I'm struggling with right now is this new level of earnings in the wealth business. Is there any reason why you would have to sort of check back? Was there anything in the quarter that would cause the results to be unusually strong and sort of return to a more normal level as early as next quarter? Or would you argue that it's structurally a higher, more profitable business at this point?

It's a new high as far as I'm concerned. And I see no reason -- I mean, obviously, the market recently has been quite -- has collaborated significantly. But if you look at the net flows from the organization, the consistency of the net flows over the years, I see no reason why it would stop at this point. And Eric wants to add, we're debating here we should answer that question. But -- so Eric, you want to add something, go ahead.

Yes. I just want to add because I know that at the end of this call, Mario, you all need to make -- to update your numbers. And there's one flavor I wanted to provide on this question that I expected today, to be honest, is when you look at the excellent result we had in the Wealth Management segment, it's important to note that the macroeconomic was a tailwind. That's for sure. And the organic or structural, as you mentioned, also contributed, and it's about 50-50. Just wanted to provide this additional information to you so that looking forward, you can adjust for that because, of course, the market has been great, and we love it. And I'd like it to be the same in the third and fourth quarter. But we know it's not going to be always like in the second quarter. So just wanted to provide you some color on how to manage this looking ahead.

All right. I think we could all use a little bit of clarity on that as we go forward because it's hard to interpret. I think my impression is that this is the new structurally higher level, but perhaps you're cautioning me otherwise. Is that right or...

I would say it's high -- when I said it's a new high in terms of AUM and AUA. That's what I'm seeing. I think Eric referred to the increase. The 37%, half of it is what you call structural...

Is structural or organic related and half of it is macroeconomic. So if I connect with Denis, Denis said that it's a new high. Everything else being equal and stock market not going down and keep increasing at a normal pace, you would expect a lower increase looking into Q4 and Q3.

The next question is from Paul Holden from CIBC.

I want to start with a bigger picture question, that's related to interest rates. Now iA obviously has brought down its interest rate sensitivity over time and intentionally. But putting aside the sensitivities that you give us, I just -- I still want to think that higher rates, particularly at the long end of the curve, are beneficial for your business, whether that's through sales, the pricing of new sales and the margins associated with that or just the earnings on surplus. Maybe you can walk us through sort of what the implications are for your business? Do I have it right that you're still positively impacted by higher rates and how so?

Yes. It's a quite important question, Paul, because the level of interest rate is important. You're absolutely right. We keep seeing that long-term interest rate being higher is positive for us if everything else stays the same. Keep in mind that the inverted yield curve a couple of years ago created some headwinds. So the level of long-term interest rate is important, but the shape of the yield curve is important as well. So to maintain this, we need a positive yield curve, meaning short-term rates being lower than long-term rates.

So assuming under the current shape of the curve, I think, is a positive. So again, maybe you can kind of walk us through like how should we expect that to show in IAA's results over time? Because I don't think it's an overnight impact. But again, maybe whether it's through sales, the margins on those new sales, earnings on surplus, how it is positive?

Yes. In fact, you're right. New sales, assuming that prices are not adjusted and there's no reason to believe the contrary at this point, the market is being very disciplined. So there's no pressure on pricing. So of course, if long-term rates are higher than our pricing, it's beneficial to us. So that's -- that's the most important element. As for the other things, keep in mind that we do our best to hedge our assets and liabilities. We've talked a couple of times about our total portfolio management approach to manage the interest rate risk. We do our best to minimize it, but we still have a small positive variance. If you look at our core earnings sensitivities to long-term interest rates, it's still positive. So it means that we'll -- by reinvesting and lengthening the duration of our portfolio over time, we still win with the overall portfolio management as well.

Okay. Let me move on. In terms of the U.S. business, you've seen negative insurance experience in each of the last 3 quarters, and I think from unrelated factors, so you could say it's all different. I guess my question is twofold. Like given the recent experience, is there anything you see in the results where maybe in terms of setting actuarial assumptions a little bit more challenging in the U.S. versus Canada. You have a very long history of being very good at getting the assumptions right in Canada. Is there anything in the U.S. that you think is different? And in any way, does that impact the way you think about further capital allocation into the U.S.

The short answer is absolutely not, Paul. I don't see any issue. The loss that we experienced in Q2 is completely unrelated with what happened in Q1. Remember, in Q1, it was a lapse issue connected with more green agents than normal. This quarter, it's mortality related. And it's -- first quarter was in American Amicable. Second quarter, it's mortality related at Fidelity Life. And it's just a couple of higher claims that took place, and those are accidents and things like that. So it's really not something that worries me with the assumptions at this point with respect to that. So there's nothing -- and on the lapse issue in Q1, we took actions to fix it. So when I look at the -- at my crystal ball for the remaining of the year, I don't see anything that preoccupies me at this point.

And just to add, Eric, on the mortality side, we look at it holistically. So overall, we had a gain. So if there was to be something on the reserve, let's say that we didn't feel good about mortality, I mean, for the U.S., overall, it would be positive.

Denis, you're absolutely right. Across the organization in the second quarter, mortality overall was positive. So we -- I keep saying that we like mortality risk. That's something we're really good at managing. We like the underwriting. We like the risk management. So we retain some risk with respect to mortality, and we like it, and it's been positive. It's been a positive profitability driver for as long as I can remember. So overall, even across the organization, there's no worry about this risk.

Okay. And then you obviously that given that answer, then it doesn't impact appetite to deploy more capital into the U.S.

No, it has absolutely no impact.

[Operator Instructions]

The next question is from Mike Rizvanovic from Scotiabank.

Just wanted to follow up on the wealth commentary. And just thinking about it from the terms of if the market does go into a declining environment, if assets under management are declining. I'm just wondering, I know that you've got a structurally higher profitability level, but what's the torque to the downside? Or how sensitive is it to the downside if AUM is to come down when you think about the composition of your fee-based revenue?

Mike, you have all the sensitivities in our supplemental information package to help you figure out the scenario you want to consider or look at. It's all in there.

Okay. Fair enough. And then maybe for Denis, just on the buyback strategy. How does your book value impact sort of play into your buybacks? And you obviously got a very aggressive buyback right now based on your NCIB. I know you care about book value growth. You've been very clear that the long-term outperformance on book value growth has been a big positive for IAG over time. How do you look at it now with current -- with respect to current valuation levels?

Yes. Well, thank you for the question, Mike. In terms of the buyback, there are many criteria that makes us decide whether we go bigger or not. The price is obviously one. So -- I mean, everything else being the same, the higher the price, the lower the amount of buyback we're going to do. But like I said, there are many other factors, our capital position, this is the alternative uses of capital, market conditions, -- so -- and we don't have an objective or a goal of buying back a certain amount. At the end of the day, we also said that in the past that we don't want to pile up capital. But again, there are many, many factors that justify whether or not we go big or not on the buyback side.

This concludes the question-and-answer session. I'd like to turn the conference back over to Caroline Drouin for any closing remarks.

Thank you, everyone, for joining us today. Our Q2 earnings release and slides for today's conference call are posted in the Investor Relations section of our website, and a recording of this call will be available for 1 week starting this evening, and the archived webcast will be available for 90 days, and a transcript will be available on our website in the next week. Note that our 2026 third quarter results are scheduled to be released after market close on Monday, November 9, 2026. Thank you again, and that concludes our call.

This brings a close to today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.

Good afternoon, everyone. I'm Tom MacKinnon with BMO Capital Markets covering insurance, asset managers, diversified financials. This afternoon, we're delighted to have Denis Ricard, the CEO of iA Financial here. Denis has been the CEO since September 1, 2018, and has been with the company for -- since 1985 in various roles. I think Denis, you were the Chief Actuary at one point. So you've seen iA through thick and thin and has been a long-time contributor to both the growth of the company and the culture of the company as well. So welcome, Denis, and a pleasure to have you join us here.

Yes, it's a great pleasure to be here. And in fact, I think we knew each other during those years that I was CFO and you went through the 2008, remember 2008. It was fun to be the CFO at the time.

Yes, that's a pretty -- that's kind of like -- those are really tough times, and I seem to recall -- and sometimes I wonder if investors really can appreciate the fact that the unknowns were just making the markets just tank, incredibly tank. And to live through a crisis like that, I think, really brings risk management front and center, especially with financial companies.

So I just want to start with, you've been more aggressive of late with the share buyback. You've raised the NCIB from 5% to 8%. What's the thinking behind this? And what are you saying to the Street here about capital allocation priorities?

Yes. I think it's an example of the confidence -- the testimony of the confidence we have in our capacity to generate excess capital or capital for deployment. And the idea is that we don't want to pilot capital.

Now as I said many, many times in the past, our priorities is really organic growth then acquisition. I mean, we've done a lot in the past. And when I look at the last 25 years, 2% out of the 10% EPS growth -- average EPS growth, this is rough, but 2 out of the 10 came from addition that we had in terms of acquisition. So it's part of our strategy over time to grow. In some years, we don't do any. In some others, we do more than one. So you never exactly know when you're going to make them, but it's part of our DNA, and we've got a team working on it. Our leaders in each sector are concentrated not only on organic, but inorganic growth as well. So that's -- acquisition is part of our strategy.

And then after that, at the end of the day, sometimes I use the word balancing item, but it's like we don't want to pile up capital. So we return capital through NCIB. And recently, we've been able to do it even more, I would say, aggressively in the sense that we generate a lot of excess capital. And it's a completely different world than 10 to 15 years ago when lifecos and including iA, it was much more difficult at the time to generate excess capital.

Why do you think it's easier to generate it? Is the business model sort of changed away? Is the business less capital intensive? And -- so that capital-intensive business runs off and it's -- and you're recycling that into less capital-intensive business. So net-net, you just come out ahead more. Is that what's happening?

The short answer would be yes, but I guess it's more than that. What changed is, first of all, more discipline in the market. So prices of long-term guaranteed product went up significantly. So par products, which are our term product, which are more -- let's say, that are light in terms of capital took the place of more capital-intensive products, as you said.

There's also the change in the capital environment -- sorry, the regulatory capital formula that is much more based on risk as opposed to the previous MCCSR formula.

I would say also that the IFRS transition or the implementation of that was a positive for the industry all in. So to me, there are many, many factors. But I would say the main one is about the discipline. Nowadays, people realize that long-term interest rates are not going to go back to 8%. And so we all became much more disciplined.

Yes, you've got a rational marketplace and disciplined as you add in Canada. And if you combine that with a bit of the benefits of an oligopoly, Canada is still a pretty good place to operate in, at least in my opinion.

I mean if you're going to buy back more stock, intuitively, just the mathematics of that just will increase your core ROE. You're already at your 2026 target of 17%. Why not increase it?

Well, we're pleased where we are, obviously. I mean, we achieved the 17% faster than what we expected. I'm not prepared to do it right now in the sense that we are still obviously contemplating making an acquisition eventually. When you buy a company, sometimes in the first year, especially for a fast-growing company, there might be a drag on ROE temporarily.

So to me, it would be premature to do it right now. It doesn't mean that we won't in the future, but it's not something that I'm prepared to do at this point.

Okay. Sure. I'm going to go into the U.S., and then I'll get back into Canada. But when we look at the U.S., kind of uncharacteristic in the first quarter of the elevated negative lapse experience. And it seemed to be related to the American-Amicable business is what you may have pointed out. You bought this business, I'm thinking...

2010.

Yes, I was going to say like 15 years ago, and you've had pretty good growth in it and pretty good success with it. So it would suggest you're quite familiar with the business as well.

What happened in the first quarter of 2026? And what are you going to do to stop this from happening going forward? And when are you going to tell the Street that any future that you got this under control now and it shouldn't be a problem going forward?

Yes. I'm talking from the U.S., by the way. So I'm in Austin, Texas as we speak. I mean in a hotel room. So we have some U.S. Board meetings these days. Okay.

So about this issue. I would qualify this as a hiccup along the history of this acquisition. We bought American-Amicable out of Waco in 2010. It was a company that was making a very low ROE at the time, very constrained in terms of capital and a very expensive reinsurance treaty. And a bit the same story that Vericity we had at the beginning.

So we knew that we could add a lot of value in this organization, and we did. We went from in terms of growth from $25 million premium to over $230 million last year. So it was a huge story -- success story, 16% CAGR over that period. And nowadays ROE that is above 20% for that specific business.

Now what -- and the success of that company has always been this way that they manage distribution in the final expense business because the key to success is really managing distribution very tightly.

Now there was a hiccup in the quarter because -- and then I'll explain, please bear with me here, okay? I'll try to be simple. It's about the profile of the distribution that sells final expense. And I'm sure you will all agree that, let's say, a green agent, like a green -- a person that is new in the industry, the portfolio that they sell, the policy that they sell, they would, in average, lapse more because they have less experience as opposed to an experienced agent that know more how to sell and the underlying lapse rate would be lower.

So over those 15 years that we bought the company, the profile of the distribution has been quite stable. But all of a sudden, in the first quarter, what we realized is that the -- for one IMO, the percentage of green agents went up significantly. And we realized that after the fact because, like I said, over the 16-year period, there's been no real variation. And after we saw that the lapse rate was increasing significantly, we realized, oh, okay, they've recruited green people much more. We've signed much more green people as opposed to experienced people. That's really what happened.

It's -- and I used the word malpractice at the conference call. I think it was a reaction to the question, which the question was about fraud. And I said, well, no, no, we're not talking about any fraud here. And it's probably my English. It's not as good as it should be. The word malpractice does not reflect exactly what it is. It's more the fact that the profile of the distribution was not as experienced and it should have been.

So what have we done since? Because what about the future? So we've corrected the situation because we want to have a stable profile of distributors. If not, we have to increase the price because it will not be consistent with the price.

So we've terminated some agents that we were not pleased with their lapses. We've suspended new recruiting in some areas. We've imposed a kind of a tap on green agents recruiting. And also, we've obviously engaged very directly with the IMO through this period.

So we believe that we've pretty much put that behind us. There might be a small residual in the second quarter. But all in all, again, when I look at the 16-year period we have, it's kind of a hiccup right now.

And lastly, we've implemented a new measure to measure the maturity or the profile of the salespeople by IMO, something that we did not have to do before because it was stable. Now we will have that information beforehand as opposed to after the fact.

Okay. That's -- help us understand, is there a clawback on the commission if somebody lapses prematurely. Presumably, the agent just can't get full share even if the client just turned around and lapsed.

Yes. So in the first year, for example, you lapse the first 6 months, we will recover the last 6 months. But you have to realize that those -- even the first 6 months commission that is earned, something that is amortized over the lifetime of the contract. So as an organization, if the lapses are too high, you will never recover that.

Okay. So that's even net of any kind of clawback here. So I guess the takeaway would be here, you've terminated some agents that were kind of responsible to this. You put a cap on new recruiting. You're dealing directly with this IMO here, and there could be residual negative lapse experienced in the second quarter. But for all intents and purposes, you guys at iA feel pretty comfortable that you've got this thing under control.

Absolutely.

Okay. That's good. Let's -- we're going to jump around a bit, but maybe a bigger question with respect to Canada. The strategy has been a mid-market strategy, good success -- reasonably good success there. And then you make this RF acquisition, which is kind of like into the IIROC channel, a little bit higher net worth. Were there gaps in what is your strategy in Canada? Is it differ when it's insurance or high net worth? Or insurance or wealth? Like maybe if you would try to summarize where you want to be in Canada, both as an insurance company and as a wealth manager. And how are you going to win and compete against some of your bigger Canadian peers in both of those parts?

Okay. So the question is -- encompasses a lot of elements in our strategy. I will say that what we try to do at a high level is to be different as much as possible from our peers, I mean, lifeco peers. And the way I express that is about, for example, the individual insurance, we try to be more in the mass market. Obviously, we sell big policies. But in average, we tend to sell much more -- much lower policies. So we try to focus on that specific market and build relationship with distributors that are in that market.

On the -- and that's for life insurance and tech funds because those are the same insurance licensed distributors. To sell tech funds, you need to be able to sell life insurance, same licensing. On the wealth management side, on the distribution side, IIROC or MFDA, they have a different name now, but let's say, for those, we try to position ourselves as the home for independent distributors. When I say independent is that as opposed to the bank where in the bank, they have to sell their products. For us, it's like you come here, it's an open architecture, you can sell any company that you want. So we offer the platform, basically, the best technological tools that they can have.

And so the RF Capital is a kind of in between the model that we had -- that we still have, which is fully independent and you have a high payout, but you pay for all your stuff. And the banks where the payout is lower and they have to pay for their stuff. It's kind of in between when I think about Richardson. So to attract advisers from the banking world is easier because the step is not as high. you know what I mean.

So this has been our strategy to increase the distribution to be able to recruit, and we've had success since we bought RF Capital to recruit some advisers from the banking world. So that's -- and we already had some success on the independent fully independent. And now we believe that we will be in a better position to attract advisers from the banking world.

Yes. And then what -- but it still be an open architecture, what you're going to push out to them. There's no way you can kind of lean into the iA funds, if you will. I mean the IIROC channel, the banks tends to sell a lot of the home shelf like -- are you going to try to play that role?

No. The short answer is no. However, I will say that sometimes you have to be smart in a way that subtly you can incorporate, for example, in some solutions, a small portion into, let's say, Clarington funds so that when you look at the diversification, it's not fully iA. But I mean, this is the play that we want to do here, try to put some of the manufacturing within the solutions that are fully independent.

And how do you feel about your franchise here in Canada now with RF? Like if I look back over the life of the times -- the long time I've covered iA, it was to build out the wealth. And I'm going back into like Clarington and Jovian and all these plays and build out distribution as well. And that -- so you got a good hold on distribution as that kind of consolidated. You got a good hold on wealth and asset management. Are there gaps at all in what you feel that you're bringing to Canada? What are your thoughts there?

We've -- you're right that we've -- over the years, we've tried both on distribution and on the manufacturing side. I forget about seg fund for the moment, it's mutual fund and distribution. We've had much more success on distribution. Our manufacturing capability is not very huge in the whole industry with iA Clarington, but we had a good portfolio of funds that we can offer to our clients. But when you look at the size of it versus other players, it's still very, very small.

So -- but on the distribution side, this has been our focus. We are #1 if we exclude the bank. In the independent space, we're #1. And so with Richardson, we've positioned ourselves to be the home of independent distribution. That's been our strategy.

And I don't feel that there's something missing on the wealth -- obviously, the technology is very important. If there is an area where we are putting a lot of energy to make sure that we stay ahead of the game is about technology and make it very simple for the advisers and the client.

Yes. And as you build out that technology stack, you've also been under pressure to sort of keep those corporate and other expenses relatively -- not growing unproportionately. So how do you balance that, the need to build out your technology and at the same time, keep your corporate expenses relatively under control?

It's discipline. It's only through discipline, good budgeting, good follow-up. It's all about choices. We cannot spend $2 billion in technology a year. We invest about $400 million a year, and we try to do as smart as possible choices. And so far, so good. So far, we've been successful. But it's no secret recipe other than great execution.

Another great part of the iA story has been the seg fund sales. It was a dirty word 20 years ago or 15 to 20 years ago. It doesn't seem to be -- I think the products changed significantly and the profitability is there and the risk associated with certainly less. And when you get good markets like this, it's -- the risk is even lower. Why is it that you're able to outpace the market so much in terms of growth in seg fund?

Listen, Tom, you know that in the history of seg funds, there's been a lot of turmoil. But we've always stayed very, very disciplined in terms of risk management, and we did not incur huge losses like some others who offered like a 10-year per deposit guarantee with technological fund. In 2010, they paid a huge amount of money. We were far from there.

So we always stayed very, very disciplined. And I must say that seg fund has always been an add-on to the life insurance. We've always trained our distribution to go after the life insurance sales. And also add on. Okay, you've got like 20,000 there, okay, you can add on to the seg fund.

And so -- and with diversified fund as opposed to you try to choose a specific fund. And so it's well diversified more than for the -- again, for the target market we're in, which is the mass market, so we sell tons of policies of state funds across the spectrum of Canada.

And -- but again, we are building it year after year. It's all about distribution at the end of the day because we know that if we can increase 10% the relationship with distributors, well, guess what, there's going to be an increase in this segment as well.

And the last thing I would say is the technology has been a new driver of growth by making it very simple, no paper, all electronic, and we've got a great tool on that.

That's good. Just sticking with Canada here. You've had -- what differentiates you from some of the others is you've always had good relationships with car dealerships in terms of selling protection products based on car loans and then working into some other warranty type things.

Now you've got actual car loan book, $1.5 billion. Do you feel comfortable with this business? How -- is it hitting your hurdle rate? Talk about that business. And why do you do it? I mean it's not really in the lending business, if you will?

It just complements the asset mix. It's not -- I mean, I don't consider that as a -- yes, well, funny the way I'm going to see it. But in terms of the whole scheme of iA, I don't position it as a business. I position it as an asset in a diversified asset management that our team is doing. And so to me, it just bring more diversification.

Obviously, there are some people that manage that business. So it is a business to some extent. And we've -- I mean, so far, it's been quite profitable when I look at the acquisition of CTL in 2015 and all the profit that we've had. There's been a bumpy road, obviously.

But I would say that right now, we have a very good book. We've strengthened significantly over the last 3 years our book. And you see it from the quarterly results that it's been improving even in the current macroeconomic environment. And I believe that -- I mean, right now, we don't intend to increase the size of it. So we are trying to keep the $1.5 billion as much -- as stable as possible and with the same quality that we have right now, which at the end of the day, we are meeting our hurdle rate.

When you talk about it being like an asset class, just as for diversification there. I mean, generally, the assets that you want are going to be on like the same kind of duration as your liabilities. I got to think these car loans are a lot shorter duration than what your individual insurance business would be. Does it -- I mean, talk about the asset liability with this as an asset class.

I did not expect that question, but that's fine because I got the whole story. Don't worry. So because I was the one who bought CTL in 2015. And the main reason at that time was that our GIC rates were not competitive. And by matching our GICs on the individual savings side with those car loans with the proper, obviously, underwriting and pricing, we were able to become much more competitive.

So overall, we would meet our hurdle rate. And so now we have a total portfolio approach in the asset management. So it's less relevant, I would say. But still, it is. And so it backs to some type of short-term liability.

Yes. That's a good answer. If we get into group insurance, I'm going to stick with Canada here, group insurance. Yes, I'm sure you get asked this one a lot just to say that you're -- how can you -- it's a business where size and scale are so important here, investments in technology. What's your edge here? What can you bring to the table versus some of your bigger peers here in the group?

Yes. I mean I qualify myself as an alternative to the other players, I mean, larger players, let's call it that way. Because when I look at all the businesses that we're in, it's probably the one where in terms of relative market share, we're not as significant as the others.

But if we concentrate on our target market, and I come back here to this idea in the iA way of identifying our target markets first, well, we try to target the between 200 and 2,000 lives, the midsized employer, I would call it that way. In that specific space as opposed to the, let's say, large case where it's only a fee business because it's ASO, Administrative Service Only. For the 200 to 2,000, we keep the insurance risk. And so managing disability is key. And we've developed great expertise in that specific field. And so we realize that we are able to make a good profit, meeting our hurdle rate by staying in that specific, let's say, market. So that's pretty much how we position ourselves.

You do as much administrative services only as some of the other bigger ones would do? Or are you taking on just more of the risk here?

In a, we're taking more of the risk to the big players.

Yes. Yes. So Okay. That's important. And on your group business, group Life and Health, you used to have some strain. And does that -- can you remind us? It seemed to catch the street a little bit off guard, I don't know, 6 or 8 quarters ago. It doesn't seem to be as much. But when you bring on a new group, is there just because of the way you would account for it, not the CSM thing and not PAA, there's some strain.

Help us understand that what this is, and I view it as really just future profits that are going to roll back in, but what causes that and how that thing can fluctuate at times?

No, it's a great point that we've categorized the group insurance in a different bucket for accounting. It makes the strain more visible.

With that said, all my competitors have a strain, but they are merged into another line of the driver of earnings. So for us, it's more visible. But as you said, to me, I mean, it's -- okay, there are good cholesterol and bad cholesterol in health, right? So there's good strain and bad strain in the financial statement.

When it is? Because you're too competitive in the market, it's bad cholesterol and you're going to have a higher strain. But if it's because you have more profit and you just delay your profit over time, then it's good cholesterol.

So it's a balance -- you try to balance that in your statement. So to me, the level of strain that we have right now is very reasonable versus the profitability that we expect. So as long as overall, we can have the ROE that we expect, I'm fine with that. And the level of strain we have right now is consistent with the target ROE.

Great. Yes. And the last one on Canada would just be like iA Auto and Home jumps around. Does it hit your hurdle? Is this a 17% ROE business? Because P&C can be tough to get that, especially if you just predominantly in personal lines. So -- now segmented ROEs are -- I always take them with a grain of salt anyways because you don't know the -- it's the denominator that you allocate it to it is always -- there can be games played with that.

But talk to us about the -- we don't know kind of combined ratio bit stuff with that. We don't know -- we get a little bit on premium growth, but if you can share with us anything that makes the iA Auto and Home sound kind of compelling or not to investors. How would you frame that?

Well, okay, let me say that we are in the P&C auto and home personal in Quebec only, and it's been historical. And the reason why is because, let's say, 50 years ago, we started that from scratch to support our carrier network that is only in Quebec. So it's a kind of a door opener for the advisers in the carrier network. That's the history behind that.

Obviously, it's been a cyclical business over time and a lot of consolidation has happened. It's more disciplined in that market right now, especially with this always -- you never know if there's going to be a catastrophe. So there's less talk about this decreased price. So I believe it's much more disciplined than it used to be. And very importantly, we do business only in Quebec. That's the best market.

It is a better auto market, that's for sure.

Yes. In Canada, for all the other players that are across Canada, they subsidize obviously, the other provinces by having more profitability in Quebec. So we are in the best market. And I mean there is -- I mean the ROE on that business, I can't remember the last time it was below. Even if it's cyclical, I can't remember over a 1-year period, it was below our target. I don't see that.

Okay. Good. Let's go back into the U.S. and talk about your -- maybe back in your sales outlook now in individual insurance sales. I mean you brought in eFinancial Vericity. You're taking some measures here on addressing the IMO in question. Sales were rocking. Like how should we be thinking about kind of sales growth going forward with that with respect to that?

I think it's double digit, certainly, as far as I'm concerned. There's still a huge space for us in this -- in the markets that we're in. And final expenses, there are some companies that, for some reason, withdrew from the market. We benefited from that. I mean the Prosperity acquisition was one of them.

So -- and we are also adding new products to the distribution that we do business with. So we're trying to leverage, I would say, the relationship that we've built with different products as we speak. So that's why I'm saying I'm confident that we can add more than just 10% on the sell side.

And would I be right in assuming that I'm looking at a U.S. 10-year right now, like 4.40%. We were running -- this U.S. 10-year was running 150 to 200 basis points for a while. Would I be right in assuming that the profitability on that business is improving as a result of this higher longer-term interest rate treasury rate in the U.S.?

No, you're right. You're right. But we try to do a good matching, however. But you're right. When we price -- I mean, in the individual insurance space, the -- I mean, you have to reinvest the premiums. So if rates go up, you benefit from it. So all in for iA. Higher long-term interest rates or in the U.S., I would say, midterm because U.S. the duration is lower, is beneficial for iA.

Good. U.S. Dealer Services. Talk about that sales outlook. I mean, when you bought the thing -- when you catapult -- when you increased your positioning there, you got hit with COVID, that didn't help. We got a rebound. I think now sales, are they more stable? What should we be thinking about there? Because a lot of the profit is kind of front-ended to some extent with that business.

Yes, you're right. However, we have a fantastic increase in DAC. DAC is more like on the insurance side. So for those, the profit is not front-ended. So I think my CFO said at the last call that he was -- or I don't know if it's one-on-one or our last call. He's happy when we can sell more, let's say, insurance because the profit is spread over time. But you're right, for a large proportion of our business, the sales are kind of upfronted.

The way I look at sales on that specific line of business, I am pleased where we stand right now because the turnover is underway. The sales are in line -- pretty much in line with our expectation right now.

Now it's lower than last year because last year, we might recall that we had a significant pull forward because of the tariff and its impact on prices of cars in the first quarter, in particular, maybe also a bit in second quarter.

But -- so when I look at the sales, look, I compare with 2014 -- '24, sorry, 2024. So 2 years ago, we -- in first quarter, we were 10% over. So let's say, 5% per year. So I was quite satisfied. I think you should expect probably like a single-digit growth in that business. We are in the used space and the used and new, so 50% each pretty much. So it's correlated to the sales of the industry, which right now faces some difficulties, but I believe that we are in a good position with our team right now to outpace. And we did in the first quarter to outpace the market.

A question came in here about acquisition priorities, where you're looking. So to sort of paraphrase, you talked 2% out of the 10% that you got was from acquisitions. Where are you looking? Where -- how are those conversations developing? Is it more Canada than the U.S. or more U.S. than Canada?

Yes, you have to take it with a grain of salt what I'm going to see here, I guess, because 2 years ago, that question was asked to me many, many times, and I said, well, we priority in the U.S. guess what, we bought RF capital in Canada. So that's why I'm seeing. I mean to some extent, you need to be opportunistic.

So we're looking at in all businesses that we're in because we are able to generate a 15% plus ROE in terms of pricing for each product that we're in right now. Even dealer services U.S., when I look at the new sales, forget about the goodwill of the acquisition. When I look at the new sales, the ROE is higher than our target range. So eventually, we'll get there.

So I'm pleased to see that I'm looking at any business that we're in. I don't think you should expect, however, for the U.S. dealer something significant for the time being. We still need until the end of the year to figure out whether we go bigger or not. So it's a question of -- so it's not a question of interest in the business. It's more a question of are there opportunities. So I might say that U.S. life is probably an area where we see a bit more opportunities, although there are not tons of opportunities. And the distribution of wealth in Canada is also a place where we are looking actively.

Yes. Okay. Here's another one about -- just remind us about the acquisitions you made in the U.S., the accretion targets you had set, are you able -- how are you progressing towards them? So I guess I'd be referring to the Vericity, Vericity Life and maybe that eFinancial in there, too, right? Is that...

Okay. When we say Vericity, it's the combination of eFinancial, which is the distributor and Fidelity Life, who is a manufacturer. So we have to be careful here what are we talking about.

So I'm talking about both of them. And we're on track. We're on track. It's going to be accretive in 2026. So we are on track on that one. And the prosperity, I mean, it's even better than we expected. So to me, it's a success.

And RF capital, if I might just add, we are ahead significantly on what we expected when we bought the company because of better retention, because of better market conditions, because also the fantastic work that my team did on that.

Yes. Another one in here. You mentioned you benefit from players withdrawing from final expense in the U.S. Why are they withdrawing? And what makes it a good business for you when others are? Others are getting out. So why are you piling on here?

Like I said, managing distribution is key in that business. So you can get burned. If it's not the main course of your business in your company, like American-Amicable core business is funnel expense. So they know how to manage that kind of business. If you are a big organization and one division, you don't spend too much time there. It's a distraction. It's a recipe for disaster, okay? You can be screwed significantly by distributors.

So the key is to manage distribution. So that's why for us, it's been successful because the focus has been there. And some others, it's not. So they just withdrawn.

I mean at some point, we did withdraw in some business. I mean, when I became CEO in 2018, there are two business that we sold. And it's because we didn't -- we were not making money. We didn't spend enough. It was Jovian and it was the residential mortgage. We did not put enough attention to it. And so at some point, you just sell it.

I seem to remember you were in the annuity market at one point in the U.S., too, and I think you got out of that business, too, right?

2012, if I recall correctly, I had a block of business.

Yes. So managing the -- and how long -- American-Amicable has been around for years before you bought them as well, right? Is that...

Yes, many, many -- I can't -- I wasn't there, so I don't know how many, but they were -- they have a long history.

Yes. Any others? I don't see another one coming in here. I might just ask a little bit about iA in terms of its kind of culture.

Correct me if I'm wrong, but are you still -- are you like mandating that everybody is back in the office 4 or 5 days a week? Or how does...

Absolutely not.

Yes. And that's different than a lot of the -- or less, Southern Ontario, Toronto or even Vancouver to some extent, people kind of think about these things.

So how is that working? How have you been able to maintain culture through that? And why are you doing that? And are you -- why do you feel it's probably more beneficial than forcing everybody back in the office?

Well, we -- first of all, the company is doing very well. So if you want to do a drastic change when things are doing very well, you need a good reason. And I don't have any evidence that culture is at risk. In fact, I believe that there are some areas in terms of culture that has been quite beneficial with the COVID.

And I'll give you an example. Before COVID, if I wanted to talk to all employees because I did in 2018, 2019, I needed to travel across the whole continent, okay? And you get exhausted and you don't really talk to everybody because there are -- we have so many offices. We have Quebec City, Montreal, Toronto, Vancouver, and we have some regional offices. And then in the U.S., we have Austin, we have Waco and Chicago now. It's exhausting. And you do that only once a year.

Now you know what, I talk to my employees every 6 weeks. I've got a town hall. It's like 45 minutes, always topic that is -- it's a soft topic, let's call it that way. I don't report on EPS or ROE to my employees. I talk about culture. I talk about what is important. I talk about leadership. I talk about -- we have the business, the growth of the business, what I expect from them directly, it's not something that goes through all the hierarchy of the organization. So to me, there's a huge opportunity to spread the culture with the technology.

And I'm not the only one using it. I know that my EVP are doing town halls also for their own division. So I mean, I feel much closer to my employee even though I don't see them as often as before.

So it's a balance. You have to find the right balance between being present at the office and doing the, let's say, the concentration work at home. And our survey of employees are through the roof. I'm telling you, I mean, my employees are very, very, very happy about the conditions.

That's great. I got one in here about -- asking about your private credit exposures in the portfolio and any risks there. Now private credit is sort of a term that sort of developed here as a result of more of these alternative investment managers developing insurance arms and then seeding that business offshore and taking some capital and risk arbitrage that the NAIC would allow that I don't think OSFI would allow. But private credit can assume like private placements, private loans, lots of things, probably stuff that you've been doing for a while, but you can.

Yes, we only have a very small portfolio of what we call private credit. It's not private debt, private debt.

And how do you define that? How do you define this private credit?

It would be commercial loan, let's call it that way.

And we have a very small -- I think it's -- I mean, we disclosed that number. I think it's $290 million. It was in the package for the quarter. And we said explicitly that it was not a big deal for us. So nothing to worry.

Okay. Not seeing any more here. Maybe just general comments on credit risk within your asset portfolio. It's pretty benign now. We started this call talking about the financial crisis when -- and I can remember years ago, there's -- I had -- I don't know, it's like Teleglobe exposures and things like that, always looking for these fallen angels and then to what extent you might have exposure to them. But credit seems to be pretty benign. And so your thoughts with respect to how investors should be looking at...

It's funny that you mentioned Teleglobe. It's because I remember it was a hiccup once -- I mean, I think our reputation was that we've always been quite conservative in our investments. And we've had some hiccup with Teleglobe and there was no she, I think.

That was like over 20 years ago though.

Yes, yes. I mean I'm talking about doing during the crisis, during that time. And we've managed the investments, let's say, I would say, a bit more consistently with what some other players are doing in the industry to generate a bit more return and also to diversify even more our portfolio.

We're very pleased where we are right now because we believe that with the total portfolio method to match asset and liability, it provides better value, less volatility in terms of earnings recognition. So to me, I see no issue on the investment side. very comfortable.

Yes. And what do you say to those who sometimes look at the difference between your reported and your core number and say, that doesn't show good quality. But then if you go look at your capital that you're generating and your book value that you're growing, which is really where the rubber meets the road, that's growing nicely. So how do you address that issue with respect to investors?

Sorry, which issue?

The -- those who say you're reported in your core, the difference there suggests low quality. But then I answer by saying, look at your capital growth and look at your book growth.

Differently.

Yes, that's -- those are more important, I think. How do you feel about that?

I don't -- I feel very confident. I have two answers to that, and I think you already gave them. I guess, when I look at the book value growth over time, we've grown significantly and better than our peers. It's very clear. I mean, it's in our package somewhere in a corporate presentation.

Because at the end of the day, what really matters, I remember once I was with an investor and he entered the room one-on-one and he said, well, you guys, sometimes you're complicated. But you know what, the one number I'm looking at is the growth of book value because it encompasses everything. And it's the growth of book value over a long period that you should look at, okay? So that's number one.

Number two, it's very normal in our business to see fluctuation of -- between reported and the core on a quarterly basis because of the macroeconomic environment. And I don't pay attention to that, to be honest with you, because over time, we are confident that we can meet the nonfixed investment return that we set, which is between 8% and 9%, I can't remember.

So when we have a loss in a quarter, it's because -- it's not because we have a loss, it's because we have a return that is lower than the expectation. That's what happened in the last quarter. We had an experience loss of $87 million, but it was just that the assumption that we -- I mean, it so that the result of the quarter was lower than the assumption we have. We had the positive return.

So to me, it's going to -- it happened that in some quarters, it was the reverse. And when you look since IFRS 17 came up, we have a positive cumulative. So that's the way you should look at -- that's the other way to look at it. Look at the positive cumulative on the macroeconomic environment, and then you make your own judgment.

Yes. Denis, is there anything else you want to leave -- any message you want to leave us with? There are no more questions coming in here. So how -- what would you say to investors, particularly with respect to the little bit of negative share price reaction we saw post your quarter print and what you're thinking about iA going forward?

It was a great opportunity to buy stocks, which I did. So it's sometimes it's strange that those brutal movement after a quarter, which was a strong quarter as far as I'm concerned, you had a hiccup on the lapses in the U.S. But guess what, to me, it's only a hiccup.

We have a very strong business model. And the one thing to retain for investors is that -- it's not by coincidence that we have outperformed our peers significantly over the last 25 years. To get a 3.5% additional return year after year in average, you need to do something different, and we are different in the target markets we choose and the way we do business, I mean, just listen to the Investor Event of 2025, we've explained it in great detail how different that we are. We tend and we aim to be different than our peers in the choices that we make. It's in our DNA, okay? So anyway, I'll leave it to you with that. And thank you for attending this fireside chat.

Thank you so much. Thanks for joining, everyone. Thank you, everyone. And thanks again, Denis. All right. Take care.

Okay. Bye.

Bye-bye.

[Interpreted] Hello to all, welcome to our joint annual meeting. My name is Jacques Martin. I am the Chairman of the Board of Directors of iA Financial Corporation and Industrial Alliance Insurance and Financial Services. I salute all participants, shareholders, participating policyholders, partners and employees who joined us today in person and via webcast. I would also like to acknowledge the presence of several of our directors and officers. Thank you for being here. I'll be pleased to guide you through the terms of this joint meeting of iA Financial Corporation and Industrial Alliance Insurance and Financial Services in order to provide the opportunity for all shareholders and participating policyholders to participate in the meeting in the way they prefer and with flexibility. We have chosen to hold our meeting in a hybrid manner.

I will be the President of Quebec City. I'm accompanied by Denis Ricard, President and Chief executive officer; and Ms. Amelie Cantin, Corporate Secretary. Before I begin, I share with you technical and administrative information necessary for the smooth running of session. I otice this meeting has been duly given the minimum number of shareholders and participating policyholders required to constitute a quorum for this meeting is met. I therefore declare this assembly open.

I bring to your attention the agenda of today's meeting, which is projected on the screen. The rules of conduct for the virtual portion of the meeting, including the online voting procedure and questions have been published on our website and are available through this webcast. As said [indiscernible] back of this room. If you are participating online, you can choose to see the entire webcast in French or English by clicking on the language button shown on the top right-hand corner of your screen. When you log into the meeting, you can choose to listen to the webcast in either original audio, French or English. If during the meeting, you would like to change the chosen bottom, you will be able to do so by clicking on the audio button shown on the bottom right-hand corner of the videocast screen. You may also submit your questions in both languages.

Please note that a question period is scheduled during the consideration of each proposal submitted to the vote of shareholders and participating policyholders as well as at the end of the meeting. This last question period is intended to receive your comments and to answer general questions that have not been answered during the meeting.

For those of you who are participating in person, we ask that you keep for this period of questions on questions on topics that do not appear on the agenda. For those attending the meeting virtually, you can submit your questions at any time, and we will deal with those that do not touch on the topics that appear on the agenda during the question period at the end of the meeting. It will be possible for you to ask your questions in writing or orally through the webcast. To this end, I encourage you to submit your questions or comments now so that we can deal with them at the appropriate time during the meeting. If you would like to submit your questions in writing, please use the dialogue box at the bottom left of the screen.

Please note that in order to access this dialogue box, you must turn off the full-screen mode of your device. If you wish to ask a question orally, we ask you to press the speak button located at the bottom left of your screen. You will need to log in and press the log-in button. You will then have the opportunity to check the configuration of your microphone can press the connect button again to be put in contact with a technician who will connect you to the assembly room at the appropriate time. In both cases, before submitting your question, please indicate whether it relates to a proposal that will be discussed and voted on or whether it is a more general nature, in which case, we will answer it during the question period at the end of this meeting. Whether you're attending the meeting virtually or in person, please identify yourself and tell us if you're a shareholder, participating policyholder, proxy holder or guest.

Also, I'm asking you to ask one question at a time. We want to ensure that all participants who wish to ask a question have the opportunity to do so. Your question should be about the company's activities or business and should not be of a personal nature. Questions and comments received through the dialogue box of this webcast will be read by the corporate secretary at e appropriate time. If we have a number of questions that deal with an identical or similar topic, Ms. Cantin will group and summarize those questions, and we will answer them at the same time.

Individuals who held common shares and participating policyholders eligible to close offices on March 10, 2026, the reporting date, will be able to vote online or in person on matters that affect them. Eligible participating policies are policies issued or assumed before June 13, 2019. The proxy holders of the shareholders and participating policyholders will also be able to vote online or in person. Persons attending the meeting as guests may not vote. We will provide you with additional instructions in a few moments.

I now draw your attention to the cautions regarding the forward-looking statements and on IFRS Financial Information and other financial measures that appear on your screen and on Pages 20 and following of the annual report. Today, we will make forward-looking statements that involve risks and uncertainties that may result in actual results that differ materially from those projected. Certain assumptions and important factors have been applied to the conclusions, forecasts and projections contained in these statements. We assume no obligation to update these statements except to the extent required by law. We invite you to carefully consider these assumptions, factors, risks and uncertainties in our press release issued earlier this week.

In addition, our comments today will include non-IFRS financial information. These are to be seen as a complement, not a substitute to financial measures established in accordance with IFRS. Reconciliations between the two can be found in our results press release, which is available on our website and on SEDAR+. Documents related to this meeting are available online on the company's website in the Investor Relations section and via the webcast platform. The video recording of this meeting will also be available shortly after the meeting on the company's website for a delayed listening.

I will remind you that iA Financial Corporation is the parent company of the group and is the sole holder of common shares in the Industrial Alliance Insurance and Financial Services, which I will name from now on iA Insurance. The meeting will therefore be held concurrently for both companies. Mr. Steve Gilbert and Mr. Vlad from Computershare will act as scrutineers for this meeting.

I will now take a few minutes to share my comments and thoughts with you on 2025. The Board of Directors is pleased that this year has once again been a remarkable year for iA Financial Group. The company delivered strong operational and financial performance, demonstrating disciplined execution of its strategic approach. Also, we note the strong growth in the company's business across all of our activities in Canada and the United States. In a few moments, Denis Ricard, President and CEO, will present the strategic directions of the company and comment on its performance and its main achievements of the year. For my part, I draw your attention to the company's dynamism in terms of capital deployment. We deployed our capital strategically to support organic growth, the completion of two targeted acquisitions, digital evolution, dividend payments and normal course share buybacks.

In Canada, iA Financial Group acquired RF Capital Group, which consolidated its leadership in independent wealth management in Canada. iA also acquired Global Warranty, expanding its presence in the used vehicle warranty market and diversifying our service portfolio. These acquisitions advance the company's strategic approach to sustainable growth by expanding its reach in target markets and elevating its proven distribution model.

In summary, the Board of Directors wishes to highlight not only the company's excellent financial performance, with results that have met or exceeded our key financial targets, but also the relevance of its strategic directions and its ongoing commitment to return capital and create sustainable value for you, our shareholders.

The strength of our capital position supported by a constant generation of capital allows us to support future growth and deploy significant resources to ensure the long-term development of the company. Thanks to its strong business model, the company continues to grow and make its mark year after year.

At iA Financial Group -- integrated as an integral part of the thinking, discussions and actions of our various business units. The Board of Directors fully endorses this course of action and is pleased with the commitment of the senior management and staff. Here are just few examples of the corporation drive and commitment to sustainability. [Foreign Language]

On the environmental front, the company has consolidated its approach to climate risk, thus strengthening the resilience of its activities and the creation of sustainable value. iA Financial Group has completed the standardized regulatory exercise of climate scenario analysis and has carried out its own internal analysis covering both invested assets and property and casualty insurance activities. On the social front, iA Financial Group has strengthened its learning culture and enriched its professional and personal development programs. The year was marked by new mentoring initiatives, equity and diversity and inclusion measures as well as increased awareness and training on diversity, health and wellness at work.

So by the Board of vector management and employees. A strong governance framework links the culture of integrity to the corporation purpose, governance structure and key governance policies and practices. The cooperation adders to governance best practices to preserve the independence of the Board and its ability to effectively oversee the corporation's activities. [Foreign Language] In fact, iA Financial Group is ranked 10th out of 206 companies in the Globe and Board Games. This is an important ranking of the largest Canadian companies listed on the Toronto Stock Exchange in terms of the quality of their governance practices.

A few words now on the activities of the Board of Directors. In September 2025, we announced the appointment of Ms. Joanne Papillon and Mr. Yusri Bissada, to the Board of Directors of iA Financial Corporation. Then in March 2026, we announced the nomination of a new candidate to the Board of Directors of iA Financial Corporation Inc. Mr. Kenneth Kroner. In addition, Mr. Benoit announced his intention not to stand for reelection to the Board at the May 2026 Annual Meeting of Shareholders. Mr. Denoit had been a member of the Board since May 2019. On behalf of all members of the Board and on my own behalf, I would like to thank Mr. Daniel for his considerable contribution to the Board's work over the years. As of December 31, 2025, the percentage of women on the Board of iA Financial Corporation was 47%. And if all nominees for director positions are elected, this percentage will remain unchanged in 2026. On behalf of all Board members, I would like to thank shareholders and policyholders as well as customers for their support and trust. I would also like to congratulate and thank all the staff of iA Financial Group. The challenges of 2025 have been met with brilliance, great efficiency and constant commitment. I now invite Denis Ricard to present his observations and comments.

[Interpreted] Thank you, Jacques, and good morning, everybody.

It's a pleasure to be with you today. Thank you for being with us today for our annual meeting. Your trust and commitment are at the heart of our ability to build a strong, successful and forward-looking organization. The theme of our annual report succeeding now and tomorrow, sums up the spirit that drives us, delivering results today, while disciplinely preparing for the growth of tomorrow.

In 2025, iA Financial Group achieved remarkable growth. Our assets under management and under administration have grown significantly. And most importantly, we have confirmed the strength of our business model through rigorous execution, both in Canada and the United States. Our stock market value reached $16 billion at the end of 2025, illustrating how far we've come and our impressive trajectory.

At our investor event, ready for more the iA. We shared new more ambitious financial targets that truly demonstrated our company's potential. Looking back to our first public offering in 2000, we've achieved outstanding total shareholder returns, setting the standard within our industry. These results are a direct outcome of our disciplined management approach and our unwavering dedication to building sustainable long-term value for all shareholders. .

Our results arise from a clear alignment around four strategic priorities: capital deployment, client experience, operational efficiency and the development of a learning organization. Let me illustrate them briefly.

First, the deployment of capital. We continue to invest where we see profitable growth, in our business, in technology and in targeted acquisitions. In 2025, we notably completed the acquisitions of RF Capital Group and Global Warranty. We also maintained a disciplined execution of return of capital to shareholders via dividend and share buybacks. At the year-end, our capital available for deployment was approximately $1.4 billion on a pro forma basis, giving us flexibility to pursue our growth ambitions.

Second, the client experience, we launched our new brand signature, taking the lead. It is not just a slogan. It is a promise to be a trusted ally to simplify access to relevant solutions and to accompany our clients and advisers with the same determination in the moments that matter. Third, operational effectiveness. We maintain rigorous discipline in all our operating units. Investments in digital transformation are paying off. We are deploying artificial intelligence in key areas such as underwriting, risk assessment and process automation while strengthening the digital experience. Our ambition remains clear: to be the leader that best combines human experience and digital experience.

Fourth, their learning organization. We continue to build a workplace that promotes knowledge sharing and learning as well as a safe and inclusive environment. In 2025, we also evolved our work model to further support performance while maintaining flexibility tailored to an organization with multiple locations in Canada and the United States. Our hybrid approach to office presence strives for an optimal balance between individual and collective performance.

Financially, 2025 was a year of great quality. We achieved record profitability with net income attributed to common shareholders of $1,053 million and core earnings of $1,210 million, diluted earnings per share were $11.29, and our return on equity to common shareholders was 14.9%, while return on equity to common shareholders, ROE from core plus activities was 17.1% in 2025 compared to 15.9% a year earlier. This performance is driven by strong business growth across all of our sectors. In Canada, our sales were supported by diversified and high-performing distribution networks, the performance of its digital tools for advisers, customers and employees as well as its extensive and distinctive range of products.

In the United States, we have made significant progress in both individual insurance and dealer services, confirming the significant potential of this market for iA. Strong sales and customer loyalty helped net premiums, premium equivalents and deposits to exceed $22 billion in 2025, an 8% increase over 2024. In addition, total assets under management and assets under administration exceeded $341 billion at the end of the year, which is a substantial increase of 31% over the last 12 months. The company maintained a robust financial position throughout the year. The company's solvency ratio remains well above the regulatory minimum at 137% at December 31, 2025, on a pro forma basis. Finally, our dividend to common shareholders increased by 13% compared to 2024, reflecting our willingness to share the value created.

We also continue our commitment to prudent governance and sustainable value creation. In 2025, we strengthened the integration of ESG criteria into our operations, improved data collection and validation and consolidated our approach to climate risk management. To it's commitment to being a learning organization, iA Financial Group has enriched development programs for employees in order to support their professional and personal progress and enable them to reach new goals. Skills development is thus encouraged not only to attract and retain talent, but also to properly prepare the next generation within the organization. At the community level, we've continued to give back. Our philanthropic contributions totaled $11.4 million. Also I want to highlight changes to the Executive Committee. Philip retired on December 31, 2025. I sincerely thank him for his instrumental contribution to the evolution of our risk management function. Since October 1, 2025, Benoit has served as Executive Vice President and Chief Risk Officer. Our background expertise and leadership testified to the quality of our next generation and our commitment to developing talent within the organization.

I would also like to take the time to get back on the changes within the management team announced on Tuesday. These announcements illustrate our ability to develop our leaders internally to foster mobility and to attract world-class talent. As of June 1, we created a new Executive Vice President for Business Development through acquisition. We are glad to welcome Benoit Hudon at iA. Benoit is coming to the table with the international experience in strategy, performance management and mergers and acquisitions. He will play an important role in the way we deploy our capital in the next years. Simultaneously, when it comes to the evolution of our team, Pierre Miron informed us of his decision to retire at the end of 2026 after an exceptional career at iA. Pierre will remain a full member of the Executive Committee until the end of the year, and he will take on the role of strategic adviser to ensure a smooth transition. His contribution to our digital transformation to our operating model and to our growth has been a pillar. I would like to thank him for his excellent work over the course of his 8 years with the Executive Committee. Denis will take over for -- he will expand his responsibility as Chief of Growth and Canadian Operations, Denis Denis combines a big operational a clear vision of the strategy and capital allocation. He is well positioned to continue supporting growth within our Canadian operations. In a whole, these changes strengthen our focus on sustainable growth in North America and are in line with our strategic priorities.

Going forward, our course remains the same, growing with discipline, simplifying our clients and advisers experience, taking full advantage of digital technology and our performance culture. We approach the future with ambition, remaining attentive to the evolution of the environment in which we work. Our diversification, financial strength and execution capacity are positioning us to continue to succeed now and in the future. This completes our review of 2025.

Here are a few highlights from the beginning of the year. iA Financial Group ended the first quarter of 2026, with a net income attributable to common shareholders of $137 million and core earnings of $298 million. Diluted earnings per common share amounted to $1.49, while diluted core earnings per common share amounted to $3.25, which is 12% higher than the same period last year, ahead of our midterm target of 10% plus. Core ROE for the trailing 12 months was 17.5%, already meeting the 2026 core ROE target of 17% plus. The solvency ratio was 134% at March 31, 2026, reflecting a strong capital position supported by solid organic capital generation. The total available -- the capital available for deployment to create and return value to shareholders was $1.2 billion at March 31, 2026. In this context, we also announced an 11% increase in the quarterly dividend bringing it to $1.10 per share, reflecting our confidence in the sustainability of our earnings power.

In terms of business growth, total assets under management and administration stood at more than $346 billion on March 31, a solid 31% increase over the last 12 months. Premiums -- representing a 10% increase year-over-year. First quarter sales were good in both Canada and in the U.S. Record seg fund gross sales of $2.4 billion were recorded, and activity remained robust in individual insurance in Canada, with a 5% increase in the number of policies issued year-over-year. Book value per share was $78.9 on March 31, representing an increase of 6% over the past 12 months.

We achieved strong growth in the recent years thanks to our different ways of doing things, and we're ready to accelerate this beautiful growth trajectory. I'll close by thanking our employees for their professionalism, our advisers and partners for their commitment as well as our customers for their trust. And of course, I thank you, our shareholders, for your continued support. I will give back the floor to Jacques Martin. Thank you very much.

Thank you, Denis. We'll now proceed to the tabling of documents that must be presented at this assembly for iA Financial Corporation, the financial statements for the year ended December 31, 2025, and the external auditors report part of the 2025 annual report, that is presented at this meeting. They were sent to the shareholders who requested them within the time limits prescribed by law. In addition, a link is available on the webcast platform to access it. For iA Insurance, the sole holder of common shares of which iA Financial Corporation as part of the financial statements for the year ended December 31, 2025, including the report of the appointed actuary and the report of the independent auditor are presented at this meeting.

I declare these documents tabled at the meeting and I ask her the Corporate Secretary, Ms. Amelie Cantin to include them in the record of this meeting. Let's move on to the formal part of this assembly. The Corporate Secretary will act as a proponent to submit to the vote of shareholders and policyholders with participation, the proposals provided for on the agenda, except for the proposals submitted by a shareholder. I now invite Ms. Cantin to explain the voting procedure.

Thank you, Mr. Chair. Today iA Financial Corporation shareholders and holders of iA insurance participating policies eligible to vote. Those who can vote or their proxy holders will be able to vote online or in person. To they found that you have already voted on a voting instruction form or a proxy vote form, your vote has already been counted, and you don't need to vote again unless you wish to change it. I'd like to remind you that only persons who held common shares of iA Financial Corporation on March 2026 or their proxies are entitled to vote on the matters presented today. With the exception of 1/3 of the directors of iA Insurance, who will be elected by participating policyholders eligible to vote.

Under the Quebec Act respecting insurers, 1/3 of the directors of an insurance company must be elected by the holders of eligible participating policies. These holders will not vote on the other proposals relating to iA Insurance, and will now have the right to vote on the proposals relating to iA Financial Corporation. Specifically, for iA Financial Corporation, shareholders or their otherwise representatives will be called upon to vote on the following items: the election of directors, the appointment of an external auditor, an advisory resolution on the company's approach to executive compensation, and the shareholder proposals. For iA Insurance, eligible participating policyholders will be required to vote for the election of 5 of the 13 directors. iA Financial company as a sole holder of iA Insurance common shares has the right to vote for the election of 8 of 13 directors and on the appointment of the external auditor of iA Insurance. It's already exercises vote through written resolution, which has been forwarded to the President of the assembly. You'll be able to vote on any of the items put to vote. Even if we haven't yet discussed this item in this meeting as long as the votes remain open. For those participating virtually, you must have logged on to the webcast using this 15 or a 4-digit control number that you got from Computershare prior to the meeting. That way, you can vote.

For those who are participating in person, you can vote by means of a ballot that was given to you by a representative of the company upon arrival. If you need a ballot, please raise your hand, and someone will come to see you. For those participating virtually, you can press the vote button on the left under the webcast screen. A window will open on the right side of your screen, and the webcast will continue simultaneously. You need to press start to begin voting. You will then be able to read the question and press the option that corresponds to your choice. Once your selection is made, you can move to the next question. If you want to vote in accordance with recommendations from management, you can press on votes as recommended by council and management. Then press yes, vote for everything, and all your votes will be submitted according to management recommendations. If you want to move from an item to the next, just scroll through your screen. You can also press summary in order to navigate among the items submitted to the vote. Finally, if you leave the voting window by mistake, you can pick up where you left off by reopening it. If you don't select any options, your vote will not be recorded. The vote is now open. Preliminary results will be announced at the end of the meeting. Financial results for iA Financial Corporation will be filed with the Canadian securities regulatory authorities at a later date. They'll be available on sedar+.ca.

Thank you, Amelie. We will move to the election of directors. By resolution of the Board, the number of directors for the coming year has been fixed at 15 for iA Financial Corporation and 13 for iA Insurance. This number was determined, taking into account articles regulations, the policy on the compensation and renewal of the Board of Directors and applicable legislation.

Let's start by the election of the 15 directors of iA Financial Corporation. Only holders of common shares of the corporation as of March 10, 2026, may participate in the selection. 12 of the 15 nominees for the position of director were elected at our last annual meeting, and we recommend that you reelect them this year for a 1-year term. Last September, the council welcome Ms. Joan Papillion and Mr. Yousry Basada. Ms. Papilion is a Corporate Director with over 25 years of experience in financial services in Canada and abroad. She spent more than 10 years in positions of increasing responsibility at Sunlife Financial, including Senior Vice President from 2020 to 2022, where she was in charge of business and financial impacts of IFRS 17 and IFRS 9 accounting standards. She's a graduate in actuarial sciences from Concordia and as a fellow of the Canadian Institute of Actuaries and the Society of Actuaries. Mr. Bissada has been President and CEO of of the Home Equity Bank. He was there since January 2026. He previously led Home Trust and Home Bank from 2017 to 2025 and Home Capital Group Inc. from 2017 to 2023 successfully leading the organization through a period of crisis and transformation. He is a chartered professional accountant and a certified general accountant. He holds the Institute of Corporate Directors ASA designation and the Certified Professional of Canada Designation. We're also pleased to recognize the nomination of a new candidate, Mr. Kenneth Kroner. Mr. Kroner is a Corporate Director with extensive global investment leadership experience. He worked for 22 years of BlackRock, where he served as Senior Executive Director and was on the Global Executive Committee until his retirement in 2016. He holds a Bachelors in Mathematics and Economics from the University of Alberta and has a doctorate in economics from the University of California and San Diego. I invite you to consultant management circular for the solicitations of proxies for more details on the bios of new candidates. As indicated in the management circular for the candidates you see on this slide that I will name are recommended. Yoursry Bissada, William -- Joan Pappion, Matt Pullen, Uma Sananikone Rebecca Schuster, and myself.

I invite to propose the election of directors of iA Financial Corporation. Mr. Chairman, I propose the election of the 15 candidates you have just nominated and who are indicated in the management circular for the solicitation of proxies.

Thank you, Amelie. Do we have any questions from participants on that note.

No, we have not received any questions or comments.

We would like to remind you that at any time during the assembly of this meeting, you can access the vote by pressing the vote button. Let's continue with the election of iA Insurance directors elected by participating policyholders. Under the Insurers Act, 5 directors will be elected by participating policyholders and 8 will be elected the sole holder of common shares, iA Financial Corporation, candidates are identified in the document for participating policyholders dated March 10, 2026.

I invite Ms. Contin to propose the election of the 5 directors of iA Insurance to be elected by the participating policyholders Mr.

M. Chair, I move the election of Martin Gannon.

Thank you, Do we have any questions related to the election of iA Insurance directors by participating policyholders?

No, we have not received any questions or comments. Thank you. If you are a participating policyholder, you can vote on this proposal.

We will now proceed to the election of the 8 directors of iA Insurance to be elected by its sole holder of common shares to the a written resolution has already been adopted by iA Financial Corporation, the sole shareholders of iA Insurance through its following directors have been appointed William Chanri, Alka Gotham, Deneka, Rebekah and myself. A copy of the resolution will be tabled with the minutes of this meeting. iA Financial Corporation shareholders and participating policyholders do not vote on this item.

Let us now proceed to the vote on the appointment of the external auditor of iA Financial Corporation for the current financial year. I would like to take this opportunity to welcome the representatives of our new external auditor, Ernst & Young; Mr. Guillen Martel; and Mr. Simon Gerard as well as our external auditor for 2025 Deloitte, Ms. Sophie Fortin, and Mr. Carlo Magna. Thank you for being here. Before proceeding with the appointment of Ernst & Young for the current fiscal year, I would like to remind you that we conducted and completed a robust bidding process, leading to the decision to recommend the appointment of Ernst & Young as an external auditor for fiscal year 2026.

During fiscal year 2025, Ernst & Young began a transition process with Deloitte to ensure an orderly transfer Deloitte's term of office ended on February 18, 2026, following the release of the company's annual financial statements. Following the end of his term of office and in accordance with the recommendation of the Audit Committee, the Board of Directors appointed Ernst & Young to fill the position of external auditor and to act as such until this meeting. This is further explained in the management proxy circular on Page 9. And following in French and 8 and following in English, and the additional documents are attached as appendix to the management proxy circular. Accordingly, the Board of Directors recommends that you vote for the appointment of Ernst & Young as an external auditor for the 2026 fiscal year.

The company wishes to express its sincere gratitude to Deloitte for its dedicated and invaluable services as an external auditor and the high quality of the audit services provided over the years. I now invite Ms. Contin to propose the appointment of the external auditor of iA Financial Corporation for the current fiscal year. Mr. Chair, I move that the firm of Ernst & Young be appointed as the external auditor of iA Financial Corporation for the 2026 fiscal year until the next meeting is adjourned and that its remuneration be determined by the Board of Directors.

Thank you, Amelie. Do we have any questions from the participants on that topic?

No, we have not received any questions or comments.

Only holders of ordinary shares of iA Financial Corporation may vote on this proposal. Let us now proceed to the appointment of the external auditor of iA Assurance by its sole holder of ordinary shares for the current financial year. To this end, a written resolution was adopted by the sole holder of ordinary shares and the firm Ernst & Young was duly appointed as the external auditor of iA Insurance. A copy of this resolution will be tabled with the minutes of the meeting. iA Financial Corporation shareholders and participating policyholders do not vote on this item.

The company is asking shareholders to participate in an advisory resolution on the company's approach to executive compensation. The Board considers this vote to be an important part of its shareholder engagement process. The compensation of iA Financial Corporation senior executives is described in the management circular for the solicitation of proxies of the corporation on Pages 97 and following in French and Pages 89 and following in English. However, I would like to highlight some important points. In 2024, iA Financial Group exceeded $10 billion in market capitalization and surpassed $15 billion at the end of 2025, driven by the increase in assets under management and assets under administration as well as net premiums and premium and deposit equivalents. In 2025, iA Financial Group demonstrated excellent performance generating a high total return, including dividend reinvestment for its shareholders of 36.8%. Sales remained at high levels in almost all operating units, particularly in individual insurance in Canada and wealth management where we continue to occupy a significant position in the segregated fund sector with nearly $7 billion in gross sales and over $4 billion in net sales.

In February 2025, at the ready for more the iA event for investors, we presented our financial targets for 2025 in the medium term, highlighting our growth trajectory and capital discipline in Canada and the United States. In the U.S., sales of life insurance policies exceeded those of Canada in 2025. Assets under management and administration reached more than $341 billion, up 31% year-on-year.

We are pursuing our strategic plan based on four pillars: the overall customer experience, operational efficiency, optimal capital deployment and learning organization. The launch of the brand signature taking the lead illustrates our ambition as a North American leader in life insurance and wealth management. This signature reflects our commitment to combining human and digital experiences for the benefit of clients, advisers, employees and communities. The acquisition of RF Capital has strengthened iA wealth management position, while our initiatives, including digital transformation and the implementation of a flexible working model support agility and quality of service. These efforts have been recognized by Forbes, which named us one of Canada's top employers in 2026. These results are based on the vision and commitment of the management team, which directly contributes to growth and shareholder value creation.

Executive compensation is aligned with shareholder visits interest and our long-term goals through a balance of financial, operational and strategic measures. Our approach is transparent and rigorous. The Human Resources and Compensation Committee made up of independent directors overseas the compensation program with the support of a Canadian financial industry reference group and an independent external consultant. I now invite Ms. Cantin to move the advisory resolution on executive compensation.

Mr. Chair, I move that the resolution on the advisory vote on the corporation's approach to executive compensation described on Page 12 of the French version of the management proxy circular dated March 10, 2026, and on Pages 10 and 11 of the English version be adopted.

Thank you, Amelie. Do we have any questions from the participants on that topic?

No. We have not received any questions or comments.

Only holders of ordinary shares of iA Financial Corporation may vote on this proposal. The last item on the agenda concerns the vote on 3 shareholder proposals. Shareholders have had the opportunity to read these proposals in Appendix C of the management circular for the solicitation of proxies dated March 2026. You will also find for each proposal iA Financial Corporation's response and position. All of these proposals were submitted by the Movement Education [Foreign Language] or MEDAC. In order to be adopted, these proposals must be supported by a simple majority of the votes of the holders of ordinary shares. Abstentions and proxies without specific instructions will be voted against the shareholder proposal in question. We are pleased to have with us today by video conference a representative from MEDAC to present shareholder proposal #1 to 3. Mr. I now invite you to present your proposals.

Hello, Mr. President, Mr. Chair, can you hear me clearly? Yes. Thank you. Great. I'm working on the account MEDAC account. The shareholders of the society over several years, we've been in activity over 30 years. I am not only for the last 20 years, but I'm also a founder for another organization, I also police in a personal title. We have 3 proposals, as you were saying, 2, which we already presented to you in the past. I won't spend too much time on those two proposals besides explaining why we are submitting them to you. Our next proposal was named reinforcing shareholders' participation in the annual assemblies of shareholders. We assisted for the first time in our history last year in a business that had defaulted. And this took us to ask a question. The reason for which it took place? All sorts of hypotheses are possible with systemic hypothesis, we sent to our society with our first measure of procedures to implant. Annually, most of these measures are what is done by most societies, most businesses. The last suggestion that we offer you is to publish a small chart where it would be easy to seize in one scan, whether we're rising or dropping, it's difficult to know this information is available, but it is spread through several documents over several years. It's difficult for shareholders to conceive such a chart, to create such a chart, but to share out this information for corporate or personal shareholders. We note that we added to the information offered by Broadridge, which offers the information for such a chart that participation rates of individual shareholders in the assemblies and to shareholder democracy seems to be dropping. So we accept it to not go to vote with this proposal. However, if the company had accepted to produce such a chart, which wouldn't cost much to produce, it would be much easier for the corporation to produce such a document rather than the shareholders themselves. So we would have appreciated being able to see this chart published. We haven't had many votes on this proposal in -- amongst other businesses, but we will continue to hope that such a chart be published. It's not a very big effort. We invite all of the shareholders to support this proposal, and we ask for proposal 2 that the consultation vote be implanted by this business every year. Last year, we had about 23% support on this proposal. So we're returning with the same proposal. The arguments are the same as in the past. And proposal #3, environmental competencies and administrative competencies that you're publishing holds an ESG information in terms of the environment. There's also other competencies that are here. And administrator could have no competencies environmentally, but may have this square tick because they have other competencies elsewhere, which would come under the umbrella of general competencies. So if this competency is particularly noted in your documents, we obtained 8% last year on this proposal. So we invite all of the shareholders to support our proposal. I'm very disappointed to not be able to be with you today in person. I did everything I could, but it wasn't possible. And we salute the fact that you have in-person assemblies. This is something that is not always easy days, but nevertheless, even if I'm not there, we're happy that the assembly is also being held in person and not only online. I will return. Thank you very much for all of the time that you have offered us.

I thank you, Amelie, do we have any questions from participants as to this proposal?

No, we haven't received any questions or comments.

We thank you, Mr. Cantin, for the constructive comments and the kind exchanges you have with the governance. I remind you that the business invites you to vote against Chart 1, 2 and 3. Only shareholders -- only holders of ordinary shares of iA Financial Corporation may vote on these proposals. Please note that if you voted by proxy prior to the meeting, and do not wish to change your vote, you do not need to take any action. You now have an extra minute to submit your votes, after which the voting will be closed for all votes in this assembly.

Okay. And now it is time for the question period. For those who participate through the webcast. I invite you to submit your questions if you have not already done so, you can do so in writing using the dedicated box under the webcast screen or verbally by pressing the speak button displayed on the webcast. Questions and comments can be submitted in French or English. For those in the room who want to ask questions, please go to the microphone. Regardless of the method used, I ask you to identify yourself and to tell us whether you are a shareholder, an equity policyholder, a proxy or a guest.

I would also ask you to ask 1 question at a time and to be brief in your comments that everybody can be heard. If necessary, I will be able to group substantially similar questions and apply time limits in accordance with the rules of conduct. Denis, Amelie and I, as the case may be, we'll answer questions. Questions received from participants that could not be answered during the meeting and comply with the rules of conduct will be published with our answers on the company's website shortly after the meeting. With the exception of questions that specifically concern a shareholder or a policyholder with participation and are not of general interest. They will be posted for a maximum period of 1 year subject to applicable legal privacy requirements.

Amelie, do we have any questions from the participants.

Yes, we have a question in the room.

I am Yvon Sova. I am a shareholder for iA Society Financial and the retiree of iA Insurance. I said my question some time ago, in fact, on the 20th of April. So I will now read it to you. On the same date last year, the Executive Board of Directors of iA Insurance agreed on modification in an important manner. Certain parameters for the retirement plan of employees with retroactive employees were informed of these modifications by an e-mail from indicating that in such a context, a portion of some of this would be used to temporarily reduce shares -- active shares in order to increase net amounts over the year whilst creating a growth of 8% over the year. This raises a more fundamental question as to the fidelity of the retirement plan. Is such a plan ensures security towards the participants over the long term, an active excellent with an increase of net pay appears difficult to reconcile with such an objective at measure where we privilege in this context, the company -- can the company specify how such a usage is conciliated with fundamental objectives of the plan. And we submit that this -- we wonder if this is going to be repeated in the future. And on the 31st of December in 2026, this is an obligatory relation.

Well, thank you, Yvon, for your question. Yes, the retirement plan has the objective to secure promises made by the plan. Our plan showed an important And in fact, we all know the risk, the ultimate risk of the plan, it's the employer that carries it. For instance, if earnings are not sufficient in the long term, the employer has to compensate for that missing amount. So surpluses belong. I'll be clear. Surpluses belong to the employer, in this case, the employer, given the situation, decided to share this accident. Between three components, as you mentioned, the renters, the active employers who are part to employees who are participating in the plan so to return a certain portion of the money that they had spent and the employer. So up until a certain point, you can think that it's arbitrary, the distribution between the 3-some years, what was done. And concerning your question is a precedent, and this is how it will be done in the future. This is an ad hoc decision by the direction to share these accidents. We don't know for the future. We'll have to evaluate it is case by case. So it's to be looked into further.

If we consider that iA employees currently, they're at the 700 participants in the retirement plan, and they have experience of about 3, 4 years. But the plan did not use the excess for many years ever since 2008. I would say that could use the success for people of a cohort using this for a cohort of people with 3 to 4 years of experience seems strange to me.

We hope these people will stay with us for a long time. So our experience with retention is very good. So fundamentally, as I was mentioning, I think I answered your question. The excess belong to the employer -- and the employer can decide as they wish to spread it amongst external people who pay in or others. Thank you.

Amelie, do we have any other questions from participants?

No, we have received no other questions or comments.

Thank you, Amelie. Since you have no further questions, we will proceed to the results of the vote. The scrutineers have the time to compile the votes. I will invite Ms. Cantin to share the preliminary results of each breach of the votes.

Thank you, Mr. Chair. According to the report of the scrutineers, I'll form you that for iA Financial Corporation 15 candidates for the position of Director, as appointed in the circular, were elected with at least 90% of the votes in favor of their candidacy. For iA Insurance, there are 5 candidates for the position of Directors as named in the information document for participating policyholders were elected with at least 93% of the votes in favor of their candidacy. For iA Financial Corporation, Ernst & Young was appointed as external auditor with at least 99% of the votes in favor of their appointment. The advisory resolution on iA Financial Corporation as approach for executive compensation was adopted with more than 93% of the vote in favor. Shareholder proposal #1 on enhancing shareholder participation in Annual General Meetings was rejected with at least 99% of the votes against this proposal. Shareholder proposal #2, the consultative vote on environmental policies was projected with at least 79% of the votes against this proposal.

Shareholder proposal #3 in the adjusted competency grid to include environmental competence was rejected at least 95% of the votes against this proposal.

The detailed financial results for iA Financial Corporation will be published on the iA Financial Corporation website and on SEDAR+, the website of Canadian Securities regulators.

Thank you, Amelie. We thank shareholders and policyholders for exercising their right to vote. We know that proposal #2 received strong shareholder support. We have always been and will always be attentive to the concerns of shareholders. We will take the time to consult with the shareholders to better understand this outcome and determine how the company can better meet the expectations of shareholders. Ladies and gentlemen, this completes our annual meeting. In closing, I would like to sincerely thank the management and all the employees who once again have demonstrated their great expertise, their constant commitment and their dynamic attitude. I would also like to thank all of those who participated in this joint meeting of iA Financial Corporation and iA Insurance, not to mention Denis and Amelie, who were with me all throughout this meeting. Thank you for your trust and your support. The assembly is now up.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]

Thank you for standing by. This is the conference operator. Welcome to the iA Financial Group First Quarter 2026 Earnings Results Conference Call. [Operator Instructions] The conference is being recorded. [Operator Instructions]

I would now like to turn the conference over to Caroline Drouin, Head of Investor Relations with iA Financial Group. Please go ahead.

Thank you, and good morning, everyone. Bonjour à tous. Welcome to iA's First Quarter 2026 Conference Call. This conference call is open to the financial community, the media and the public. And I remind you that the question period is reserved for financial analysts.

Before we start, I draw your attention to the forward-looking statements information on Slide 2. Forward-looking statements made today are subject to risks and uncertainties that could cause actual results to differ materially. These statements are based on certain material factors and assumptions.

I also draw your attention on the non-IFRS and additional financial measures on Slide 3.

Today's commentary will also include adjusted financial measures, which should be considered as a supplement to IFRS measures. For further details, including those factors and assumptions, please refer to our press release and MD&A.

I will start by introducing everyone attending on behalf of iA. So Denis Ricard, President and CEO; Eric Jobin, Chief Financial Officer and Chief Actuary; Alain Bergeron, Chief Investment Officer; Stephan Bourbonnais, responsible for our Wealth Management operations; Renee Laflamme, responsible for Individual Insurance, Savings and Retirement; Pierre Miron, Chief Growth Officer for our Canadian operations and responsible for iA Auto & Home; Sean O'Brien, Chief Growth Officer for our U.S. operations and responsible for all of our Dealer Services operations; and finally, Louis-Philippe Pouliot, in charge of Group Benefits and Retirement Solutions.

And with that, I will now turn the call over to Denis Ricard.

Good morning, and thank you for joining us today. Before turning to our first quarter results, I'd like to briefly touch on leadership changes announced last night that further highlight our organization's ability to develop leaders, promote internal mobility and attract talent of international caliber.

Effective June 1, we are creating a new Executive Vice President role dedicated to lead acquisition-driven business development. And we're very pleased to welcome Benoit Hudon. Benoit brings deep international experience in strategy, performance management and M&A, and he will play a key role in how we deploy capital going forward. At the same time, as part of the continued evolution of the senior leadership team, Pierre Miron has informed us of his decision to retire at the end of 2026, following an exceptional career. Pierre will remain a full member of the executive team through the end of this year, serving as strategic adviser to support a smooth and orderly transition. His contribution to our digital transformation operating model and growth trajectory has been truly remarkable since he joined iA in 2018.

As part of this transition, Denis Berthiaume will assume Pierre's responsibilities as Executive Vice President, Chief Growth Officer, Canadian Operations. Denis combines strong operational rigor with a clear strategic and capital allocation perspective and is well positioned to continue driving profitable growth across our Canadian platforms.

Taken together, these leadership changes reinforce our focus on delivering sustainable growth across North America and directly support iA's strategic priorities.

With that context, let's now turn to our first quarter results. Turning to Slide 9. The first quarter clearly demonstrates the power of our unique and diversified business model, the depth of our distribution capabilities and our ability to execute consistently in a dynamic environment. We delivered solid core earnings growth. Core EPS increased by 12% year-over-year, reaching $3.25. Our trailing 12 months core ROE reached 17.5%, which already meets our 2026 target.

These results reflect strong operating discipline across all business units as well as the resilience and consistency of our earnings profile. Business growth was also very good across our business units and contributed to a 10% year-over-year increase in premiums and deposits as well as a 31% increase in assets under management and administration. This performance was supported by strong demand across our target markets, the effectiveness of our distribution model and the relevance of our offerings.

Our financial strength remained a key pillar this quarter. At March 31, our solvency ratio stood at 134%, well above regulatory requirements, supported by $155 million of organic capital generation during the quarter. This strong capital generation contributed to capital available for deployment to $1.2 billion, giving us significant flexibilities to support organic growth, pursue strategic opportunities and continue returning capital to shareholders.

Reflecting this financial strength and our confidence in the sustainability of our earnings power, we're pleased to announce today an 11% increase in the quarterly dividend, bringing it to $1.10 per share. In addition, we continued to actively return capital through share buybacks with $261 million deployed under the NCIB during the quarter. And based on our strong ability to generate capital, we are also announcing today that the maximum capacity of our NCIB will be increased from 5% of shares outstanding to 8% of our public float, providing us with additional flexibility to return capital to shareholders going forward. Finally, book value per common share reached $78.90 at quarter end, up 6% year-over-year and up 10% over year, excluding the impact of the NCIB.

Overall, in an environment that remains volatile, our first quarter performance underscores the quality of our earnings, our prudent capital deployment decisions and our continued focus on long-term value creation for shareholders.

Turning to Slide 10. Taking a look -- taking a closer look at business growth by segment, starting with Insurance, Canada, which delivered a good quarter. In Individual Insurance, sales of $97 million were comparable to last year's strong performance. Sales were down slightly year-over-year, but this does not reflect a slowdown in activity. In fact, the number of policies issued was up 5% year-over-year, reflecting strong distribution activity, continued adoption of our digital tools and our comprehensive product offering. This level of activity reinforced our leading position in the Canadian mass market.

In Group Insurance, premiums and deposits growth in Employee Plans and Special Markets reflects good sales over the past 12 months. In Dealer Services, sales grew 7% to $174 million, driven by continued momentum in P&C insurance. Finally, iA Auto & Home once again delivered good results with sales up 6% to $137 million. Growth was driven by an increase in the number of policies, combined with pricing actions implemented in the last 12 months.

Turning to Slide 11. Wealth Management delivered another strong quarter, highlighted by record individual gross sales of $3.7 billion. We continue to strengthen our leadership position in the Canadian seg fund market with very strong performance in both gross and net sales. Individual seg fund gross sales rose 23% year-over-year to almost $2.4 billion, while net sales reached nearly $1.5 billion. This growth reflects sustained adviser engagement and continued client demand.

In mutual funds, gross sales increased by 30% year-over-year to $838 million, while net outflows of $90 million were recorded. The outflows were influenced by a single isolated factor. Excluding that impact, mutual fund trends continue to improve, supported by strong sales and adviser activity. Sales of other individual savings products reached $494 million, a 6% increase year-over-year as safer products became appealing -- become appealing to certain investors in the current volatile market.

Finally, in Group Savings and Retirement, assets under management were 10% higher than a year ago. Sales for the first quarter totaled $704 million. Growth in insured annuities was positive, although this was more than offset by lower accumulation product sales during the quarter.

Turning to Slide 12 to review the U.S. operations, where we see continued momentum in Individual Insurance and in Dealer Services. In Individual Insurance, sales increased 16% year-over-year to USD 79 million. Once again, this quarter, U.S. Individual Insurance sales exceeded those in Canada, reflecting solid momentum in our core markets. This result highlights the underlying demand in the U.S. life insurance market with continued focus on profitable growth.

In U.S. Dealer Services, first quarter sales totaled USD 273 million compared to a strong USD 306 million in a very strong prior year quarter. This quarter's results reflect a general slowdown in industry-wide vehicle sales. It is important to note that the prior year quarter benefited from a significant pull forward of sales driven by expectation of potential price increases related to tariff uncertainty and other temporary market factors. In addition, our disciplined repricing actions across the portfolio weighted modestly on volumes this quarter while improving the profitability of new business.

Note that on a more comparable basis, U.S. Dealer Services sales were up 10% versus Q1 2024. Overall, we remain focused on expanding our distribution relationships and executing our U.S. growth strategy with discipline while continuing to adapt to evolving market conditions and maintaining a clear focus on profitability.

Now turning to Slide 13, where our financial results this quarter demonstrate consistent and tangible progress toward our targets. Core EPS grew by 12% year-over-year in the first quarter, ahead of our midterm target of 10% plus. This performance was achieved despite core experience losses during the quarter, which we do not expect to be recurring. As we have consistently said in the past, significant experience items, whether gains or losses, should not be extrapolated.

What this quarter highlights is the consistency of our earnings profile and the benefits of our diversified business model. Core ROE remained solid at 17.5% at March 31, already meeting our 2026 objective. This reflects disciplined execution across the organization, strong business fundamentals and continued focus on capital efficiency.

Organic capital generation continues to be a key strength. During the first quarter, we generated $155 million of organic capital, positioning us well toward our objective of generating more than $700 million of organic capital for the full year. As usual, capital generation is expected to accelerate from the second quarter onward. This continued capital generation supports both growth and shareholder returns while preserving financial flexibility.

Finally, our dividend payout ratio remained well within our target range at 30.5% and the dividend increase announced today is expected to keep us within the target range.

With that, I will now hand it over to Eric, who will take you through our first quarter profitability and capital position. Eric?

Thank you, Denis, and good morning, everyone. I'm pleased to walk you through our first quarter results, which reflect our continued focus on profitable growth, expense management and sustainable value creation for shareholders. So let's now take a closer look at the drivers of our strong 12% year-over-year core EPS growth by segment.

Starting on Slide 15, with Insurance, Canada. Core earnings for the quarter were $96 million compared to $100 million a year ago. Core insurance service results was higher compared to last year, reflecting higher combined risk adjustment release and CSM recognized for service provided from Individual Insurance as well as higher expected insurance earnings on PAA insurance mainly from iA Home & Auto.

These positive items were partly offset by higher impact of new insurance business from confirmed renewals and sales in Employee Plans and by experience losses of $3 million, mainly reflecting unfavorable morbidity experience compared to experience gains of $4 million in the same period last year. Core noninsurance activities were slightly lower year-over-year, mainly due to higher expenses.

Let's now move to Wealth Management segment. Core earnings in the Wealth Management segment were up 24% year-over-year, reflecting another very strong quarter. This solid growth was driven by higher combined risk adjustment release and CSM recognized for services provided, supported by strong net segregated fund sales as well as the favorable impact of financial markets over the last 12 months.

Core noninsurance activities were also higher, reflecting higher net revenue on assets and a strong contribution from RF Capital Group of more than $10 million, which continues to perform well and better than expected at the time of acquisition. This contribution from RF Capital was partly offset this quarter by higher expenses mainly related to IT projects and expense reallocation from core other expenses.

Turning to Slide 17. First quarter core earnings in our U.S. operations were $26 million compared to $30 million a year ago. Let me break this down by business unit. In Individual Insurance, the strong earnings growth over recent years continues to be reflected by high levels of risk adjustment release and CSM recognized for services provided. This growth was moderated this quarter by experience losses of $9 million, largely driven by unfavorable policyholder behavior, lapse activity, which we view as mostly contained and nonrecurring. Vericity's contribution during the quarter continued to support progress towards the financial goals set at the time of the acquisition, which is to be accretive in 2026.

In Dealer Services, we are pleased with the results as the gradual improvement we have been describing in the past year continues to take shape. This is reflected in the strong growth in expected earnings from PAA insurance, driven by a sales mix increasingly weighted towards insurance product. Overall, core earnings and excluding expecting variances, grew 10% year-over-year for the sector as a whole, which is a good development.

Now turning to Slide 18 for the results of the Investment segment. Core earnings for the quarter were $93 million compared to $85 million a year ago and to $91 million in the fourth quarter. Core earnings were driven by a core net investment result of $126 million, supported by expected investment earnings of $119 million and favorable credit experience of $7 million attributable to the car loan portfolio. Quarter-over-quarter, expected investment earnings reflect lower asset levels following the RF Capital Group acquisition and share buybacks as well as normal seasonality of iA Auto Finance results.

For the first quarter, core earnings adjustment totaled $121 million, mainly from unfavorable macroeconomic variations in public and private equity and infrastructure compared to long-term expectations. This also includes a tax-related adjustment tied to the measure introduced in the 2025 federal budget, and I'll briefly address this next.

The federal government released its budget last November, outlining its intended tax policy directions. Bill C-15 was enacted at the end of March, implementing certain measures, including some provisions that apply retroactively to January 1, 2025. These measures primarily affect the taxation of investment income. As a result, a tax-related adjustment of $40 million was recorded in the first quarter in respect to the 2025 fiscal year.

Also, the company has revised its medium-term core effective tax rate outlook to a range of 21% to 23%, with expectations for 2026 positioned toward the upper end of that range. This outlook reflects the tax policy directions outlined in the November 2025 federal budget, including the impact of the Bill C-15. The revision of the tax outlook has no impact on our guidance as we remain fully aligned with our financial targets, including core EPS and core ROE and organic capital generation.

Moving to Slide 19 for the results of the Corporate segment. Core other expenses were $65 million before taxes, flat year-over-year and at the low end of the quarterly target of $70 million, plus or minus $5 million. This demonstrates disciplined expense management amid ongoing inflationary pressures. This result also reflects a lower-than-expected provision for variable compensation as well as the timing of certain corporate initiatives, resulting in a temporary deferral of related expenses. Overall, we continue to manage expenses with a strong ongoing focus on operational efficiency while continuing to invest in and enhance our IT infrastructure to support the businesses.

Please turn to Slide 20 to review our robust capital position and financial strength. As at March 31, 2026, our solvency ratio stood at 134%, and our capital available for deployment was $1.2 billion. The ratio increased by 1 percentage point during the quarter, driven by solid capital -- organic capital generation and the positive impact of the 2026 AMF-revised CARLI guideline. These favorable items were partly offset by disciplined capital deployment, including $261 million deployed through share buybacks under our NCIB as well as the impact of macroeconomic variations. Overall, the balance sheet remains high quality and resilient, and we continue to deploy capital in a disciplined and consistent manner, fully aligned with our capital priorities.

To conclude, we delivered another strong quarter with core EPS growth of 12%, supported by solid performance and continued growth across all our business segments. This performance was achieved despite nonrecurring core insurance experience losses recorded in the first quarter, while we continue to manage expenses effectively and maintain a robust capital position. Our balance sheet strength provides us with flexibility to deploy capital and support both the increase in the quarterly dividend and the increase in the maximum number of shares that can be repurchased under our NCIB. We are executing our plan into action and remain fully on track to meet our financial targets.

With that, I'll turn the call back to Denis.

Okay. Thank you, Eric. So we started the year with a strong momentum across our businesses, and it's driven by elevated activity across both our wealth management and insurance distribution platform. In Canada, this resulted in a 5% increase in individual insurance policies issued, reinforcing our leadership position. In Wealth Management, it translated into record gross sales in seg funds, while in the U.S. we continue to see solid growth in individual insurance. Overall, premiums and deposits were up 10% year-over-year. Assets under management and administration reached $346 billion, up 31% during the last 12 months.

In Wealth Management, this momentum was further supported by RF Capital, which is already contributing positively to results 3and strengthening our overall value proposition. Through continued growth, we create value by delivering on our financial targets. This is reflected in a trailing 12-month core ROE of 17.5% and a 12% year-over-year increase in core EPS. This growth was supported by several key drivers, including disciplined expense management, the contribution of recent acquisition and the ongoing execution of our NCIB program.

Returning value to shareholders remains a priority. We increased the common share dividend by 11%, and we will amend our share buyback program to allow repurchases of up to 8% of public float. These actions are supported by our robust capital position, solid organic capital generation and $1.2 billion of capital available for deployment giving us the flexibility to invest in growth while maintaining a resilient balance sheet.

Overall, we are pleased with the way we have started the year. Our strategy is delivering results. Our financial position remains strong, and we are well positioned to continue executing with discipline as we move through 2026.

Thank you. Operator, we are now ready to take questions.

[Operator Instructions] First question comes from Gabriel Dechaine with National Bank.

I want to ask my first question to be about the noncore market experience. There's an $87 million negative experience in the public and private equity portfolio. Can you maybe break that down a bit? Was that private equity related or infrastructure? Any specific issue there? And also, if there's any seasonality to that type of thing because last year, Q1, we also saw a pretty big negative number.

Gabriel, it's Alain Bergeron here. So yes, I'll focus on the $87 million. Just to be clear, it's about the equity component. So about half or so is related to public equity, and this is coherent with the sensitivities that we provide. S&P was down about 4% over the quarter. Now I didn't check this morning, but as of yesterday, it was up about 6% since. So if the quarter ended today, then actually, we would have a nice positive credit -- actually, market experience.

For the other half private equity and infrastructure, I'd say a couple of things. The first one is that the return was actually a small positive, but it was lower than our long-term expected return. The second thing is that our portfolio performed in line with broad market benchmarks that we use. So this means that for Q1, it's really an asset class story more than a iA-specific portfolio story.

If you zoom out, though, the one thing I'd mention is that since IFRS 17 and including this quarter of negative $87 million, the equity bucket was -- had a cumulative positive market experience of $239 million. And I know, Gabriel, that was not your question specifically. But just for all the listeners that there's no confusion here when I talk about private equities, we're talking about private equity and infrastructure together. And we're not talking here about private credit. I'm just flagging this because there's a lot of headlines in private credit. And if anyone is interested, we've added a slide on that on the deck on Page 33. And the bottom line on this is that the private credit exposure is small. So does that answer -- sorry, does that answer your question?

Yes. Well, the seasonality part, I don't know if you mark your private equity portfolios once a year or every quarter or what because Q2 -- Q1 of last year, sorry, there was another negative, but I don't know what the breakdown was last year.

So we mark our book at every quarter. So there's -- now it's not exactly 25% per quarter, but it's not a bad rule of thumb. Now it turns out that in Q4, that's the quarter where we have the most valuation because it's the actual marks NAV plus a forecast of what's coming in Q1. But in general, it's not a bad rule of thumb to use that everything is marked quarterly.

And Gabriel, just one thing I'd like to add on this. We are in a long-term business. And so fluctuation in the short term, actually for us is not a concern. And Alain has demonstrated very clearly that over the last couple of years, the cumulative impact has been positive, and we expect in the long term to meet the target of return that is in our assumption. So it's normal that you see fluctuation. It could be both positive or negative in the quarter.

Okay. And next question is about the lapse in the -- lapse experience in the U.S. Is this tied to the -- I guess, the customer characteristics, like it's a smaller, I guess, a lower end of the market product? Is there affordability issues that are causing them to lapse? Or is it something else? And then, Denis, you had mentioned about the experience overall, don't extrapolate significant experience. Can you give me a benchmark, I guess, for what is significant, plus or minus? I think it used to be plus or minus $0.04 for an individual type of thing.

Yes, I'll answer the first part first. It's Denis here, and then Sean can give you more details on the lapses. I would say that when you look at, let's say, over a longer period than just 1 quarter, obviously, we have, I would say, a bias towards a positive experience gain. So you might have plus or minuses. And the $0.04 that you're talking about is something that -- it was an old method that was used. I think we should all forget about that. But when you really look at the cumulative impact of both gains in the quarter versus losses, we tend to be conservative in our assumptions in the reserve. And so there is a positive bias towards being positive. So that's why I was quite adamant in my speech saying that you should not expect that over the long term, there will be, let's say, a permanent loss.

And Sean, you might just go on the first part.

Yes, just back to the lapse rate. So what we saw, we've had exponential growth at American Amicable. And as part of that growth late last year, we identified a small group of contained new agents with an inordinately high lapse rate. So we quickly removed those agents. We're now working with the IMO partners to update our products and training to help reduce that risk. It was not a systemic issue. We contained it pretty quickly and very confident still with our targets for American Amicable on profit and sales. I'd also say we're happy with the team for quickly identifying it and dealing with that issue. So it's not related to the broader market, as you said, Gabriel.

The next question is from Doug Young with Desjardins Capital Markets.

Just staying with the U.S., obviously, a 33% increase in expected earnings on the PAA business. And Eric, I think you mentioned a shift in mix towards insurance products. And I think you had something similar last quarter. Can you kind of maybe break out the mix between insurance and noninsured products? And does this impact at all the return profile of that business? And maybe you can update us because it looks like sales were up, but the profitability for that dealer services business has improved as you've indicated that it would. Just hoping to get maybe as well a bit of an update on the outlook for that business, if that has changed at all.

Yes, I'll leave Eric to answer more specifically. It's Denis here. But I would say that we're quite pleased where we are right now with the U.S. dealer business in terms of the gradual improvement. So as you said, we've got some good earnings during this quarter that we were pleased with. And Eric can provide a bit more details about your question.

Yes, sure, Denis. I understand your question, Doug. I don't think we published the split between insured and admin products only, but you see it and directly through the profitability. The thing you have to keep in mind is that the profitability of admin-only product is mostly front-ended. So when I look at the profitability of those separate products, I like to see more insurance product than admin product because when you see the insurance product sales, the profitability is amortized over the lifetime of the contract. So it contributes to the growth of the PAA line of the insurance product, and it remains sticky for a little time instead of restarting every quarter. So that's the particularity of the profitability of those products. And personally, I have a positive bias toward insurance product instead of admin-only.

And just -- I know you don't give the split, but I think it used to be around 80 insured -- or 80 admin and 20 insured or something. It's still well -- like insured is still well below 50%, I would assume.

Yes. It's -- you're referring, Doug, to reinsured product, and this is for the insured product at the top. -- even though we take on insurance risk, in some cases, we reinsure partially the product. And in some cases, like the admin product, it's fully reinsured.

Okay. And then, yes, just like the outlook for that business, I don't know if that's Sean or you, Eric, or...

Yes, it's a -- I think what you're seeing on the insurance side is that it's leading the recovery. So that is a business that we jumped on quite quickly last year, and we're just starting to see the results of the sales on that side. But the admin fee side of the business will recover as well, and that's coming. That's the dealer direct business that we're working with. So I think it's just -- it's the order of operations of the gradual recovery you're seeing.

Okay. So it doesn't look like there's any big change in your gradual profitability improvement for that business. And then second question, Denis, you mentioned something in your opening remarks, I think around mutual fund sales that were impacted by an isolated factor. And if you excluded that, you had net sales. Did I hear that correctly? And if so, like what was the isolated factor?

Yes. And I will leave it to Stephan to just give some details.

Yes. I'd say -- I mean, it's more cyclical timing issue that we've seen rather than a structural failure, I would say. So it's having a diversified lineup with different managers with different styles. I mean, you're going to have some managers that are going to be in favor, some are going to be out of flavor. So this is what we've seen. We've seen a bit of a drag because overall, it would have been positive, but nothing to be concerned about. We're -- we've got all of our managers on the watch list. We've seen a huge pickup on gross sales, up 30% from last year. Huge pickup from the affiliate. We're up 39%. Non-affiliate are doing well with 20% growth. So the team is executing, delivering, and we're on the right path to get back to net positive in the next quarter.

Sorry. And what was the isolated fact? Like so was this just like just normal variation? Or was there like a big...

Normal but just out of -- like I said, it's more cyclical. So it was just out of style considering the current environment we're in. So nothing to isolate specifically, but it's been obviously a drag on our overall sales.

The next question is from Tom MacKinnon with BMO.

Just with respect to the negative lapse experience in the U.S. I think in the fourth quarter, you actually strengthened lapse reserves overall for the company. Can you elaborate on what you did for the U.S. Did you do anything to reflect these new agents at American Amicable in terms of your lapse rate? What was driving your lapse rate strengthening in the U.S. when you did your reserve review? And maybe as a follow-up, what percentage of your U.S. individual insurance sales are you getting from these new agents that you've -- that were contributing to that high lapse rate?

Thanks, Tom, for the question. In fact, just a reminder, to start with, in Q4, the insurance adjustment we had to -- we did in the reserve strengthening was related to Insurance, Canada. So unrelated to what's happening here in the U.S. So that's one thing.

Second thing, regarding your question with respect to the U.S., we did not do a reserve adjustment. What happened is actually early lapses. As Sean talked about, it's related to distribution. And the quality of the business was not sticky, if I can say it in simple words. It's -- those policies were issued and they lapsed almost immediately. So that's what happened and that it did hit us. Sean took management action to fix it. As he mentioned, we talked with the IMO in question, and we're improving the situation. I don't expect at this time to have an adjustment for reserve. We'll see at year-end because at this time, what I consider the issue to be resolved, but we'll see at year-end if there's any residual effect of this to be considered.

And what percentage of your U.S. individual sales does this IMO represent? And are they -- is this IMO placing any new business with you going forward?

Yes. It's less than 5% of our sales. So you look at the last year's growth, I can't remember, what it was around 30%, 32%. So it would have been around something 5% less than that. And that IMO is still being with us and working with very decisively in getting rid of those agents and changing their practice to make sure they're not bringing agents with a high lapse rate or high early lapse rate.

So it wasn't the entire IMO. It was just some agents within that IMO.

No. Yes, small contained group within IMO.

The next question is from Paul Holden with CIBC.

So a couple of questions. First one is with respect to the increase in expected tax rates. I understand why that's happening. But in theory, all else being equal, that would take your earnings growth down modestly below your medium-term objective at least for the year. That's all else being equal, and that's never really what happened. So are there any actions you're thinking about to offset that increase in the tax rate? Like -- and maybe just simply that's part of the reason you increased your NCIB, just thinking about how you're thinking about offsets to that higher tax rate.

Yes. Paul, it's Eric. I'll handle this one. As we mentioned, those measures were announced last November. So we had visibility on the potential effect walking into the planning for 2026. So we had visibility on this. And we looked at the different internal levers we can have and how we can adapt to this new tax environment. And when we confirmed our guidance for 2026 in terms of profitability, we had this in visibility, knowing that we would be able to meet those targets even though we had this, let's say, short-term headwind in front of us.

Yes. Maybe one thing I'd like to add on your second point regarding the buyback increase from 5% to 8% has nothing to do with tax rate. Actually, we needed more flexibility for the buybacks. The pace right now, as you've seen in the quarter, was such that because we are generating excess capital, we want to be opportunistic about the buyback. So we needed that flexibility, but it has nothing to do with tax rate.

I understand. So to that point then, I mean, given you have the visibility, you've planned for it. Clearly, there are levers you feel you can pull to offset it. I mean, are there 1 or 2 you would like to highlight given it's not the NCIB? Or is there just -- there's many small things, and so there's nothing really in particular to focus on?

I would say that there's many small things that we can pull. So yes, we feel confident about that.

Okay. Okay. I'll leave that there. And then second question, given recent lapse experience, I think you've done a good job explaining why it's contained. I guess one question that people want to ask, like in any way, does it change your acquisition appetite for the U.S.? Like I think you've been very clear that most likely, you'll look at the U.S. for acquisitions. So does this change in any way either your appetite or maybe the way you approach acquisition potential in the U.S.?

Paul, no, great question. No absolutely not. It doesn't change anything. We are obviously focusing on growing the organization organically first. But I mean, obviously, we look at acquisition because we generate so much capital. I would say that on the organic side, when I look at the life insurance business, whether it's Canada or the U.S., managing distribution is really an art. And sometimes there are situations that arise, which to me is normal in the long run. The idea is to be able to, over time, generate an experience gain. I mean, net of loss that is positive. And it's part of the business as far as I'm concerned, managing distribution.

Okay. And just one final one point of clarity. The Canadian morbidity experience this quarter unrelated to the special markets experience last quarter. Is that correct?

Absolutely. It has nothing to do with the student business. I said last quarter that we did what we had to do with the reserve strengthening, and it's behind us. So this is clearly something that is normal variation that we've seen in morbidity, medical stuff, managing group businesses.

[Operator Instructions] The next question is from Mario Mendonca with TD Securities.

If we go back to the U.S. lapse issue, when I hear a story like that about agents writing policies and the lapse almost immediately thereafter, I can't help but think that these were fraudulent policies, policies written to fictitious individuals that were then canceled. So first, I mean, am I barking up the wrong tree on this one with these real customers? And secondarily, isn't there a mechanism in place that protects industrial lines from this where commissions just aren't paid immediately. So you sort of season these policies before you pay commissions. Like why wasn't there a mechanism in place to protect industrial lines?

Well, okay. So it's Denis here. I wouldn't use the word fraud, but I would certainly use the word malpractice in terms of some of the, I would say, distributors. But like I said, I mean, we have increased the vigilance of the IMOs and the underlying representative under this IMO. And certainly, we are looking at all our processes to make sure that we can avoid that in the future. Now you cannot be 100% protected in those situations. There's -- but you can certainly mitigate the loss that you can have.

So at the end of the day, it's really managing business. And sometimes, there might be some cases where there are some malpractice. So -- but we are strengthening our processes as we speak.

Do you see, Denis, any lingering legal liability for industrial IMOs?

Absolutely.

I mean beyond lapsation, I'm talking about. So no lingering liability there.

Absolutely.

Okay. Maybe -- I appreciate that. Maybe this next one might be best for Eric. And Eric, you and I have talked about this issue before. I look at Industrial Alliance and I see $1.2 billion of deployable capital. But even more importantly, the capacity to generate capital is as good as anyone on a relative basis. But when I look at Slide 27 and you talk about your capital allocation priorities, and perhaps I'm reading too much into this, but the NCIB appears lapsed. And you've recently just increased the NCIB to 8 million -- I'm sorry, 8% from 5%. So am I reading too much into the order of these priorities? Is the NCIB, are we likely to perhaps see the same pace of buybacks in subsequent quarters as we saw in Q1 '26? Maybe walk me through that.

Yes, absolutely. Thank you, Mario. The order in Slide 27 is the real order as far as I'm concerned. And it's really focusing on organic growth, investing in our business and then acquisition. I mean NCIB to me is the last result, let's call it that way. And we don't want to pile up capital. But we are generating so much these days that, yes, when you look at the actual NCIB because there is no acquisition right now, I mean -- and we don't want to pile up. It's kind of the last point in the equation that you have to use. So it's not my preferred choice, but I think it's a great way to at least return some value to the shareholders until we find an acquisition. So that's pretty much the idea. Yes, 27 is fine.

This concludes the question-and-answer session. I'd like to turn the conference back over to Caroline Drouin for any closing remarks.

Thank you, everyone, for joining us today. Our Q1 earnings release and slides for today's conference call are posted on the Investor Relations section of our website at ia.ca. A recording of this call will be available for 1 week starting this evening and the archived webcast will be available for 90 days, and a transcript will be available on our website in the next week.

Our 2026 second quarter results are scheduled to be released after market close on Tuesday, August 4, 2026. Thank you again, and that concludes our call.

This brings to a close today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.

Thank you for standing by. This is the conference operator. Welcome to the iA Financial Group Fourth Quarter 2025 Earnings Results Conference Call. [Operator Instructions] And the conference is being recorded. [Operator Instructions] I would now like to turn the conference over to Caroline Drouin, Head of Investor Relations with iA Financial Group. Please go ahead.

Thank you, and good morning, everyone. Welcome to iA's Fourth Quarter 2025 Earnings Call. This conference call is open to the financial community, the media and the public. And I remind you that the question period is reserved for financial analysts. So before we start, I draw your attention to the forward-looking statements information on Slide 2 as well as the non-IFRS and additional financial measures and information on Slide 3. Also, please note that a detailed discussion of the company's risks is provided in our 2025 MD&A available on SEDAR and on our website.

And I will start by introducing everyone attending on behalf of iA. Denis Ricard, President and CEO; Eric Jobin, Chief Financial Officer and Chief Actuary; Alain Bergeron, Chief Financial Officer; Stephan Bourbonnais, responsible for our Wealth Management operations; Renee Laflamme, responsible for Individual Insurance, Savings and Retirement; Pierre Miron, Chief Growth Officer for our Canadian operations and responsible for iA Auto and Home; Sean O'Brien, Chief Growth Officer for our U.S. operations and now responsible for all of our Dealer Services Operations; and finally, Louis-Philippe Pouliot, in charge of Group Benefits and Retirement Solutions.

So with that, I will now turn the call over to Denis Ricard.

Good morning, everyone, and thank you for joining us. We are very pleased to be here to review our fourth quarter and also the full year results. I would qualify the results as a good quarter and closing an excellent year. And before getting into our fourth quarter performance, I'd like to take a moment to reflect on 2025. A remarkable year for iA, marked by strong execution across the organization. We met or exceeded all our key financial targets delivering a core ROE of 17.1% and 16% growth in core EPS, fully aligned with our midterm objectives. Our businesses in both Canada and in the U.S. continue to build strong momentum with solid sales across every segment and disciplined progress on our strategic priorities.

This growth was supported by our robust capital position fueled by $665 million of organic capital generation in 2025. Throughout the year, we deployed capital with discipline, balancing strong return to shareholders with investments that support future growth. This included the acquisition of RF Capital, which is already accretive and strengthening our wealth platform. Thanks to the dedication of our teams and the consistency of our performance across the organization, we closed 2025 with excellent momentum and a solid foundation as we enter 2026.

With that, let's turn to Slide 9 for an overview of the results. Our fourth quarter results reflect strong and profitable growth across all business segments, including record individual insurance sales and very strong individual net fund inflows. This momentum underscores our continued success in the mass market and the power of our distribution networks, which we continue to invest in to drive sustained growth. We delivered a solid finish to the year with core EPS of $3.10 and a trailing 12-month core ROE of 17.1%, which already meets our midterm target. These results underline the strength and resilience of our diversified business model and the momentum we carry throughout 2025.

Business growth remains strong across the company. Net premiums and deposits reached $5.9 billion, up 4%, and total assets under management and administration exceeded $341 billion, a substantial 31% increase. This was driven by strong seg fund inflows, favorable market conditions and the addition assets from RF Capital. This performance highlights the continued expansion of our distribution network, the breadth of our product offering and the sustained demand across our target markets.

Our capital position remained robust at year-end with a pro forma solvency ratio of 137%, this trend was underpinned by $170 million of organic capital generation in the quarter, a testament to our consistent value creation. As at December 31, our capital available for deployment was $1.4 billion on a pro forma basis. We deployed significant capital again this quarter, including the RF Capital acquisition and continued investments. At the same time, we continue returning capital to shareholders through regular dividends in our NCIB. This balanced approach to capital deployments remain a cornerstone of our strategy, enabling us to support strategic growth, return capital to shareholders and continue investing in digital and AI-enabled capabilities that enhance efficiency and our overall product and service offering.

Finally, our book value per share increased to $79.24 up 8% year-over-year or more than 10% when excluding the impact of NCIB. In a year where book value growth across the industry was generally modest. Our performance reflects the consistency of our results and our disciplined approach to capital deployment.

Turning to Slide 10. Our Insurance Canada segment delivered another strong quarter, with broad-based growth across all units. Starting with Individual Insurance business, sales reached a record high of $111 million this quarter, supported by the strength of our distribution networks, the effectiveness of our digital tools and high adviser engagement. We continue to rank #1 in Canada for the number of policies issued, a leadership position we're proud of. In Group Insurance, premiums and deposits rose by 2% year-over-year, supported by premium increases on renewals and good sales throughout the year. In the fourth quarter alone, sales were up 15% from last year. In Dealer Services, sales grew 4% to $183 million.

Finally, iA Auto & Home delivered another good quarter with sales rising 9% to $146 million. This reflects both an increase in number of policies in force and the positive impact of recent pricing adjustments. Overall, our results in Insurance Canada demonstrate solid execution and ongoing momentum across the board.

Turning to Slide 11 to comment on sales on Wealth Management. Business activity was very strong in this quarter in Q4, as evidenced by record individual gross sales of $3.1 billion. In seg funds, we continue to build on our leading market position. Gross sales reached nearly $2 billion, up 27% year-over-year, and net sales grew to almost $1.2 billion. This reflects the sustained appeal of our product lineup and the effectiveness of our distribution networks. In mutual funds, gross sales increased by 16% year-over-year to $694 million and net sales reached $13 million. This reflects favorable market conditions and improving industry-wide sales. Sales of other individual savings products totaled $429 million, essentially in line with last year. And in Group Savings and Retirement, total sales reached $851 million. While this is lower than last year, it is important to note that prior year sales included a nearly $1 billion insured annuities transaction. Assets under management and group savings were 11% higher than a year ago.

Turning to Slide 12. Our U.S. operations performed very well again this quarter. In Individual Insurance, sales increased 18% year-over-year to USD 80 million. This strong result reflects ongoing momentum in both final expense and middle market segments with Vericity again contributing meaningfully this quarter. Taken together, this business is an important driver of our long-term growth ambitions in the U.S. market. Dealer Services delivered another strong quarter with sales rising 8% year-over-year to USD 295 million. Our strong distribution relationships and diversified offering continued to support growth. We are seeing good traction from our management actions particularly our focus on service quality and disciplined pricing. This positions the business well to continue generating sustainable growth and to further expand our presence in the U.S. market.

With that, I will now hand it over to Eric, who will take you through our fourth quarter profitability and capital position.

Thank you, Denis, and good morning, everyone. I'm pleased to walk you through our fourth quarter results, which we are very satisfied with, especially considering the normal seasonality and higher-than-expected expenses linked to the company's strong performance in 2025. Overall, our fourth quarter results continue to reflect the underlying strength of our business fundamentals.

Turning to Slide 14 for a closer look at the performance by segment. In Insurance Canada, core earnings for the fourth quarter were $105 million compared to $116 million in the same period last year. As a reminder, last year results included elevated core insurance experience gain of $15 million, while Q4 2025 reflected core insurance experience loss of $4 million. This year-over-year variation is due to the normalization of the P&C insurance experience at iA Auto and Home as well as unfavorable morbidity experience in special market this quarter. Excluding this experience variance, underlying performance remains solid, higher core insurance service results were recorded, driven by individual insurance, employee plans and iA Auto and Home.

Core noninsurance activities, which typically show slightly lower results due to seasonality in the first and fourth quarters were nevertheless higher year-over-year, supported by the good performance of dealer services. Core other expenses were slightly higher year-over-year as a result of normal business growth.

Let's now move from Insurance Canada to Wealth Management. On Slide 15, core earnings in the Wealth Management segment were $127 million in the fourth quarter, up 13% year-over-year. This growth was primarily driven by higher combined risk adjustment release and CSM recognized for services provided, reflecting strong net segregated fund sales and positive financial market performance over the last 12 months. Core insurance experience gains of $2 million were also recorded due to favorable longevity experience. These positive factors were partly offset by higher impact of new insurance business and group savings and retirement. Core noninsurance activities were similar to the same quarter in 2024. The higher net revenue on assets and the strong contribution from RF Capital, which is already accretive and performing ahead of expectation were offset by lower net interest income and nonrecurring expenses and other distribution and advisory affiliates.

Turning to Slide 16. Fourth quarter core earnings in our U.S. operations were $30 million, an increase of 15% compared to the same period last year. This result reflects higher combined risk adjustment release and CSM recognized for service providers supported by good business growth over the past 12 months. The segment also benefited from lower core other expenses, although slightly tempered by core insurance experience losses from unfavorable insurance lapses. Core noninsurance activities, which typically post lower results in the first and fourth quarters due to seasonality totaled $15 million essentially in line with last year.

This includes results from dealer services and from eFinancial, the distribution -- the digital distribution entity of Vericity. In Dealer Services, the sales mix was more weighted towards insurance product for which earnings emerge gradually over time, while eFinancial performed as expected.

Now turning to Slide 17 for the results of the Investment segment. Core earnings for the quarter were $91 million before taxes, financial charges and debentures dividend. Core earnings were driven by core net investment result of $127 million compared to $120 million in Q4 2024 and $132 million in the third quarter. This result was driven by strong expected investment earnings of $124 million and favorable credit experience of $3 million in the car loan portfolio at iA Auto Finance. The $5 million quarter-over-quarter decrease in expected investment earnings reflects the impact of the reduction in assets following the acquisition of RF Capital. The $3 million year-over-year decrease reflects the same impact partially offset by favorable impact of the interest rate variation, including the steepening of the yield curve.

Moving to Slide 18 for the result of the corporate segment. Core other expenses totaled $87 million pretax in the fourth quarter. This includes $74 million of core other expenses, which is near the upper end of the quarterly target range of $68 million, plus or minus $5 million. It also includes a provision for variable compensation that was higher than expected by $13 million, highlighting the company's strong performance in 2025. For the full year 2025, core other expenses were in line with target, showing our disciplined approach to expense management and our continued focus on operational efficiency. Looking ahead, our quarterly target range for core other expenses has been updated from $68 million, plus or minus $5 million in 2025 to $70 million plus or minus $5 million for 2026, reflecting normal inflation while maintaining our strong commitment to operational efficiency.

Please turn to Slide 19 to review our robust capital position and financial strength. As of December 31, 2025, our solvency ratio stood at 133% and 137% on a pro forma basis when taking into account the impact of the 2026 AMF revised CARLI Guideline that came into effect on January 1, 2026. The quarter-over-quarter variation reflects the impact of our strategic capital deployment activities, including the RF Capital acquisition, share buybacks and dividend payments to common shareholders. These were partly offset by strong organic capital generation, favorable macroeconomic variation and the positive impact of the updated capital requirements related to domestic infrastructure.

In the fourth quarter alone, we generated $170 million in organic capital, bringing the total for the full year to $665 million, surpassing our 2025 target of at least $650 million. We closed 2025 with high-quality and flexible balance sheet 1.4 billion in capital available for deployment on a pro forma basis and a sustainability to generate capital organically. The strong financial position gives us the capacity to deploy capital strategically while preserving a prudent and resilient balance sheet.

Please turn to Slide 20, which summarizes the year-end assumption review and management actions. The net economic impact was a positive $10 million. The review was positive across nearly all categories. These updates and management actions ensure we maintain an accurate representation of our underlying economics and appropriately position the company as we enter 2026. The total impact, which includes an immediate impact on earnings as well as an increase in both CSM and risk adjustment reflects a shift in the timing of profit recognition, which is positive for future periods. This concludes my remarks.

Denis, I'll turn it back to you for the closing comments.

Thank you, Eric. Now please turn to Slide 22. We are very pleased with our fourth quarter results, particularly considering normal seasonality and higher expenses tied to the company's strong performance in 2025. The quarter allowed us to close out a remarkable year, one in which we achieved all our key financial objectives. As we look ahead to 2026, we are in a very strong position to sustain our profitable growth trajectory. Our earnings momentum is well established, and we continue to see strong sales across all business segments. We also have a robust and flexible balance sheet and significant capital available for deployment, key ingredients to support growth, acquisition and expansion.

With these trends, we are moving forward with confidence and discipline. Our strategic investments in digital capabilities are enhancing efficiency and supporting business growth and the recent acquisition of RF Capital, which is performing ahead of our initial expectations, further strengthens our wealth management platform. Our confidence in our earning power is reflected in our new core ROE target as we now expect to achieve a core ROE of at least 17% again in 2026, along with more than $700 million in organic capital generation. In short, everything is in place. We have the means, the strategy and the momentum to achieve our ambitions and meet our financial targets.

Thank you. Operator, we are now ready to take questions.

[Operator Instructions] The first question is from Gabriel Dechaine from National Bank Financial.

Quick question on lapse. We saw it in the -- your actuarial adjustments and then we saw it was tied to one specific product. Can you tell us which product that was? And if it's related to the small amount of lapse, negative lapse experience we saw in the U.S. this quarter?

Yes, Gabriel, it's Eric. This -- the product that is in that is at play here is a term product in Insurance Canada. And this product has been sold for, I would say about 10 years now. And just before we started to sell it just before the pandemic. And the pandemic created a bit of noise and the results, and we wanted to take the time to appropriately understand what was going on before triggering reserve strengthening. So now we're confident with a couple of years out of the pandemic, we're now confident in the experience.

And we had to increase the lapse. Just to be clear here, it's not a lab supported product. It's really a term product. So we had to increase the lapses at almost all duration, including the renewal. So that's what took place here. It's not connected with the U.S.

Okay. So you've had this issue for a while now, and you've observed it for I don't know what period of time, but sufficiently enough to have a firm handle on that particular problem. Is that what you're saying?

Exactly. We had set up in the past temporary provision to face what we thought was temporary headwinds. And now that we see the fact that it's permanent and it's a different behavior than expected. We fixed it and put it behind us.

Got it. Your buyback program, will you tell me how that works? Is it on a program that -- or do you have discretion because we saw some acceleration over the course of, well, actually this quarter heading into results and seems to maybe have been -- could have been a better timed, I guess, is one way of putting it? Like what are your plans going forward, Denis?

Yes, yes. Okay. Thank you. Thanks for the question. We've accelerated it recently, starting in November. I think you can see the number on a monthly basis. We are running at the pace of around 4% a year right now, and we might accelerate it. It's obviously dependent. It's the formula that we have, and it depends on the price and a couple of criteria but you might expect that it might increase a bit if the price as it is this morning continue.

Got it. And then last one on these expenses in corporate. So for the full year, these -- what do they call non -- whatever they call, the one that qualifies for that $68 million plus or minus $5 million. You say you hit that this year. But then we have Q2 and Q1, you had these variable compensation costs that created some deviation is more noticeable this quarter. But why shouldn't we consider those as part of the corporate expenses and take away a different conclusion?

Yes, thanks for the question, Gabriel. In reality, what took place here is one part of the variable compensation. As we do the financial statement every quarter, we want the provision to be at the right level at quarter end, reflective of all variable compensation necessary. And in Q4, what took place is that one part of that variable compensation with the stock performance from September 30 to December 31, justified significant increase on top of some other multiplicative effect that came at play. So it's just a normal provisioning given what happened in Q4.

And just -- can I go in the other direction?

Yes.

The next question is from Paul Holden from CIBC.

First question, I guess, will be on RF Capital. Since we could see the results as a publicly traded company, we saw it was operating around breakeven, but you managed to squeeze out $8 million of net income this quarter. So I just want to understand that source of accretion. And then maybe also, you can remind us what can we expect from RF Capital through the course of 2026, both in terms of sort of integration targets and accretion?

Well, I think, Eric, you will cover the first part, and then Stephan can go on the second part.

Yes, sure, absolutely. In fact, Paul, what is at play here is -- and remember, in Q3, I said that we were moving ahead or moving forward the accretiveness expected on RF Capital for 1 year for two specific reasons, the good work around the retention of the advisers and the market performance as well. So those were the two explanations for moving ahead of schedule with that. And I said at the same time that don't expect it to be accretive in Q4. But the reality is that the stock market performance and retention effort even showed benefit right from the start in Q4. So those are still the same reason as for last quarter. And for the business, I would leave it to Stephan now.

Yes. Thank you, Eric. I'd say when you look at it, the integration synergy plan is progressing really, really well. The -- I think what was kind of unexpected for us is that we were able to close sooner than expected on October 31, right? So that what gave us a real head start to our plan. We were able to create those road maps really, really early from the get-go and be able to deliver that in Q4 in November and December. So as you know, we're no longer operating as a public company, which helped us to save on board committee audit and external costs that we needed to deal with. In the same week of the announcement, we were able to move quickly to realign the leadership team structure at RF to make sure we'd be aligned on our growth strategy and our road map.

We started harmonizing corporate function as well when you're thinking about HR, legal and IT and again, benefited from the synergies there. And we even started reviewing some of the contracts with vendors. I mean we are sharing the same vendors across multiple platforms, and we're now able to benefit from the scale there. So this is what I think you're seeing in the results, and this is what you're seeing in us being comfortable to say we move this to be accretive year 1 instead of year 2. And on -- I would say, on the forward-looking and what you could expect, Eric mentioned very strong retention. So it's -- we're in a better spot than we thought. We're creating good momentum with the team in terms of bringing them solution for their clients in terms of products, investment solution, the assistance of capital market. This has been very well received by the team.

And what's been interesting to see is kind of the noise that we've created in the industry. So our story about being the #1 nonbank in Canada with over $200 billion is catching on and people are interested in learning about it. So we've seen Investia and iA Private Wealth benefit from that. Advisers retention has been stronger than we've seen in those channels as well because I think our advisers understand that we're committed to the business. But we're also seeing an increase in the recruiting pipeline for both dealers. I think we're going to be able to announce some significant adviser movement towards our organization in the next coming weeks. So overall, things are going very well, and we feel very good about the progress that we've seen so far.

That's good. So I think the point on the adviser retention is a really important one. I don't know if you're able to provide any data statistics in terms of where retention is versus what your expectation was? So we -- yes, go ahead, Eric.

Yes, I was going to say, Paul, just a reminder, we did not disclose because those are kind of sensitive parameters in our acquisition models and so on. So we did not disclose the expected assumption, neither the actual outcome, but I will tell you that it's really, really good in terms of actual outcome compared to expectation, which was high, but it showed up very, very well.

Understood. Okay. Okay. I'll leave that there. And then second question I want to ask is on the ROE target. So the positive for me is you achieved the ROE target actually this year, so 2 years ahead of plan, which is obviously very positive. My question really then is like why not increase the ROE target? I get you pulled it from 27% to 26%, but you're already there. So why not increase the ROE target? Is that -- is it related to capital deployment and that you can't buy a business that's generating 17% ROE, I get that. So maybe that's a factor? Or is it new businesses coming on at roughly 17% ROE? I guess -- or maybe you're just being conservative because I just want to understand a little bit better, like why can't it expand from the 2025 result?

Yes. The question is good. I mean why don't we increase it? I mean the question could be asked, why would we increase it? -- in a sense that 17% is already where we had made the guidance at the beginning of last year. We were able to deliver on it. And I mean, quicker. Now we're changing it. We're seeing this is like the run rate of our ROE. But don't forget the plus, okay? So we're working on the plus. And so for us, it's really a matter of being, I would say, conservative, prudent in our approach. We would rather underpromise, overdeliver. We always work to obviously improve the ROE. And you hit one important point also because if we are a growth company, okay? We want to grow the organization, and we're looking at acquisitions. And sometimes when you buy an acquisition in the first year, you might not get the ROE that is your target. So you also have to take that into consideration in your guidance. So I would say it's really about being prudent going forward here.

[Operator Instructions] The next question is from Tom MacKinnon from BMO.

I wonder if you could talk a little bit about your group experience in the quarter. I think it may have been hurt by some outsized claims. What's your strategy is with respect to renewal of that group and how we should be looking at group experience going forward?

Yes. Again, in this case, I guess, Eric, you will go first and then Louis-Philippe.

Yes, absolutely, Denis. In fact, what happened in the quarter, Tom, is that there was, the federal government took some measures in the past to limit the number of permits for foreign students coming to Canada. This is a group we have in terms of covering medical foreign students coming to Canada in special market -- in the special market division. And since the government limited the number of permits, we kind of got hit on both sides I referred to. The premium income did go lower than expected, and we were hit on the claims side as well. So unfortunately, it resulted in bad experience in Q4. And -- but at the same time, this group will renew, is expected to renew in -- during the course of 2026.

I will leave Louis-Philippe to talk about the strategy going forward. But note that in the change of assumptions for this group, we took a reserve increase or reserve strengthening to put this phenomenon behind us in 2026 up to the point of renewal. So it's part of -- we saw the impact in 2025. You have it in the experience loss. We fixed the reserve to have it at the appropriate level at year-end. And now strategically speaking, Louis-Philippe will talk about what he's doing on the business side.

Well, so I think the main takeaway here is we're looking at that business. And for a group of that size, there's a number of tools at our disposal. Eric touched on a few of them. It includes also working with our distribution partners, repricing those groups. So we have a number of those tools. And we've taken some of those actions already, and we have the ability to make the choices of not renewing the business even if we figure out that we can't get to where we want. So we feel pretty good. We don't have a headwind ahead of us in 2026 on that front.

Is the coverage that you're strengthening the reserves for, is that like supplementary medical? What is it specific? It's not disability, is it? Maybe you can just describe what, where you're seeing these elevated claims. What kind?

Yes, you're right, Tom. It's not -- it has nothing to do with disability. It's really supplemental coverage. So it covers medical drugs and therapists coverage. So it's all of those site benefits and group insurance.

And when does this group renew?

September.

Okay. So you're still going to have them for a few more quarters, but you're comfortable that you've bumped up the reserves enough to cover the additional incidents. Is it more of an incidence issue? Is that what it is just more going on claim here?

Well, I said, but I said that Tom, two things. It's an incident and severity. But at the same time, we had less new students that came to Canada to keep the volume of premium at the appropriate level. So it's a combination of the two. And you are absolutely right. The move we did on the reserve was really to strengthen the balance sheet so that we don't have expected loss ahead of us up to the point of renewal.

Right. And would you be able to share with us that reserve build, what the dollar amount was after tax or pretax?

Yes. We did not disclose it, Tom. But it's part, if you look at the change of assumption page on Page 20. It's part of the other segment on the P&L side. So you see that we have a $70 million charge on this P&L side, and it's part of that, but it's significant. You saw the magnitude of the loss in Q4. So it's significant.

And it's -- is it a significant part of the $4 million insurance experience loss that you had in Canada in the quarter?

Yes, absolutely. Because when you think about it, we refer to the fact that iA Home & Auto had a normalization of experience in the fourth quarter, but it didn't mean that iA Home & Auto had an experience loss. They were still positive, but it was reflective of a normal winter. So if you take that into account, the fact that we had favorable mortality, and you see that we end at minus $4 million, it means that the loss was significant.

This concludes the question-and-answer session. I would like to turn the conference back over to Caroline Drouin for any closing remarks. Caroline, your line is open.

Thank you, everyone, for joining us today. All of our fourth quarter earnings release and slides for today's conference call are posted in the Investor Relations section of our website at ia.ca. A recording of this call will be available for one week starting this evening and the archived webcast will be available for 90 days, and a transcript will be available on our website in the next week. Our 2026 first quarter results are scheduled to be released after market close on Tuesday, May 5, 2026. Thank you again, and this does conclude our call.

This brings a close to today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.

So while I know we've got a day schedule here, so I'm going to be in trouble if I don't keep us on track here. We see chat on but we have Eric Jobin from Industrial Alliance. He's the CFO and Chief Actuary.

And where I've been kind of starting out the discussions kind of open-ended big picture, 3 or 4 strategic priorities that management -- the management team is spending a lot of time focusing in on and why. And I know there's some defined kind of goals that you guys have. But maybe I'll just kind of put it there and then we can kind of drill down from there.

Yes. Thanks, Doug, and pleased to be with you today on this first event. Really, what is top of mind right now for the management is all about capital deployment. Yes. So it's really topical. We've just closed a big acquisition on the wealth side. So we want to continue our growth journey. So capital deployment is really the key piece then organic growth initiatives. We have many of them ongoing in lines of business and centralize a client experience, so those are really keeping us busy as well.

So operational efficiency has been quite a topical over the last couple of years after entering into the journey of transformation and important IT investment. It was important to get some additional to help us navigate through those additional investments and make sure that we deliver value on top of those investments. So that's been quite topical. And then delivering the benefits on those IT investments that we've been doing over the last couple of years, and also the accretiveness on the acquisition that we've made. We confirm very typisition last year when we are now entering year 2, so we're making sure that we deliver and execute the plan. Stephan is just starting up. So that's a pretty busy schedule.

There's a lot going on. And some of this, we're going to kind of dig into in the discussion, but I wanted to start just on the financial side, going to your core EPS growth target which you're more than above that this year, year-to-date. From 22%, 6% of the target is organic and 4% is from various initiatives.

And I think you've outlined some of those initiatives and the RF acquisition now being accretive year 1 will be kind of contributed to that as some buybacks will be contributed to that. But when you think about that 4% component, can you kind of break that down a little bit more granular in terms of the levers you can pull to kind of drive that?

Interesting because I just spoke about organic growth initiatives. We have a lot ongoing there, whether it's on the operational efficiency initiatives keep improving and getting better at doing things in all lines of business. or collecting the benefits of the IT investment and the important technology investment we've been making over the last for 5 years is key as well. So those are 2 things.

On top of, like you mentioned, on the 4% piece, there is as discussed in the investor event, there is an embedded, let's say, NCIB target in there that contribute to the 4% as well.

Yes. And that was $300 million but that will flex based upon the other initiatives, is that right way to see that?

Yes. The flexible thing is will be contributing to the plus of the 10% plus.

Yes. So one thing I always like to ask is you are 22% year-to-date, your target is 10%. Is there areas that we should be thinking about that are over-earning this year such that we don't get too far over our skews in terms of expectations for next year? Or is this a good base off which to build?

I think it's a good base on to build because we had some very good experience gains aligning in Q2. You're right. But those are experience gains -- that is experience gains. The baseline is pretty solid. And where we are really working on as well is on the dealer side, on the U.S. We want to improve that business. We stabilize the profitability and it starts improving. Growth is coming as well. So this is a baseline we want to push upward.

Okay. Because yes, your U.S. division, if I've got my math right, it was up 36% year-to-date.

Yes.

And so this is kind of -- this is pushing that further up.

Then on top of debt, let's keep in mind the improvement in the aggressiveness of the acquisition as well, right? The baseline Vericity will start to be accretive early next year, and then Stephan will continue with the wealth as well. So those will improve the baseline as well for next year.

So just -- I'd say you've got the RF acquisition. You've got Vericity coming through. You get the improvement in the U.S. extended vehicle warranty side. So there's lots of different items that are the key contributors to that.

Yes, absolutely.

Okay. Okay. So then we'll come to core ROE. So you target 17%. You're well above this or not well above this, but you're above this. Last quarter, annualized, your well above it. But on an LTM basis, you're above this. Like -- you've switched the makeup and mix of the business to be more capital light, especially with the RF acquisition. What -- when you look out 5 years or so, what's the core ROE that this business should be generating?

Yes. First, I'll just make an adjustment. We said 17% plus. I know, that's inclusive.

I had plus here.

So that's -- just keep that in mind. We're confident that we're really at it. We just moved our later -- our most recent 15% guidance, up to 17% plus in February. We talked in February that this was a reasonable guidance for 2027. Fortunately, we had some pretty good development so far this year that made us move ahead of plan along this one. And those things are mostly related to macro economy, tough market. There has been really, pretty great this year, so it's contributing on the wealth management side and everything.

So this will -- if everything stays the same, this will continue to contribute in the coming years. And experience gain has been exceptional in the second quarter also for the year. So that contributed to move forward the achievement of our 17% plus. But there's still room to improve over that in the coming years.

When we look at the potential capital deployment activities with acquisition and NCIB, we think that we can do better than that. And as a rule of thumb, remember, in the investor event, we had the rule of thumb that was talking about $1 billion more capital deployment is contributing roughly 1% on the ROE. So that gives you an idea of the potential and the ongoing ...

Well, that's where I was going next because you did bring up capital deployment. You have $1.3 billion of excess capital. When you think about -- like what metrics do you debate internally when you decide between M&A and buybacks?

Well, we always favor M&A, okay? When you look at our story in the past, we've been very successful in compounding shareholder value over the years and this is because of our history of acquisition over the last 25 years, achieving more than 70 new acquisitions. This contributed to the significant build up as a compounding shareholder value. So this is quite an important metric to follow.

So favor M&A. And given what you see right now in the market environment, is there more opportunity on the M&A side?

Yes, there is always. We always look at opportunities. Yes, of course, we're really, I think, with what happened last year and this year. There may be other opportunities as well. But really, plan A, as I referred, is deployed through acquisition and plan B is to return shareholder value to shareholders to -- for NCIB. And on this, we're flexible, depending on the opportunities were really flexible with the NCIB a couple of years ago was about 7%. And for you to know and for people to know, we've just reviewed our formula over the last week, and we're increasing the pace again of NCIB in -- these days. So that's another tool that we have in our toolbox.

Well, I was going to say my question was going to be how long are you comfortable sitting on $1.3 billion?

We don't want to buy cash. That's clear for us. We don't want to do the ROE and pile up cash.

So it feels like ramping up on the buyback.

Yes. That's why we've been reviewing our formula.

Yes. Okay. And then we've done some work on the U.S. extended vehicle warranty market. I mean it's gone to some challenges through COVID that everything -- a lot of things much challenges through COVID. But the -- it's a high ROE business. It's a fragmented business. It's an area where you've got experience in Canada, in different areas in creditor in more in Canada. And the question is, what's holding you back from being more acquisitive in the U.S. extended vehicle warranty business?

Yes. I guess, first, we're really happy with the change with made over the last couple of years. Heading into the pandemic was quite turbulent period and timing was not great. But at least it allowed us the opportunity to make the right fix to the business model, bringing in new management with a different culture, adjusting the culture, adjusting the technology behind the scene.

So we use that kind of crisis, let prices to reinforce the business model. And that's what we're starting to see the benefit of -- but we want to make sure that before we swing for a bigger acquisition, that we want to make sure that we have turned the corner and the adjustment we've made to the business model, repricing, cultural change and management that we have the right mix of -- and we're in a pretty good end right now.

Sean made great hiring on that front with John Laudenslager, and John has made a few changes. So we're getting where we want with that business. But before swinging for the big one, we want, let's say, a couple of quarters a year to make sure that we're hope with the solutions. And then we'll be happy to go to go bigger, but it doesn't mean in the short term that we can do any small tuck-in. Small tuck-in Is less disturbing than bigger files. So that's how we see it.

As an outside observer, is there something that we should be looking at that would kind of give us kind of a signal that you're kind of hitting your mark on the U.S. extended vehicle business from a financial perspective?

Yes. I think the key point will be growth in the coming quarters.

Sales or?

Yes, sales. We've made adjustments in the pricing we lost a couple of clients because of that because, of course, when you bring in changes sometimes, it brings a bit of volatility. But we're really confident with the solutions that we've put in place and the way the business model is set up, when sales will pick up with the adjustments we've made will be a pretty good signal.

Okay. So it doesn't seem like from a capital deployment, you're kind of there yet on the U.S. extended vehicle warranties. The other one would be U.S. life insurance. Where you've been acquisitive and you went back -- we went back way back and you built this with American-Amicable and Golden State, you proved it out and then you've layered on top of it.

Someone like me that's covered the life insurance space in a long time, U.S. life insurance expansion, can be in banking, too, but it can be a bit of a dirty word. So when -- I'm sure you get questions on this. And so why is this a good market? Why is it so attractive? Why is the U.S. life insurance market so attractive? And I know you're not in secondary guarantee UL or you're not in variable and UEs and all that stuff. But like what really attracts you to that marketplace?

Yes, that's an interesting question, and I'll start with an anecdote to give you a bit of context. At the time when we decided to go south of the border with a real footprint with the company in the U.S., I was in the acquisition team. So I worked there for a couple of years. I've mentioned it at the investor event.

At that time, I was helping the that went into the U.S., our former leader, Mike Stickney, to scan the market and identify potential market and targets. And what draw our attention with American-Amicable was that it was an opportunity for us to build on our strengths, which is the know-how of managing life insurance. So first thing.

Second thing was about our strength also on distribution management and American-Amicable business model is relying on important distribution relationship with IMOs. So we were quite excited. And I would say, finally, the other criteria we had in mind is that we didn't want to compete it with big names in the U.S. like Metropolitan and Prudential.

We wanted a niche market that was reinforcing on our strength and deliver value. And guess what, we would that company was selling about $25 million a year in 2010, and it's now selling over $225 million a year. So very successful broad story out there, building on our -- the highest trend foundation.

Any sort of product extension in the U.S.?

Yes, that's always top of mind. With American-Amicable for example, this year with -- we've put in place a bit of saving products like the pulp product and index UL for the same target market, because we want to keep the same distribution relationship. But for those that have a little bit of savings and wanted to do a bit more estate planning. There was a need for that. So we've just launched those products in the U.S. over the last 12 months. So those are 2 very good and recent examples.

Okay. I'm going to pull us back higher level out of the U.S. market and go back to Canada because I don't think we don't talk enough about Canada, and it's still a big part of your overall business. But it feels like you've got some of your competitors that are looking and waking up to the opportunity in Canada and Great-West has talked about the site fund market and Manulife with their strategic refresh has talked more about the mass insurance market in Canada, which is where you compete. Thoughts on increased competition in Canada in those particular segments or just frankly, in general.

Yes. In fact, let's be specific. We're in the -- our target market is mass marketing. Manu is talking about this now, but the Canadians in general are underinsured in Canada. We have LIMRA studies that talk about this. 50% of the Canadians are underinsured. Underinsured. So plenty of room to grow, okay? That being said -- and there could be growth opportunities for peers as well.

But the key thing with the mass market is really to meet a number of critical characteristics to be successful in that market. And those require years of buildup, which means infrastructure to be efficient, it requires technology as well. These days, we say that we -- one out of 2 policies that iA shows is issued automatically. We have, over the years, transform traditional underwriting with algorithm underwriting that has made by those algorithm. It will take years to build those and what's even more important is building distribution relationship.

And that's the key piece, a masterpiece that requires a lot of time to build up as well. So those 3 things make it. Finally, it requires time and money to invest and experience. So with all of that, iA has been building that story for years and in Canada. So for our peers that want to enter that market, they need to be as performance as we are right now in that market segment as it makes all the difference in the world.

Yes. And I assume you're not seeing any pressure at this point.

Not at this point. Even we heard about Canada and tension on the funds, but we don't really see it.

So going to the RF transaction, and you're going to be graded here because he is taking out. But the -- this isn't your first acquisition in the distribution, you have a history of doing acquisitions and distribution, you have experience doing it. Like what is -- and it's in different areas like dealers and stuff like that, but what is the history of your acquisitions in the distribution space? How has that helped you kind of formalize your -- the acquisition of RF and you're thinking about the opportunity with RF?

Yes. We've always been looking at distribution. It's part of our DNA to build. I just talked about the importance that the distribution place us within iA DNA. So it's not any different for wealth. So this is something we care a lot about, and we have a lot of interest, and we see that we can build something profitable. And we can scale technology costs and compliant cost are really, really increasing. And when you scale up those businesses, it allows us to be more competitive year after year with scaling benefits.

So that's quite important. And it's all about when we did something to acquire, but you need to be perfect at execution. You need to look at the missing -- the gap that the potential target as Stephan identified with a number of gaps that we were seeing. They had, and we had number of gaps and RN. And so when we look at this and the combined portions of our model with their model was really delivering more than 1 plus 1.

So it was really positive for them, and it was positive for us as well. So we look at all of these things when we look at acquisition, what does it bring to us? And what do we bring to them as well?

Five years from now, what will define the success of the RF acquisition?

Yes. First, I'll see meeting the execution and the CFO. So maintaining the financial target is quite important. So -- but I know that Stephan, we're in good hands. Stephan has been since the day after the announcement of the acquisition, Stephan hit the road and he met everybody and did great retention. So we think the financial target is quite important. And then building on and leveraging capabilities with the revenues and other parts of iA like insurance sales and so on in that market will be a key success criteria.

Will you provide revenue synergy targets at some point in time?

No, we did not think about that, but maybe that's something I will talk with Caroline. But keep in mind that when we talked about the acquisition and the accretiveness, we said that the improved EBITDA synergies will come about 50-50 between revenue and cost synergies. And on the revenue side, Stephan has a number of things that he wants to target -- to tackle for revenue synergies, like you know, it allowed us to improve the geographical footprint in Canada because we were not exactly in the same cities.

And also another example is that it provides us the RF acquisition, provides us an opportunity to recruit true bank adviser, that's really the key. With Stephan, what the model and the wealth model we had in place with financial advisory and the independent model we work hard with that independent dealer model or adviser model to be able to recruit these advisers from them. We needed a step in between that was a software lending space for bank advisers. And for us, that will be a good opportunity to even scale further the business model of RF.

So we've got just over a minute left, and I'm going to have to be kept on time here. So what I'll do is I'll pass it over to you just for some key messages and maybe there's something you want to address that maybe we haven't addressed or talked about in her discussion.

Yes, sure. For us, the next year, I would say, Doug, what will be top of mind for the next year is really deploying our capital. That's really -- that's really the key. We want to deploy capital through acquisitions through NCIB. I just said that we have just announced the increase of the NCIB. We want to optimize capital as well. We've done great in the last couple of years, tweaking and optimizing our capital structure. So that will be a key aspect as well.

And most importantly, deliver the benefits on the acquisitions that we've made and on the important investments. So those are the key things. All of this with maintaining our great story about organic growth internally and building those distribution relation.

We got through a whole discussion without talking about anything actuarial.

Yes. Great.

Thankful to everybody. So well, thank you very much. We really appreciate your participation in our inaugural conference here, and thank you very much and have a great rest of the day.

Thank you. Thank you, Doug.

Thank you for standing by. This is the conference operator. Welcome to the iA Financial Group Third Quarter 2025 Earnings Results Conference Call. [Operator Instructions] The conference is being recorded. [Operator Instructions] I would now like to turn the conference over to Caroline Drouin with iA Financial Group. Please go ahead.

Thank you, and good morning, everyone. Welcome to iA's Third Quarter 2025 Conference Call. This conference call is open to the financial community, the media and the public, and I remind you that the question period is reserved for financial analysts. Before we start, I draw your attention to the forward-looking statements information on Slide 2 as well as the non-IFRS and additional financial measures information on Slide 3. Also, please note that a detailed discussion of the company's risk is provided in our 2024 MD&A available on SEDAR and on our website with an update in our Q3 2025 MD&A, which was released yesterday.

I will start by introducing everyone attending on behalf of iA. First, Denis Ricard, President and CEO; Eric Jobin, Chief Financial Officer and Chief Actuary; Alain Bergeron, Chief Investment Officer; Stephan Bourbonnais, responsible for our Wealth Management operations; Renee Laflamme, responsible for Individual Insurance, Savings and Retirement; Pierre Miron, Chief Growth Officer for our Canadian Operations and responsible for Dealer Services Canada and iA Auto and Home; Sean O'Brien, Chief Growth Officer for our U.S. operations; and finally, Louis-Philippe Pouliot, in charge of Group Benefits and Retirement Solutions.

So with that, I will now turn the call over to Denis Ricard.

Good morning, everyone, and thank you for being with us on the call today. Before we dive into our strong third quarter financial results, I'd like to begin with a significant milestone for iA. On October 31, we officially completed the acquisition of RF Capital Group, one of Canada's leading independent wealth management firms. This transaction represents a major step forward in our strategy to strengthen our national footprint and expand our presence in the high net worth segment. We are very pleased to welcome RF Capital's talented teams to iA, and we look forward to the opportunities this partnership will unlock. Later in the call, Stephan Bourbonnais will provide more details on this successful transaction.

Now let's turn to Slide 8 for an overview of our third quarter results. We entered the second half of the year with strong momentum. Core EPS reached $3.47, up 18% year-over-year, and our core ROE stood at 17.2% on a trailing 12-month basis, already meeting our 2027 target of 17% plus. These results underscore the resilience and strength of our diversified business models, which continues to deliver consistent long-term value for our clients and shareholders.

Sales continued to be strong with premiums and deposits up 6% year-over-year and total assets under management and administration up 15%. This performance reflects our ability to meet evolving client needs through a broad and competitive product suite, supported by high-performing distribution network. Our capital position proves to be robust with a solvency ratio of 138% at the end of Q3, well above the regulatory minimum. This was supported by strong organic capital generation of $170 million during the quarter. As of September 30, our capital available for deployment stood at approximately $1.7 billion.

Together, the acquisition of RF Capital and the AMF-revised CARLI Guideline, which we will be discussed in more detail by Eric later in the call, are expected to reduce the solvency ratio by 3 percentage points and to reduce the capital available for deployment by $375 million. Therefore, on a pro forma basis as of September 30, the solvency ratio is 135%, and our capital available for deployment is estimated at $1.3 billion. Finally, our book value per share increased to $79.22, up 11% year-over-year. We continue to return value to shareholders through our active NCIB. Excluding the impact of NCIB, the increase in book value over the last 12 months is close to 13%.

Let's now turn to Slide 9 to review the business growth in our Insurance, Canada segment. Sales level and growth were good across almost all business units. Starting with Individual Insurance, sales reached $102 million, marking a second consecutive quarter above the $100 million mark. While this represents a 1% year-over-year decline, it's important to look beyond this figure. We continue to rank #1 in Canada for the number of policies issued with volume up 5% compared to the same quarter last year. This growth reflects strong business activity, particularly in our core market, the mass market. More importantly, net premiums increased by 11% year-over-year. On a year-to-date basis, sales are up 5%, and this is fully aligned with the expectations we shared at our last investor event. This performance underscores the strength of our distribution networks, the effectiveness of our digital tools and the breadth of our product offering.

Turning to group insurance. Premiums and deposits rose by 4% year-over-year, supported by good sales implemented in the last 12 months. In Dealer Services, sales grew by 9% to $214 million, driven by continued momentum in P&C insurance and the contribution from Global Warranty. Finally, iA Auto and Home delivered another strong quarter with sales up 10% year-over-year to $180 million, reflecting both an increase in the number of policies issued and price adjustments.

Moving to Slide #10 to highlight Wealth Management sales. where combined net fund sales from SEG and mutual funds across all our units surpassed $1.1 billion this quarter. We continue to build on our leadership position in the Canadian SEG fund market, posting strong results in both gross and net sales. Gross sales of SEG fund rose 23% year-over-year, exceeding $1.6 billion, while net sales reached $997 million. These results speak to the strength of our distribution networks and continued appeal of our product offering.

In mutual funds, gross sales increased by 58% to $608 million, and net sales reached $25 million, supported by favorable market conditions and a rebound in the industry-wide sales. Sales of other individual savings product declined 17% year-over-year as investors continue to favor higher return asset classes in the current market environment. Finally, in Group Savings and Retirement, total sales reached $607 million compared to $900 million a year earlier. Sales of accumulation products and insured annuities were lower this quarter. Note that volumes in this unit can fluctuate significantly depending on the size of contracts. That said, total assets under management and group savings were up 15% compared to a year ago.

Looking at Slide 11. Our U.S. operations continue to perform well. In Individual Insurance, sales increased by 15% year-over-year, reaching USD 78 million or approximately CAD 107 million. Once again, this quarter, our U.S. individual insurance sales surpassed those in Canada, driven by organic growth in our core markets. Vericity continues to benefit from its scalable platform and data-driven capabilities. Its integration remains on track and is supporting our long-term ambitions in the U.S. market.

In Dealer Services, sales remained stable at USD 286 million, reflecting consistent year-over-year performance. It's worth noting that sales in the third quarter of 2024 were temporarily elevated due to a system outage and that the growth momentum observed in the first half of 2025 was moderated by dealer group attrition. This attrition was partly driven by repricing efforts as part of the management actions we've been executing with discipline in recent quarters. While repricing efforts led to the loss of certain accounts, it was a strategic decision aimed at strengthening the foundation of the business and ensuring long-term profitability. We continue to invest in distribution relationships and remain focused on driving sustainable growth through our high-quality offerings.

Now turning to Slide 12, where our financial metrics demonstrate consistent progress toward our mid-term targets. Core EPS growth for the first 9 months of 2025 stands at 22% year-over-year, well ahead of our mid-term target of 10% plus and a strong indicator of our earnings momentum. Core ROE remains solid at 17.2%, already meeting our 2027 objective. Year-to-date, we've generated $495 million in organic capital, keeping us firmly on track to meet our 2025 target of over $650 million. Lastly, our dividend payout ratio of 28.3% is well within our target range.

To conclude, we renewed our NCIB program, allowing us to repurchase up to 5% of our outstanding shares. This decision reflects our balanced approach to capital allocation and underscores our commitment to returning value to shareholders while continuing to invest in organic growth and strategic acquisitions. With that, I will now hand it over to Eric, who will comment on our third quarter profitability and capital strength. Following Eric's remarks, Stephan Bourbonnais will share a few comments on the RF Capital acquisition, and then we will open the line for questions. Eric?

Thank you, Denis, and good morning, everyone. I'm pleased to walk you through our third quarter results, which reflect the consistency of our performance, the disciplined execution of our strategy and the strength of our diversified business model. These results, combined with a robust capital position, reinforce our ability to deliver on our financial targets.

Let's begin with Slide 14, which provides an overview of our profitability and financial strength for the third quarter. Core EPS for the third quarter reached $3.47, representing an increase of 18% year-over-year and reported EPS came in at $3.91, up 31% from the same period last year. This performance reflects strong growth in our core insurance service results, higher core noninsurance activities and a solid increase in the core net investment result. These results reaffirm the strength of our fundamentals and the effectiveness of our strategy in delivering sustainable profitability.

The quarterly core ROE annualized for the quarter was 18%, and our trailing 12-month core ROE reached 17.2%, continuing to trend above the target of 17% plus for 2027. We are pleased with this level of performance and remain focused on building on this momentum while staying prudent given macroeconomic and trade-related uncertainties. Our financial position is both solid and flexible, supported by our continued ability to generate organic capital. This strength enables us to pursue high-quality growth opportunities, both organically and through targeted acquisitions while maintaining a strong financial position. I'll return to the financial position later in my remarks to discuss the impact of the RF Capital acquisition and the upcoming 2026 AMF-revised CARLI Guideline.

Over the past 12 months, our book value per share has increased by 11%. Excluding the impact of our active share buybacks, this increase would have been 13% Yesterday, we announced the renewal of our NCIB program, authorizing the repurchase of up to 5% of our outstanding shares. This renewal reflects our continued commitment to disciplined capital deployment and delivering value to shareholders.

Turning to Slide 15 for an overview of our third quarter total earnings performance. Net income grew by 29% year-over-year, while core earnings rose 17%, reflecting solid contributions from all three operating segments and strong investment results. Notably, net income exceeded core earnings this quarter, driven by favorable macroeconomic variations.

Now turning to Slide 16 for a closer look at segment performance in the third quarter. In Insurance, Canada, core earnings were $113 million, up 7% year-over-year. This growth was driven by higher core insurance service result, reflecting an increase in combined risk adjustment release and CSM recognized for services provided. Unfavorable morbidity in group insurance, which continued to -- which contributed to insurance experience loss of $2 million was partially offset by favorable mortality and lower claims at iA Auto and Home.

Impact of new business was $10 million as a result of new insurance business in employee plans stemming from high volume of confirmed sales, including one large group. Core non-insurance activities also contributed positively, led by the good performance of dealer services. Finally, core other expenses were slightly higher than last year, reflecting normal business growth.

Let's now move to -- from Insurance, Canada to Wealth Management on Slide 17. You'll see that in the Wealth Management segment, core earnings reached $125 million in the third quarter, up 18% year-over-year. This growth was primarily driven by increase in the combined risk adjustment release and CSM recognized for services provided, supported by strong net segregated fund sales and positive financial market performance over the past 12 months. Core non-insurance activities also posted a solid increase, thanks to good performance from Group Savings and Retirement, our wealth distribution affiliates and iA Clarington, where higher net revenues on assets was recorded.

Turning to Slide 18, covering our U.S. operations, where third quarter core earnings totaled $32 million, up 3% year-over-year. This result reflects several factors, including a higher combined risk adjustment release and CSM recognized for service provided, supported by good business growth over the past 12 months. The segment also benefited from a lower impact of new insurance business and reduced core other expense. During the quarter, we recorded insurance experience gains of $2 million, driven by favorable mortality in individual insurance. Core non-insurance activities totaled $19 million, in line with the prior year. Higher earnings from Dealer Services were offset by expected losses in Vericity distribution activities. That said, core earnings growth was tempered by higher core income taxes, primarily due to onetime adjustments.

Now turning to Slide 19 for the results of the Investment segment. Core earnings for the quarter were $105 million, up from $80 million in Q3 2024. Before accounting for taxes, financing charges on debentures and dividends, the core net investment result was $132 million compared to $111 million a year ago. This strong performance was supported by several factors, including the favorable impact of interest rate variations in recent quarters, stemming from the steepening of the yield curve as well as to a lower extent, higher results from iA Auto Finance and the contribution of additional assets from the June issuance of institutional pref shares. In addition, credit experience was positive with higher impacts from upgrades and downgrades in the fixed income portfolio. At iA Auto Finance, our underwriting discipline and portfolio quality contributed to a positive credit experience in the car loan segment.

Moving to Slide 20 for the Corporate segment. Core other expenses totaled $70 million pretax in the third quarter, consistent with our quarterly expectation of $68 million, plus or minus $5 million as we continue to focus on operational efficiency.

If you turn to Slide 21 to review our solvency ratio and capital available for deployment. As of September 30, 2025, our solvency ratio stands at 138%, well above the regulatory minimum ratio of 90%. The ratio remained stable during the quarter as the positive impacts of organic capital generation and macroeconomic variations were offset by capital deployment activities, including share buyback, IT investments and other non-organic factors such as adjustment in the investment portfolio.

On a pro forma basis, the solvency ratio is estimated at 135%, taking into account the impact of the RF Capital acquisition completed on October 31, 2025, and the expected impact of the 2026 AMF-revised CARLI Guideline. On that note, in September 2025, the AMF published a consultation for a revised CARLI Guideline set to take effect on January 1, 2026. If adopted as published, the guideline would, among other changes, modify the treatment of excess capital recognition for property and casualty subsidiaries. This effect is expected to be positive for our U.S. Dealer Service business unit and results in favorable impact on the solvency ratio and capital available for deployment.

During the third quarter, we generated strong $170 million in organic capital, keeping us on track to reach our 2025 target of $650 million plus. As of September 30, capital available for deployment was assessed at $1.7 billion, supported by organic capital generation and the positive impact of the 2025 AMF-revised CARLI Guideline on segregated funds. On a pro forma basis, taking into account the RF Capital acquisition and the expected impact of the AMF 2026 revised CARLI Guideline, capital available for deployment is estimated at $1.3 billion. Despite investing in the second largest acquisition in our history, we remain -- we maintain a substantial amount of capital available for deployment, giving us the flexibility to pursue attractive growth opportunities.

As we build on successive quarters of strong profitability and a robust capital position, we entered the final quarter of the year with confidence in our strategy and in our ability to execute. We remain focused on maintaining this momentum and delivering consistent high-quality results that support our long-term objectives. These conclude my remarks. I will now turn it over to Stephan, who will speak about the RF Capital acquisition. Stephan, over to you.

Thank you, Eric. Good morning, everyone. I'm pleased to take a few moments to speak about the successful closing of the acquisition of RF Capital. As you know, that took place on October 31. And as Denis mentioned, this transaction marks a major milestone in our ambition to establish ourselves as Canada's leading non-bank wealth management platform. When you look at Slide 23, you'll see that the total price of the transaction is $693 million, which includes the advisor retention strategy we implemented prior to closing. Transaction and integration costs are estimated at $60 million before tax and are expected to be incurred over the first 3 years.

So this investment reflects our long-term commitment to the value of advice and advisor engagement, and we expect the acquisition to be neutral to core earnings in year 1 and accretive to core EPS by at least $0.15 in year 2. This acquisition strengthens our position in the high net worth segment and expands our national footprint by adding advisors and offices coast to coast. And by integrating RF Capital Advisor Network, in iA Wealth now operates with three complementary business model with Investia and iA Private Wealth, which will allow us to drive efficiency in technology, operations, and innovation and will position us for accelerated growth, all with the main objective to equip our advisors with tools and expertise that they will have access to that will help them deliver a strong experience and outcome to their clients.

If we now move to Slide 24, we present the time line of this acquisition. So since the announcement in July, we've been on the road. Our objective was to meet with RF Capital Advisors. Obviously, the focus was on advisor retention. We wanted to take the time and the opportunity to visit every office in Canada to sit down with advisors one-on-one to get to know them better, to share our vision, and to ensure a smooth transition for everybody involved. The conversations were rich. The conversations were candid and very much forward-looking. We're pleased with the overwhelming positivity and openness demonstrated by the advisors. They see a real opportunity in this new chapter and are genuinely excited about joining forces with us.

Three things really captured, I think, their attention in terms of how we wanted to go forward with them. The fact that we wanted to keep it as a distinct business, I think they were excited about the opportunity to continue growing and building their own culture. The thoughtful approach that we had to avoid any disruption for them with advisors not needed to repaper or lose any client data was a key. And last but not least, they really see true value in our partnership, understanding the capabilities from an IT and solution perspective that we could bring immediately to their road map.

In the light of their feedback and the enthusiasm they have shown, we are ready to move forward with the integration. The synergy plan is officially in motion. We're approaching it with the same discipline and focus that guides us through our -- all of our strategic initiatives. This is an exciting moment. When you look at the numbers that we show on Slide 24, when we started the process at the end of June, the assets under administration was at $40.4 billion and it now is up to $43.6 billion at the end of September. The number of advisors remained stable. We did lose some advisors, but we started the process with 143 teams. And at the conclusion of the transaction, we were at 142 teams, reflecting teams that have joined us during this process.

So with the addition of RF Capital, iA Wealth now serves over 500,000 clients through more than 1,450 advisors with assets under administration exceeding $192 billion. At the group level, we have assets under administration and management in excess of $330 billion, a clear reflection of our continued growth and the successful execution of our strategic priorities. With the retention strategy completed, our focus now shifts to unlocking synergies, accelerating the integration, and delivering the full value, all in line with the iA. These benefits include expanded product access, shared technology, enhanced recruiting potential, and operational efficiency. And this transaction [indiscernible] our strategic vision and sets iA Wealth on a path towards sustained long-term growth.

So thank you, and I will now turn it back to Denis for concluding remarks. Denis?

Thank you. Thank you, Stephan. And yes, we are very, very pleased with the RF Capital acquisition and I'm very proud to close the retention strategy chapter on a strong note with successful outcomes leading up to the closing of the transaction.

So before we move to the Q&A, let me just take a moment to close with a few reflections. Please turn to Slide 26. Our third quarter results once again demonstrate the strength and consistency of our diversified business model and our ability to execute with discipline. We're not just delivering, we're compounding. Quarter after quarter, year after year, we continue to build momentum. Our earnings growth is consistent, underpinned by high-quality results and a clear focus on long-term value creation. Our organic capital generation and robust financial position give us the flexibility to invest in strategic growth and return value to shareholders.

Sales momentum is strong, particularly in Wealth Management, which generated over $1.1 billion in net fund sales this quarter. These results reflect the continued appeal of our offerings and the strength of our distribution network. This performance is no coincidence. Our strategy is clear. We are executing the iA way. It's the result of a resilient and differentiated business model built on five reinforcing pillars: targeted niche markets, a broad and entrepreneurial distribution network, diversified product offerings, agile technology, and scalable platforms. This unique combination is what sets us apart. It makes us resilient and enables us to consistently deliver across economic cycles while positioning us for long-term growth. Our recent acquisition of RF Capital is a clear example of how we deploy capital to strengthen our foundation and accelerate future growth. We are focused, disciplined, and confident in our ability to continue delivering, not just results, but sustainable compounding growth.

Thank you. Operator, we are now ready to take questions.

[Operator Instructions] Our first question is from Gabriel Dechaine with National Bank Financial.

So another good news on the capital front there with the AMF modification there. Just wondering, is this -- for starters, is this bringing the AMF more in line with OSFI treatment? And then second, I mean, I'll ask the obvious question, what's your appetite for more acquisitions at this stage? It seems like it would default to buybacks in my assumption, but you're an acquisitive company historically. So maybe there's something else on the horizon?

Yes, Gabriel, it's Eric. I'll take the first part, and I'll leave it the second part for Denis. For the CARLI Guideline, it brings AMF. This dealer business model is kind of unique for an insurer in Canada. So there's not really comparable at the OSFI level. So it's not necessarily that, but it brings AMF in line with the U.S. regulators in terms of capital requirements. So there's -- this is where the alignment is coming.

Recognizing that it's a P&C business basically or...

Yes, exactly. And so it takes into account the risk of the business instead of just applying a guideline.

Yes. It's Denis here. We're very pleased with the end result. Having a level playing field with our competitors in the U.S. was a goal, and we're very pleased that the discussion we had with the regulators. The regulator has been quite open on that. Obviously, the regulator is not here to give us a Christmas gift, but really, the level playing field was the goal all the way for both of us.

In terms of the appetite for the dealer business, obviously, it was a milestone for us here in a sense that before we -- this was settled, there was -- I mean we were not sure exactly what will be the end result. And to some extent, we were patient to wait to see what will be the end result. Now that it's being solved, there's one, I guess, step forward before we want to go, let's say, bigger on the dealer business in the U.S., which is really to bring profitability to a, I would say, an adequate level, a reasonable level that we would be comfortable with. And the team is working very, very hard. And at some point, I'm sure we're going to get questions, and Sean can answer that. But we've done various steps toward improving the profitability and the growth of that business. We are on the right path. I'm very confident that within a couple of quarters, we might take a decision to go bigger on that.

And then my second question, just from a modeling standpoint, I guess, the capital deployed, you closed that RF Capital post quarter. Is there a step down in the expected investment income line that we should expect? And just for clarification, then there would be an offset in somewhere else, I guess, expected profit such that it's still an EPS neutral in the first year?

Yes, Gabriel, you are right. In fact, one of the reasons why the expected investment earnings in the third quarter was higher than last quarter was that we issued capital in June, and we will get the opposite impact in the fourth quarter where we have now deployed the capital, reduced the amount of asset. So that will reduce our investment income, but increase our operating results in the wealth segment going forward.

So that being said, Gabriel, in terms of accretiveness, we -- of course, we just have 2 months into '25. We expect to get some neutrality. But as we look and if macroeconomic holds and Stephan has done a great job with retaining advisors. So we now expect to be accretive in the first year if everything holds like this. So we -- and as a simple rule, we mentioned some accretiveness number in -- when we made and announced the acquisition. You should assume that this number can move a year earlier as a good proxy for what the performance of this acquisition.

I think that $0.15 could be year 1 as opposed to year 2. Got it. Okay.

Exactly. But the only thing, Gabriel, is expect some neutrality in the next couple of months. But overall, for the first year, we see that it will be accretive.

The next question is from Doug Young with Desjardins Capital Markets.

Maybe for Eric or Stephan. Just continuing with the ARF acquisition discussion. I was going to ask how you get from neutral year 1 to $0.15 accretion in year 2, but you talked a little bit about it. But can you maybe just elaborate like why initially you thought it was going to be 0 in year 1, $0.15 in year 2 and why it could be pulled forward? And then there's been no discussion on -- and I don't think there's been a lot of discussion on revenue synergies, but maybe I missed it. But like do you think there's opportunity for revenue synergies? And can you kind of elaborate a little bit about where that could come from?

Yes. Well, thank you, Doug, for the question. It's Denis here. When we bid for an acquisition, there's always a lot of assumptions behind that. In this case, there were two that were critical. One was the retention, obviously, and the second was about the, let's say, the performance of the market. And on both sides, we've had fantastic results much better than we expected on both retention and the macroeconomic environment has been very favorable, a huge tailwind. So that's why we're seeing today that the $0.15, we might just realize it in the first year as opposed to the second year.

Thoughts on the revenue synergy.

Yes, I could take that part. When we visiting with them what we've heard, there's a lot of opportunities. When you think of from a product solution perspective, whether it is UMA, SMA, they need assistance. They were looking for a team that could support them on product development oversight. They were looking for support on economic insight, asset allocation strategy.

So those are all the things that we have within our organization that we're going to be able to put forward capital market activities. They did have a team, but I think there's complementary skill set that we're bringing to the table, considering the high net worth profile that they have with advisors in the alternative space, there's an appetite for us to support them. There's a distinct product that we could build with them as well from structured notes, ECM, syndication. They're excited about our trading desk on the equity and FX side. So I really do think there is a lot of opportunity. And the thing that we like is we are ready to bring this forward.

So we are actually at the office today speaking to the advisors and the employees, and we are able to show them a road map from the synergies perspective in terms of what we expect right now and for the next coming quarters. We also see a lot of opportunity on the recruiting side. I think I had shared with this group with the Investia model in Private Wealth, we were good at attracting non-bank advisors. There's a huge opportunity in Canada to attract bank advisors. People are looking for an alternative.

And I think the Richardson channel offers us that opportunity to bring bank advisors to us. So this will accelerate the recruiting and probably improve as well as the retention. We were doing well, but now having multiple channel advisors, we'll be able to pick and choose where they want to operate based on their needs and preferences. And we could also say there's a huge opportunity on the cash management side for us. So we feel comfortable about what we could create in terms of synergy on the revenue side.

That's helpful. And then just second, I don't know if this is for Alain or for Eric, but strong quarter for the Investment division. I was finding this is really tough to model. Can you talk about any puts and takes that we should be thinking about when we're modeling Q4 2026? Anything unusual? I know you did a raise that obviously bolstered cash and then you had cash that's now been deployed with RF. Like I'm just trying to put in context of how to think about that division and model that division, so I don't get any huge surprises.

Yes. It's Eric, Doug. I'll help -- I'll keep -- I'll take this one. As you're right, first, our -- the capital issuance in June was one of the driver of the beat or the increase quarter-over-quarter. The other item that is difficult for you to predict is when the yield curve is moving and steepening or flattering. So this part is difficult to model. But -- and it was positive in the quarter. And I would say that the third part that has been positive and that is contributing to investment income as well is the improvement in iA Auto Finance performance.

The expected investment earnings coming from that segment has improved over the last 12 months. We've done many things to improve the credit underwriting criteria, and we're seeing the results. And now the expected investment earnings is improving and credit experience start to be positive as well. So I think we've been successful in turning around that investment portfolio, and we're just collecting the benefits of that hard work.

So is this -- Eric, is this like a normal quarter? Or should we kind of be thinking about something a little less robust?

You mean in iA Auto Finance, Doug, or in general.

No, the general division in general.

Okay. Yes. In general, I talked about three things that explain. So obviously, the capital issuance is going the other way around this time. As we've just deployed $700 million, you should expect investment income to go down by roughly, I would say, $5 million next quarter. But you will see improvement in the operating result of the wealth segment. And keep in mind the guidance I gave about the accretiveness earlier on. So those are the moving parts. And then it's difficult to guess where the yield curve will move in the coming quarters. But for iA Auto Finance, we're really confident that we're there, and we've made the improvement that we needed to do. So that should prevail in Q4 as well. That's kind of how I see it.

The next question is from Tom MacKinnon with BMO.

I've got two questions. The first is with respect to the core non-insurance activities in the U.S. down quarter-over-quarter, $4 million. You mentioned losses for distribution activities of Vericity. Can you elaborate on that? Is -- how much of those losses are in that $19 million? What's the dollar amount there? And what would drive that core non-insurance activities number to increase? Is it predominantly related to dealer services sales? How should we think about these other distribution activities at Vericity and their impact? And I have a follow-up.

Yes. Thanks. I'll start with an explanation for the financial impact, and then my colleague, Sean, will step in for the strategy. In fact, what you've seen in the quarter is a decrease related to the sales activity that will Sean comment just after me. And the only thing I would remind you, Tom, is that we say all the time that the profit recognition for dealer service is happening mostly at time of issuance. So when sales go down, it impacts directly the core non-insurance activities. And as a rule of thumb, I said previously, I think someone asked me, and I said 70% -- 75% of the revenue are recognized at time of sales. So it's really that effect. And I will leave now the mic to Sean to explain what he is doing on the -- on your strategy. Sean?

Yes. Thanks, Eric. And Denis mentioned in the open, for the Dealer Services business, we're really happy with the recovery we're seeing this year. The real focus was working on the operations, reducing some of the expenses on it and then looking at pricing across the board. And I mentioned last quarter that we've repriced all of our onerous products in that business. And it was expected as part of that process with a real focus on profitable, high-performing dealers that we would see some attrition, which we did, all within sort of the range of what we'd expected.

The other impact we're seeing this year is there's some variance in the normal sales flow in the U.S. with Q1 was so strong. It was 23% higher than the year previous, as I recall. And so we sort of saw some pull ahead, I think, at the beginning of the year and Q3 was softer. But overall, really happy with the results. We're going to come in very close to our target of 10%, I suspect, for the year. Yes, so things are looking good, very happy with it.

And the Vericity, what was the impact there? And how should we be -- is Vericity really material to that line?

Go ahead, Eric.

Yes. If you want to add, Sean, the materiality of Vericity, keep in mind that in that core non-insurance activities, you have the distribution impact of the Vericity acquisition. So it's still minimal, Tom, on this. It's slightly negative, but it's as expected. We knew when we made that acquisition that we would have a couple of years of loss and on that line. And when we refer to accretiveness overall, starting in year 2, it's when we look at the overall picture, including the insurance activities that you have in the driver of earnings in other lines. So overall, things are moving in the right direction. But for the distribution arm, it's still operating at loss, and we still expect losses to happen for a little while before it becomes profitable, but things are moving in the direction that we expected.

Okay. And then the follow-up question is just with respect to capital generation, organic capital generation. Year-to-date, your earnings are up. Your core earnings are up 22%. I think if you kind of look just, you might be almost up 18% year-over-year in the quarter. Yes, so certainly tracking well ahead of the 10% guide or the 10% growth plus guide. But the organic capital generation, the $650 million versus the $600 million isn't -- is substantially less than the core earnings growth. Is there any reason why? Or is it the policyholder gains that aren't necessarily transferable into organic capital generation? Just any color there would be helpful.

Things are moving in line with plan, Tom. We always have some seasonality that takes place for organic capital generation during the year, specifically in the first half where it's kind of lower and then it's stronger in the second half. If you look at the past year, you'll see the same trend. As we speak, we're at $495 million of organic generation, well on our way to get to the $650 million plus. So things are $595 million, excuse me, I said $495 million, but we're well in a good direction to get there.

No, my question isn't, are you going to get there? My question is, why is the growth in the organic capital? Why is that growth less than the growth in the core earnings?

We'll take it offline, Tom, if you don't mind. It can get technical.

Understood.

The next question is from Paul Holden with CIBC.

Two questions for you as well. First one on the mutual fund sales, a big improvement in gross sales, up 58% year-over-year, and then that drove net sales to the positive, which is great. So I want to understand that a little bit more, obviously, with the idea of sustainability of that improvement. So if you can explain where that huge growth in gross sales is coming from, if it's affiliated distribution versus third party, if there's been improvement of fund performance or if it's more new product launches, whatever color you can give us.

Yes, we're very pleased with the mutual fund sales this quarter. And maybe, Stephan, do you want to give more color on that?

Yes. Thank you. Yes, great improvement, I would say, quarter-over-quarter and year-to-date. The industry has rebounded as well, right? So I think we also benefited from that. But I think what you're seeing here is we've done a lot of work on retooling the team, realigning the team, upgrading our talent. We've been successful at increasing our sales to the affiliate channel with new products that have landed well with our team, mostly with our UMA approach and elite pools that has been a huge success, and we've seen significant adoption. We've supported advisors with alternative products as well that they've been looking at. And we've seen increased sales in the non-affiliate as well.

We onboarded a new manager -- a new portfolio manager a year ago with a firm named Agile, and they've been quite successful at opening up doors with the bank. So it's been great to see. And that has driven, obviously, net sales to be in a positive territory. So it's looking good. What I like is we see the consistency week over week. We've seen an increase in sales on our average. We've also seen week after week the net number being there. So it's not like one big week or one big month that is giving and showing to the numbers. It's the consistency in the approach we're having. So I feel pretty good about the momentum where we're at right now.

Okay. Great. And then a bigger picture question on ROE. I mean, as you highlighted, you're ahead of plan in terms of ROE expansion, which is great. If I recall from Investor Day, you kind of highlighted two potential catalysts for the ability to exceed that 17% target, which were share buybacks and acquisitions, two things that look to be in the card. Are those kind of the things we should continue to look at in terms of your ability to exceed that 17% level? Or can you also get there based on where you are today just based on organic growth as well?

Yes. Thank you for the question. Absolutely. That's the answer -- the short answer. We have a pace of buyback right now, which is lower than our capacity to generate organic capital. i.e., we are actively looking for profitable acquisition going forward. But at the end of the day, there's always a plan B that if we're not able to deploy profitably our capital that we might increase the NCIB, the buyback. So those are the very important tools that return value to the shareholders.

Our first choice is really to grow the company, grow the organization. That's what we've done recently with the RF Capital acquisition. But -- and we are actively looking at some. That's of our first choice. But at the end of the day, if we cannot, for whatever reason, we'll return the value to the shareholders. Our goal is not to pile up capital.

[Operator Instructions] the next question is from Mike Rizvanovic with Scotiabank.

Just a quick follow-up from Eric, maybe on the steepening of the yield curve. And just making sure I heard you correctly. So $5 million down potentially, that's for the investment segment overall next quarter?

Yes, accepting -- excluding any macroeconomic impact. That's what you should expect, everything being the same.

Got it. Okay. And then as far as the movement in the yield curve, the steepening, just trying to get a better sense of was there anything peculiar about the steepening? Is it any part of the curve that drove an outsized result? Just trying to get a sense of just what happened in the quarter. It seems like it's a sustainable level with maybe a bit of downside for next quarter. But generally, you're going to keep those gains because the yield curve has already steepened. Is that the way to think about it?

Yes, exactly. We always say that we're winning when the curve is steepening overall for the organization. Of course, some sector may be affected by a short-term decrease in interest rate. But overall, when we look at our overall organization, we win and of course, at some point, steepening on its own is not enough. We need a good long-term interest rate as well. But in the current environment, it's favorable for us on both sides, steepening and the level of interest rate.

Okay. That's helpful. And then a quick one for Stephan, just on the retention of the iAs with RF Capital. Do you think you're past the point where the risk of attrition has basically gone? What I'm getting at is I'm not really sure if it's at the announcement date within a few months of the announcement date, and that's when you normally see attrition? Or is it like 12 months later? Like do you feel like you're past the point where the downside risk on attrition has basically diminished at this point?

I'd love to say yes to this. But unfortunately, right, our focus is always the same, and it's true for RF, but it's true for Investor and Private Wealth, right? It's always to make sure that we're keeping our advisors to stay with us, right? So obviously, they had opportunities to choose a different path. I think what they're saying is they're willing to stay with us and see what we can do by coming together.

So I think we're going to have a really good shot at showing to them the value of our new partnership. I think they're excited about it. So I was obviously concerned from the first few weeks to see how they would react. And I know the industry was close to them and offering them an alternative. And I think the message that we're getting is they're willing to give us a fair shot. And we're going to take it, and we're going to work with them to make sure that it's a successful partnership for both parties.

Yes. Maybe just one thing to add is that, obviously, the first weeks were very, very critical. So they pretty much understand what's our value proposition right now. And as you've seen from the numbers, I mean, most of the teams are with us as we speak. But obviously, for any other -- for any organization, including us, you always have to demonstrate your value.

The next question is from Darko Mihelic with RBC Capital Markets.

I'll be very quick. Eric, I just want to go back to that $5 million drop in investment. Are you talking the -- I mean which line item are you talking about? Because we calculate that the LRCNs alone will be an $11 million impact next quarter. So are you talking ex that? Or am I -- are you talking the investment line? Like are you talking bottom line number for just $5 million?

No, no. I'm talking about the expected investment income, Darko, the top line of that. When we reduce our invested asset by $700 million, if you make a reasonable assumption, you'll figure out quickly how we get to the $5 million per quarter.

Yes. Okay. Great. And then just overall, Denis, are you getting a little -- I mean, the markets have been very kind. How do you feel about the overall exposure to very strong equity markets, a solid yield curve, essentially, where I'm going with this is we're at a stage now where your wealth business is much bigger, your investments are in a very strong place. How do you feel about a downturn, a drawdown supposedly, like something like that. How do you -- can you speak to your sensitivity to these items? And what makes you comfortable that your earnings power is really secure in a bear market, so to speak?

I mean we have sensitivity -- thank you for the question. We have sensitivity testing on the market movement. So you can relate to that if you want. But the one thing that I would say is that, I mean, as far as I'm concerned, I'm not that concerned of a downturn. We know it's going to happen at some point for sure. When we commit for the 10% EPS growth going forward, 10% plus, it's really for the long term. So there are years where the 10% might not be hit because of market -- if there is a strong market downturn, it might affect the profitability overall.

But at the end of the day, when we look long-term, we're pretty confident -- pretty much confident that we will reach or even exceed the 10% plus. We've already had a great ride so far, much more than the 10% plus. So you have to look at it on a very long-term basis. I mean, obviously, from one year to the other, you'll see some sensitivity.

Okay. And does it change your capital deployment plans?

No, it's not changing. Absolutely not. We will be prepared to allocate and deploy our capital in any business, even the ones that is sensitive to the market, like RF Capital that we've just bought, obviously, we're very pleased where we are right now because the market has also collaborated a lot since we announced the acquisition. So if there are other opportunities in this space, we'll get there and any other space like individual insurance in the U.S. is one that is less, I would say, affected by stock market. This is one that we would be very much prepared to invest as well. Dealer Services, we'll see, as I said before, still need a couple of quarters before we go bigger on that. But again, any business we're in, we're pretty happy because the ROE is higher than the target.

Eric, if you have a chance, I'd like to also speak offline. regarding your capital. We did an analysis using comprehensive income core and reported, and we found very little relationship between those and organic capital generation. So I'd love to be part of that conversation, please. Thank you.

No problem, Darko.

This concludes the question-and-answer session. I'd like to turn the conference back over to Caroline Drouin for any closing remarks.

Thank you, everyone, for joining us today. All of our Q3 earnings release and slides for today's conference call are posted on the Investor Relations section of our website at ia.ca. A recording of this call will be available for 1 week starting this evening. And the archived webcast will be available for 90 days, and a transcript will be available on our website in the next week. Note that our 2025 fourth quarter results are scheduled to be released after market close on Tuesday, February 17, 2026. Thank you again, everyone, and this concludes our call.

This brings to a close today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.