iA Financial (TSE:IAG) reported higher second-quarter earnings and continued growth in wealth management, while management highlighted ongoing efforts to improve profitability in its U.S. Dealer Services business.
Core earnings totaled CAD 330 million in the second quarter of 2026, while net income reached CAD 384 million. Core earnings per share were CAD 3.68, up 5% from a year earlier, and reported EPS was CAD 4.28, up 25% year over year. Trailing 12-month core return on equity was 17.5%, meeting the company’s 2026 target of at least 17%.
Capital Position and Shareholder Returns
The company ended the quarter with a solvency ratio of 137% and CAD 1.1 billion of capital available for deployment. It generated CAD 188 million of organic capital during the quarter and CAD 335 million in the first half, keeping it on track toward its goal of generating more than CAD 700 million in organic capital during 2026, Ricard said.
iA Financial returned capital through dividends and CAD 347 million of share repurchases during the quarter. Book value per common share was CAD 80.55, up 6% over the previous 12 months.
CFO and Chief Actuary Éric Jobin said the solvency ratio increased three percentage points during the quarter, supported by a May capital issuance, organic capital generation and favorable macroeconomic impacts. The increase was partly offset by buybacks, investments in organic growth and common-share dividends.
Jobin told analysts that the company’s capital available for deployment declined by about CAD 100 million from the prior quarter primarily because of share repurchases. He said the company is currently constrained by its core ratio, with negative reserves associated with growth in Canadian insurance and segregated funds limiting the immediate recognition of some sales-related gains in deployable capital.
Wealth Management Drives Earnings Growth
Wealth Management core earnings increased 37% year over year to CAD 155 million. Jobin attributed the increase to strong segregated fund inflows, favorable financial markets, higher net revenue on assets, advisor recruitment and a CAD 13 million contribution from RF Capital Group, which he said was performing better than expected at the time of its acquisition.
Gross sales in wealth management reached CAD 4.3 billion, while combined net inflows in segregated and mutual funds were CAD 934 million. Individual segregated fund gross sales climbed 52% year over year to more than CAD 2 billion, and net sales exceeded CAD 1 billion. Mutual fund gross sales increased 46% to CAD 644 million, though the business recorded net outflows of CAD 73 million.
Group savings and retirement sales exceeded CAD 1.1 billion, rising 35% from a year earlier, while total assets under management increased 15% year over year.
Management said wealth earnings benefited from both structural and market-related factors. Jobin told analysts that the contribution was roughly split between organic or structural factors and favorable macroeconomic conditions, cautioning that market conditions may not remain as strong in future quarters.
Canadian Insurance Remains Stable
Insurance, Canada generated CAD 128 million in core earnings. Favorable mortality and morbidity experience contributed CAD 19 million before taxes, compared with a CAD 31 million gain a year earlier. Higher risk-adjustment releases and contractual service margin recognition in individual insurance and employee plans also supported results.
Individual insurance sales were CAD 102 million, broadly comparable with the prior year. Ricard and Renée Laflamme, executive vice president for individual insurance, savings and retirement, said the company remains disciplined in underwriting and pricing, particularly for participating insurance products with early value accumulation features.
Laflamme said iA Financial held a 25% market share in policies issued in Canada, though quarterly policy volumes can vary. Management said it is maintaining heightened vigilance around certain high-mid and large-case sales concepts to avoid assuming undue long-term lapse risk.
Employee plans implemented sales reached CAD 30 million, compared with CAD 8 million in the second quarter of 2025. In special markets, sales were affected by lower international student medical insurance volumes following federal measures limiting international student entry into Canada. Management expects that impact to remain visible in the second half.
Dealer Services sales in Canada were CAD 218 million, close to the prior-year result, while iA Auto and Home direct written premiums increased 5% to CAD 216 million.
U.S. Dealer Services Remains a Focus
U.S. operations generated CAD 24 million in core earnings, down from CAD 36 million a year earlier. U.S. individual insurance sales reached a quarterly record of US$86 million, up 10%, driven by final-expense and middle-market products. However, the segment recorded an CAD 8 million experience loss, primarily from a small number of large mortality claims at Fidelity Life.
Jobin characterized the mortality losses as statistical fluctuations and said they were expected to be non-recurring. Management continues to expect the Fidelity Life acquisition to become accretive to core earnings in the second half of 2026.
U.S. Dealer Services sales were US$292 million, broadly unchanged from a year earlier amid less favorable auto-market conditions. Ricard acknowledged that the business has performed below the company’s long-term expectations, but said management actions are intended to support a gradual recovery.
Sean O’Brien, executive vice president and chief growth officer for U.S. operations, said the company has repriced products, focused on operations and restructured its sales organization. He said iA Financial initially emphasized its dealer acquisition channel and has since put sales leaders in place to focus on agent and dealer channels, with a pipeline building for later this year and into 2027.
Ricard said the company expects U.S. operations to become a growth tailwind in 2027 and 2028, though improvement in U.S. Dealer Services is not expected to occur within only a few quarters.
About iA Financial (TSE:IAG)
iA Financial Group is one of the largest insurance and wealth management groups in Canada, with operations in the United States. Founded in 1892, it is an important Canadian public company and is listed on the Toronto Stock Exchange under the ticker symbol IAG (common shares). To learn more about iA Financial Group, you can sign up for our newsletter on our website at ia.ca. iA Financial Group is a business name and trademark of iA Financial Corporation Inc
