iA Financial Group Reports First Quarter Results and an 11% Common Dividend Increase

Delivering on financial targets – Strong momentum in wealth management

This news release presents financial information in accordance with IFRS^® Accounting Standards (referred to as “IFRS” in this document) and certain non-IFRS and additional financial measures used by the Company when evaluating its results and measuring its performance. For relevant information about non-IFRS financial measures and other specified financial measures used in this document, see the “Non-IFRS and Additional Financial Measures” section in this document and in the Management’s Discussion and Analysis for the period ended March 31, 2026 (the “Q1/2026 Management’s Discussion and Analysis”), which is hereby incorporated by reference and is available for review at sedarplus.ca or on iA Financial Group’s website at ia.ca. The results presented below are for iA Financial Corporation Inc. (“iA Financial Group” or the “Company”).

FIRST QUARTER HIGHLIGHTS

• Core EPS^†† of $3.25 (+12% YoY) and trailing-12-month core ROE^†† of 17.5%, in line with the 2026 core ROE target¹ of 17%+
• EPS of $1.49 (-25% YoY) and trailing-12-month ROE² of 14.3%
• Record segregated fund gross sales³ of $2.4 billion, and individual insurance policies issued up 5% YoY in Canada
• Good sales and business retention, bringing net premiums,³ premium equivalents and deposits³ to nearly $6.4 billion, up 10% YoY
• Total assets under management³ and assets under administration³ up 31% over the last 12 months to exceed $346 billion
• Solid organic capital generation³ of $155 million in Q1, up from $125 million in Q1 2025, on track to reach the 2026 target of $700+ million¹
• Robust capital position emphasized by a 134% solvency ratio⁴ and capital available for deployment³ of $1.2 billion as at March 31, 2026
• Share buyback program (NCIB) maximum to be increased from 5% of shares outstanding⁵ to 8% of public float⁵ (subsequent to the quarter)

QUEBEC CITY--(BUSINESS WIRE)--For the first quarter ended March 31, 2026, iA Financial Group (TSX: IAG) recorded core diluted earnings per common share (EPS)^†† of $3.25, which is 12% higher than the same period in 2025. Core return on common shareholders’ equity (ROE)^†† for the trailing 12 months was 17.5%. First quarter net income attributed to common shareholders was $137 million, diluted EPS was $1.49 and ROE for the trailing 12 months was 14.3%. The solvency ratio was 134% as at March 31, 2026, highlighting a robust capital position.

“Solid core earnings growth in the first quarter demonstrates the power of our unique and diversified business model, the depth of our distribution capabilities, and our ability to execute in a dynamic environment,” commented Denis Ricard, President and CEO of iA Financial Group. “Elevated activity on our wealth management and insurance distribution platforms resulted in a 5% increase in individual insurance policies issued, reinforcing our leadership position in Canada. It also resulted in record gross sales in segregated funds and continued solid growth in U.S. individual insurance.”

“We remain focused on financial discipline, profitable growth and sustainable value creation for shareholders,” added Éric Jobin, Executive Vice-President, CFO and Chief Actuary. “We continue to manage expenses effectively while maintaining a robust capital position supported by strong organic capital generation. This strength provides significant flexibility to deploy capital and supports higher capital returns, as reflected by our decision to increase the maximum percentage of shares eligible for repurchase to 8% of public float.”

Earnings Highlights

Unless otherwise indicated, the results presented in this document are in Canadian dollars and are compared with those from the corresponding period last year.

FINANCIAL TARGETS

The table below presents the progress towards achieving the Company’s annual and medium-term financial targets.

ANALYSIS OF EARNINGS BY BUSINESS SEGMENT

The following tables set out the core earnings^† and net income attributed to common shareholders by business segment. An analysis of the performance by business segment for the first quarter and a reconciliation between the net income attributed to common shareholders and core earnings^† for each business segment are provided in the following pages.

Core Earnings (Losses)^†

Net Income (Loss) Attributed to Common Shareholders

Insurance, Canada

• The net income attributed to common shareholders for the Insurance, Canada segment was $88 million, which is 1% higher than $87 million for the same period in 2025. Net income attributed to common shareholders is composed of core earnings^† as well as core earnings adjustments.
• Core earnings adjustments to net income totalled $8 million. As explained in the “Reconciliation of Net Income Attributed to Common Shareholders and Core Earnings^†” section of this document, these adjustments include a charge resulting from a management action related to the pension plan ($2 million). They also include the amortization of acquisition-related finite life intangible assets ($5 million), the non-core pension expense ($2 million) and a reallocation for reporting consistency, which sum to zero on a consolidated basis ($1 million). These items were partially offset by proceeds from the disposition of a block of business within the Dealer Services business unit ($2 million).
• Core earnings^† for this business segment were $96 million for the first quarter compared to $100 million for the same period in 2025. The $4 million decrease in core earnings^† reflects the net impact of the following items:
  • Core insurance service result,¹⁰ totalling $139 million compared to $137 million a year earlier, driven by:
    • higher combined risk adjustment (RA) release¹⁰ and CSM recognized for services provided¹⁰ from Individual Insurance
    • higher expected earnings on PAA insurance,¹⁰ mainly from iA Auto and Home
      and partially offset by:
    • higher impact of new insurance business,¹⁰ composed of confirmed renewals and sales in Employee Plans
    • core insurance experience losses¹⁰ of $3 million, mainly reflecting unfavourable morbidity experience, compared to core insurance experience gains of $4 million for the same period in 2025
  • Core non-insurance activities,¹⁰ totalling $13 million for the quarter compared to $15 million a year earlier, mainly due to higher expenses
  • Core other expenses¹⁰ of $16 million for the quarter compared to $15 million a year earlier
  • Core income taxes of $40 million for the quarter compared to $37 million a year earlier

Wealth Management

• The net income attributed to common shareholders for the Wealth Management segment was $114 million, which is 20% higher than $95 million for the same period in 2025. Net income attributed to common shareholders is composed of core earnings^† as well as core earnings adjustments.
• Core earnings adjustments to net income totalled $17 million. As explained in the “Reconciliation of Net Income Attributed to Common Shareholders and Core Earnings^†” section of this document, these adjustments include a charge resulting from a management action related to the pension plan ($1 million). They also include acquisition-related items ($14 million), the non-core pension expense ($1 million) and a tax-related item (true-up) from RF Capital Group for periods prior to the acquisition ($1 million).
• Core earnings^† for this business segment were $131 million for the first quarter compared with $106 million a year ago. The 24% increase in core earnings^† over the same period in 2025 is mainly the result of the higher combined RA release and CSM recognized for services provided due to strong net segregated fund sales and the impact of favourable financial markets over the last 12 months. Additionally, core non-insurance activities were higher, reflecting higher net revenue on assets and the strong contribution from RF Capital Group of more than $10 million. Growth of non-insurance activities was tempered by higher expenses, mainly related to IT projects, and an expense reallocation from core other expenses.

US Operations

• The net income attributed to common shareholders for the US Operations segment was $16 million, compared to $19 million for the same period in 2025. Net income attributed to common shareholders is composed of core earnings^† as well as core earnings adjustments.
• Core earnings adjustments to net income totalled $10 million from acquisition-related items ($8 million) and specified items ($2 million), mostly consisting of a reallocation for reporting consistency, which sum to zero on a consolidated basis.
• Core earnings^† for this business segment were $26 million, which compares to $30 million for the same period in 2025. Expected insurance earnings¹⁰ were higher due to the increase in the combined RA release and CSM recognized for services provided, mainly driven by good business growth in Individual Insurance in the last 12 months, and higher expected earnings on PAA insurance business from Dealer Services. Core insurance experience was unfavourable ($9 million before taxes), mainly due to unfavourable policyholder behaviour in Individual Insurance. In addition, core non-insurance activities were lower, reflecting a sales mix in US Dealer Services weighted toward insurance products.
  
  In the first quarter, the contribution of Vericity (Fidelity Life and eFinancial) continued to support progress toward financial expectations set at the time of the acquisition.

Investment

• A net loss attributed to common shareholders of $28 million was recorded in the first quarter compared to net income attributed to common shareholders of $35 million for the same period in 2025. The net loss attributed to common shareholders is composed of core earnings^† as well as core earnings adjustments.
• Core earnings adjustments reflected a net negative impact on net loss of $121 million as a result of the following items:
  • Market-related impacts that differ from management’s expectations, which resulted in an $87 million decrease in net income. This adjustment is explained by the unfavourable impacts from public and private equity and infrastructure variations ($87 million); investment properties ($10 million), mainly driven by market value adjustments; and the impact of the CIF¹¹ ($8 million). These negative items were partially offset by the favourable impact of interest rate and credit spread variations ($18 million).
  • The positive impact of assumption changes of $6 million resulting from the update of credit assumptions used to develop the interest rate scale (this is a recurring assumption update specific to the Investment segment and is expected to be carried out in the first quarter of each year).
  • Specified items resulting in a $40 million decrease in net income consisting of a tax-related adjustment for the 2025 fiscal year, as detailed in the “Income taxes” paragraph of this document.
• Core earnings^† for this business segment were $93 million, which is 9% higher than $85 million for the same period in 2025. Before accounting for taxes, financing charges on debentures and dividends, core earnings^† were driven by a core net investment result¹² of $126 million. This result compares with $124 million recorded a year earlier and $127 million the previous quarter. The core net investment result is composed of expected investment earnings¹² and credit experience.¹²
  • Expected investment earnings quarter-over-quarter analysis – $119 million in the first quarter compared to $124 million in the fourth quarter of 2025. This result mainly reflects the impact of a reduction in assets following the acquisition of RF Capital Group, and, to a lesser extent, the impact of share repurchases (NCIB). The decrease is also explained by the lower contribution of iA Auto Finance due to normal seasonality in the first quarter.
  • Expected investment earnings year-over-year analysis – $119 million in the first quarter compared to $123 million a year earlier. This result mainly reflects the impact of a reduction in assets following the acquisition of RF Capital Group, and, to a lesser extent, the impact of share repurchases (NCIB), partially offset by the favourable impact of macroeconomic variations, in part due to the steepening of the yield curve.
  • Credit experience – Favourable credit experience resulted in a $7 million gain for the quarter due to positive credit experience of $8 million in the car loans portfolio of iA Auto Finance and net negative credit experience of $1 million in the fixed income portfolio.

Corporate

• Net loss attributed to common shareholders for the Corporate segment was $53 million compared to $50 million for the same period in 2025. This item is composed of core losses^† as well as core loss adjustments.
• Core losses adjustments to net loss for this business segment totalled $5 million. As explained in the “Reconciliation of Net Income Attributed to Common Shareholders and Core Earnings^†” section of this document, these adjustments include a charge resulting from a management action related to the pension plan ($1 million). They also include charges related to the integration of Vericity (Fidelity Life and eFinancial), Global Warranty and RF Capital Group (collectively, $3 million), and the non-core pension expense ($1 million).
• This segment recorded core losses^† from after-tax expenses of $48 million, similar to the first quarter of 2025. The stability of these expenses reflects disciplined expense management amid inflationary pressures, supported by a strong, ongoing focus on operational efficiency and investments to enhance IT infrastructure performance. Before taxes, corporate core other expenses were $65 million, the same as in the first quarter of 2025. These expenses for the quarter reflect the lower-than-expected provision for variable compensation and the timing of certain corporate initiatives, resulting in a temporary deferral of related expenses. As a result, Corporate core other expenses for the quarter were at the lower end of the Company’s target range of $70 million plus or minus $5 million.¹³

RECONCILIATION OF NET INCOME ATTRIBUTED TO COMMON SHAREHOLDERS AND CORE EARNINGS^†

Core earnings^† of $298 million in the first quarter are derived from net income attributed to common shareholders of $137 million, after applying a total adjustment of $161 million (post tax) for:

• Market-related impacts that differ from management’s expectations, which resulted in an $87 million decrease in net income. This adjustment is explained by the unfavourable impacts from public and private equity and infrastructure variations ($87 million); investment properties ($10 million), mainly driven by market value adjustments; and the impact of the CIF¹⁴ ($8 million). These negative items were partially offset by the favourable impact of interest rate and credit spread variations ($18 million).
• The impact of assumption changes and management actions, leading to a $2 million increase in net income. This adjustment results from the positive update of credit assumptions used to develop the interest rate scale ($6 million) (this is a recurring assumption update related to the Investment segment and is expected to be carried out in the first quarter of each year), partially offset by a charge ($4 million) resulting from a management action related to the pension plan, as disclosed in the second quarter results of 2025.¹⁵
• A net charge of $3 million related to the acquisition and integration of RF Capital Group and the integration of Vericity (Fidelity Life and eFinancial) and Global Warranty (which together result in total charges of $5 million), partially offset by proceeds from the disposition of a block of business within the Canadian Dealer Services business unit ($2 million).
• Expenses associated with acquisition-related intangible assets of $25 million.
• The impact of the non-core pension expense of $4 million.
• Specified items resulting in a $44 million decrease in net income. This adjustment consists primarily of a $40 million tax-related adjustment attributable to the 2025 fiscal year, as detailed in the “Income taxes” paragraph of this document. It also includes a tax-related item (true-up) from RF Capital Group for periods prior to the acquisition ($1 million), as well as other small adjustments.

Net Income Attributed to Common Shareholders and Core Earnings^† Reconciliation – Consolidated

Contractual service margin (CSM)¹⁶

During the first quarter, the CSM increased organically by $136 million. This increase is due to the positive impact of new insurance business of $202 million, organic financial growth of $114 million and net insurance experience gains of $39 million, partly offset by the CSM recognized for services provided in earnings of $219 million, up 12% from a year earlier. Non-organic items led to a decrease in the CSM of $77 million during the first quarter, mostly due to the impact of market variations. As a result, the total CSM increased by $59 million (+1%) during the quarter to stand at $7,709 million as at March 31, 2026, an increase of 11% over the last 12 months.

Income taxes

The federal government released its budget on November 4, 2025, outlining its intended tax policy directions. Pursuant to this budget, Bill C-15 was enacted on March 26, 2026, implementing certain measures, including some that apply retroactively to January 1, 2025.

Consequently, the results for first quarter 2026 reflect an increase in the core effective tax rate, as well as a $40 million adjustment recorded for the impact on existing tax positions following the adoption of the new tax measures, which took effect January 1, 2025. The $40 million core earnings adjustment consists of $20.5 million in core income tax for fiscal 2025 and a $19.5 million core earnings adjustment for an income tax gain recognized in 2025. In accordance with IFRS, specifically IAS 12 Income Taxes, this adjustment is recognized in the period of legislative adoption and does not constitute a retroactive restatement or an adjustment to prior periods.

The Company has revised its medium-term core effective tax rate^†† outlook to a range of 21% to 23%,¹⁷ with expectations for 2026 positioned toward the upper end of the range. This change reflects the tax policy directions outlined in the November 2025 federal budget, including the impact of Bill C-15.

Business growth

Sales and business retention contributed to the strong growth in net premiums, premium equivalents and deposits, which reached nearly $6.4 billion, a 10% increase compared to the same period last year. Total assets under management and assets under administration exceeded $346 billion, an increase of 31% over the last 12 months. In Canada, Individual Insurance sales were good, at $97 million, and the Company maintained its leading position in the market, with the number of policies sold¹⁸ increasing by 5% year over year. Dealer Services and iA Auto and Home both recorded good sales growth compared to the first quarter of 2025. In the Individual Wealth Management segment, total gross sales reached a quarterly record of more than $3.7 billion and total net segregated and mutual fund inflows reached nearly $1.4 billion. The Company continued to rank first for both gross and net individual segregated fund sales.¹⁹ In the U.S., Individual Insurance sales recorded a notable year-over-year increase and Dealer Services sales reflected lower vehicle sales across the industry.

Investor Relations
Caroline Drouin
Office: 418-684-5000, ext. 103281
Email: caroline.drouin@ia.ca

Public Affairs
Chantal Corbeil
Office: 514-247-0465
Email: chantal.corbeil@ia.ca