iA Financial Group Reports Second Quarter Results

Wealth Management and diversified business model drive earnings growth and return on equity

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 June 30, 2026 (the “Q2/2026 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”).

SECOND QUARTER HIGHLIGHTS

• Core EPS^†† of $3.68 (+5% YoY) and trailing-12-month core ROE^†† of 17.5%, in line with the 2026 core ROE target¹ of 17%+
• EPS of $4.28 (+25% YoY) and trailing-12-month ROE² of 15.1%
• Wealth Management core earnings^† up 37% YoY and net income up 28% YoY, driven by $4.3 billion in gross sales³ and favourable markets
• 37% growth in total assets under management³ and assets under administration³ over the last 12 months, which exceeded $374 billion
• 25% YoY growth in net premiums,³ premium equivalents and deposits³ to more than $6.3 billion, from strong sales and business retention
• Solid organic capital generation³ of $180 million in Q2, on track to reach the 2026 target of $700+ million¹
• Robust capital position emphasized by a 137% solvency ratio⁴ and capital available for deployment³ of $1.1 billion as at June 30, 2026

QUEBEC CITY--(BUSINESS WIRE)--For the second quarter ended June 30, 2026, iA Financial Group (TSX: IAG) recorded core earnings^† of $330 million and core diluted earnings per common share (EPS)^†† of $3.68, which is 5% higher than the same period in 2025, when insurance experience was very favourable. Core return on common shareholders’ equity (ROE)^†† for the trailing 12 months was 17.5%, in line with the 2026 target of 17%+.¹ Second quarter net income attributed to common shareholders was $384 million, diluted EPS was $4.28 and ROE for the trailing 12 months was 15.1%. The solvency ratio was 137% as at June 30, 2026, highlighting a robust capital position.

“Our diversified business model continued to demonstrate its strength in the second quarter, as broad-based performance across our businesses, led by Wealth Management, generated solid earnings and robust capital generation,” commented Denis Ricard, President and CEO of iA Financial Group. “The 25% increase in premiums and deposits and the 37% growth in assets⁵ over the past year reflect the strength of our distribution capabilities, our ability to attract and support high-quality advisors, and the continued execution of our growth strategy.”

‘’Wealth Management generated significant earnings growth in the second quarter, reflecting strong organic momentum, favourable markets and the contribution from RF Capital. This strong momentum continues to drive robust growth across our business units, supported by our leading distribution platform and sustained demand for segregated fund solutions,” added Éric Jobin, Executive Vice-President, CFO and Chief Actuary. “Strong earnings, combined with a solid capital position and $1.1 billion in capital available for deployment, gives us continued flexibility to allocate capital in a disciplined manner and create long-term value for shareholders.”

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 performance by business segment for the second 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 $118 million, compared to $130 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. 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 integration and restructuring costs ($1 million).
• Core earnings^† for this business segment were $128 million for the second quarter compared to $133 million for the same period in 2025. The $5 million decrease in core earnings^† mainly reflects the net impact of the following:
  • Core insurance service result,⁹ totalling $171 million compared to $177 million a year earlier, mainly explained by:
    • Core insurance experience gains⁹ of $19 million, driven by favourable mortality and morbidity experience, compared to elevated core insurance experience gains of $31 million for the same period in 2025. Note that at iA Auto and Home, the impact of higher claims associated with the heavy rainfall event that occurred in June 2026 was mostly offset by lower claims overall during the period.
    • The favourable impact of the higher combined risk adjustment (RA) release⁹ and CSM recognized for services provided⁹ from Individual Insurance and Employee Plans.
    • The impact of new insurance business,⁹ which is dependent on confirmed sales in Employee Plans, totalling $15 million this quarter compared to $14 million for the same period in 2025.
  • Core non-insurance activities,⁹ totalling $17 million for the quarter compared to $19 million a year earlier, mainly due to slightly lower earnings from P&C products in Dealer Services.
  • Core income taxes⁹ of $45 million for the quarter compared to $48 million a year earlier.

Wealth Management

• The net income attributed to common shareholders for the Wealth Management segment was $134 million, compared to $105 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 $21 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 ($19 million) and the non-core pension expense ($1 million).
• Core earnings^† for this business segment were $155 million for the second quarter compared with $113 million a year ago. The 37% 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 the impact of favourable financial markets over the 12-month period and strong net segregated fund sales. Additionally, core non-insurance activities were higher, reflecting increased net revenue on assets and a strong contribution from RF Capital Group of $13 million. Growth of core non-insurance activities was tempered by higher expenses to support business growth.

US Operations

• The net income attributed to common shareholders for the US Operations segment was $12 million, compared to $55 million for the same period in 2025. Net income attributed to common shareholders is composed of core earnings^† as well as core earnings adjustments. For more information on the factors contributing to the variations between the periods, refer to the “US Operations” sub-section of the “Analysis According to the Financial Statements” section of the Q2/2026 MD&A.
• Core earnings adjustments to net income totalled $12 million from acquisition-related items ($10 million) and small specified items ($2 million), including a reinsurance adjustment related to 2025 and a reallocation for reporting consistency, which sum to zero on a consolidated basis.
• Core earnings^† for this business segment were $24 million, which compares to $36 million for the same period in 2025. Expected insurance earnings⁹ 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 business⁹ from Dealer Services. A core insurance experience loss of $8 million was recorded, mainly due to unfavourable mortality experience at Fidelity Life (the insurance entity of Vericity) on account of a small number of large claims. Core non-insurance activities were lower than a year ago, reflecting a sales mix in US Dealer Services weighted toward insurance products. Dealer Services core earnings^† growth was tempered by less favourable U.S. auto market conditions and dealer group attrition within administration-fee-generating dealer channels.
• The results from Fidelity Life and eFinancial combined (both entities of Vericity) were neutral to core earnings^† in the second quarter of 2026, without considering the experience losses that are expected to be non-recurring, and are still expected to be accretive to core earnings^† in the second half of 2026.

Investment

• The net income attributed to common shareholders was $183 million compared to $103 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 of $104 million reflected a positive impact on net income from market-related impacts that differ from management’s expectations. These adjustments are explained by the favourable impact from non-fixed income assets ($112 million), mainly driven by the good performance of public equity, and the favourable impact of the CIF¹⁰ ($6 million). These positive items were partially offset by the unfavourable impact of interest rate and credit spread variations ($14 million).
• Core earnings^† for this business segment were $79 million compared to $102 million for the same period in 2025. The decrease is explained by higher financing charges on debentures, higher distributions on other equity instruments and dividends on preferred shares, and higher core income taxes. Before accounting for these items, core earnings^† were driven by a core net investment result¹¹ of $129 million. This result is higher than the $127 million recorded a year earlier and the $126 million recorded the previous quarter. The core net investment result is composed of expected investment earnings¹¹ and credit experience.¹¹
  • Expected investment earnings quarter-over-quarter analysis – $119 million in the second quarter, which is similar to the result from the first quarter of 2026. The positive contributions from iA Auto Finance and from the capital issuance in May were offset by the impact of a reduction in assets, mainly from capital deployment activities (share repurchases under the NCIB).
  • Expected investment earnings year-over-year analysis – $119 million in the second 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 in the fourth quarter of 2025 and the impact of share repurchases (NCIB), partially offset by the favourable contribution from iA Auto Finance.
  • Credit experience – $10 million gain in the second quarter due to more upgrades than downgrades in the fixed income portfolio ($6 million) and favourable experience in the car loans portfolio of iA Auto Finance ($4 million).

Corporate

• Net loss attributed to common shareholders for the Corporate segment was $63 million compared to $72 million for the same period in 2025. This item is composed of core losses^† as well as core losses adjustments.
• Core losses adjustments to net loss for this business segment totalled $7 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 acquisition, integration and restructuring of a business, mainly from the RF Capital Group, Fidelity Life and eFinancial (both entities of Vericity) and Global Warranty acquisitions (collectively, $5 million) and the non-core pension expense ($1 million).
• This segment recorded core losses^† from after-tax expenses of $56 million compared to $57 million in the second quarter of 2025. This result reflects disciplined expense management amid inflationary pressures, supported by a strong, ongoing focus on operational efficiency and investments to enhance IT infrastructure performance. In the second quarter of 2026, before taxes, corporate core other expenses were $74 million compared to $79 million in the second quarter of 2025. Corporate core other expenses for the second quarter of 2026 are composed of core other expenses of $65 million—which were favourably impacted by the timing of certain corporate initiatives and which were at the lower end of the Company’s target range of $70 million, plus or minus $5 million¹²—as well as a higher-than-expected provision for variable compensation of $9 million before taxes.

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

Core earnings^† of $330 million in the second quarter are derived from net income attributed to common shareholders of $384 million, reduced by total adjustments of $54 million (post tax) for:

• Market-related impacts that differ from management’s expectations, which resulted in a $104 million increase in net income. This adjustment is explained by the favourable impact from non-fixed income assets of $112 million, mainly driven by the good performance of public equity, and the favourable impact of the CIF ($6 million). These positive items were partially offset by the unfavourable impact of interest rate and credit spread variations ($14 million).
• The impact of assumption changes and management actions leading to a $4 million reduction in net income, resulting from a management action related to the pension plan, as disclosed in the second quarter results of 2025.¹³
• A net charge of $15 million related to acquisition, integration and restructuring of a business, mainly from RF Capital Group, Fidelity Life and eFinancial (both entities of Vericity), and Global Warranty.
• Expenses associated with the amortization of acquisition-related finite life intangible assets of $25 million.
• The impact of the non-core pension expense of $4 million.
• Specified items resulting in a $2 million decrease in net income (from the US Operations segment as detailed above).

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

Contractual Service Margin (CSM)¹⁵

During the second quarter, the CSM increased organically by $120 million. This increase is due to the positive impact of new insurance business of $217 million, organic financial growth of $111 million and net insurance experience gains of $26 million, partly offset by the CSM recognized for services provided in earnings of $234 million, up 17% from a year earlier. Non-organic items led to an increase in the CSM of $403 million during the second quarter, mostly due to the impact of market variations. As a result, the total CSM increased by $523 million (+7%) during the quarter to stand at $8,232 million as at June 30, 2026, an increase of 15% over the last 12 months.

Business Growth

During the second quarter, sales and business retention contributed to the strong growth in net premiums, premium equivalents and deposits, which reached more than $6.3 billion, a 25% increase compared to the same period last year. Total assets under management and assets under administration exceeded $374 billion as at June 30, 2026, an increase of 37% over the last 12 months. In the Individual Wealth Management segment, total segregated and mutual fund gross sales reached nearly $3.2 billion, while combined net inflows were close to $1 billion. The Company continued to rank first for both gross and net individual segregated fund sales.¹⁶ In Canada, Individual Insurance sales remained good at $102 million and the Company maintained its leading position for the number of policies sold.¹⁷ Employee Plans and iA Auto and Home both recorded good sales growth compared to the second quarter of 2025. In the United States, Individual Insurance sales recorded a notable 10% year-over-year increase and Dealer Services sales were broadly in line with the same quarter a year earlier.

INSURANCE, CANADA

• In Individual Insurance, second quarter sales totalled $102 million, a result comparable to last year’s strong performance. The Company maintained its leading position in the Canadian market for number of policies issued.¹⁷ This result reflects the strength of our growing distribution networks, the excellent performance of our digital tools, as well as our comprehensive and distinctive range of products.
• In Group Insurance, second quarter implemented sales of $30 million in Employee Plans were significantly higher than the $8 million recorded in the second quarter of 2025. Net premiums, premium equivalents and deposits for Employee Plans were comparable to those of the same quarter last year. Note that sales in this business unit vary considerably from one quarter to another based on the size of the contracts sold. Special Markets sales reached $83 million compared to $99 million in the same quarter a year earlier, reflecting lower sales of international student medical insurance, due to federal government measures to cap the number of international students entering Canada.
• For Dealer Services, total sales ended the second quarter at $218 million, close to the result for the same period last year. P&C Insurance sales remained good in the second quarter, with total sales reaching $173 million, in line with the results reported a year ago. Creditor Insurance sales declined 10% year over year, primarily reflecting the impact of Quebec’s Law 15 (also known as Bill 30), which introduced new requirements for the sale of creditor insurance through dealerships.

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