Industrial Alliance sees record income in Q4
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Industrial Alliance Insurance and Financial Services says it earned record net income of $67.4 million or 83 cents per share in the fourth quarter, reversing a year-earlier loss. Revenue for the quarter was $1.4 billion, compared with $1 billion a year earlier, when Industrial Alliance saw a loss of $110.2 million or $1.37 per share. This loss was the result of a strengthening of the company’s provisions for future policy benefits to “take into account the sharp drop in the stock markets and interest rates,” it said. Industrial Alliance said its profits for the quarter were boosted by the stock market upswing, which led the company to a $7-million increase in its net profit compared with the expected result, as well as a $5.3-million increase related to debt accounting. This was partially offset by an after-tax credit loss of $500,000. For more details about Industrial Alliance’s fourth quarter earnings, please see the text version of this story.
The financial services company said its premiums and deposits increased by 27 per cent in the fourth quarter compared with a year earlier and amounted to $1.5 billion. This was due primarily to 83 per cent growth in sales of segmented funds and mutual funds. “We are extremely satisfied with these results,” stated president and CEO Yvon Charest. “Strict risk management, close monitoring of investments, strong capitalization, and a focused, balanced and realistic strategy for growth all contributed to these excellent results.” Broken down by business segment, individual insurance saw a profit of $104.3 million, individual wealth management lost $700,000, group insurance earned $12.2 million and group pensions lost $45.9 million. Assets under management and administration grew to a new high of $58.4 billion, up three per cent for the quarter and 18 per cent for the year. Industrial Alliance forecasted earnings per share of $2.75 to $3.25 in 2010. The company also said Friday that it will buy back up to 2.4 million common shares, representing approximately three per cent of its total common shares issued and outstanding. Shares in Industrial Alliance added 27 cents to $32.43 in midday trading Friday on the Toronto Stock Exchange.
