2007 Second Quarter Financial Results
Desjardins Financial Security reports strong growth across Canada
Net earnings up 70.8%
Return on shareholder equity of 25.7%
Insurance sales growth of 22.9%
Gross insurance premiums up 12.0%
Profitability across the business lines
Levis, August 27, 2007 - Desjardins Financial Security continues to have a very strong year. At the end of the first half of 2007, the net earnings of the life and health insurance and retirement services provider had risen from $69.2 million in 2006 to $118.2 million on June 30, 2007, for an increase of 70.8%.
After six months, the Company's income from insurance and annuity premiums and investment and other income stood at $1,386.4 million. Gross insurance premiums alone accounted for $1,178.5 million, up 12.0%, or $126.2 million. The Company recorded growth of 7.2% in Quebec and 25.1% in the other provinces. New insurance sales figures were impressive at $210.0 million, for an increase of $39.1 million over the first half of 2006. These excellent results are in part attributable to the sale of major group contracts in Ontario, Newfoundland and Labrador and Quebec. A few weeks ago, the Ontario Hospital Association signed a $75 million group insurance contract with Desjardins Financial Security for the benefit of the 70,000 employees of the Ontario health network's 185 employers. The contract took effect on August 1.
The share of Desjardins Financial Security's net earnings attributable to the Desjardins caisses, the Company's ultimate shareholders, stood at $111.4 million, up $43.3 million over last year. Return on shareholder equity was 25.7% versus 19.4% after the first two quarters of 2006, and remains one of the best in the financial services industry. The Company continues to make a substantial contribution to the profitability of Desjardins Group, its parent company and Canada's largest integrated cooperative financial group, whose net earnings before member dividends between January and June 2007 stood at $580 million.
Assets under management and administration totalled $22.4 billion, for an increase of $1.6 billion since the beginning of the year.
Second quarter results
For the period of April 1 to June 30, 2007, net earnings stood at $68.4 million compared to $38.7 million in the second quarter of 2006. Insurance premium income totalled $598.1 million, for a gain of 12.4%, while sales totalled $112.0 million.
Commenting on these results, Mr. Alban D'Amours, President and Chief Executive Officer of Desjardins Group, and also Chief Executive Officer of Desjardins Financial Security, said he was very pleased with the remarkable progress the Company had made in the Canadian market. "Desjardins Financial Security continues to differentiate itself in the Canadian marketplace, where it is enjoying a great deal of success, especially in the group and business insurance market. The quality and added value of Desjardins Financial Security's product offering is getting more and more recognition in the public and parapublic sectors and giving the Company an edge over its main competitors."
Desjardins Financial Security's President and Chief Operating Officer, Mr. Richard Fortier, said these results were the outcome of rigorously applying the Company's 3-year strategic plan. "Without continually striving to improve our operational efficiency and significantly reduce our unit costs, we wouldn't be able to develop and market the competitively priced products and services we are offering not only to groups and businesses, but also to individuals, including the members of the Desjardins caisses, our financial centre clients and business partners.
Sector Results
Strong growth in group insurance sales
In the first six months of 2007, group and business insurance sales rose by 24.2% to total $189.6 million. Gross premiums stood at $695.5 million, for an increase of $107.8 million over the first six months of 2006. These excellent results stem from the enrolment of groups with 1,000 or more participants and the natural growth of the groups already in place. Premiums, and credit insurance premiums in particular, generated by plans offered through financial institutions, including the Desjardins caisses, totalled $236.7 million, for an increase of $10.2 million.
Growth in individual insurance sales and premiums
In Individual Insurance, new sales realized during the six-month period ending on June 30 through the SFL financial centre network, Desjardins Financial Security Independent Network, and the Financial Security Advisors assigned to Desjardins caisses, grew by 12.1% to total $20.4 million. Gross premiums amounted to $230.4 million, for an increase of $9.1 million over last year.
Increase in mutual fund sales
In Savings, overall sales totalling $660.5 million exceeded last year's figures by $18.5. Mutual funds stood at $380.7 million versus $275.9 million a year ago. The marked growth (27.0%) in Millennia segregated fund sales, which reached $85.9 million, brings total individual savings sales for the first half of the year to $143.1 million, down 6.2% over 2006 results. In group retirement savings, sales totalled $136.7 million on June 30, which represents a 36.0% decline over the corresponding period in 2006, when major payout annuity contracts were signed.
About Desjardins Financial Security
Desjardins Financial Security is a subsidiary of Desjardins Group, the largest integrated cooperative financial group in Canada, and specializes in group and individual life and health insurance, and retirement savings products and services. Every day, over 5 million Canadians rely on Desjardins Financial Security to ensure their financial security. With a staff of over 3,700 employees, Desjardins Financial Security manages and administers over $22 billion in assets from offices in major cities across the country, including Vancouver, Calgary, Winnipeg, Toronto, Ottawa, Montreal, Québec, Lévis, Halifax and St. John's. For more information, visit www.desjardinsfinancialsecurity.com
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Source:
Shannon Bowness
External Communications Advisor
Tel.: 416-926-2700 or toll-free at 1-877-906-5551, ext. 2015
Virtual pressroom: http://www.desjardinsfinancialsecurity.com/press
