Desjardins Financial Security reports net income of $83.3M and asserts its financial strength

Individual savings sales up 178.7%
Group retirement savings sales up 161.1%
Insurance premium volume up 3.3%
Net income of $83.3M
Return on shareholder equity of 22.9%

Lévis (Québec), September 2, 2009 – Despite the sustained impact of the worldwide financial crisis, Desjardins Financial Security maintained its profitability at the end of the first six months of 2009 with a net income of $83.3 million. The Desjardins Group subsidiary, specializing in life and health insurance and retirement savings, also reported continued growth in insurance premium income, which stood at $1,344.9 million for a 3.3% improvement over the first half of 2008. Quebec posted an increase of $14.1 million (1.6%) and the other provinces a significantly higher increase of $28.4 million for a 6.7% improvement. Insurance sales were $116.3 million and similar to those in the first half of 2008. Retirement savings sales were also up, standing at $799.5 million compared to $527.4 million in the same period a year earlier.

The share of the company's net income attributable to the shareholder, the Desjardins caisses, stood at $82.1 million. Return on shareholder equity was 22.9%, one of the best in the financial services industry. Assets under management and administration totalled $20.4 billion.

Despite the financial and economic crises, and turmoil on the global financial markets, the company has maintained its financial strength and continues to benefit from excellent capitalization. Fundamental insurance operations also remain very profitable.

Second Quarter Financial Results

For the period of April 1 to June 30, 2009, net income totalled $52.8 million compared to $59.3 million in 2008. Insurance sales amounted to $51.2 million versus $57.5 million for the same period last year. Gross insurance premiums were $675.7 million, up $21.6 million over the second quarter of 2008, with Quebec recording a 1.5% increase and a 7.0% increase in the other provinces. Savings sales totalled $444.9 million, up $90.3 million over the first quarter of 2009. This increase is primarily due to major group retirement savings contracts signed in the second quarter.

Commenting on these results, Ms. Monique F. Leroux, President and Chief Executive Officer of Desjardins Group and also Chief Executive Officer of Desjardins Financial Security said, “Our life and health insurance subsidiary is recording good business growth and substantial profitability in economic conditions that remain challenging and call for prudence and vigilance. The company's contribution to the overall performance of Desjardins Group remains significant.”

Mr. Richard Fortier, Chief Operating Officer of Desjardins Financial Security, expressed his pride in the Company's efforts since the beginning of the year and the benefits they have generated. “All our efforts to maintain premium income and insurance sales growth are paying off. We continue to take the necessary steps to keep the Company financially healthy and remain confident in our ability to successfully deal with the consequences of the financial crisis.”

Sector by sector results

In group insurance, the volume of gross premiums from groups and businesses, and those associated with plans offered in financial institutions including the Desjardins caisses, stood at $1,095.7 million as at June 30, 2009, up $33.0 million over the same period last year. Sales, which totalled $94.3 million, were similar to those recorded at the same time in 2008.

In individual insurance, total sales recorded in the first half of 2009 by the financial security advisors assigned to the Desjardins caisses and by the network of SFL and Desjardins Financial Security Independent Network financial centres stood at $22.0 million, up slightly from June 30, 2008 ($20.5 million). Gross premiums totalled $249.2 million, for a 3.9% improvement over the same time last year.

In savings, overall sales stood at $799.5 million. Group retirement savings sales totalled $175.8 million, up 161.1% over the first half of 2008, while individual savings sales amounted to $465.6 million, more than double the figure from the same period last year. Guaranteed investment fund sales were $406.9 million compared to $98.3 million in the same period in 2008. Mutual fund sales totalled $158.1 million, down from June 30, 2008.

About Desjardins Financial Security

Desjardins Financial Security, a subsidiary of Desjardins Group, the largest integrated cooperative financial group in Canada, specializes in providing life insurance, health insurance and retirement savings products to individuals and groups. Every day, over five million Canadians rely on Desjardins Financial Security to ensure their financial well-being. Desjardins Financial Security employs some 3,800 people and administers over $20.4 billion in assets from offices in several cities across the country, including Vancouver, Calgary, Winnipeg, Toronto, Ottawa, Montréal, Québec, Lévis, Halifax and St. John's. For more information, visit our website at www.desjardinsfinancialsecurity.com.

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Source :
Claude Beauchamp
Senior Director, Communications
Desjardins Financial Security
418-838-7800 or 1-877-828-7800, ext. 7664