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iA Financial Corporation Inc (TSE:IAG)
TSX:IAG
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iA Financial Corporation Inc
(TSX:IAG)
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Rating:72Outperform
Price Target:
C$168.00
â–²(11.28% Upside)
Action:ReiteratedDate:02/19/26
The score is driven mainly by strong underlying financial performance and a constructive earnings outlook with confident ROE and capital-generation targets. This is partially offset by weak near-term technical momentum (oversold and below key moving averages), while a reasonable P/E and moderate dividend yield provide supportive valuation.
Positive Factors
Strong capital generation & solvency
Consistent, above‑target organic capital generation and a pro‑forma solvency ratio (137%) provide durable financial flexibility. Reliable internal capital supports dividends, buybacks, accretive M&A and reserve buffers, reducing dependence on external funding and strengthening long‑term resilience.
Large AUM and wealth sales momentum
Rapid AUM expansion and strong wealth sales create stable, fee‑based revenue and scale economics. Higher AUM diversifies income away from underwriting volatility, supports cross‑sell of insurance and wealth products, and underpins long‑term growth of recurring management fees.
Accretive RF Capital acquisition
An accretive acquisition with high adviser retention and realized synergies strengthens distribution and product access. Successful integration expands scale in wealth channels, enhances cross‑selling of insurance/wealth products, and provides a durable boost to earnings and revenue diversification.
Negative Factors
Reserve strengthening on legacy term block
Management increased lapse assumptions and strengthened reserves for a legacy term block, reducing near‑term earnings clarity. Persistent adverse lapse behavior can depress margins and require multi‑period reserve adjustments, pressuring capital and earnings predictability.
Adverse group experience tied to foreign student coverage
Regulatory permit changes led to higher claims and weaker premium volumes in the foreign student group book. This structural regulatory exposure may require repricing, non‑renewals, or ongoing reserves, reducing scale and profitability in that niche over multiple periods.
Uneven cash flow and revenue volatility
While 2025 delivered strong free cash flow, the company's cash generation has been inconsistent over the cycle, with negative FCF in 2021 and a 2024 decline. This variability weakens predictability for sustained capital returns and investment planning across multi‑year horizons.
iA Financial Corporation Inc (IAG) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$13.74B
Dividend Yield2.11%
Average Volume (3M)249.62K
Price to Earnings (P/E)15.1
Beta (1Y)1.06
Revenue Growth-25.13%
EPS Growth16.40%
CountryCA
Employees7,000
SectorFinancial
Sector Strength70
IndustryInsurance - Diversified
Share Statistics
EPS (TTM)3.10
Shares Outstanding91,005,570
10 Day Avg. Volume208,907
30 Day Avg. Volume249,624
Financial Highlights & Ratios
PEG Ratio0.98
Price to Book (P/B)2.00
Price to Sales (P/S)1.46
P/FCF Ratio5.15
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$178.33Price Target Upside18.12% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)14.1
Revenue Forecast (FY)C$600.00M
iA Financial Corporation Inc Business Overview & Revenue Model
Company DescriptioniA Financial Corporation Inc., through its subsidiary, Industrial Alliance Insurance and Financial Services Inc., provides various life and health insurance products in Canada and the United States. The company operates through Individual Insurance, Individual Wealth Management, Group Insurance, Group Savings and Retirement, US Operations, and Other segments. It offers life, health, disability, and mortgage insurance products, as well as individual products and services for savings plans, securities brokerage, trust operations, and mutual funds. The company also provides group insurance products and services, including accidental death and dismemberment, dental care, short and long-term disability insurance, products for employee plans; creditor and replacement insurance, replacement warranties, extended warranties, and other products for dealer services; and specialized products. In addition, the company offers group products and services for savings plans, retirement, and segregated funds. Further, the company provides auto and home insurance products, as well as offers asset management and financing services. The company was founded in 1892 and is headquartered in Québec, Canada.
How the Company Makes MoneyiA Financial Corporation generates revenue through multiple key streams. The primary source of income comes from the premiums collected on life and health insurance products, which are paid by policyholders. Additionally, the company earns money through investment income generated from its portfolio of invested assets, including stocks, bonds, and real estate. The wealth management division contributes to revenue via management fees on mutual funds, segregated funds, and other investment products. iA Financial Corporation also has significant partnerships with various financial advisors and institutions that facilitate the distribution of its products, further enhancing its market reach and revenue potential. Other factors contributing to its earnings include a focus on cost management and operational efficiency, which enable the company to maintain healthy profit margins.
iA Financial Corporation Inc Earnings Call Summary
Earnings Call Date:Feb 17, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 06, 2026
Earnings Call Sentiment Positive
The call presented a predominately positive picture: iA delivered strong full-year results, met or exceeded key midterm targets (core ROE 17.1%, 16% core EPS growth), produced above-target organic capital ($665M), reported sizeable AUM growth (+31%), and showed broad-based sales momentum across Canada and the U.S. The RF Capital acquisition is already accretive and contributing to growth. Notable near-term headwinds include reserve strengthening for a specific term product and adverse group experience tied to foreign student coverage, a Q4 spike in corporate variable compensation and some one-off charges that weighed on quarter results. Overall, the strategic and financial momentum appears to outweigh the contained operational and reserve-related challenges.Q4-2025 Updates
Positive Updates
Core profitability and EPS growth
Core ROE of 17.1% (trailing 12 months) and 16% growth in core EPS for 2025; Q4 core EPS of $3.10, meeting midterm objectives.
Strong capital generation and balance sheet
Organic capital generation of $665 million for 2025 (surpassing the $650M target) and $170 million generated in Q4; pro forma solvency ratio of 137% and $1.4 billion of capital available for deployment on a pro forma basis.
Large AUM / AUA expansion
Total assets under management and administration exceeded $341 billion, up 31% year-over-year, driven by segregated fund inflows, market performance and RF Capital acquisition.
Record and strong sales in Wealth Management
Record individual gross sales of $3.1 billion in Q4; segregated fund gross sales nearly $2.0 billion, up 27% year-over-year, with net segregated fund sales of almost $1.2 billion; mutual fund gross sales up 16% to $694 million.
Canada Insurance and distribution momentum
Record individual insurance sales of $111 million in Q4; Insurance Canada net premiums and deposits reached $5.9 billion (up 4%); Group Insurance premiums and deposits rose 2% YoY and Q4 group sales were up 15% YoY; iA Auto & Home sales up 9% to $146 million; Dealer Services sales $183 million, up 4%.
U.S. operations growth
U.S. Individual Insurance sales increased 18% year-over-year to US$80 million; U.S. Dealer Services sales rose 8% to US$295 million; U.S. segment core earnings up 15% in Q4 to $30 million.
Segment earnings strength
Wealth Management core earnings up 13% YoY to $127 million in Q4; Investment core net investment result of $127 million in Q4 (up from $120M YoY) and Investment segment core earnings of $91 million before taxes/financial charges/debenture dividend.
Accretive RF Capital acquisition and integration progress
RF Capital acquisition already accretive and performing ahead of expectations; faster-than-expected adviser retention, cost synergies from de-listing and corporate function harmonization, and positive contribution to net revenues.
Book value growth and capital return
Book value per share increased to $79.24, up 8% year-over-year (more than 10% excluding NCIB impact); continued share buybacks (NCIB) and regular dividends with flexibility to accelerate buybacks.
Negative Updates
Insurance Canada quarterly earnings decline
Insurance Canada core earnings fell to $105 million in Q4 from $116 million a year earlier; prior-year included a $15 million core insurance experience gain while Q4 2025 recorded a core insurance experience loss of $4 million driven by normalization at iA Auto & Home and unfavorable morbidity in special markets.
Reserve strengthening and lapse experience on term product
Management increased lapse assumptions and strengthened reserves for a long‑standing term product sold pre-pandemic after observing persistent adverse lapse behavior across durations, reducing near-term earnings clarity for that block.
Adverse group experience tied to foreign student coverage
Special market group business covering foreign students saw lower premium volume and elevated claims due to federal permit changes; management implemented reserve strengthening (referenced as part of a significant ~$70 million P&L charge area) and anticipates renewals with repricing or non-renewal options.
Elevated corporate expenses and variable compensation
Total corporate core other expenses were $87 million pretax in Q4 (including $74 million core other expenses near the upper end of the target range) and a $13 million higher-than-expected provision for variable compensation, leading to a Q4 expense uptick and an updated quarterly corporate expense target to $70M ± $5M for 2026.
Reduction in expected investment earnings from acquisition-related asset change
Expected investment earnings decreased by $5 million quarter-over-quarter and $3 million year-over-year reflecting a reduction in assets following the RF Capital acquisition (partially offset by yield curve benefits).
Group Savings & Retirement sales lower year-over-year
Group Savings and Retirement sales totaled $851 million, lower than the prior year mainly because 2024 included a nearly $1 billion insured annuities transaction, making comparatives less favorable.
Company Guidance
Management guided to at least 17% core ROE for 2026 and more than $700 million of organic capital generation next year, while updating quarterly core other‑expense guidance to $70 million ± $5 million; they closed 2025 with a pro‑forma solvency ratio of 137% (133% reported), $1.4 billion of capital available for deployment, $665 million of organic capital generated in 2025 (including $170 million in Q4), and a continued, balanced capital‑deployment approach (RF Capital acquisition accretive, ongoing NCIB and dividends). Key year‑end metrics cited to support the guidance included Q4 core EPS of $3.10 and a trailing‑12‑month core ROE of 17.1%, book value per share of $79.24 (up 8% YoY, >10% ex‑NCIB), net premiums and deposits of $5.9 billion (+4%), total AUM/A of >$341 billion (+31%), record Q4 individual insurance sales of $111 million, strong wealth sales (individual gross $3.1 billion; segregated funds gross ≈$2.0 billion, net ≈$1.2 billion), and noted Q4 corporate core other expenses of $74 million (near prior upper target) and $87 million pretax including a $13 million variable‑comp provision.iA Financial Corporation Inc Financial Statement Overview
Summary
Overall financials are strong: solid profitability and conservative leverage (low debt-to-equity with rising equity). Offsets include notable volatility in revenue/cash flow across the period (including an outlier year) and uneven free cash flow consistency despite a very strong 2025.Income Statement
Profitability is solid, with net margin generally in the mid-to-low double digits in recent years (about 9.1% in 2023, 12.1% in 2024, and 9.7% in 2025) and operating profitability holding up. Revenue rebounded sharply in 2025 after a slight decline in 2024, but results show meaningful volatility across the period (including an anomalous negative-revenue year in 2022), which tempers the quality and stability of the earnings trajectory.78
Positive
Balance Sheet
Leverage appears conservative for the period provided, with debt-to-equity consistently low (roughly 0.23–0.34 from 2020–2025) alongside steadily rising equity and a growing asset base. Returns on equity were healthy in 2023–2024 (about 11%–13%), though lower in 2022, indicating some cyclical/market sensitivity despite an overall sound capitalization profile.84
Very Positive
Cash Flow
Cash generation improved materially in 2025, with strong operating cash flow and free cash flow (free cash flow about $3.2B), and free cash flow running close to net income (roughly 93% in 2025). However, cash flow has been uneven year-to-year (including negative free cash flow in 2021 and a decline in 2024), and some provided coverage ratios are reported as 0.0 in multiple years, limiting confidence in consistency and comparability.72
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 11.31B | 7.93B | 8.71B | -3.50B | 13.40B |
| Gross Profit | 11.31B | 3.70B | 3.14B | 12.00M | 4.35B |
| EBITDA | 1.75B | 1.61B | 1.35B | 656.00M | 1.60B |
| Net Income | 1.10B | 962.00M | 789.00M | 334.00M | 859.00M |
Balance Sheet | |||||
| Total Assets | 122.81B | 109.86B | 93.85B | 87.42B | 94.66B |
| Cash, Cash Equivalents and Short-Term Investments | 1.95B | 1.57B | 1.38B | 1.36B | 1.55B |
| Total Debt | 2.77B | 2.09B | 1.87B | 2.07B | 1.65B |
| Total Liabilities | 114.54B | 102.39B | 86.81B | 80.28B | 87.41B |
| Stockholders Equity | 8.27B | 7.47B | 7.04B | 7.14B | 7.25B |
Cash Flow | |||||
| Free Cash Flow | 3.21B | 763.00M | 1.06B | 326.00M | -63.00M |
| Operating Cash Flow | 3.44B | 1.04B | 1.34B | 613.00M | 185.00M |
| Investing Cash Flow | -2.02B | -491.00M | -307.00M | -287.00M | -294.00M |
| Financing Cash Flow | -712.00M | -397.00M | -1.01B | -525.00M | -294.00M |
iA Financial Corporation Inc Technical Analysis
Negative
150.97
Price Trends
168.41
Negative
165.95
Negative
155.15
Negative
Market Momentum
-4.51
Positive
34.21
Neutral
36.74
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:IAG, the sentiment is Negative. The current price of 150.97 is below the 20-day moving average (MA) of 160.49, below the 50-day MA of 168.41, and below the 200-day MA of 155.15, indicating a bearish trend. The MACD of -4.51 indicates Positive momentum. The RSI at 34.21 is Neutral, neither overbought nor oversold. The STOCH value of 36.74 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:IAG.
iA Financial Corporation Inc Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $15.98B | 13.28 | 12.37% | 3.59% | -1.02% | -5.65% | |
73 Outperform | C$5.62B | 2.39 | 15.37% | 892.19% | -31.32% | -26.23% | |
72 Outperform | C$13.74B | 15.09 | 14.34% | 2.11% | -25.13% | 16.40% | |
72 Outperform | C$49.59B | 12.88 | 14.25% | 4.11% | -19.88% | -13.92% | |
68 Neutral | C$8.24B | 21.30 | 13.44% | 0.98% | 19.80% | -12.93% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
65 Neutral | C$8.01B | 9.04 | 5.15% | 0.36% | 2.46% | -27.48% |
* Financial Sector Average
TSE:IAG
iA Financial Corporation Inc
150.97
26.69
21.48%
TSE:SLF
Sun Life Financial
89.54
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18.26%
TSE:IGM
IGM Financial
68.23
26.23
62.45%
TSE:ELF
E-L Financial
16.24
3.57
28.15%
TSE:ONEX
ONEX Corporation
104.94
3.41
3.36%
TSE:DFY
Definity Financial Corp.
67.75
5.92
9.58%
iA Financial Corporation Inc Corporate Events
Business Operations and StrategyFinancial DisclosuresM&A Transactions
iA Financial Group Hits 2025 Targets and Lifts Profitability With Strong Q4
Positive
Feb 18, 2026
iA Financial Group reported strong fourth-quarter and full-year 2025 results, with core diluted EPS rising 16% year over year to $12.96 and core return on equity reaching 17.1% on a trailing 12‑month basis. The company also expanded assets under management and administration to $341.1 billion and maintained a solid solvency ratio of 133%, underscoring a robust balance sheet.
iA achieved all of its 2025 key financial targets, including organic capital generation of $650 million and early attainment of its 17%+ core ROE goal, while recording record Canadian individual insurance sales and strong net fund inflows. The acquisition of RF Capital Group is already accretive and outperforming expectations, strengthening the company’s wealth management positioning and supporting its 2026 ambition to maintain core ROE at or above 17%.
The most recent analyst rating on (TSE:IAG) stock is a Buy with a C$188.00 price target. To see the full list of analyst forecasts on iA Financial Corporation Inc stock, see the TSE:IAG Stock Forecast page.
Dividends
iA Financial Corporation Declares Quarterly Dividend and Highlights DRIP Option
Positive
Feb 18, 2026
iA Financial Corporation Inc., parent of iA Financial Group, is a major Canadian insurance and wealth management provider with a significant presence in Canada and operations in the United States. The company, founded in 1892 and listed on the TSX under IAG, serves a broad client base through diverse financial and investment offerings.
iA Financial Corporation Inc. has declared a quarterly dividend of $0.99 per common share for the quarter ended December 31, 2025, payable March 16, 2026 to shareholders of record on February 27, 2026. The company also highlighted its dividend reinvestment and share purchase plan, noting that enrolled investors can reinvest this dividend via secondary-market share purchases with no discount, and confirmed that its common share dividends are classified as eligible dividends for Canadian tax purposes.
The most recent analyst rating on (TSE:IAG) stock is a Buy with a C$188.00 price target. To see the full list of analyst forecasts on iA Financial Corporation Inc stock, see the TSE:IAG Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.