All right, welcome back. Hope everybody enjoyed the break. Next speaker is, Monsieur Denis Ricard, long time, you know, long time, guest at this event. Appreciate you coming, again this year. And. Denis, of course, is the President and CEO of iA Financial Group. Thanks, Denis, for making the time. Thank you for the invitation. Always a pleasure. Well, I'd like to start with a big picture question. The last year, the calendar fiscal, was an exciting year, because of the big transition, IFRS 17. At the outset of the year, there was a lot of optimism, at iA, with regards to your growth objectives. Fell short of that. I'm just maybe you can talk about some of the challenges that presented themselves over the course of the year, that kind of, you know, prevented you from hitting what you were hoping to hit. And then we'll flip that around in the next question as far as, you know, the outlook stuff. Yeah. No, yeah. Obviously, it's this big question about IFRS 17 and its impact on our business. And, I must say that at the transition, we expected, I would say some positive, and it happened. And I'll talk about the challenge for last year. But in terms of the positive that we've seen for our organization, the book value of the company has not been affected by the transition. In fact, our book value, if we compare the end of last year versus, let's say, two years prior to that, under the previous regime, we were up like 8%, whereas, you know, the whole industry was negative during that period. So we're very proud that our, I would say, prudent approach in the past has materialized through this transition with the book value. For us, it's when you look at our business in the long term, it's one of the main, I would say, KPIs in terms of profitability. Beginning of last year, we said that we thought that the increase of EPS would be around, I would say, between 13%-18%, so let's say 15%-ish. We finished at 5%. Are we happy? No. We're not happy about what happened. There's been more tailwind, sorry, headwind than tailwinds when we think about it. Mortality for the first six months has not been good. The, let's say the P&C claims, has not been good. Also the yield curve has not been favorable for the year. The last, at the end of the year, we incurred some strain on the group business, higher than, I would say, you know, we used to have. We might comment on about that later on. Yep. But, so I mean, when you think about it, there's been some negative during the year that was not expected. But we took some action and, oh, I mean, if you ask me about 2024, I feel confident that this is big. Well, let's, yeah, let's segue into 2024. The 10% EPS growth target, how, you know, how do you get back on track for that in this year? Because some of the headwinds that, you know, you've talked about are still relevant, like the auto sales in the U.S. affecting that warranty business, the P&C. I mean, there, we had good weather, I guess, but there, there's still some headwinds. Yeah, well, I see more tailwinds now. Okay. When I look at it, on the P&C side you mentioned, the weather has been pretty favorable during the first quarter, at least during the first quarter. Mortality is back on track. When I look at the general expenses, corporate expenses, we've, you know, we've set the market. We have a goal of maintaining the same level of last year. Growth has been fantastic in most of our lines of businesses. Organic growth is really the key to grow this organization. In fact, when I look at, let's say, I move to a higher level, I feel more confident today about our capability to deliver on the 10% EPS growth going forward, which is like it's not only 2024. I'm talking about, let's say, over a midterm period. I feel more confident today than ever, because we are generating CAD 600 million of excess capital on a yearly basis. We already have CAD 1.6 billion sitting in the bank to some extent, but you know, capital for deployment that way that we could deploy, generating a lot on an annual basis. When I look at it, yes, we would like to grow and deploy it through acquisition. But the reality is that, I mean, the likelihood that I have of being able to deploy that amount of capital is not, obviously, that high. So. Quicker switch and. So now we are buying back shares. It's fueling the EPS growth, obviously. So organic growth, opportunistic, strategic acquisition, maybe. We're working on some, but we don't know exactly if we'll be able to do it. And the buyback is obviously fueling it. So I feel more confident today than, let's say, 10 years ago, when we were in a much more difficult capital environment. Interest rates were declining. It was difficult to generate excess capital at the time. For any acquisition, we needed to go to the market and raise capital. It's not the case anymore. Bankers won't be happy to hear that. But the internal capital generation question. So CAD 600 million of, is your target CAD 600 million plus for 2024, which is on par with last year, I believe. I guess given that there's an expectation of a turnaround year in 2024, so improved growth, given that your sales mix is still more capital-light than it, you know, continues to be, progressing in that direction, I think there was some expectation that maybe that target would go up. And my question would be, are you simply, you know, under-promising to over-deliver? Is that your positioning with regards to that particular target? The short answer is yes. All right. Actually, at CAD 600 million it's +600, by the way. So but at 600, I mean, we're, you know, the highest in terms of the core earnings of, you know, the organization, I mean, the industry. So, I mean, to me, we feel very comfortable with that amount. And, the goal is really to, to improve it, obviously. But, short answer is yes. Is there any thought towards, I mean, we're always asking for more transparency, and I think that's part of it. It's the nature of the beast covering insurance companies. They're still opaque to outside observers. Is there any thought towards illustrating the creation of the excess capital, if you will, like being able to reconcile it somehow? Because it's a number that we get, not just from IA, but other companies. They say, "This is our internal capital generation," and being able to, "Oh, I can calculate that. I can't," simply. Is there any? No, that's a great question. I mean, I personally, I am interested in understanding, and we look internally, you know, at that KPI. And we might at some point, you know, be a bit more. I mean, we are in the process right now with the IFRS 17 transition to improve some of the disclosure that we're having. It might be part of that. I mean, general expenses is another one where I think we need to improve, you know, a bit. Let's say, the fact that we are classifying the group business differently from some of our other companies also is a place where we will improve our disclosure. So, we will adjust. I mean, the idea for us, and we've done that in the past, is to be a leader in disclosure and be able to, I would say, explain and educate to some extent, the market about our business. Well, you mentioned the group business and how it's classified differently at IA versus the approach your peers have opted for. Given how you've classified it, is this Q1 kind of phenomenon of a big strain number that weighs on profits a permanent feature? And maybe it's going to vary in terms of size. There was unusually large renewals this year. Like, just how should we be thinking about that seasonality, probably? So let me just first say that it's not because the competitive environment is more difficult that the strain was that high in the first quarter. In fact, I'm encouraging my team to grow that business. And if the number was higher because we gained more market share, I'm fine. And, I mean, and we could demonstrate that to the market. But let me just explain one thing. When we decided to use the General Method in the IFRS 17, we could have used the PAA, I think. Here's the other one. Just rolls off the tongue. Yeah, anyway. So General Method, for us, okay, the whole group insurance business, the required capital is CAD 180 million if we had used the other methodology. Under the GMM, the General Method, it's CAD 140 million. So it's CAD 40 million less required capital because we chose that methodology. For the whole? For the whole group insurance business. That means that our group insurance business is bringing a higher ROE than otherwise we would it would have done under the other formula. That's why we chose that. Now, on a P&L basis, it changes nothing. It just shows the strain separately from, let's say, an I mean, if we had used the other methodology, it would the strain would have been buried in a in another line. So on the P&L side, it changes nothing. On the capital side, it optimized the capital, generated a higher ROE. That's why we did it. And I still I mean, it's pretty clear that we did the right we made the right decision. Well, I think the issue is, you know, it's a learning process. IFRS 17, I think it's going to be continue to be in a learning process, sadly, for another five-10 years because, I agree. It's more, it becomes then an issue of, let's try to frame, you know, expectations. Is this like I said earlier, is this a we'll have Q1 a big hit every year, and we get just accustomed to that, and that's the way it is. So familiarity will kind of deflate the issue, so to speak. Is that so, seasonality is a bigger factor now? Yeah, I mean, the renewal are more like Q4 we've seen it than maybe Q1. Let's say there might be some seasonality in terms of renewal. Like, groups tend to renew more at the end of the year. But at the end of the day, I mean, you should expect that it will come back over time. And it's a great thing because the insurance profit is increasing. I mean, the value of the organization is higher when we sell those even if there is a strain. So the expenses we did, you touched upon the corporate expenses a few moments ago. And you're committed to keeping it flat. And I'm just wondering, are there, you know, and this is in the vein of IG s in the past had, you know, periods where growth wasn't where you wanted it to be, but then you take management actions, and then, you know, things are back on track, maybe even better than before. And I think about expenses. Well, that's an area where you can, you know, pull a lever and then increase improve your growth profile. And it doesn't sound like that, though. You're just keeping it flat, but there's no active cost-cutting initiatives in any other segments? Well, we are managing our expenses, you know, on a continuous basis. So, from time to time, yes, we look at our businesses. There might be some changes here and there. We've done that last year with the capital market. You might recall that we've improved significantly our bottom line on, on the wealth management side. That was one of the reasons. So, from time to time, we look at our businesses and, and we do make some decisions. We have invested significantly over the last five years in technology. I mean, and now we are reaping the benefit, starting to reap the benefit out of it. So, we, I think we made well, I'm sure we made the right decision in terms of general expenses. Now, when you look at general expenses under IFRS 17, again, it's a, it's, it's a problem. We need to improve our disclosure here because what you have seen as investors is a significant increase in corporate expenses. You don't see the whole picture. You don't see, I mean, corporate expenses might be like 12% of the total expenses of the company only. You don't see the rest. Now, for 2023, I am pleased with where we finished. In fact, when you get the circular, you'll see that, you know, when you look at the bonus component of general expenses for executives, it's on track. I mean, we've done just a bit better than expected. And it's because there are other expenses in other areas where it's been favorable. So to me, I mean, we have work to do to explain a bit more our general expenses, and we'll improve. One, I want to shift over to the U.S., and, there's a couple, you know, subjects under the U.S. that we can talk about. But where I'd like to start is, you know, not understanding the fact that you've been there for a number of years, is it still a challenge explaining to the Street and investors what exactly your U.S. strategy is? And I mean, that's a simple, stupid question, but I think it's one that's pretty relevant. And if so, what are you doing to address that? No, I don't think the issue is explaining the strategy. I think the issue is to explain the how, how let's say how great we did on the life side, but obviously, now it's challenging on the U.S. dealer side. Now, the strategy has always been to leverage our strength in Canada in sectors, I would say comparable in the U.S.. Life is a good example, and the U.S. dealer business is another one. And in the U.S., when you look at it, I mean, you know, sometimes we need to be patient here. When we bought American Amicable in 2010, I mean, sales were like $25 million a year. Last year was $170 million. So we have had great success, 15% CAGR over that period. Our ROE is amazing, is way above the target ROE of the organization. We are in a niche market, okay? We're not competing against the big, big guys there. So we select our market, and we are a leader in that business in the U.S. Now, on the U.S. dealer side, timing was not good, okay? We closed the deal, the biggest one, in May 2020, okay? Car sales were not that good at that time. You might recall that. So now interest rate is high. Affordability is an issue. So there's things we can control and things we can't control. So we cannot control the interest rates in the environment, but we can control the expense. We can control our sales strategy. So we are focusing on two things in the U.S. dealer: managing expense and gaining more accounts than we lose. You should see some gradual improvement over the next quarters. So, that was a message that was clearly delivered last quarter. What's the, you know, timing of impact? So when you sign up new dealers, how long does it take for them to become pro? It takes a few months because, you know, there's some administrative process. And so it's not immediate. So that's why we're saying you should see some improvement over the next quarters. Is one of the challenges today the opposite of, well, there was a bit of a tailwind in the pandemic when supply was low. Dealers were, "Well, we want to get some revenue here, so let's sell some F&I products." And now the sales are just weak because demand's low. They just want to get a car off the lot without hindering the sales process by introducing a, you know, F&I pitch. Is that a challenge? Well, the issue is more that the prices of cars have gone up significantly. The financing of the cars for the client have gone up significantly. So there is less room for the affordability for the clients to pay for the F&I product. And we see it across all the whole spectrum of dealerships we do business with. The attachment rate of F&I products has decreased last year. So we'll see over time. As I said, it's not something that we can control, 100%. Obviously, we can do some training and things like that. But at the end of the day, the affordability has been an issue. So if rates go down, it should help in that business. The other U.S. top and you mentioned American Amicable a few moments ago. That one, people, I think, forgot about. And then last year had a really good, good year, looks like. I don't know. 20%. 20% increase in sales. Earnings hard to decipher just given the but, but looks like it's a needle-moving type of operation now. So what's been, you know, what's been the recipe for, for that success of that? Okay, you'll find my answer boring. Sure. Okay? So it's really the combination. I mean, we've got superb operators in the U.S. It's really the combination of good products, good service, good digital tools, and relationship long-term relationships with distributors. If you do those four in a superb way, you have a competitive advantage. It's like, what changes have I? Don't know if it's on the distribution side, the product side. It's over the. the. I'm talking about a longer period, 10 years or so. Is it still very much focused on final expenses and a client base that's, you know, less affluent, if you will? Yes. The market is really like, it's final expense type of products. We're trying to focus on that on that part of the market, which is less competitive, as I mentioned. Now we've, we've bought, like, Vericity. You might be interested in hearing about it. The reason why we bought Vericity is that I mean, right now, we are present in the independent distribution in the U.S., IMOs, Independent Marketing Organization. And with Vericity, we are broadening the scope of distribution, adding the digital distribution. So they are expert at generating leads through digital means, using AI, using other, you know, technology. They get the leads, and they also have around 200 people that on the phone, online, sell the products to the client that it's been, you know, generated. So yeah, that's the Vericity acquisition. It was a bit surprising to some and maybe underappreciated in terms of what it adds to the mix because I know I expected something maybe more like American Amicable and a scale-enhancing type acquisition. This one's more of a capacity-enhancing acquisition. And you know, how do these two? You know, you explained one facet of it. It's they're going to sell the same product but in a different channel. Is that essentially? Well, not exactly. They could sell the same product in the Final Expense, but right now, they have more than that. So they will continue to sell other type of products, like simple products, like term products, and things like that. But one thing also to keep in mind in that deal is that we are going to gain expertise not only for the U.S. business, but across the board. So our expectation and but we have not priced for it. But our expectation is that that expertise could be could be brought in Canada also at some point. So that's something that we're going to work on. So, for us, it's really a strategic move, on that matter. What's the path to profitability of Vericity? That, you acquired it, and then it wasn't. I assume that's because they were spending a lot building these systems. A public company. Yeah. So what's the path? 2025 should be accretive to our earnings. So very quickly. On a core basis, we're talking about? Yes, on a core basis. Yeah. Yeah, it will be accretive. So, for us, I mean, there's a lot of expense because it's a public company. But the reality is that, I mean, we're going to generate additional revenue as well. So it's in our plan. It's both on the revenue side and the expense side. So and Vericity. Keep in mind, sorry to interrupt you here. Yeah, sure. It's just a story that it's a bit similar to what we did with American Amicable at the time. They were not making money in 2010 when we bought the company. We were able to generate, I would say, additional leverage both on the revenue side and on the expense side, we were able to be more efficient. So it's a kind of we see it we see this as the same kind of story. Vericity has a tech platform, distribution platform, and then a more of a legacy, traditional type business as well. How does that one fit in? Well, actually, we bought a manufacturer, Fidelity Life. And we bought also the e-commerce or e-distributor. So it's a combination of the two. So they have the platform. They have some expertise. We have a CTO there, like a chief technology officer, that we believe is going to be able to bring some additional expertise within the group. Okay. You know, I've got a couple minutes here. I want to spend some time talking about CRE. Pretty big experience loss in Q3, smaller one in Q4. What's the expectation going forward? I know that's a difficult question to answer. And, you know, there is a heavy skew towards office in that portfolio. Are you anticipating making some changes opportunistically over the next few years to kind of readjust that? I mean, we are, let's say, we're happy with our portfolio. Let's say, you know, when we look at it in percentage of our total, I mean, it's really there to back the long-term liabilities of the organization. So it's really a long-term view. Our biggest—I mean, the quality of our real estate is very good. A lot of government occupied by government, long-term lease. The average weighted average is about nine years. We have one. The biggest one is like, is, the lease will end in 2047. And it's full of civil servants. And actually, because of the hybrid work, I mean, it's not fully occupied. So they're bringing other ministry in that building because it's so long. So we are very well positioned when you think about it. So the quality is great. We took some write-down because of the cap rate last in Q3, even for that one, even if we know that the lease is going to be there up to 2047. And so, we're pleased with the—I mean, obviously, there are some cyclical, how do you call that? Cyclicals. Cyclicality. Cyclicality. But we, because we look at it on the long term, we're not that, that I mean and we have other type of assets. I mean, the non-fixed assets, it's not only made of real estate. So in average, we're pleased with the results we have. The whole portfolio has been reviewed, so to speak, right? Yeah, yeah, absolutely. Yeah. In Q3, I mean, we applied the increase in cap rate for the whole portfolio. Even like I said, even that one, which is the lease ends in 2047. Just to wrap up on capital management, you mentioned buybacks earlier in this presentation. It's, you know, last year very active under the program. This year, a similarly sized program. A, you expect to be similarly active this year. I guess B would be what conditions would need to change for you to maybe dial it back, whether it's an acquisition or market conditions. What's the strategy there? Well, right now, it's, you know, we are very active. In fact, we have a program that's supposed to end in November. And at the pace we are right now, it's we're going to hit the 5% before that. So we'll see what we do there. But the reality is that at the current price, we see this as a great opportunity to buy back our stock. For us to stop buying back, because we generate CAD 600 million a year. We have CAD 1.6 billion. So I mean, there would need to be a sizable acquisition to do that. So that would be the only condition I would see. Okay. Well, thanks again for spending the time with us. I hope the rest of your day goes well. Okay. Thank you. Bye-bye.