Desjardins Financial Security strengthens market outside of Quebec

Desjardins Financial Security posted a net income of CD$69.2 million for the second quarter 2006 compared with CD$74.2 million for continuing operations in 2005, when results benefited from a reversal of allowance for impaired loans.
In the Q2, the net income was CD$38.7 million compared with CD$42.4 million in 2005, a drop of CD$3.7 million compared with the same period last year. The Quebec-based insurer says, the poor experience in long-term disability experienced in the Q1 2006, continues to affect the year’s results.
Insurance sales totalled CD$175.9 million, up by CD$98.3 million over the Q2 of 2005. Desjardins says the acquisition of new major contracts, including one with the Government of Newfoundland and Labrador for its 36,000 employees and retirees, explains the 126.7% increase over last year. Insurance and annuities income, investment income and other income represent approximately CD$1.6billion compared with approximately CD$1.5 billion in 2005, up 8.1%. Desjardins also reports assets under management rose to CD$17.5billion, up CD$2.0 billion from the corresponding date in 2005.
The insurer says it continues its sustained contribution to the profitability of Desjardins Group which, at the end of theQ2, reported CD$376 million in surplus earnings before patronage dividends to members.
Desjardins Financial Security’s share of the net income attributable to the ultimate shareholders, the Desjardins caisses, is CD$68.1 million with a return on shareholder equity of 19.4%.
President and CEO of Desjardins Group and CEO of Desjardins Financial Security, Alban D’Amours, says in line with the 2006-2008 strategic plan, the performance of the Q2 means the Company can expect to see continued profitable growth.
Franois Joly, president and COO, emphasized the solid growth especially outside Quebec where the Company is aiming to double its market share.
“The signing of major group insurance and retirement savings contracts in the past few months has helped strengthen our penetration into the Canadian market,” Joly says. “Also, the recent acquisition of the Performa Financial Group will reinforce our capacity for product and service distribution, and thus help reach our objectives for development outside Quebec, which will allow us to strengthen our position among the key financial service providers in Canada.”