This improvement is attributable to increased business volume in all insurance sectors. Insurance sales stood at $463.5M, compared to $433.4M for the same period in 2011, for an increase of 6.9%. Savings product sales were up 15.5% ($2.2B) over last year ($1.9B). Company profitability stood at $217.0M compared to $281.8M in 2011.
Despite excellent business growth in 2012, the Company’s lower profitability is due to less favourable economic conditions, which exerted pressure on the entire insurance and financial services industry, to a deteriorating disability insurance claims experience and to adjustments in actuarial liabilities dictated by the need for prudence in this current environment.
The share of net income attributable to the shareholder, Desjardins Financial Corporation, totalled $163.1M for the period ended December 31, 2102. Return on shareholder equity was 10.3%, in a context that required the Company to exercise caution by adjusting its actuarial liabilities and increasing its capitalization.
Desjardins Financial Security continues to enjoy excellent financial stability. Assets under management and administration totalled $34.4B as at December 31, 2012 versus $33.0B at the end of 2011.
Commenting on the Company’s results, Monique F. Leroux, Chair of the Board, President and CEO of Desjardins Group and CEO of Desjardins Financial Security, noted that "Once again, despite tough economic conditions, our life and health insurance subsidiary remained on its growth course in 2012, while consolidating its capital base and maintaining excellent financial stability. Our members and clients across the country continue to appreciate the quality of Desjardins Financial Security’s products and services, resulting in increased sales for our insurance and savings business lines."
Denis Berthiaume, President and Chief Operating Officer, remarked that "Our business lines’ performance throughout the year reflects the smart business decisions we made and the excellent work they do. They have laid solid foundations on which we will continue to build by developing products and services that meet the varied needs and expectations of an ever-growing numbers of members and clients across the country."Results for Q4 2012
For the period of October 1 to December 31, 2012, net income totalled $60.8M compared to $104.3M for the same quarter in 2011. Insurance premiums were $835.7M versus $781.6M in 2011. Insurance sales totalled $82.2M compared to $83.3M for the same period last year. On the savings side, total sales came to $450.1M versus $474.2M for the same period a year ago.Results by business sector for the year ended December 31, 2012
In group insurance, the volume of premiums from groups and businesses and plans offered in financial institutions, including the Desjardins caisses, stood at $2.6B as at December 31, 2012, compared to $2.5B for 2011. Insurance sales were up 5.9% and totalled $367.0M versus $346.5M for the same period a year ago.
In individual insurance, premium volume totalled $617.6M for the year ended December 31, 2012 compared to $583.3M for the same period in 2011. Total sales recorded 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 $96.5M versus $86.9M as at December 31, 2011, for an increase of 11.0% over the previous year.
On the savings side, total sales came to $2.2B as at December 31, 2012 versus $1.9B for the same period in 2011. In individual savings, sales totalled $508.3M, while mutual fund sales stood at $1.2B versus $658.5M, for an increase of 84.4%. This increase is primarily due to sales recorded by MGI Financial Inc., a company acquired in the last quarter of 2011. In group retirement savings, sales totalled $434.5M as at December 31, 2012.