Despite low interest rates and volatility in the financial markets, Desjardins Group posted a 1.5% increase in operation income, to $14,131 million.
However, Desjardins Group’s insurance results declined, both in life and health insurance and in property and casualty insurance, despite growth in net premiums to $7.17 million (up from $6.91 million in 2015), announced Desjardins Feb. 27.
Surplus earnings before member dividends amounted to $1,77 million (compared to $1,96 million in 2015). According to Desjardins, this decline can be explained by additional investments in new innovative technology platforms, the payment of severance benefits and adjustments to the actuarial assumptions related to life and health insurance operations. Surplus earnings in 2015 were enhanced by the gain realized on the acquisition of State Farm’s Canadian operations.
Net surplus earnings decline by 8% in life and health insurance
In 2016, net surplus earnings generated by the Wealth Management and Life and Health Insurance segment declined by 8%, amounting to $461 million compared to $503 million the previous year. This was mainly caused by adjustments made to actuarial assumptions in the normal course of business and by higher gains on the disposal of investments in 2015, says Desjardins.
On December 31, 2016, Desjardins Group’s total assets amounted to $258.4 billion, up $10.2 billion (+4.1%) from December 31, 2015. This compares to growth of $18.7 billion (+8.2%) the year before. This sustained growth was largely due to growth in the net loans and acceptances portfolio and in segregated fund net assets.
DFS surpasses a half billion in net income for the first time
On March 1, Desjardins Financial Security (DFS) – the Desjardins Group subsidiary specialized in life, health and retirement savings – announced record net income of $504.5 million for 2016 – a 12.5 per cent increase over 2015.
Gross insurance premium sales reached $4 billion, 3.0 per cent growth over 2015. Insurance sales grew by 4.5 per cent, to hit $470.8 million compared to $450.6 million in 2015.
"We're very happy with these results, particularly the major growth we've seen in net income and gross insurance premiums, which hit record highs this year. In a challenging market, our disciplined management style, excellent sales growth and the increased cohesiveness between our activities were all key factors in making 2016 such a successful year," explains Gregory Chrispin, President and Chief Operating Officer of DFS.