Organic Capital Generation and IFRS Transition Outlook
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Non-IFRS and Additional Financial Measures (cont.)
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Core return on common shareholders' equity (core ROE):
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Category under Regulation 52-112: Non-IFRS ratio.
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о
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Definition: A ratio, expressed as a percentage, obtained by dividing the consolidated core earnings by the average common shareholders' equity for the period.
Purpose: Provides a general measure of the Company's efficiency in using equity, based on core earnings, and an additional indicator for evaluating the Company's financial performance.
Reconciliation: There is no directly comparable IFRS financial measure that is disclosed in the financial statements of the Company to which the measure relates.
Components of the sources of earnings (SOE), on a reported and core basis:
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о
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Category under Regulation 52-112: Supplementary financial measures.
Definition: Presents sources of earnings in compliance with the guideline issued by the Office of the Superintendent of Financial Institutions and developed in cooperation with the Canadian
Institute of Actuaries using the following components:
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Operating profit, which is the sum of the following components of the sources of earnings analysis: expected profit on in-force, experience gains and losses, impact of new business
and changes in assumptions and management actions.
Expected profit on in-force, which represents the portion of the consolidated net income on business in force at the start of the reporting period that was expected to be realized
based on the achievement of best-estimate assumptions.
Experience gains or losses, which represent the difference between reported income and the income that would have been reported if all assumptions made at the start of the
period had materialized.
Impact of new business, or strain, which represents the point-of-sale impact on net income of writing new business during the period. The expected profit realized in the years after a
policy is issued should cover the strain incurred at the time of issue.
Changes in assumptions and management actions, which is the impact on pre-tax net income resulting from changes in actuarial methods and assumptions or other management
actions. Changes in assumptions result from the Company ensuring the adequacy of its provisions given the existing economic and financial environment as well as the Company's
own experience in terms of mortality, morbidity, lapse rates, unit costs and other factors. Management actions represent the impact of actions apart from the normal operation of
the business, including but not limited to changes in methodology, model refinement and impacts of acquisitions, mergers and divestitures.
Income on capital, which represents the income derived from investments in which the Company's capital is invested, minus any expenses incurred to generate that income. The
Company also includes financing expenses from debentures, amortization of intangible assets related to acquisitions and the results of the iA Auto and Home (iAAH) subsidiary in this
item.
Income taxes, which represent the value of amounts payable under the tax laws and include tax payable and deferred income taxes. A life insurer's investment income taxes and
premium taxes are not included in these amounts. Income taxes are considered to be an expense for the purpose of calculating the operating profit.
Purpose: Provides additional indicators for evaluating the Company's financial performance and an additional tool to help investors better understand the source of shareholder value
creation.
Reconciliation: There is no directly comparable IFRS financial measure for components of the SOE that is disclosed in the financial statements of the Company to which the measure relates.View entire presentation