Q: Eric, you mentioned that Q1 is seasonally lower for organic capital generation. Can you explain what drives this seasonality? A: The seasonality is primarily due to the group businesses, where capital deployment is higher in Q1 and Q2 to support business growth. Many employers renew their business in the first quarter, which affects capital deployment.
Q: Regarding Dealer Services, are you hearing any changes in customer behavior due to tariffs and uncertainties? A: In the US, we observe that customers are advancing their car purchases, anticipating potential price impacts. This behavior might cause some quarterly noise, but the long-term demand for cars remains unchanged.
Q: Why was there a slowdown in share buybacks this quarter? A: The slowdown was due to strategic capital deployment, including the acquisition of Global Warranty. We have since accelerated the NCIB, aligning with our capital deployment strategy for the year.
Q: Can you discuss the impact of the new capital rule changes for seg funds? A: The new capital formula will be effective from July 1, and we do not expect it to have a meaningful impact on our results, thanks to our disciplined risk management practices.
Q: How does the capital available for deployment remain unchanged despite organic capital generation? A: The macroeconomic variations and adjustments to our investment portfolio, aimed at optimizing returns, have impacted capital deployment. These adjustments are part of our strategy to enhance long-term returns.
Q: Are you seeing improvements in the US Dealer Services business, and would you consider M&A in this area? A: We are seeing improvements and are on the right track. While we focus on organic growth, we are open to smaller acquisitions if opportunities arise due to market disruptions.
Q: How are you managing potential cost inflation in US Dealer Services due to tariffs? A: We are closely monitoring the situation and are prepared to adjust pricing as needed. The business is highly reinsured, which mitigates some of the cost impacts.
Q: Is the Vericity acquisition on track to become earnings accretive by the second half of 2025? A: Yes, we are on track for Vericity to start being accretive in the second half of 2025, aligning with our initial expectations.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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