Thank you for standing by. This is the conference operator. Welcome to the Industrial Alliance Financial Group First Quarter 2025 Earnings Results Conference Call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation there will be an opportunity to ask questions. [Operator Instructions]. I would now like to turn the conference over to Caroline Drouin, Head of Investor Relations. Please go ahead.

Thank you. Good afternoon, and welcome to iA's earnings conference call for the first quarter of 2025. All of our Q1 documents, including press release, slides for this conference call, supplementary information package and quarterly MD&A are posted on the Investor Relations section of our website at ia.ca. This conference call is open to the financial community, the media and the public. I remind you that the question period is reserved for financial analysts. A recording of this call will be available for one week starting this evening, and the archived webcast will be available for 90 days, and a transcript will be available on our website in the next week. I draw your attention to the forward-looking statements information on Slide 2 as well as the non-IFRS and additional financial measures information on Slide 3. Also, please note that a detailed discussion of the company's risks is provided in our 2024 MD&A available on SEDAR and on our website with an update in our Q1 2025 MD&A released yesterday. And with that, I will now turn the call over to Denis Ricard, President and CEO.

Good afternoon, everyone, and thank you for being with us on the call today. As usual, I will start by introducing everyone attending on behalf of iA. Joining me are Eric Jobin, Chief Financial Officer and Chief Actuary; Alain Bergeron, Chief Investment Officer; Stephan Bourbonnais, responsible for our wealth management operations; Renee Laflamme, in charge of Individual Insurance Savings and Retirement; Pierre Miron, Chief Growth Officer of our Canadian operations and responsible for Dealer Services Canada and iA Auto and Home; Sean O'Brien, Chief Growth Officer of our U.S. operations; and Louis-Philippe Pouliot, in charge of Group Benefits and Retirement Solutions. Starting with Slide 8 for an overview of our first quarter results. We had a strong quarter marked by continued momentum in our sales and earnings, along with disciplined execution. I'm pleased to walk you through the highlights of this remarkable quarter. Core EPS increased by a robust 19% year-over-year, reaching $2.91. Core ROE stands at 16.1% on a trailing 12-month basis, progressing well towards our new target of 17% plus in 2027. Sales in both Canada and the U.S. continued to be strong this quarter, contributing to the 19% year-over-year growth in premiums and deposits as well as a 15% increase in assets under management and administration. This marks the fourth consecutive quarter of double-digit growth in premium and deposits as well as assets under management and administration. We maintain a robust capital position with a solvency ratio at 132%, which is supported by the ongoing organic capital generation and disciplined capital management. Our book value per share reached $74.62, representing an 8% year-over-year increase. Excluding the impact of the NCIB, the increase over the last 12 months is close to 11%. Turning to Slide 9 to look at Q1 business growth for Insurance Canada. In this segment, strong sales momentum in all businesses units while strengthening our leadership position in our foundation businesses, including Individual Insurance, Dealer Services and seg funds. In Individual Insurance, sales increased by 11% year-over-year to reach $99 million. This result reflects the strength of all our distribution networks, the outstanding performance of our digital tools and our comprehensive range of products. We maintain leading position in the Canadian market for the number of policies issued. In Group Insurance, sales were driven both by increased product uptake among existing clients and by the addition of plan members, resulting in a 31% year-over-year increase. This growth contributed to premiums and deposits totaling $531 million, representing a 5% increase from the previous year. In Dealer Services, total sales of $163 million grew by 10%, supported by guaranteed asset protection and ancillary products. This solid result highlights our position as a top Dealer Services provider, offering a comprehensive range of products and leveraging our extensive distribution network. Finally, iA Auto and Home delivered good sales results with direct written premiums reaching $129 million in the first quarter, marking a strong increase of 13% over the same period last year. The growth in this subsidiary was driven by a high number of policies issued and targeted repricing. Now looking at Slide 10 to comment on sales results for wealth management, which were again very solid, particularly for seg funds. IA continues to rank first in Canada for both gross and net seg fund sales, achieving record-breaking levels this quarter. Gross sales soared to over $1.9 billion, marking an impressive 52% increase compared to last year. Net sales amounted to nearly $1.2 billion. These outstanding results highlight the strength of our distribution networks and the quality and breadth of our product lineup. Gross sales of mutual funds increased by a strong 33% compared to the same period last year, reaching a total of $647 million in Q1. Net outflows amounted to $62 million. Sales of other individual savings products reached $467 million during the quarter, maintaining high levels despite the market environment that favored asset classes with higher return potential. Finally, sales in Group Savings and Retirement totaled $841 million, reflecting an 8% decrease compared to the previous year. This is the net result of accumulation product sales remaining consistent with 2024 levels, while insured annuity sales were lower than last year. Let's move on to Slide 11, which covers our sales results in the U.S. In Individual Insurance, sales of USD 68 million were 62% higher than a year earlier, driven by good organic growth in our target markets and the addition of sales from the Vericity acquisition, which added scale and new digital capabilities. In Dealer Services, first quarter sales increased by 23% compared to the same period last year, reaching an impressive USD 306 million. This performance underscores the effectiveness of our growth strategy and focus on execution. By expanding our distribution channels and prioritizing superior customer experiences, we are solidifying our position in the industry. The impressive sales results in both U.S. business units demonstrate the potential for expansion of our business model as we continue to allocate capital to grow and scale in the U.S. Moving to Slide 12, where you see that our key financial results are well aligned with their respective targets. Core EPS growth of 19% year-over-year compares favorably with our midterm annual average target of 10% plus. Core ROE of 16.1% is progressing well towards our target of 17% plus in 2027. This good profitability contributed to the generation of $125 million in organic capital in Q1, on track to meet our 2025 target of $650-plus million. Lastly, our dividend payout ratio is near the middle of the target range. Turning to Slide 13 to discuss our capital deployment priorities and recent initiatives. As you may recall, the revised CARLI guideline effective January 1, 2025, has positively impacted our financial flexibility and increased our ability to deploy capital, a top priority for executing our growth strategy. As of March 31, 2025, we had $1.4 billion in capital available for deployment following another active quarter of strategic capital deployment initiatives. These initiatives included dividends, share buybacks, IT investments and the recent acquisition of Global Warranty, which strengthens our presence in the Canadian used car warranty market. Now before I turn the call to Eric to detail our first quarter financials, I'd like to offer my perspective on the uncertainty created by the fast-moving political and macroeconomic environment. I want to highlight the financial strength and stability of our organization. Throughout our history, we have successfully navigated various economic cycles, slowdowns and recessions. Our business model is highly diversified, spanning products, markets and geographies, which makes us less sensitive to economic fluctuations today than in the past. This resilience is due to our multiple revenue streams and best-in-class risk management expertise. We remain committed to focusing on improving what we can control, harnessing the entrepreneurial energy of our distribution networks, adjusting pricing as needed, driving efficiency internally and prioritizing the support and service of our clients' needs. In February, we hosted an investor event where we unveiled new financial targets and outlined a clear strategy for achieving them. We emphasize that our goal to increase ROE and create long-term value for our shareholders is grounded in our unique approach, the iA way. A prime example of this approach is our distribution network, which serves as a key differentiator that sets us apart from competitors. In uncertain environments, customers tend to choose the provider they trust most. Our extensive distribution network, combined with the high-quality advice from our human advisers is a true point of distinction that reinforces this trust. Our Q1 2025 results demonstrate that we haven't seen any attenuation of demand yet. While there may be some short-term noise along the way, we approach this new financial cycle confidently. And remember that in every challenge lies great opportunity. With that in mind, we will remain focused on growth by actively exploring acquisition opportunities and staying disciplined and vigilant to capitalize on potential new opportunities. With that, I will now hand it over to Eric, who will comment on the first quarter profitability and capital strength. Following Eric's comments, we will take questions.

Thank you, Denis, and good afternoon, everyone. Let's begin with Slide 15, where we highlight a strong start to 2025 with good profitability results and financial strength. Core EPS for Q1 2025 reached $2.91, representing 9% year-over-year increase and reported EPS was $1.98. The rise in core EPS reflects notably a strong increase in the insurance service result, driven by all operating business segments as well as a strong increase in the core net investment result. Our strong earnings, coupled with our strategic capital deployment initiatives, have elevated our core ROE to 16.1% for the last 12 months, marking steady progress toward our new target of 17% plus set for 2027. Our capital position is robust and supported by ongoing organic capital generation, providing plenty of capacity for organic growth and acquisitions. Finally, over the last 12 months, our book value per share has increased by 8%, reflecting our ability to create value for shareholders. During the same period, we have strategically executed a series of share buybacks, reflecting our commitment to enhancing shareholder value and optimizing our capital structure. Without the impact of share buybacks, our book value per share would have increased by approximately 11%. These figures underscore the significant role that our share repurchase program has played in driving value for our shareholders. Turning to Slide 16 to look at the Q1 total earnings performance. Net income decreased by 20% year-over-year due to the Investment segment being affected by macroeconomic fluctuations. I will come back to this point in a minute. Meanwhile, net income for all other segments together grew by a solid 14%. Core earnings grew by 12% year-over-year with all operating business segments posting good growth. Now moving to Slide 17 to take a closer look at Q1 results by segment. In Insurance Canada, core earnings for the quarter rose to $100 million, representing a 9% year-over-year increase. This growth was primarily driven by higher expected insurance earnings, which included an increase in the combined risk adjustment release and CSM recognized for services provided. Additionally, there was an increase in expected earnings from iA Auto and Home PAA business. Also contributing positively to this growth are the reduced impact from new insurance business in employee plans, favorable insurance experience resulting from lower claims at iA Auto and Home and positive morbidity experience. Lastly, core noninsurance activities were higher, driven by good performance in dealer services and distribution activities Turning to Slide 18 in the Wealth Management segment. First quarter earnings rose to $106 million, representing a 12% year-over-year increase. This growth was mainly driven by an increase in the combined ROE and CSM for service provided. These favorable impacts were largely due to a strong net fund, segregated fund sales and positive financial market performance over the past 12 months. Core noninsurance activities were higher as a result of good performance from group savings and retirement due to higher net revenue on assets. On Slide 19, core earnings from U.S. operations totaled $30 million in Q1, marking a significant 58% year-over-year growth. This increase was primarily driven by a strong pretax $19 million rise in the core insurance service result, which includes contribution from the Prosperity blocks of business and an additional $8 million from the Vericity acquisition. Core noninsurance activities saw an increase of $1 million year-over-year. This result is the net of $4 million loss from Vericity distribution activities and $5 million increase in earnings in Dealer Services. We are particularly pleased with the performance of Dealer Services, which underscores the effectiveness of the disciplined management action that we have been implementing. Looking ahead, we remain focused on executing our integration plan and realizing synergies on the Vericity acquisition. It's important to highlight that during Q1, the combined impact of the Vericity and Prosperity acquisition was neutral on core earnings. This result aligns with our expectations at the time of the acquisitions. Now turning to Slide 20 for the results of the Investment segment. Core earnings for the quarter were $85 million, consistent with the same period last year. Before accounting for taxes, financing charge and expenses, core net investment result was $124 million, up from $109 million a year ago and exceeding the $120 million recorded in the previous quarter. This strong performance was supported by several factors, including the favorable impact of interest rate variation in recent quarters. In addition, credit experience was positive in Q1 due to the higher impacts from upgrades than downgrades in the fixed income portfolio, while credit experience in the iA Auto Finance car loan portfolio met expectations. Non-core adjustments totaled $50 million, primarily reflecting unfavorable market-related variation, including losses in public and private equity and value adjustment in the investment properties. Moving to Slide 21. The Corporate segment core other expenses totaled $65 million pretax, aligning with the quarterly expectation of $68 million, plus or minus $5 million. This consistency reflects our ongoing focus on operational efficiency. Please go to Slide 22 for an overview of the company's robust capital position. Our solvency ratio stands at 132%, well above the regulatory minimum ratio of 90%. The 7-percentage point decrease during the first quarter primarily resulted from the strategic capital management and deployment activities, including the redemptions of subordinated debentures, the Global Warranty acquisition, share buybacks and IT investments. Our strong profitability enabled the organic generation of $125 million in additional capital during the first quarter. This aligns with our projections to exceed the annual target threshold of $650 million in 2025. As a reminder, due to the seasonality, organic capital generation is typically lower in the first quarter and tends to strengthen from the second quarter onwards. As of March 31, 2025, the capital available for deployment was assessed at $1.4 billion, positively impacted by the updated quarterly guideline as of January 1, 2025. Our first quarter results demonstrate the strength of our operations. Profitability was strong, and we have the capacity to continue to generate and deploy capital. This financial strength provides the resources necessary to fuel our continued growth. As we progress through 2025, we look to the future with great confidence in our strategy, capabilities and long-term sustainable growth. These conclude my remarks. Operator, we will now take questions.

[Operator Instructions] The first question is from Meny Grauman from Scotiabank. Please go ahead.

Hi, good afternoon, Eric, you ended your comments by talking about the seasonality in organic capital generation, noting Q1 seasonally lower. And I just wanted to understand what drives that seasonality? Why is Q1 lower?

Absolutely, Meny. What's happening there is the seasonality effect of the group businesses. The capital deployment to support that line of business, if you remember, we talked that seasonality is higher in Q1 and Q2. So that's what is happening. It's only capital deployment to support the business growth in there. And employers typically renew a lot of their business on the first quarter of the year.

Got it. And then a second question, just on the Dealer Services side. Obviously, good results in Q1, but lots of uncertainty and question marks about the underlying auto business. And just wondering if you are hearing from the dealers on either side of the border, any change in customer behavior due to tariffs and the uncertainty of tariffs? And do you expect that to change?

Meny, it's Denis here. What we've seen so far is that, especially in the U.S., people tend to -- I would say, we have more purchase of cars. People kind of advance the purchase of cars. That's what's going on right now. So there might be some movement from, let's say, the next quarters to this quarter or the last quarter in a sense that people kind of expect that there might be some impact on price. So they pretty much well in advance changing their cars. So that's, I would say, the behavior that we see at this point.

So you're talking about the pull forward of demand. So I guess does that mean it's reasonable to assume that we could see some weakness in the coming quarters?

The way I look at it myself, okay, there might be some noise per quarter. But at the end of the -- the question we have to ask ourselves is that will people drive less cars in the future? It might be that the sales per quarter will vary. It would be different from the historical pattern. But the reality is that people need their cars to go to work, to travel. And to me, it's like the midterm, long-term perspective hasn't changed at all. It's just that there might be some noise in the near future.

The is from Gabriel Dechaine from National Bank Financial. Please go ahead.

Hi there. Just a couple of questions around capital. I think your buyback had been very active for the past 1.5 years or so, and it really pulled back this quarter. I know there's a priority list that ranks lower than some of the other ones. But I'm wondering if there's any other element to that decision not to repurchase as many shares this quarter. Does it have to do with, I guess, you're timing it with your internal capital generation possibly? Yes. And then I have a follow-up.

Just -- it's Eric. I'll take it. In terms of NCIB in the quarter, remember at the investor event, we talked about capital deployment for the year. And remember that early in the quarter, in January, we announced an acquisition of Global Warranty, which resulted in about 1 percentage point reduction in the ratio. So for us, it's a form of capital deployment. So that's why we had a slow start in the year with respect to NCIB. And if you look in the recent months, we've been accelerating the NCIB to deploy more capital through it. And if you look at the monthly adjustment that we've made in February, March and now April, you will see that it's steadily increasing.

Gabriel, I would add that if you look at the investor event document, we kind of provided some kind of guidance where we would like to be for this year in terms of capital deployment. And the pace of buyback is consistent with that.

Got it. So pretty straightforward there. And as far as the capital rule changes for seg funds, you're still using the old capital formula in the first half, but then switching to the new one in the second half, if I understand correctly. Any impact there that you can quantify? Will it be meaningful?

Yes, Gabriel, it's Eric again. You're right. This will be effective on July 1. So it's third quarter. And we don't expect this to be meaningful to our results. You know that we've talked at the investor event about our disciplined risk management practices. So this is reflective of our good risk management practices.

The next question is from Doug Young from Desjardins Capital Markets. Please go ahead.

Hi, good afternoon. Just going to Slide 22 and I look at the organic capital generation and capital available for deployment this quarter versus last quarter. And the capital available for deployment didn't change quarter-over-quarter. And one of the things that seems to be dragging down organic capital generation is the macro variations. And it's happened for two quarters in a row. So I'm just trying to figure out how to think about this, and what is driving the impact from the macro variations. I think you talked about what happened last quarter. Is it similar to this quarter? But just if you can kind of talk through how I should be thinking about all that.

Yes. Doug, it's Eric again. On the macroeconomic side, you have to remember that what we do on the investment side in terms of getting closer to our optimal portfolio deploys somehow capital down the road. So adjustments to our portfolio is a way to deploy capital to get additional returns. So that's a big element.

And so maybe two follow-ups on that. Can you talk about what you're doing or what you're investing in? And why wouldn't that be just a normal organic consumption of capital? Or am I missing something?

It's Alain Bergeron speaking here. I think you're right that generally speaking, the trend will be that as the firm grows, as the liability grows, our investments in portfolio, including assets consuming capital like privates or public equity will go up. Now quarter-to-quarter, there may be noise depending on opportunities, depending on return. And so I think that's the high level.

Okay. So you wouldn't expect this to be kind of ongoing. This can be a little bit -- just happened two quarters in a row, but like it could be a little bit lumpy, seems like quarter-to-quarter. That's how we should be thinking about it. And this is going into private and public equities, that's really what's consuming the capital then.

On the investment portfolio, that's correct. So I think you're right to say that's a trend, but quarter-over-quarter, really, that could go either way. A little bit of noise around it.

Fair enough. And then I don't know, Sean or Denis, like the U.S. Dealer Service profits, I think you talked a bit about it. It looked like the profits, when I kind of back into it, have improved by a good amount year-over-year. It sounds like you're feeling better about this business. Am I reading that correctly? Can you talk a bit about how much core earnings at the U.S. Dealer Services -- like how much was core earnings up? And has this business kind of turned the corner? And is it to the point where things get tough, you would be more willing to allocate capital to do M&A in this business?

Okay. Several questions. Thank you for that. I was expecting it, I guess. Well, first of all, about turning the corner. Last quarter, I said that there are signs that we are turning the corner. And now we -- let's say, we are on the high road right now to turn the corner. We might be on the highway soon, but we're not there yet. That's the way I would put it at this point. And regarding the core earnings, I don't know -- just before, about acquisition because you asked a question about acquisition. It's interesting because there might be opportunities that will arise in the foreseeable future because of all the, let's call it, the disruption with the tariffs and whatever is going on in the U.S. and the interest rates and the cost of debt for private equity, whatever. There might be opportunities that will arise in terms of opportunities in that space. So for us, it's to be on the lookout, and it could be positive on that regard. And with that said, Eric, do you want to comment on the core earnings?

Yes. Just quickly to add on the core earnings, the situation improved. We've mentioned explicitly that there was a $5 million improvement in earnings for U.S. dealer. We're very happy with this. This is the combined impact, I would say, of profitable growth and the impact of collecting the benefits on the investment we've been making and adjusting the processes and the business in the last year or so. So we're collecting the benefit on that, and we expect that these will remain going forward.

And maybe I would like to ask Sean, just to give some color about what we are doing in the U.S. on that front to improve the business.

Yes. Thanks, Denis. It's quite an exercise in really extracting the benefit out of the work that we've done in modernizing that business and bringing together the administration systems. We're also putting a lot of focus on -- we have a nice distribution, a variety of distribution channels in the U.S. So we're investing in those particular channels to bring in the new business. And then the other part is the repricing initiatives where we were looking at our products and just doing some catch-up in a number of the products across our bandwidth. So we're seeing some nice benefit from that catch-up on pricing. So it's kind of a 3-pronged approach that's starting to pay off.

And Denis, just one follow-up on the acquisition side in the U.S. dealership, you're on the lookout, obviously, if there's disruption. Are you willing to do a big deal? I mean you've done bigger deals with IAS. Is this more tuck-in? Or would you be willing to step in and lean into something bigger?

I would say that we are concentrating on focusing on the organic growth at this point, turning the corner solidly. I would say, we are on the right track, feel very confident about the team and the actions that they are taking. And I think we have to be a bit patient about the next step where we would go for a bigger acquisition. There might be a smaller one, but I don't think you should expect a big one in the short term.

The next question is from Paul Holden from CIBC. Please go ahead.

Thank you. Good morning. So ongoing question I continue to hear related to tariffs is the impact that might have on U.S. Dealer Services profitability, not so much from a sales perspective, which we've already covered, but more from a claims cost perspective. So two parts to that question. One, are there any actions you're taking today to help mitigate potential cost inflation or higher cost of parts? And then two, how would you think about the longer-term impact and ability to reprice? So sort of going to Denis' point, that maybe creates some short-term noise, but longer term, it would actually maybe be positive.

Sean O’Brien: Yes. This is Sean O'Brien. Yes, we're watching that one closely. We haven't seen parts increases or labor increase. But as that gets passed down, we expect that potentially could come. So we're watching it really closely and are prepared to adjust pricing as we need to. And we're also watching the industry as well to see as competitors are making any moves of that such. So we're ready to do it and prepared for it. The other part that we're sort of seeing as we talk to dealers is as there's uncertainty and pricing gets pushed on to the consumers that there -- having protection on their -- in their vehicle is important. I mean vehicle repairs are quite heavy. So it's having that protection and that peace of mind is something that we will -- hopefully, we'll see a bit of an uptick on F&I sales even as prices are going up in the U.S.

If I can add one thing that is specific to U.S. as well is that the business is highly reinsured, Paul. So it's 75% reinsured. We do mostly admin in the U.S. So we're less affected because of that.

Yes. Okay. No, that's a fair point. And then I guess second question, I guess, Denis, I can't remember Denis or Eric. You mentioned that the Vericity and Prosperity deals were earnings neutral in Q1. I think based on original guidance, the expectation is for them to start becoming earnings accretive in second half of this year. I just want to verify that I have that correct. And if that is correct, that you're on path to delivering that expected accretion by second half of '25.

Yes, Paul, it's Eric again. I will say, absolutely. You're right on this. We're on the path to get there. We're still in the first year. So we're slightly negative on Vericity. And remember last year that we said that the combined Vericity and Prosperity was kind of neutral in the first year. And we're expecting Vericity to start being accretive starting in the second half of the year.

Okay. Great. And last one for me, and hopefully, it's a quick one, too. I don't recall you mentioning technology investments as an impact on the LICAT ratio in the past. Maybe that's just because now we're talking about a larger capitalized cost versus something that's expensed. But just kind of curious on the accounting and nature of that investment.

It was just a question of materiality, I guess, Paul. It's always been there. We have a very robust program to deploy capital to IT to support our businesses. And it's -- as you know, we're following very thoroughly our operating leverage and capital deployment. So it's just business as usual for this.

Okay. And maybe some quick color on what that investment exactly is for, like the nature of it?

It varies a lot. It's for back-office system, front office, everything that supports lines of business.

The next question is from Tom MacKinnon from BMO Capital Markets. Please go ahead.

Yes, thanks. Good afternoon. Just going to take the acquisition of Vericity a little bit further. I think when you disclosed your third quarter '23 results, that's just shortly after you announced the acquisition, you talked about $0.04 core EPS dilution in the first year, $0.02 accretion in the second year and then $0.10 accretion in the third year. Are you still seeing that?

I'm not sure. Can you repeat what you mentioned, Tom, because -- can you repeat your question, please?

Yes. You talked about the core EPS impact of the acquisition of Vericity. It was $0.04 dilution in the first year. This is to core EPS. $0.02 accretion in year two and $0.10 accretion in year 3. And it looks like you would still stand by -- I mean, this is three quarters through year 1 and you're already neutral. So are you on the trajectory to be $0.02 accretion in year two and $0.10 accretion by year three or for year three?

Yes. The short answer is yes to this, Tom.

Okay. That's great. And then the second is just with respect to the new business strain and group business, this thing came down nicely year-over-year. But if I look at the employee benefits sales, they basically doubled or more than doubled year-over-year. So is it really a function of that? The strain is down because the sales are up? Or have you done anything different to mitigate strain outside of just volume?

Yes. I'll just start with the strain, and I'll pass it over to Louis-Philippe for business outlook. On the strain, we're just out of the year-end review of assumptions. So -- and what you've seen in the strain reduction is just an update. We've got pretty good profitable renewals. So the strain is lower in Q1 because of those items, Tom. So on the business outlook with respect to premiums, I will pass it over to Louis-Philippe.

Yes. Thanks, Eric. I'm happy you mentioned the renewal because when you look at the weight of renewals versus new sales and the effect of strain, renewal is actually a bigger effect. And what we see is that we are executing really well on our renewal strategy. So it maintains profitability over time. So we like what we're seeing on that front. And maybe with respect to, I guess, what we see for the future and how things are going. I mean, we're looking at internal indicators right now, the quoting activity. And so what we're seeing in the marketplace is an indication that we can continue on the same trend that we've seen in the last maybe 1 year or 2. And yes, it's great news. Happy to see $70 million in the first quarter compared to a full year 2024 of $80-something million. So we're in a great spot, and I see that momentum continuing for sure. It's the result of a few things. I'm sorry.

Yes. And if you continue that kind of momentum, do we expect that, that strain number is going to kind of stay in the range that we saw in the first quarter? I mean there is an analogy...

I think we're on the right spot the way we're looking at it at this level and probably a good indicator. It's going to be bumpy. It's going to be because there's -- it's just the nature of things. But I think the level we're at is a good indication for the future.

Sounds good.

Tom, I just want to remind you one item, though, because you compare business growth with respect to strain. Keep in mind that the business growth of that line of business is reflective implemented sales. So what Louis-Philippe is talking about is implemented sales and the strain is connected with confirmed sales that may take a while to be implemented. So there is a slight disconnect between the growth that you see and the strain. Strain comes first.

Okay. So -- I mean you report confirmed sales, but by the time you get them on your books, they're implemented. Is that the way we would distinguish the difference there?

No. Not exactly. We report the strain on the confirmed business that will take a little while to implement. And the business growth that you see in the SIP is reflective of the implemented sales that were confirmed, let's say, in the last 12 months or so.

The next question is from Mario Mendonca from TD Securities. Please go ahead.

Good afternoon, Denis, I appreciate your comments about the long-term trends in U.S. Dealer Services. But in the short term, it does appear that there could be some volatility. And maybe going to Eric then, there's $306 million of U.S. Dealer Services sales in the quarter. If we assume 75% of that is reinsured, so we're looking at maybe $240 million. What I'd like to understand is how that $240 million or so of sales in a given quarter would impact the drivers of earnings in the U.S. Firstly, does it go through the core noninsurance activities? Does it go through PPA? And then secondly, sales in a given quarter, how do they affect the quarter? Do they benefit earnings over, say, a 12-month period or immediately in the quarter of the sale?

Mario, it's Eric. I will start with respect to your question with where does it shows up. The reinsured business is admin business. So you're right, it shows up in the core noninsurance line of the driver of earnings.

Does it get reflected immediately or over time?

It's mostly reflected at time of sale.

Okay. So if, in fact, there is some meaningful volatility and sales have been pushed forward. And that's what every -- you would read. You could read that in pretty much any economists' papers of late that there was a significant pull forward of sales, then does it necessarily mean that if sales were to come off meaningfully in Q2 that, that line could be impacted, the core noninsurance activities.

Yes, it can be impacted because of the -- what I just explained about the timing and where it shows up.

Okay. And then maybe, Denis, there was a discussion around material capital flexibility for the company. This was a discussion that was had late last year because of the change in capital standards. I'm trying to understand how that might play out at a practical level. And I may have asked you this in the past, is this something where we'd see the company's leverage ratio increase more significantly? Is that still something we should expect? Or will there be no meaningful impact on the balance sheet as a result of that change?

Our intent, Mario, is to have the most optimized balance sheet eventually. So the idea is to move, I would say, gradually over that state. So you should -- I mean, I would say that the leverage ratio right now is too low in terms of where we want to be.

This concludes the question-and-answer session. I would now like to turn the conference over to Denis Ricard for closing comments.

Well, thank you for all your questions and being there. I just want to emphasize three things that I think are important. We didn't have that many questions on growth, but growth has been fantastic in the quarter, and it's really a testimony of our capacity to grow the company for the next quarter because you're going to ask questions in the next quarters. And I mean, the more sales we have now, the better the results should be in the future. That's number one. Second is that when you look at our core ROE, we're moving towards our 17% plus. I mean we're not there yet, but we are certainly moving towards that. And lastly, the U.S. earnings operation is improving significantly. So I'm very pleased about that. So thank you for attending this call, and see you next time.

This brings a close to today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.