Source: The Canadian Press

Industrial Alliance Insurance and Financial Services Inc. (TSX:IAG) reported a big increase first-quarter profit Wednesday as premium revenue continued to soar.

Canada’s fourth-largest insurance company booked net income of $66 million, or 73 cents per common share, up from $51 million or 58 cents a share in the same quarter last year. Revenue was $1.76 billion, up from 1.13 billion last year.

Return on common shareholders’ equity was 12.7% on an annualized basis compared with 11.2% in the same 2009 quarter, within the company’s target range of 12 to 14%.

“Profitability for the quarter was stimulated by the significant stock market upswing in the last year, exceptional auto and home insurance results, (and) good experience results for several life and health insurance benefits,” the company said in a news release.

Industrial Alliance said it also enjoyed a gain resulting from the favourable evolution of the difference between the fair value of the debt instruments and that of the underlying assets.

The company did not post any credit losses during the quarter, which it said attested to the “very good quality of the investment portfolio.”

Year over year, premiums and deposits grew by 46% to reach an all-time high of $1.8 billion.

All sectors contributed to the improvement, particularly Individual Wealth Management, thanks to the stock market recovery and record net investment fund sales.

“Our results are continuing on the previous quarter’s momentum and confirm that we came out of the financial crisis even stronger,” president and CEO Yvon Charest said in a news release.

“Profit is significantly higher than last year. Financial strength improved after we issued $200 million in capital in February. We can absorb an even bigger stock market downturn than at the end of the last quarter,” he said.

Industrial Alliance shares were down six cents at $35.10 in late morning trading Wednesday on the Toronto Stock Exchange.