(TSX: IFC) - PowerPoint PPT Presentation

���������������������������� (TSX: IFC) Continuing our journey to build a world-class P&C insurer Investor Presentation August 2013

Canada’s ��� ����������������� Who we are 1 Distinct brands • Largest P&C insurer in Canada • $7 billion in direct premiums written • #1 in BC, Alberta, Ontario, Quebec, Nova Scotia • $12.3 billion cash and invested assets • Proven industry consolidator Leader in a fragmented industry Industry outperformer 2012 Direct premiums written 2 10-year performance – ($ billions) Top five insurers represent 44% 7.2 IFC vs. P&C industry 2 of the market 3.6 Premium growth 4.2 pts 2.9 2.7 2.2 Combined ratio 3 3.2 pts Intact Aviva Canada RSA Canada TD Insurance Co-operators Return on equity 4 8.5 pts Estimated Market Share 17.1% 8.5% 7.0% 6.5% 5.2% 1 IFC’s direct premiums written in 2012 is pro forma Jevco for a full year 2 Industry data source: MSA Research excluding Lloyd’s, ICBC, SGI, SAF, MPI, Genworth and IFC. All data as at Dec 31, 2012. 3 Combined ratio includes the market yield adjustment (MYA) 4 ROEs reflect IFRS beginning in 2010. Since 2011, IFC's ROE is adjusted return on common shareholders' equity (AROE) 2

Consistent industry �������������� Sophisticated In-house Significant Broker Multi- Proven Solid pricing and claims scale relationships channel acquisition investment underwriting expertise advantage distribution strategy returns 2012 metrics Five-year average loss ratios Industry IFC Industry IFC 76.5% 96.7% 16.5% 69.2% 67.9% 93.4% 67.7% 10.6% 63.7% 58.1% Combined Ratio ROE Auto Personal Property Commercial P&C Industry data source: MSA Research excluding Lloyd’s, ICBC, SGI, SAF, MPI, Genworth and IFC Data in five-year chart is for the period ended December 31, 2012 Includes market yield adjustment (MYA) 3

A ������������ from which to grow Enhanced business mix Strong capacity to outperform Line of business FY2010 FY2012 Combined Ratio 1 Q1-2013 Personal Auto 50% 45% IFC 96.5% Personal Property 24% 23% Industry Benchmark 2 97.2% Commercial 26% 32% Outperformance 0.7 pts Geography FY2010 FY2012 Return on Equity Q1-2013 Ontario 46% 40% IFC 3 16.1% Quebec 25% 30% Industry Benchmark 2 11.2% Alberta 18% 17% Outperformance 4.9 pts Rest of Canada 11% 13% 1 Includes MYA Note: Change in business mix reflects the acquisitions of AXA Canada and Jevco 2 Industry data source: MSA Research. Generally consists of the 20 largest companies, excluding Lloyd’s, Genworth, FM Global and IFC 3 IFC’s ROE corresponds to the adjusted return on equity (AROE) 4

A 36-month roadmap for �������������� Beat industry ROE by NOIPS growth of 10% 5 points every year per year over time Pricing & Segmentation: Organic growth: 2 points 4-6% Claims management: Margin improvement: 3 points 0-3% Investments and capital Capital management/deployment: management: 2 points 2-4% Total: 7 points Leaves 2 points to reinvest in customer experience (price, product, service, brand) 5

Canadian P&C industry �������� ������� We remain well-positioned to continue outperforming the Canadian P&C insurance industry in the current environment • Industry premium growth is likely to evolve at a similar pace to that of the last 12 months. • Potential for increased government intervention in Ontario auto could Premium growth negatively impact premium growth. We expect premium reductions to be commensurate with cost reductions and, as such, we do not foresee material margin deterioration. • We expect the active summer catastrophe season to meaningfully accelerate the hard market conditions in property. Underwriting • We believe the elevated level of catastrophes in recent months will negatively impact the loss ratio in commercial lines and could translate into firmer conditions over time. • We do not expect the industry’s ROE to reach its long term average of 10% over the next 12 months. Return on equity • We believe we will outperform the industry’s ROE by at least 500 basis points in the next 12 months. 6

Strong financial ��������������������� $12.3 billion – conservatively managed Solid balance sheet Note: Investment mix is net of hedging positions and financial liabilities • $486 million in total excess capital related to investments. • MCT of 197% Cash and short term notes, 3% • Debt-to-capital ratio of 19%, below our target level of 20% Loans, 3% • Low sensitivity to capital markets Preferred shares, 10% volatility: - 1% increase in rates ~ 4 pts of MCT - 10% decline in equity markets Common shares, Fixed income, ~ 3 pts of MCT 11% 73% • Credit ratings: Moody’s 1 A.M. Best DBRS Long-term issuer a- Baa1 A (low) • 99% of bonds are rated ‘A’ or better credit ratings of IFC • 95% of preferred shares are rated ‘P1’ or ‘P2’ IFC’s principal • No leveraged investments insurance A+ A1 n/a subsidiaries 2 * As of June 30, 2013 1 Jevco and companies previously held by AXA Canada are not rated by Moody’s. 2 On April 25, 2013, A.M. Best upgraded the financial strength rating of Jevco to ‘A+’ (Superior) from ‘A’ (Excellent) and revised the outlook to stable. 7

��������� capital management Capital management framework Shareholder friendly approach • We have increased our dividend each year Strong capital base has allowed us to pursue our since our IPO growth objectives while returning capital to shareholders 0.50 Quarterly dividend per share $0.44 0.45 $0.40 0.40 $0.37 Maintain leverage ratio $0.34 $0.32 0.35 $0.31 (target 20% debt to total capital) $0.27 0.30 $0.25 0.25 0.20 $0.163 0.15 Maintain existing dividends 0.10 0.05 - 2005 2006 2007 2008 2009 2010 2011 2012 Q2-13 • We believe we have organic growth Increase dividends opportunities within our multi-brand offering • We have a track record of 12 accretive acquisitions, the most recent being AXA Canada Invest in growth initiatives – Jevco will be #13 • We have returned over $1.2 billion to Share buybacks shareholders in the form of buybacks in the past five years 8

Four distinct avenues for ������ Firming market conditions (0-2 years) Develop existing platforms (0-3 years) • Continue to expand support to Personal lines our broker partners • Build on outperformance in auto to accelerate growth • Leverage addition of AXA • Industry premiums likely to be bolstered by hard Canada and Jevco products market conditions in personal property • Expand and grow belairdirect Commercial lines and Grey Power • Leverage acquired expertise and products, and our industry outperformance to gain share in a firming • Build a broker offer better able environment to compete with direct writers Consolidate Canadian market (0-5 years) Expand beyond existing markets (0-5+ years) Principle Capital • Build organic growth pipeline with meaningful impact • Solid financial position within 5+ years Strategy Strategy • Grow areas where IFC has a competitive advantage • Enter new market by leveraging our world-class Opportunities strengths: 1) pricing and segmentation, • Canadian P&C industry remains fragmented 2) claims management and 3) online expertise • Global capital requirements becoming more stringent • Continued difficulties in global capital markets 9

Recent acquisitions are �������� AXA Canada – closed September 2011 Jevco – closed September 2012 • Strengthened product offering across • Strong strategic fit which bolstered our IFC distribution to include: risk selection and claims management capabilities − Recreational vehicles − Non-standard auto • Represented $2 billion of premiums • Represented $350 million of premiums • Retention on the AXA Canada portfolio has been better than expected • Continuing to convert policies into IFC • Conversion is on track and are focused systems; retention and cross-selling have been better than expected on decommissioning the AXA systems • Expect to reach our initial $15 million • Q2-2013 run rate of $87 million in after-tax target for annual expense after-tax synergies, and continue to synergies a year earlier than expect to reach our targeted $100 anticipated, with a new target of $23 million in early 2014 million for end of 2014 • IRR estimated above 23% • IRR estimated above 20% 10

Building on our ������������������������ ���������� � We have a sustainable competitive advantage versus the industry � We continue our shareholder-friendly approach to capital management � Our solid financial position enables us to take advantage of growth opportunities which may present themselves in a consolidating industry � Integrations are progressing well, and on many fronts, better than we expected � Best-in-class team in place to reach our goals 11

���������������������������� (TSX: IFC) Appendices