A Growth Platform Creditor Insurance & Warranties

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Sabina Booker
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1 A Growth Platform Creditor Insurance & Warranties Gerry Bouwers President and COO Industrial Alliance Pacific 1 Toronto, A partner you can trust. Creditor Insurance and Warranties Non-Traditional Businesses for IA Traditional Non-traditional but well-established Fairly new and often non-traditional > Individual Insurance > Individual Annuities > Group Insurance > Group Savings and Retirement > IA Clarington Creditor > Special Markets > IA American > IA Excellence > IA Auto & Home > Warranties Warranties > (with Creditor) > Mutual Fund and Securities Dealers 2

Creditor Insurance and Warranties Non-Traditional Businesses for IA Traditional Non-traditional but well-established Fairly new and often

2 What We Do Our mission What we sell To build a strong partnership with each dealer by employing a dedicated team of professionals and providing products, services and training i Creditor insurance, financing, warranties* and ancillary products to consumers who finance New cars Used cars RVs Heavy equip. Boats Other More than 3,300 signed dealers Finance & Insurance (F&I) is an important source of profit for dealers Less than 3% of revenue, but more than 13% of profit 3 * In this presentation, warranties means extended warranties and replacement insurance. What We Like About the Business > Well-established > Leader in a niche market > One-stop product line > Strong growth momentum 43% in 2011 > Distribution network > Only company with an exclusive Canada-wide direct distribution network Competitive advantage to attract deals and distributors > Specialists > What we like > Profitable: Low unit costs & ROE higher than company average > Low capital requirements > No IRR/URR risk > Extended warranties: Untapped growth potential 4

Boats Other More than 3,300 signed dealers Finance & Insurance (F&I) is an important source of profit for dealers Less than 3% of revenue, but more than 13% of profit 3 * In this presentation,

3 Giving Dealers One-Stop Shopping A Distinct Competitive Advantage Full-Service Offer Creditor Insurance Warranties Car Insurance Car Financing Other Products Life, disability and critical illness insurance Already the leader Extended warranty and replacement insurance High growth potential IA Auto & Home well established in Quebec Referral program Introduced in May 2012 Personal loans through IA Trust High growth potential Adds the F in F&I! Ancillary products Theft protection, chemical protection, chemical warranties, tire and rim warranties, etc. 5 Momentum on the Rise Sales ($M) objective: Sales of $0.5B Warranties* * (Dealer cost) Creditor insurance (Gross premiums) Q1/12 6 * Include replacement insurance sales which are part of IAAH business since 2010

IA Trust High growth potential Adds the F in F&I! Ancillary products Theft protection, chemical protection, chemical warranties, tire and rim warranties, etc.

4 Until 2011: Acquired and Built the Offer Growth through acquisitions Seaboard (SAL) Mecagroup Aegis National Warranties VAG & Accès SAL brand and reputation almost 50 years old! Focus on More vertical integration ti creditor insurance Focus on creditor and warranties through new car Adding products to the offer dealerships Enter used car dealerships market 3 areas for growth 7 Today: Focused on Growth Increase the number of used car dealerships Optimize penetration of current distribution network Stay Hungry: Be Opportunistic Canadian Light Vehicle Sales ($Thousand)... riding the growth in car sales 1,636 1,557 1,585 1,

Focus on More vertical integration ti creditor insurance Focus on creditor and warranties through new car Adding products to the offer dealerships Enter used car dealerships

5 Add More Used Car Dealerships Increase Extended Warranty Sales The proportion of used vehicle sales is increasing In % of light vehicle sales were used vehicles Most used cars are sold by dealers 65% of used cars are sold through dealers Useful life of vehicles is increasing Useful life of vehicles in 2010 (forecast) 320,000 km Was 57% in %: New car dealers 35%: Independent dealers 35%: Private sales 1970s: 170,000 km 2000s: 277,000 km 9 Optimize Current Distribution Network Training Specialists best of class training programs Increasing Penetration > Focus on training to develop long-term relationship with dealers > Training is a differentiating factor > Recently more resources put on training than sales > Ancillary products > Warranty products > Performance specialists > Selling more products to end consumers > Increase extended warranty sales by new car dealers on their used car business > Increase penetration in other-than-auto dealers 10

dealers 35%: Private sales 1970s: 170,000 km 2000s: 277,000 km 9 Optimize Current Distribution Network Training Specialists best of class training programs Increasing Penetration > Focus on training

6 Stay Hungry: Be Opportunistic New Grounds to explore OEMs (Original Equipment Manufacturers) Acquisitions Still have appetite > Warranties for brown and white goods (electronics, furniture, home appliances ) > Deals & Finance sources > White label products > Brokers > Used car warranty company 11 Today Goal We are #1 for creditor insurance through auto dealers To be #1 in extended warranty business Strategy Leveraging our relationships with dealers to increase our business in finance and other. 12

products > Brokers > Used car warranty company 11 Today Goal We are #1 for creditor insurance through auto dealers To be #1

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