Special Markets Solutions Dealer Services

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Victoria Parsons
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1 Denis Ricard Executive Vice-President Business Development Special Markets Solutions Dealer Services Investor Day, June 11,

2 Overview Industrial Alliance Individual Insurance Individual Wealth Management Group Insurance Group Savings and Retirement Life (Canada) Employee Plans Annuities Disability (Canada) Life (US) Mutual Funds Dealer Services Special Markets Solutions 2

Life (Canada) Employee Plans Annuities Disability (Canada)

3 Discussion Points Special Markets Solutions Steady as she goes: It s a success story Still: High growth potential Disciplined growth: Focus is on high profitability market Dealer Services Creditor insurance: Already the leader P&C: High growth potential Untapped potential: New territory and acquisitions 3

high profitability market Dealer Services Creditor insurance: Already the

4 Special Markets Solutions Markets Niche insurance markets underserved by traditional group carriers Products Term life insurance AD&D coverage Disability insurance Critical illness insurance Travel insurance Other special products Distribution Over 725 distribution partners Canada-wide What we like Capital-light, short-term guarantees, several low risk products 4

insurance Travel insurance Other special products Distribution Over 725 distribution

5 Special Markets Solutions - Sales A proven strong and stable performer Gross Sales (in $M) Acquired with Seaboard in 1999 Historically fuelled by organic growth Last 2-year CAGR of 13% mainly due to travel insurance

1999 Historically fuelled by organic growth Last 2-year CAGR of 13% mainly due

6 Special Markets Solutions - Key Differentiating Factors Strong Reputation Well-established brand recognition: Over 670,000 plan members Signed agreements with some 4,000 groups Over 725 distribution partners Unique Expertise Solutions tailored to client needs Local underwriting capacity/expertise Competitive Advantages Competitors vary by product segment Good reputation for flexibility and sound administration Partnership with brokers/associations 6

Expertise Solutions tailored to client needs Local underwriting capacity/expertise Competitive Advantages

7 Special Markets Solutions - Strategy Disciplined growth at the service of profitability Development Potential Increase market share of targeted products Build relationships with new distributors Exploit new niche markets Expand product offering Expand presence in Eastern Canada Challenges Maintain growth Objective $180M in sales in 2014 $189M in sales in % annual sales growth target 7

distributors Exploit new niche markets Expand product offering Expand presence in Eastern Canada

8 Dealer Services Markets New and used vehicle dealers (cars, boats, motorcycles, RVs) Products Creditor insurance (life, disability and critical illness) P&C (warranties and ancillary products) Financing through IA Trust Car insurance through IA Auto and Home (Quebec) Main Risks Consolidation of dealerships What we like Capital-light, short and mid-term guarantees Leader in a niche market with high growth potential 8

through IA Trust Car insurance through IA Auto and Home (Quebec) Main Risks Consolidation of dealerships

9 Dealer Services - Key Differentiating Factors Wide Distribution Canada-wide distribution network Leader in motor-vehicle dealers market Strong Reputation Strong brand recognition Well-established (insures over 500,000 individuals) Full Service Offer Products, services and training One-stop shopping/product line for dealers One of the few companies that can meet this demand Strong Relationships Dedicated team of professionals Training program for dealers 9

individuals) Full Service Offer Products, services and training One-stop shopping/product line for dealers One of

10 Dealer Services - Evolution of Product Mix Good growth from creditor insurance But even higher growth from P&C products Sales 2007 $238M 6-year CAGR Cred. Ins.: +10% P&C: +33% Total sales: +14% 2013 $525M 11% P&C 27% P&C 89% Creditor Insurance 73% Creditor Insurance 10

11 Creditor Insurance Leader with around 45% market share in Canada VAG acquisition fuelled recent growth Creditor Insurance Sales (in $M)

12 P&C Products Used car market represents high growth potential that will drive future sales for this division P&C Sales (in $M) 143 P&C Products 128 Extended warranties Replacement insurance Ancillary products Theft protection Chemical protection Chemical warranties Tire and rim warranties

warranties Replacement insurance 50 60 82 Ancillary products Theft protection

13 Dealer Services - Environment A unique market with few competitors Automobile Dealers Market Our Competition Close to 3,500 new car dealers in Canada Finance & Insurance accounts for 3% of revenues but 14% of profits Around 6,500 used car dealers in Canada Few players Challenge Dealer consolidation of new car dealers Over the last 10 years: Number of dealerships: stable Number of owners: 30% Dealership groups have more bargaining power 13

Around 6,500 used car dealers in Canada Few players Challenge Dealer consolidation of new car dealers Over the

14 Dealer Services - Strategy Capitalize on competitive advantages to exploit untapped potential Training program with dealers Build long-term relationships Use performance specialists to deepen relationships Sell more products per customer Strong focus on used car dealers Explore new territory New products (e.g.: warranties for electronics, furniture, home appliances, etc.) Increase penetration in other-than-auto dealers (e.g.: boats, motorcycles, RVs) Stay open to acquisitions Brokers and manufacturers OBJECTIVE Already exceeded 2012 Investor Day objective of $500M in sales Maintain our past performance that has been excellent, given the low industry growth in Canada Sales targets: $542M in 2014 $559M in 2015 >3% annual sales growth 14

) Increase penetration in other-than-auto dealers (e.g.

15 15 Q&A

A Growth Platform Creditor Insurance & Warranties

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