���� ���� �������� ��������������������� Intact Financial Corporation (TSX: IFC) June 2016
����������������������������� Leader in a fragmented 10-year outperformance Distinct brands industry versus the industry IFC 17.0% 3.9 pts Premium growth #2 10.4% #3 8.7% 1 Combined ratio 3.1 pts #4 6.5% 2 Return on equity 5.8 pts #5 6.1% Industry data: IFC estimates based on MSA Research excluding Lloyd’s, ICBC, SGI, SAF, MPI, Genworth and IFC (Aviva is pro forma including RBC General Insurance Company). All data as at December 31, 2015. 1 Combined ratio includes the market yield adjustment (MYA). 2 ROEs reflect IFRS beginning in 2010. Since 2011, IFC's ROE is adjusted return on common shareholders' equity (AROE). 2
�������������������� ���� Sophisticated In-house Scale Broker Multi-channel Proven Tailored pricing and claims advantage relationships distribution acquisition investment underwriting expertise strategy management Five-year average loss ratio YE2015 outperformance outperformance gap (for the period ended December 31, 2015) Industry IFC (for the period ended December 31, 2015) 96.6% 6.4 pts 14.3% 6.2 pts 92.8% 4.3 pts 9.2% 2.7 pts Combined ratio ROE Personal Auto Personal Commercial Commercial Property P&C Auto Industry data: IFC estimates based on MSA Research excluding Lloyd’s, ICBC, SGI, SAF, MPI, Genworth and IFC. Combined ratio includes market yield adjustment (MYA) IFC’s ROE corresponds to the AROE 3
��'�'��'������(��������� �����������#)������� NOIPS growth of $"% per year over time Pricing & Organic Growth Segmentation 3-5% 2 points Investments & Capital Mgmt & Capital Mgmt Deployment 2 points 3-5% Claims Management Margin Improvement 3 points 0-3% Beat industry ROE by !""�#��� every year * Leaves &�������� to reinvest in customer experience (price, product, service, brand) 4
��(�����*�������������� ��*� ���������������#)������� We will continue to target !""�#�� We will continue to target NOIPS growth of $"%� per year over time ROE outperformance vs. the industry $7.00 800 500 bps target 700 $6.00 600 $5.00 500 $4.00 400 $3.00 300 $2.00 200 $1.00 100 0 $0.00 5-year avg. FY2015 2011 2012 2013 2014 2015 Industry data: IFC estimates based on MSA Research excluding Lloyd’s, ICBC, SGI, SAF, MPI, Genworth and IFC. IFC’s ROE corresponds to the AROE 5
�������+�������,�������������� �������������*��� LTM growth: &-/% Rational regulatory Next 12 months: environment • Expect low to mid single-digit growth in commercial lines. • Firmer market conditions with rates stabilizing. LTM growth: $-&% LTM growth: .-.% Next 12 months: • Expect low-single-digit Next 12 months: growth in personal auto. • Expect upper single-digit • Current cost pressures growth. should lead to moderate • Hard market conditions rate increases in all likely to continue. markets. Growth numbers reflect Industry Top 20 (excluding IFC) for the 12 month period ended December 31, 2015 6
0���������������*��'�( Firming market conditions Develop existing platforms Consolidate Canadian market Expand beyond existing markets 0 1 year 2 years 3 years 4 years 5 years 7
�����*������������������� Our balance sheet is solid Low sensitivity to capital markets volatility 1/"2 &$!% $/-!% 3 ��� $ ��� & ��� million in Minimum debt-to-capital of MCT per of MCT per 5% of MCT per total excess Capital Test ratio, below 100 bps in 10% decrease decrease in capital (MCT) our target interest rates preferred share in common level of 20% shares prices prices Credit ratings 1 A.M. Best DBRS Fitch Moody’s a- A A- Baa1 Long-term issuer credit ratings of IFC A+ AA (low) AA- A1 IFC’s principal insurance subsidiaries * All data as of March 31, 2016 1 Refer to Section 11.2 – Credit ratings of the Q1-2016 MD&A for additional commentary. 8
������*����������� ���*� ��� Debt-to-capital ratio Maintain leverage ratio 22.9% (target 20% debt-to-total capital) 16.6% 18.9% 18.7% 17.3% 19.5% 14.3% 11.8% Increase dividends 2009 2010 2011 2012 2013 2014 2015 Q1-16 Manage volatility Quarterly common share dividends (per share) $0.58 $0.53 $0.48 Invest in growth $0.44 $0.40 opportunities $0.37 $0.34 $0.32 $0.31 $0.27 $0.25 $0.16 Share buybacks 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Q2-16 9
������������������*� We will continue to ����������������� and create a strong and diverse workplace We believe that engaged employees provide the best customer service, and we are proud that our employees ranked us as one of Canada’s Best Employers in the 2015 Aon Hewitt Employee Engagement Survey. Recognized as one of Canada’s Top 100 Employers by MediaCorp Canada Inc. for 2016. We scored highly on the project’s eight criteria which include health benefits, vacation, employee communications, performance management, and community involvement. We have a deep executive talent pool. Executive Committee members have an average of 17 years experience with the organization in various roles and we have identified approximately 5 successors for each Executive Committee position.* * As of December 31, 2015 10
4�+���,��'�+� We have a ��������#����� �����������*�� due to our disciplined approach and scale advantage $ Our #�����������#������������� � positions us & well for organic growth 3 We have a �����*�������������������� and a proven track record of consolidation 2 5����#���(� in place to ensure the sustainability of our performance 11
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����������������������� A $47 billion market representing approximately 3% of GDP • Fragmented market: Industry DPW by line of business – Top five represent 49%, versus bank/lifeco Commercial markets which are closer to 65-75% Personal P&C and Property, – IFC is largest player with approx. 17% other, 34% 23% market share, versus largest bank/lifeco with 22-25% market share – P&C insurance shares the same regulator as the banks and lifecos • Home and commercial insurance rates Personal Commercial unregulated; personal auto rates regulated in Auto, 36% Auto, 7% some provinces. • Capital is regulated nationally by OSFI* and by Industry – premiums by province provincial authorities in the case of provincial insurance companies. Alberta, Quebec, • Brokers continue to own commercial lines and a 18% 14% large share of personal lines in Canada; direct-to- consumer channel is growing (industry distribution ex. IFC = brokers 59.8% and direct 40.2%). • Industry has grown at 6% CAGR and delivered Other ROE of approximately 10% over the last 30 years. provinces and territories, Ontario, Industry data: IFC estimates based on IBC and MSA Research Inc. excluding Lloyd’s, ICBC, 20% SAF, SGI, MPI and Genworth. MSA Research Inc. data excludes provincially regulated 48% entities. Data as at the end of 2015. * OSFI = Office of the Superintendent of Financial Institutions Canada 13
�����������+�$"6+���� ������ �������������0� Combined ratio IFC’s competitive advantages 110% • Scale advantage US Industry 1 • Sophisticated pricing and underwriting 105% 10-year avg. = 99.9% discipline 100% CAD Industry 1 • In-house claims expertise 10-year avg. = 98.4% 95% • Broker relationships • Solid investment returns 90% 10-year avg. = 95.3% • Strong organic growth potential 85% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Return on equity Direct premiums written growth 215 30% (Base 100 = 2005) 195 25% 10-year avg. 10-year avg. = 7.4% 175 20% = 14.7% 2 CAD Industry 1 CAD Industry 1 155 15% 10-year avg. 10-year avg. = 3.5% = 8.9% 135 10% US Industry 1 US Industry 1 10-year avg. 5% 115 10-year avg. = 1.9% = 8.7% 0% 95 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 1 Industry data: IFC estimates based on SNL Financial and MSA Research excluding Lloyd’s, ICBC, SGI, SAF, MPI, Genworth and IFC. All data as at Dec 31, 2015. 2 ROEs reflect IFRS beginning in 2010. Since 2011, IFC's ROE is adjusted return on common shareholders' equity (AROE). 14
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