��������������������� Intact Financial Corporation (TSX:IFC) September 2014 Intact Financial Corporation
����������������������������� Leader in a fragmented industry Distinct brands • Largest P&C insurer in Canada • Over $7 billion in direct premiums written • #1 in British Columbia, Alberta, Ontario, Quebec and Nova Scotia • $12.9 billion investment portfolio • Proven industry consolidator 2013 Direct premiums written ($ billions) Top five insurers 10-year outperformance represent 48% of 7.4 �������������������� � the market 3.9 3.7 3.1 2.9 Premium growth 5.1 pts Combined ratio 3 3.5 pts 1 IFC Desjardins Aviva Canada RSA Canada TD Insurance Estimated Market Share Return on equity 4 8.4 pts 16.8% 8.9% 8.5% 7.0% 6.6% 1 Desjardins direct premiums written in 2013 is pro forma including State Farm. 2 Industry data source: MSA Research excluding Lloyd’s, ICBC, SGI, SAF, MPI, Genworth and IFC. All data as at December 31, 2013. 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). Intact Financial Corporation 2
������� ���������! � A strong and diversified base for growth 2013 DPW by 2013 DPW by 2013 DPW by Business Line Geography Distribution Channel 3% 9% 6% 12% 32% 17% 42% 46% 82% 29% 22% Personal Auto Intact Insurance Ontario BrokerLink Personal Property Quebec belairdirect Commercial Lines Alberta Grey Power Rest of Canada * Excluding pools Intact Financial Corporation 3
"#$% ��!����& �%������ ��%�� BEAT INDUSTRY ROE BY '�������� NOIPS GROWTH OF ()* PER YEAR EVERY YEAR OVER TIME Margin Investments improvement: Pricing & and capital )�, "* Segmentation: management: ��� ���� ��� ���� Organic growth: +�, #* Capital management/ deployment: � , +* Claims management: " � ���� * Leaves ��� ����� to reinvest in customer experience (price, product, service, brand) Intact Financial Corporation 4
� ��������� �����& �%���� Sophisticated In-house Broker Proven Solid Significant Multi-channel pricing and claims relationships acquisition investment scale distribution underwriting expertise advantage strategy returns 2013 outperformance Five-year average loss ratios Industry IFC 100.7% 77.2% Industry IFC 10.3% 97.3% 68.3% 67.6% 65.3% 6.2% 64.1% 58.0% Auto Personal Property Commercial P&C Combined Ratio ROE Industry data source: MSA Research excluding Lloyd’s, ICBC, SGI, SAF, MPI, Genworth and IFC Data in charts is for the period ended December 31, 2013 Combined ratio includes market yield adjustment (MYA) ROEs reflect IFRS beginning in 2010. Since 2011, IFC's ROE is adjusted return on common shareholders' equity (AROE) Intact Financial Corporation 5
�����������%���-���������%���� $12.9 billion investment portfolio Investment mix (net of hedging positions and financial liabilities Objective: (#)�.��� related to investments, as of June 30, 2014) Loans, 3% of ROE outperformance Cash and short- term notes, 4% Preferred shares, 9% ')*�������%���� ')*�������� Fixed-income Common equity � ���� /���-�%��� strategies, 72% strategies, 12% • Leverage the tax- • Active free nature of management has dividends contributed to our solid track record • Overweight ROE from Investments (after-tax) of consistently equities and 8.8% 8.1% outperforming 6.9% 6.7% preferred shares 6.0% 6.0% our benchmarks to improve after- tax returns 5 Year 3 Year 1 Year Industry IFC Intact Financial Corporation 6
������-�����������%���-�%��� Capital management framework History of dividend growth • Strong capital base has allowed us to pursue our • We have increased our dividend each year growth objectives while returning capital to since our IPO shareholders Quarterly dividend per share • $657 million in total excess capital * $0.48 $0.44 Maintain leverage ratio $0.40 $0.37 (target 20% debt-to-total capital) $0.34 $0.32 $0.31 $0.27 $0.25 Maintain existing dividends $0.163 Increase dividends 2005 2006 2007 2008 2009 2010 2011 2012 2013 Q1-2014 Invest in growth initiatives • We believe we have organic growth opportunities within our multi-brand offering • We have a track record of 13 accretive acquisitions, Share buybacks the most recent being AXA Canada and Jevco * As of June 30, 2014 Intact Financial Corporation 7
�������������(�$% ��!� ��� 0 We remain well-positioned to continue �����& �%��- the Canadian P&C insurance industry in the current environment • Industry premiums are likely to increase at a low single digit rate, with low single digit growth in personal auto and commercial lines and upper single digit growth in personal property expected. Premium growth • We expect future premium reductions in Ontario auto will be commensurate with government cost reduction measures. • We expect the current hard market conditions in personal property to accelerate as the magnitude of 2013 catastrophe losses negatively impacted industry results. Underwriting • We believe continued low interest rates and the impact of elevated catastrophe losses on commercial lines loss ratios could translate into firmer conditions over time. • We expect the industry’s ROE to trend back toward its long-term average of 10% in 2014. Return on equity • We believe we will outperform the industry’s ROE by at least 500 basis points in the next 12 months. Intact Financial Corporation 8
� ����������� &�-� 1�! Personal lines • Bring advantages of scale to brokers • Build on outperformance in auto • Hard market conditions in personal • Optimize brand architecture property • Double direct capabilities Firming Develop Commercial lines • Build operated distribution • Leverage our industry market existing to $1 billion outperformance, and acquired conditions platforms expertise and products, to gain share in a firming environment (0-2 years) (0-3 years) Expand Consolidate Capital beyond Canadian • Strong financial position Build organic growth existing market Strategy pipeline by leveraging our markets • Grow areas where IFC has a (0-5 years) world-class strengths in: competitive advantage (0-5+ years) 1) pricing and segmentation, Opportunities • Canadian P&C industry remains 2) claims management, and fragmented 3) online expertise • We expect 15-20% of market share will change hands in the next 5 years Intact Financial Corporation 9
������ �����������-� � Building the best insurance team � Identification, development and retention of key talent is fundamental to our talent management strategy – In 2013, 22% of key talent were promoted or developed through exposure to other business units – Voluntary turnover is significantly better than industry average* � Deep executive talent pool � Executive Committee members have an average of 15 years experience with the organization in various roles � We have identified approximately 7 successors for each Executive Committee position � Becoming a best employer * 2013 Mercer survey of 17 Canadian P&C insurance companies (GIHRG Index) Intact Financial Corporation 10
2�����0��1��� � We have a ��������.���� %�����������-�� due to our disciplined approach and size advantage � Our .� ���������.��� ������& �%� positions us well for organic growth � We have a ��� �-�&���������� ���� �� and a proven track record of consolidation � 3����.���!� in place to ensure the sustainability of our performance Intact Financial Corporation 11
�������4 Intact Financial Corporation
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