Q3 - 2016 Another outstanding quarter Reported EPS of $1.40: 12% - PowerPoint PPT Presentation

Third Quarter 2016 Conference Call Presenters: Yvon Charest, President and CEO René Chabot, EVP, CFO and Chief Actuary November 2, 2016 1

Q3 - 2016 Another outstanding quarter ► Reported EPS of $1.40: 12% above top of guidance ($1.15-$1.25 EPS) ► Core EPS of $1.37: up 25% YoY Profit ► Favourable policyholder experience (+$0.12 EPS), mostly from Individual Insurance ► Market-related gain for hedging (+$0.04 EPS), UL policies (+$0.04 EPS) and MERs (+$0.01 EPS) ► Favourable strain ratio at 12% vs. guidance of 15% ► The momentum continues in retail insurance in both Canada and US (+18%) ► Net fund sales turn positive reflecting improvement in mutual fund flows Business ► iA seg funds still 1st in Canada for net sales and 3rd for assets Growth ► Growth in assets under management and administration (4% QoQ) reflects seg fund inflows and markets ► Growth in premiums and deposits (18% YoY) driven by inflows from individual and group wealth ► Solvency ratio of 218% reflects capital issuance (207% post-redemption) Financial ► Book value per share of $38.63: +6% YoY and +3% QoQ Strength ► Quarterly dividend of $0.32 per common share (payout of 23% vs. target range of 30%) 2

Sales Highlights Strong quarter for retail insurance and a turnaround for net fund sales Third quarter Year-to-date at September 30 ($Million, unless otherwise indicated) 2016 2015 Variation 2016 2015 Variation ► Individual Insurance Canada 50.3 43.1 17% 140.7 124.7 13% United States 24.7 20.7 19% 72.6 55.9 30% Total 75.0 63.8 18% 213.3 180.6 18% ► Individual Wealth Management Segregated funds - net sales 71.6 80.5 (8.9) 267.6 340.1 (72.5) Mutual funds - net sales (69.1) (315.7) 246.6 (481.6) (747.8) 266.2 Total - net sales 2.5 (235.2) 237.7 (214.0) (407.7) 193.7 ► Group Insurance Employee Plans 13.2 12.9 2% 48.3 53.5 (10%) Dealer Services (Creditor Insurance & P&C) 165.3 165.6 0% 430.6 422.3 2% Special Markets Solutions 42.9 41.9 2% 134.3 131.2 2% Total 221.4 220.4 0% 613.2 607.0 1% ► Group Savings and Retirement 455.1 246.0 85% 1,114.2 839.2 33% ► iA Auto and Home 74.9 66.7 12% 219.2 195.1 12% 3

Mutual and Seg Fund Net Sales Mutual fund business improving Retail fund net sales ($M) 364 356 195 154 147 139 78 67 57 21 5 3 -62 -68 -76 -96 -149 -165 -235 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2012 2013 2014 2015 2016 4

Q3 Earnings Strong YoY growth Third quarter Year-to-date at September 30 ($Million, unless otherwise indicated) 2016 2015 Variation 2016 2015 Variation Net income attributed to shareholders 148.5 117.6 +26% 394.5 378.1 4% Less: dividends attributed to preferred shares 4.1 4.5 (9%) 12.3 13.9 (12%) Less: redemption premium on preferred shares — — — — 4.0 — Net income attributed to common shareholders 144.4 113.1 +28% 382.2 360.2 6% Earnings per common share (EPS) (diluted) $ 1.40 $ 1.11 $0.29 $ 3.71 $ 3.54 $ 0.17 Return on common shareholders' equity (ROE) 1 14.7% 12.3% 240 bps 10.1% 13.5% (340 bps) Book value per share $38.63 $36.45 6% $38.63 $36.45 6% 5 1 Annualized for the quarter and trailing twelve months for the year to date.

Q3 Earnings Favourable policyholder experience continues Q3 items of note (gains and losses) Experience Gains of 12 ¢ MER +1¢ Other +1¢ UL +4¢ Morbidity +3¢ +4¢ Hedging +3¢ Mortality Longevity +4¢ +3¢ & Expenses +1¢ +1¢ Individual Income on Individual Group Dealer Market Related Employee Strain Wealth Capital -2¢ Insurance Savings Services +9¢ Plans +7¢ -3¢ 6

Policyholder Experience Third consecutive solid quarter 2016 2015 Experience 2015 2016 2015 by line of business Annual YTD YTD (EPS impact in cents) Q3 Q2 Q1 Q4 Q3 Q2 Q1 Individual Insurance 7 4 2 9 9 14 (4) 28 13 19 Group Insurance 0 1 7 (2) 5 1 (3) 1 8 3 Individual Wealth 4 3 0 (7) (2) 0 2 (7) 7 0 Management Group Savings 1 2 0 (1) 2 0 1 2 3 3 and Retirement Total 12 10 9 (1) 14 15 (4) 24 31 25 iAAH (Income on capital) (3) (1) 0 (3) 0 1 (6) (8) (4) (5) 7

Management's View of Core $1.37 EPS for Q3, above guidance and consensus Q3 CORE EPS Q3 Reported EPS $1.40 2016 YTD Core EPS $1.37 Q1 $0.98 No exceptional items $1.14 Items greater than ±4¢ Q2 $1.26 $3.61 ► Individual Insur. gain ($0.03) Q3 $1.37 CONSENSUS 1 iA Q3 Core EPS $1.37 2016 YTD EPS Guidance 25% growth in core EPS vs. Q3/2015 ($1.10 ) $3.10 to $3.40 8 1 Core consensus as of October 25, 2016.

Q3 Results vs. Guidance Clearly another strong beat Guidance Reported EPS $1.40 Reported and core ($1.37) above guidance $1.15 to $1.25 ROE 14.7% Reported and core (14.4%) above guidance 11.0% to 12.5% (quarter annualized) Lower than target on higher sales Strain 12% 15% ± 5% and lower expenses in Canada and US Effective tax rate 20% In line with guidance 18% to 20% Solvency ratio 218% Above guidance, 207% post-redemption 175% to 200% 25% to 35% Payout ratio 23% Below guidance (mid-range) 9

YTD Results vs. Guidance Still well ahead on our 2016 plan Guidance Reported EPS $3.71 YTD core is $3.61 $3.10 to $3.40 ROE 10.1% 12.6% on core basis 11.0% to 12.5% (trailing twelve months) Strain 14% Below annual target 15% ± 5% Effective tax rate 19% Within guidance 18% to 20% Solvency ratio 218% Above guidance, 207% post-redemption 175% to 200% 25% to 35% Payout ratio 25% At low end of guidance (mid-range) 10

Capital Position Increase in solvency ratio reflects recent capital issuance Solvency Ratio (%, end of period) Key changes during the quarter 218 217 217 213 209 205 200% 199 ► +18% Debt issue ($400M) Target ► +2% Profit 175% ► +2% CTL review ► -3% Interest rate decline After redemption of the $250M sub-debt in December, ratio would be 207% 2012 2013 2014 2015 Q1/16 Q2/16 Q3/16 11

A Flexible Balance Sheet Good capacity to fund our growth Agency Rating September 30 June 30 December 31 September 30 2016 2016 2015 2015 Solvency ratio 218% 199% 213% 225% S&P A+ (Strong) (207% post-redemption) Leverage ratio 28.7% 23.8% 24.3% 24.5% A.M. Best A+ (Superior) (25.4% post-redemption) Coverage ratio 10.3x 9.5x 8.2x 9.5x DBRS A (high) 12

Steady Value Creation for Shareholders Q3/2016 $38.63 Book Value Per Share CAGR (end of period) 1-year +6% 5-year +7% 10-year +8% Since 2000 +9% $9.36 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 13

Individual Insurance Strain on New Business +$0.01 EPS in Q3 on higher sales volume and lower expenses 2016 2015 2014 ($Million, unless otherwise indicated) Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Sales 75.0 72.9 65.4 73.7 63.8 61.7 55.1 62.1 51.1 55.5 47.3 Strain 8.8 9.3 11.3 14.4 15.2 15.2 21.3 16.0 17.3 12.7 12.7 Strain (%) 12% 13% 17% 20% 24% 25% 39% 26% 34% 23% 27% Annual total 14% 26% 27% 2016 YTD is ahead of annual guidance 14

Income On Capital Lower profit at iAAH due to adverse experience 2016 2015 2014 2016 ($Million, pre-tax) Run Rate Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Investment income 30.0 32.1 33.5 33.5 33.7 27.7 28.4 32.6 29.8 29.3 27.2 26.7 Financing & Intangibles (12.0) (12.8) (12.0) (11.8) (10.6) (10.0) (9.9) (8.8) (6.8) (6.7) (7.4) (7.1) Subtotal 18.0 19.3 21.5 21.7 23.1 17.7 18.5 23.8 23.0 22.6 19.8 19.6 iA Auto (0.5) 1.3 (4.0) (6.9) (2.9) 5.8 1.7 (10.2) 5.1 4.7 0.1 (3.5) with and Home seasonality Total 17.5 20.6 17.5 14.8 20.2 23.5 20.2 13.6 28.1 27.3 19.9 16.1 15

Effective Tax Rate (ETR) Within guidance 2016 2015 2014 ($Million,unless otherwise indicated) Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Operating income 165.6 157.7 108.3 (20.7) 122.5 142.5 102.7 78.8 92.2 109.2 93.2 Income on capital 20.6 17.5 14.8 20.2 23.5 20.2 13.6 28.1 27.3 19.9 16.1 Pre-tax income 186.2 175.2 123.1 (0.5) 146.0 162.7 116.3 106.9 119.5 129.1 109.3 Income taxes 37.7 31.6 20.7 (8.8) 28.4 16.6 1.9 (16.8) 21.0 8.4 19.3 ETR 20% 18% 17% NM 19% 10% 2% NM 18% 7% 18% 16 NM: Not meaningful

Equity Market Sensitivity Q3/2016 Q2/2016 Q4/2015 Q3/2015 (End of period) S&P/TSX index 14,726 pts 14,065 pts 13,010 pts 13,307 pts IAG solvency ratio 218% 199% 213% 225% Sensitivities Stock matching Level of S&P/TSX before reserves 10,000 pts 9,800 pts 9,500 pts 10,100 pts long-term require strengthening for future policy ( -32% ) ( -30% ) ( -27% ) ( -24% ) benefits liabilities 7,300 pts 8,600 pts 7,900 pts 6,900 pts Level of S&P/TSX at which solvency ratio is 175% ( -50% ) ( -39% ) ( -39% ) ( -48% ) Solvency ratio 5,800 pts 6,800 pts 6,100 pts 5,400 pts Level of S&P/TSX at which solvency ratio is 150% ( -61% ) ( -52% ) ( -53% ) ( -59% ) Full-year potential impact of a sudden Net income ($29M) ($28M) ($28M) ($28M) 10% decrease in equity markets 17