Solid Fundamentals Yvon Charest, President and CEO Ren Chabot, - PowerPoint PPT Presentation

Solid Fundamentals Yvon Charest, President and CEO René Chabot, EVP, CFO and Chief Actuary Fixed Income Presentation Montreal, September 27, 2017 1

Table of Contents 3 Solid fundamentals 12 Premiums and deposits 4 H1 results 13 Mutual fund net sales 5 Strain management 14 AUM/AUA 6 Other profit improvement 15 Acquisitions 7 Lapse rate assumption 16 Balance sheet 8 Lapse assumption review 17 Macroeconomic protections 9 EPS growth 18 Dividend growth 10 Competitive position 19 Book value 11 H1 growth by line of business 2

Solid Fundamentals  Delivering on our short- and long-term earnings targets  Robust business growth across all lines of business + HollisWealth acquisition  Strong capital management to sustain long-term value creation 3

Half-time Earnings Solidly on Track Meeting our short-term objectives H1/2017 results Guidance Reported Core EPS $2.22 $2.26 $2.15 to $2.35 (diluted) ROE 12.9% 11.8% 11.0% to 12.5% (trailing twelve months) 5% Strain Annual target of 6% 206% post-HollisWealth Solvency ratio 175% to 200% 4 This slide presents non-IFRS and core financial measures. See "Non-IFRS Financial Information" at the end of this document for further information.

Strain Management Improves Profit at Issue of New Business Without reducing future earnings Strain (% sales) 53% 38% 27% 26% 21% 11% 6% 2011 2012 2013 2014 2015 2016 2017 target Strain ($M) -111 -96 -49 -59 -66 -35 (impact on earnings) 5 This slide presents non-IFRS financial measures. See "Non-IFRS Financial Information" at the end of this document for further information.

Other Profit Improvement Employee Plans back on track, iA Auto and Home being addressed ► Overall profit better than expected in 2016, and 2017 is off to a good start Employee Plans ► Next target: Back to pre-crisis profit levels ($15-20M/year) and above-guidance ROE ► Two premium increases in 2017; traction expected in 2018 iA Auto and Home ► White-labeling initiatives : 3-year investment with breakeven expected in 2018 6

Lapse Rate Assumption Emergence of industry/iA experience gives rise to assumption repositioning Ultimate lapse rate assumption for attained age 80+ Traditional Lapse supported products… products 1.4% 1 0.5% 2 ~6% ~3% <0.5% ~10% 1980-1990s 2000s 2007 2015 2017  Very high interest rates  Dramatic decrease in  iA uses industry rates for  iA studies still have low interest rates credibility (+10X exposure) credibility but most  Drives the price of life recent experience shows  Drives the price of life  iA aligns its lapse insurance contracts down rates lower than last insurance contracts up assumption with 2007 and industry study  Policy churning is the 2015 industry studies that  Policy churning drops reality  iA will position its lapse demonstrate lower rate (no incentive to lapse) assumption below last  Industry innovates with industry study at the end  T100 key assumption (lapse T100 products of 2017 rate) is rapidly decreased 7 1 Study 2002-2004 (published in 2007) 2 Study 2005-2012 (published in 2015)

Update of Lapse Assumption is Manageable (based on information at June 30, 2017) - Reserve strengthening for lapse assumption + New CIA mortality improvement table + Interest rate assumptions: • URR is 10 bps ahead of the curve at 3.1% (vs. 3.2% prescribed) • IRR is comfortably positioned and any rate increase would be favourable + Investment gains from actively managed asset portfolio = Near-neutral impact on bottom line 8

Achieving Our Long-term Growth Aspirations Core EPS consistently within or above guidance EPS Guidance 5.05 ($, diluted) 4.60 4.20 4.65 3.80 4.20 3.40 3.80 3.10 3.40 10% 3.00 annual 2.50 EPS growth 2012 2013 2014 2015 2016 2017 2018 2019 9

A Strong Competitive Position In our largest business segments 1 Segregated funds (net sales) • 3rd for assets 1 Adjustable disability (sales) 1 Individual insurance policies (total of life, critical illness and disability policies sold) Mutual fund distribution (non-bank) Top 2 Car dealer services (creditor insurance sales and non bank auto loans) Top 2 10

Top-line Trend Is Robust For Both Insurance and Wealth H1/17 YoY Sales ► Retail Life Insurance  $95M +5% Canada Continued growth in both Canadian and US operations  US $50M +5% INSURANCE ► Group Insurance  Employee plans $65M +85% Strongest H1 sales for Employee Plans in the last 5 years  Dealer Services $300M +13% Strong growth in extended warranties  Special Markets Solutions $98M +7% Steady growth $162M +12% ► iA Auto and Home Strategic partnerships continue to fuel top-line ► Retail Wealth Management WEALTH  Seg funds (net sales) $295M +$99M Industry leader for net sales  Mutual funds (net sales) $277M +$689M Turning the corner ► Group Savings & Retirement $901M +37% Strong growth in accumulation products 11 This slide presents non-IFRS financial measures. See "Non-IFRS Financial Information" at the end of this document for further information.

A Recent Growth Spurt for Premiums and Deposits With strong contributions from individual and group wealth Net premiums, premium equivalents and deposits ($Billion) H1/2017 $M YoY Individual Insurance 881.1 7% 8.2 Individual Wealth 7.7 2,523.4 63% 7.5 7.4 Management Group Insurance 760.8 5% 5.2 Group Savings and 887.9 37% Retirement General Insurance 135.6 12% TOTAL 5,188.8 34% 2013 2014 2015 2016 H1/2017 12 This slide presents non-IFRS financial measures. See "Non-IFRS Financial Information" at the end of this document for further information.

Mutual Fund Net Sales Turning the Corner And building scale in distribution ($ Million) 200 77 77 58 (11) (68) (69) (98) (121) (165) (248) (267) (291) (316) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2014 2015 2016 2017 13 This slide presents non-IFRS financial measures. See "Non-IFRS Financial Information" at the end of this document for further information.

Assets Reflect Expansion of iA Distribution Network HollisWealth will support momentum AUM/AUA in wealth management (assets under management and administration at end of period, $Billion) AUA 132.2 126.2 ($Billion, at June 30, 2017) 115.8 109.5 44.0 98.8 41.4 36.9 32.7 29.3 AUA 77 88.2 84.8 78.9 76.8 69.5 AUM 44 iA iA + HW 2013 2014 2015 2016 Q2/2017 14 This slide presents non-IFRS financial measures. See "Non-IFRS Financial Information" at the end of this document for further information.

Acquisition Wish List A specific desire to expand our footprint in the US market ► US Top ► Retail distribution priorities ► Retail wealth management ► Dealer Services ► Auto and home insurance Other ► Group businesses ► Life insurance ► Institutional wealth management 15

A Strong and Flexible Balance Sheet To support long-term value creation Solvency Ratio Debt Ratio Coverage Ratio (%, end of period) (Debentures and pref. shares/capital, (number of times) %, end of period) 12.8 225 12.5 24.3 23.8 23.7 213 209 23.2 206 ~ Post HollisWealth acquisition 8.2 7.9 Better than Above 6x minimum Above 175%-200% target 25%-35% target 2014 2015 2016 Q2/17 2014 2015 2016 Q2/17 2014 2015 2016 Q2/17 16 This slide presents non-IFRS financial measures. See "Non-IFRS Financial Information" at the end of this document for further information.

Protection Gives Management Time to React Interest rate protection and stock market protection doubled over the last 5 years Protection against LT interest rate decrease at year-end Protection at end of period (drop in TSX absorbed before reserves need strengthening) Sudden Trump effect on rates raised protection temporarily 3.27% 32% 40 bps Canadian 27% 2.51% LT rate 25% 2.37% 2.34% 2.35% 23 bps 23% 2.17% 40 bps 43 bps iA 75 bps 43 bps protection 14% 2.87% 12% 2.28% 1.97% 1.91% Minimum 1.74% 1.60% LT rate 2011 2012 2013 2014 2015 2016 2011 2012 2013 2014 2015 2016 17

Dividend to Common Shareholders 43% increase since 2013 $0.40 Payout ratio guidance Payout ratio guidance $0.35 is 25% to 35% is 25% to 35% $0.30 35¢/share $0.25 paid in Q2/17 $0.20 First lifeco in Canada to increase dividend after $0.15 the financial crisis $0.10 $0.05 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 18

Shareholder Value Creation Understated in current price-to-book valuation iA Book Value Per Share BVPS CAGR + 275 % and Dividends Paid 1-year +12% (end of period) 5-year +10% 10-year +8% Peers Since 2000 +10% +163% June 30, 2004 0% Q2/17 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 1.80 1.74 1.94 2.03 1.15 1.41 1.49 1.00 1.14 1.53 1.31 1.20 1.30 1.33 IAG Price / Book value per share 19