The President of Industrial Alliance Presents The Company’s Growth Strategy: To Become One of The Country’s Five Largest Life Insurers

QUEBEC CITY, May 7, 2003 – “We believe that Industrial Alliance has the potential to become one of the five largest life and health insurance companies in Canada, able to offer a wide range of insurance products and financial services. This is a motivating objective, which we believe to be achievable from a business standpoint, realistic from a financial standpoint and stimulating from a personal point of view.” This was the message conveyed today by Yvon Charest, President and Chief Executive Officer of Industrial Alliance Insurance and Financial Services at the annual meeting of shareholders, as he explained the Company’s growth strategy for the next few years.

Inspired by the theme of the strategic plans developed over the last few years, “Turning Potential into Performance,” Mr. Charest evoked the main competitive advantages the Company can rely on to achieve its development plan. “We have succeeded in standing out in the market through a combination of several key characteristics: an entrepreneurial culture that favours innovation and performance; a well thought-out and efficient business strategy that focuses on mutually profitable relationships with our distribution partners; a reputation for excellence in insurance and investment risk management; and qualified, internally trained personnel who focus on achieving the Company’s long-term business growth and profitability objectives.”

After having pointed out that three insurers are ahead of their peers in the life and health insurance market in Canada, Mr. Charest reiterated Industrial Alliance’s desire to close the gap on this leading group and become one of the five largest insurers in the country.

Mr. Charest also reasserted the two major financial objectives that guide the Company’s strategy. “In terms of profitability, we are targeting a rate of return on equity between 13% and 15%. With respect to business growth, we are targeting a growth rate of sales five percentage points higher than the industry.”

Development Strategy

To reach these objectives, the Company has pinpointed a strategy for each of its lines of business. This strategy focuses on the following three elements:

  • Further strengthen the Company’s distribution capacity, which relies on its multi-channel distribution system. Today, Industrial Alliance has one of the largest distribution networks in Canada. This network contains over 15,000 agents and brokers, grouped together in three distribution networks. Industrial Alliance is recognized in the market as a company that respects its business partners. It has built a reputation as a long-term partner that provides its agents with constant coaching and support, so that they are the driving force behind their own success. Hence, the Company aims to expand its distribution networks in all regions of the country, by seeking to become the “insurer of choice” for a growing number of agents.
  • Accelerate the Company’s growth in wealth management. In addition to life insurance, Industrial Alliance distributes a wide range of wealth management products, including segregated funds, guaranteed investment certificates, registered retirement savings plans and registered education savings plans. In order to take advantage of the current convergence movement, Industrial Alliance intends to accelerate its development in all areas related to wealth management, particularly mutual funds and securities, where the Company has recently started its operations. The Company’s objective is quite simple: further expand its distribution capacity in all financial services fields, as well as provide its representatives with a full line of financial products. The Company’s recent acquisitions are part of this strategy. In the last year Industrial Alliance has acquired the operations of three securities brokerage firms, acquired a 25% share in FundEX, a mutual funds broker, and has just announced an offer to buy Global Allocation Financial Group, another mutual funds broker. Hence, the Company intends to pursue, indeed accelerate its growth in these fields, both organically and through acquisitions.
  • Use the Company’s Canada-wide infrastructure in the retail sectors, particularly Individual Insurance and Annuities, to support its geographic expansion in the group sectors, particularly Group Insurance and Group Pensions. Currently, about one half of the Company’s business comes from outside Quebec. The Company’s objective in the group sectors is to be recognized as a national insurer, a goal it has already reached in the retail sectors.

Mr. Charest concluded by reiterating his belief that not only will this strategy allow the Company to create value for its shareholders, but it will also ensure the long-term solidity of the Company, for the greater good of its policyholders.

About the Industrial Alliance Group

The Industrial Alliance Group is among the most solid financial institutions in the country, where it is an industry leader in the fields of insurance and financial services. The Group has operations across Canada, through Industrial Alliance (Quebec City), National Life (Toronto) and Industrial Alliance Pacific (Vancouver). The seventh largest life and health organization in Canada, the Industrial Alliance Group insures over 1.5 million Canadians, employs more than 2,150 people and administers $17.1 billion in assets. Industrial Alliance stock is listed on the Toronto Stock Exchange, under the ticker symbol IAG. Industrial Alliance is among the 100 largest public companies in Canada.