Industrial Alliance Closes its Acquisition of BLC-Edmond de Rothschild Asset Management and Enters into a Long-Term Exclusive Distribution Agreement with Laurentian Bank

QUEBEC CITY, Dec. 31, 2004 – Industrial Alliance Insurance and Financial Services Inc. (Industrial Alliance) is pleased to announce the closing of its acquisition of BLC-Edmond de Rothschild Asset Management Inc. (BLCER), which was initially announced November 4, 2004. Concurrent with the closing of the transaction, Industrial Alliance entered into a 10-year exclusive distribution agreement with Laurentian Bank whereby the bank will distribute to its clients the R Funds acquired by Industrial Alliance, along with Industrial Alliance mutual funds.

“We are very pleased with this transaction, which is both an excellent springboard for our mutual fund management activities, and a further development in our private client and institutional investment capabilities,” stated Yvon Charest, President and CEO of Industrial Alliance. “This transaction enables us to quickly expand our fund family and provides us with immediate scale in this sector. Moreover, our agreement with Laurentian Bank grants us access to a new distribution network made up of experienced advisors.”

At closing, Industrial Alliance made an initial payment of $69 million for the acquisition of BLC-Edmond de Rothschild Asset Management Inc., which will be renamed Industrial Alliance Fund Management Inc. The final price of the transaction is subject to certain conditions. At December 29, 2004, BLC-Edmond de Rothschild managed assets of $911 million in mutual funds, $147 million in private wealth management and $725 million in institutional management, for a total of $1.78 billion.

“The closing of the transaction comes at a perfect time, as we are about to launch our 2005 RRSP campaign,” added Yvon Charest. “The R Funds family is a great addition to Industrial Alliance’s portfolio of mutual funds, segregated funds and securities. Industrial Alliance now offers an ever wider range of financial products to its independent advisors all across Canada.”

About Industrial Alliance

Founded in 1892, Industrial Alliance is a life and health insurance company that offers a wide range of insurance products and financial services. The fifth largest life insurance company in Canada, Industrial Alliance is at the head of a large financial group – the Industrial Alliance Group – which has operations across Canada. Industrial Alliance insures over 1.7 million Canadians, employs more than 2,400 people and manages and administers $25.5 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.