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Credit Insurance Market with Automobile Dealers

Industrial Alliance Launches a Friendly Takeover to Acquire Aegis Insurance Corporation and Sascar Management Ltd.

Quebec City,

News Release

Industrial-Alliance Life Insurance Company (Industrial Alliance – Toronto Stock Exchange: IAG) announced today a friendly takeover bid for Aegis Insurance Corporation (Aegis) and its affiliate company, Sascar Management Ltd. (Sascar). Aegis is a Saskatchewan based life insurance company that primarily offers credit insurance products with automobile dealers in the Western provinces, while Sascar, also based in Saskatchewan, is a holding company owning shares of Aegis.

The offer contemplates the purchase of all outstanding Class A and Class B shares of Aegis and all outstanding Class A common shares of Sascar. The price offered is $44.8718 for each Class A share of Aegis, $190 for each Class B share of Aegis and $2,000 for each Class A common share of Sascar. Aegis and Sascar shareholders can elect to receive these amounts in cash or common shares of Industrial Alliance.

The offer is conditional upon, among other things, there being validly deposited at least 90% of the issued and outstanding Class A and B shares of Aegis and at least 90% of the issued and outstanding Class A common shares of Sascar. The offer is open for acceptance until 5:00 p.m. (Saskatchewan time) on July 19, 2001, unless withdrawn, extended or terminated. If all of the shares are tendered, the acquisition price will reach $9.1 million. To facilitate the transaction, Industrial Alliance has agreed to issue from treasury up to 275,000 of its common shares.

The Boards of Directors of Aegis and Sascar have unanimously recommended to their shareholders to accept Industrial Alliance´s offer. A group of shareholders have conditionally agreed to tender into the bid all of their Class A and B shares of Aegis (representing approximately 90.7% of the outstanding Class A shares and approximately 97.8% of the outstanding Class B shares) as well as all of their Class A common shares of Sascar (representing approximately 97.8% of the outstanding Class A common shares).

"This offer shows Industrial Alliance´s desire to remain the primary insurer in the Canadian credit insurance market with automobile dealers in all regions of the country," declared Yvon Charest, President and Chief Executive Officer of Industrial Alliance. "This offer is part of our strategy to make the Industrial Alliance Group a national insurance organization in promising and targeted segments."

You may recall that in May 2000, Industrial Alliance acquired Mécagroupe Inc., one of the main suppliers of credit insurance to automobile dealers in Quebec. If the takeover bid launched today is accepted, Industrial Alliance will strengthen its presence in this segment, with over a third of the Canadian market.

The credit insurance operations of Aegis will complement those of Industrial Alliance, which distributes credit insurance products among automobile dealers through the SAL Marketing Group of its Western-Canadian subsidiary, IA Pacific Life. The SAL Marketing Group is one of the most well-known names in the Canadian credit insurance market in the automobile, heavy truck and recreational vehicles market. It distributes a wide variety of life, disability and health insurance products, as well as extended warrantees and other ancillary products. The SAL Marketing Group distributes its products through professional, well-trained, salaried representatives, a distinct feature of this market, which allows SAL to offer products at very competitive prices and high quality service.

About the Industrial Alliance Group
The Industrial Alliance Group is among the most solid financial institutions in Canada, where it is an industry leader in insurance and financial services. The Group has operations across Canada through Industrial Alliance (Quebec City) and its subsidiaries, including IA Pacific Life (Vancouver) and National Life (Toronto). The seventh largest life insurance company in Canada, the Group insures more than 1.5 million Canadians and employs almost 2,000 people. The Group has more than $14 billion in assets and funds under management. Industrial Alliance´s stock is listed on the Toronto Stock Exchange under the ticker symbol IAG. As one of the 100 largest public companies in Canada, Industrial Alliance’s stock is part of the TSE 300 and TSE 100 indices. The address of Industrial Alliance´s web site is www.inalco.com.

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Sources and information:
Doug Carrothers
IA Pacific Life, Vancouver
Office tel.: (604) 737-9362
Cellular: (604) 209-8926

Jacques Carrière
Industrial Alliance, Quebec City
Office tel.: (418) 684-5275
Cellular: (418) 576-3624