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Industrial Alliance Annual Meeting

The Meeting Takes Place Under the Theme A partner you can trust

Quebec City,

News Release

" This is the kind of year we like at Industrial Alliance. We successfully achieved all of our objectives in 2006." These remarks were made today by Yvon Charest, President and Chief Executive Officer of Industrial Alliance Insurance and Financial Services Inc. while commenting on the Company’s 2006 achievements before shareholders and participating policyholders who attended the Industrial Alliance annual general meeting.

Main Achievements in 2006
Proud of the progress that the Company made in 2006, Mr. Charest began by going over the main achievements in the last year:
  • Profitability objective surpassed – Record shareholder net income of $227.9 million, up 72% compared to 2005, and 15.7% return on common shareholders equity, above the 13% to 15% target range.
  • Strong business growth – Premiums and deposits at a new high of $5.0 billion, a 39% increase over 2005.
  • Integration of Clarington Corporation – Rapid and successful integration of Clarington, which increased the Company’s earnings per share by $0.02 in 2006, as expected. Clarington is a mutual fund manager that was acquired in December 2005.
  • Pursuit of development outside Quebec – Over 50% of sales in all lines of business were made outside Quebec, a first, which is in line with the Company’s objective to expand throughout Canada.
  • Integration of National Life – This integration reduced the Company’s unit costs and increased its efficiency. National Life was Industrial Alliance’s Toronto-based subsidiary.
  • Acquisition of FundTrade Financial Corporation – FundTrade was merged with FundEX, which now administers some $10 billion in assets. FundTrade is a mutual fund brokerage firm. This was Industrial Alliance’s twelfth acquisition in the wealth management sector since 2001.
  • Active capital management – Solvency ratio at 201% as at December 31, 2006, slightly above the 175% to 200% target range, thanks to active capital management, including the issuance of $125 million in preferred shares. This issue was well received by the markets.

"The year’s positive results enabled us to increase our dividend by 20% in 2006. In the last year, we have paid out 22% of the Company’s net earnings in the form of dividends to the common shareholders," continued Mr. Charest. "Even though this rate compares favourably with that of other public companies, we want to do even better. We have therefore set a goal of increasing the payout ratio to 28% by early to mid-2008. We have already taken a step in this direction, by announcing a 12.5% increase in the quarterly dividend at the beginning of 2007. The first quarter 2007 dividend thus increased from $0.16 to $0.18 per common share."

Growth Strategy
"These achievements are part of a larger long-term growth strategy that targets five objectives," specified Mr. Charest:

  • Continue our expansion in the wealth management sector.
  • Continue to develop our multi-channel distribution networks.
  • Accelerate our geographic diversification.
  • Penetrate new market segments.
  • Optimize the synergies within the Industrial Alliance group of companies."

"As in the past, we are determined to focus all our efforts on making Industrial Alliance grow," indicated Mr. Charest. "Industrial Alliance’s success is the result of an entrepreneurial culture and a constant effort to maintain and develop relationships of trust with its clients, its distributors, its employees, the community and its shareholders. That is why we have decided to reintroduce the theme that has always defined and inspired us:A partner you can trust!? "

Before closing, Mr. Charest took the opportunity to present the Company’s new corporate image and bold new logo, inspired by its previous one, and which truly reflects its identity as a financial institution. The new logo integrates the letters "IA", for Industrial Alliance known to its clients and the financial community. It also has a sense of continuity, drawing on the characteristics shared by the elephant, the Company’s symbol, and Industrial Alliance: strength, solidity, longevity, sense of family and sense of responsibilities.

In closing, Mr. Charest underlined the excellent work accomplished by all company employees across the country who, through their commitment and their professionalism, actively work to achieve Industrial Alliance’s objectives. "The employees can be proud of the Company’s success, since they are behind it," he concluded.

About Industrial Alliance
Founded in 1892, Industrial Alliance Insurance and Financial Services Inc. is a life and health insurance company that offers a wide range of life and health insurance products, savings and retirement plans, RRSPs, mutual and segregated funds, securities, auto and home insurance, mortgage loans and other financial products and services. The fifth largest life and health insurance company in Canada, Industrial Alliance is at the head of a large financial group, which has operations across Canada as well as in the western United States. Industrial Alliance contributes to the financial well-being of over 3 million Canadians, employs more than 2,800 people and manages and administers $50 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.

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Jacques Carrière
Vice-President, Investor Relations
Office phone: 418 684-5275