Chairman's Letter

10 years of outperformance

Intact is celebrating its 10-year anniversary in 2019. It became an independent and widely held company in 2009 against the backdrop of the global financial crisis. It was a bold move that has consistently delivered strong growth for you over the last 10 years.

In 2018, Intact delivered solid results across underwriting, investments and distribution, in both Canada and the U.S. Net Operating Income Per Share (NOIPS)1 of $5.74 drove Operating Return on Equity (OROE) of 12.1%, with over $1.3 billion of total capital margin. In addition, the Company announced a 9% increase in the quarterly dividend for shareholders to $0.76 per common share – the 14th consecutive annual increase.

Under the leadership of Charles Brindamour and his management team, the Company continues to excel, outperform and deliver value to you while staying grounded in its founding values – integrity, respect, customer driven, strive for excellence and socially responsible.

Despite continued challenges with extreme weather across North America, personal auto in Canada and recent market volatility, the Company is well-positioned to outperform in a changing environment, through enhanced risk selection, better segmentation and leveraging data analytics.

Intact continues to accelerate its digital offerings, investing in software engineering, machine learning and artificial intelligence to design relevant products and provide options for customers. With the successful integration of OneBeacon in the U.S. and close to $2.3 billion in combined direct premiums written in 2018, Intact is making good strides towards achieving its goal of creating a leading specialty insurer in North America.

Recognizing the significance of climate change and the Company's expertise as a risk manager, Intact is participating in the United Nations Environment Programme Finance Initiative (UNEP FI) Task Force on Climate-related Financial Disclosures (TCFD) pilot to help better assess the intensifying impacts of climate change on the business.

Built on strong governance principles, and a high standard of compliance and ethics, Intact is today one of the most respected companies in Canada. The Company was ranked first (tie) by the Clarkson Centre for Board Effectiveness in its Board Shareholder Confidence Index 2018, for the third year running. This index examines the quality of corporate governance practices among Canadian public companies. As well, Intact maintained its second position in The Globe and Mail’s 2018 Board Games report card. Intact was also recognized by Brendan Wood International (BWI) as one of five 2018 Global TopGun insurance companies for transparency and financial reporting. Louis Marcotte was also named a Global TopGun CFO by BWI.

Having engaged employees is integral to Intact’s success. Besides retaining past awards – an Aon Best Employer in Canada at the platinum level, one of Canada's Top 100 Employers and Greater Toronto’s Top Employers, and one of Canada's Top Employers for Young People, the Board is pleased to note that Intact was voted for the first time as one of the 25 Top-Rated Workplaces in Canada by Indeed, Canada's top job search site, as well as one of the 25 best places to work in Canada, by Glassdoor. Also, the Company was one of three companies awarded with Platinum Parity Certification by Women in Governance, recognized for our ongoing focus and progress in developing women in the workplace. These accolades speak to the Company’s commitment to talent development, employee engagement and diversity.

I want to thank Louise Roy who retired from the Board in 2018. Louise served on the Board of the Company since its IPO in 2004 and brought her expertise to the Board’s Human Resources and Corporate Governance committees during her tenure. Following Louise’s retirement, we welcomed William L. Young, a director with extensive public company board and board leadership experience gained at several U.S., Canadian and European-based companies.

As Intact marks a decade of delivering for customers and outperforming, l want to pay tribute to the management team and employees at Intact, who deliver on the Company’s purpose every day – helping people, businesses and society prosper in good times and be resilient in bad times. Your dedication, passion and commitment are most admirable and are what sets the Company apart in the marketplace.

To shareholders, customers and brokers, thank you for your trust and support over the last decade. It is with your continued trust that Intact will continue to grow, outperform and succeed in 2019, and for many years to come.

Chairman of the Board