AUTO HOME BUSINESS

Fixed Income

Investor Presentation

Ken AndersonVice President Investor Relations & Treasurer

Intact Financial Corporation (TSX: IFC)

June 15, 2017

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Canada’s largest home, auto and business insurer

5.9%

6.4%

9.1%

10.4%

17.3%

#5

#4

#3

#2

IFC

Largest market sharein a fragmented industry

10-year outperformance versus the industry

Distinct brands

Industry data: IFC estimates based on MSA Research Inc. Please refer to Important notes on page 3 of the Q1-2017 MD&A for further information.All data as at December 31, 2016.1 Premium growth includes the impact of industry pools.2 Combined ratio includes the market yield adjustment (MYA).3 ROEs reflect IFRS beginning in 2010. Since 2011, IFC's ROE is adjusted return on common shareholders' equity (AROE).

4.2 pts

3.3 pts

5.4 pts

Top 5 represent

49%market share

Premium growth 1

Combined ratio 2

Return on equity 3

3

Consistent outperformance

4.1 pts

7.4 pts

3.1 pts3.6 pts

Personal Auto PersonalProperty

CommercialP&C

CommercialAuto

Five-year average loss ratio outperformance gap

FY2016 outperformance

(for the period ended December 31, 2016)

(for the period ended December 31, 2016)

Sophisticated pricing and

underwriting

Broker relationships

Tailored investment

management

Multi-channel distribution

Proven acquisition

strategy

In-house claims

expertise

Scaleadvantage

2.4%

3.8%

99.6%

95.2%

5.2%

11.0%

Premium growth 1

Combined ratio 2

Return on equity 3

IFC Industry

Industry data: IFC estimates based on MSA Research Inc. Please refer to Important notes on page 3 of the Q1-2017 MD&A for further information.1 Premium growth includes the impact of industry pools.2 Combined ratio includes the market yield adjustment (MYA).3 IFC's ROE is adjusted return on common shareholders' equity (AROE).

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What we are aiming to achieve

Our customers are our advocates

Our employees are engaged

Our company is one of the most respected

Two million advocates by 2020

One of Canada’s

best employers

Outperform industry ROE by

500 basis points every year

Grow NOIPS 10% per year

over time

� Close to one million advocates

� Highest broker satisfaction scores ever recorded

� Unaided brand awareness is at an all-time high and continues to climb

� Named one of Canada’s Top 100 Employers and one of the Best Employers in Canada for second year in a row

� Recognized as one of Canada's Top Employers for Young People

� The Globe and Mail’s Board Games ranked us #2 for the quality of our governance

� Made the Best 50 Corporate Citizens in Canada list for 4th straight year

Goal Target Progress

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Sustaining performance going forward

Beat industry ROE by 500 bps every year

NOIPS growth of 10%per year over time

Investments & Capital Mgmt

2 points

Pricing & Segmentation

2 points

Claims Management3 points

Organic Growth3-5%

Margin Improvement0-3%

Capital Mgmt & Deployment

3-5%

* Leaves 2 points to

reinvest in customer

experience (price, product,

service, brand)

Financial strengthStrong balance sheet and disciplined financial management

* Excess capital at 170% includes net liquid assets in non regulated entities

• High quality, strategically

managed investments

• Conservative reserving

practices

• MCT well above 170%

• Target 20% debt-to-total capital

Strong balance sheet Our balance sheet

Investments

Total Assets

Total Liabilities

Total capitalization

Debt-to-total capitalization

Q1-2017 2016

$14.2 $14.4

$22.5 $22.9

Medium Term Notes $1.4 $1.4

Credit Facility - -

$16.4 $16.8

Shareholder’s equity $6.1 $6.1

$7.5 $7.5

MCT

Excess Capital (170%)*

18.5% 18.6%

223% 218%

$1,034M $970M

Common shares $2.1 $2.1

Preferred shares $0.5 $0.5

Retained earnings and other $3.6 $3.5

Debt plus preferred shares-to-total capitalization

25.0% 25.2%

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In billions of Canadian dollars

0%

20%

40%

60%

80%

100%

Investment portfolio asset mix

Fixed income: 70%

Fixed income credit rating

Common equity: 15%

Preferred shares: 10%

Loans: 3%Cash: 2%

*

* Net of hedging positions and financial liabilities related to investments, as of March 31, 2017

Fixed-Income Portfolio Common Equity

US, 10%

Canadian, 90%

Geographic diversification

Preferred shares credit rating

Investment portfolioA high quality investment portfolio of $14.2 billion

Canadian, 68%

US, 25%

Other, 7%

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P2 81%

P3 19%AAA

44%

AA37%

A16%

BBB2%

Not rated1%

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Track record of prudent reserving practices

� Quarterly and annual fluctuations in reserve development are normal

� 2005 reserve development was unusually high due to the favourable effects of certain auto insurance reforms

� Our consistent track record of positive reserve development reflects our preference to take a conservative approach to establishing and managing claims reserves

Rate of claims reserve development(favourable prior year development as a % of opening reserves)

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Very strong levels of capital over time

Conservative and well managed leverage levels

Strong capital base

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$435$599 $550 $681 $625

$970 $1,034

197% 205% 203% 209% 203% 218% 223%

2011 2012 2013 2014 2015 2016 Q1-2017

Excess Capital at 170% MCT

22.9%

18.9% 18.7% 17.3% 16.6%18.6% 18.5%

2011 2012 2013 2014 2015 2016 Q1-2017

Debt-to-cap IFC Target: 20%

As of Q1-2017 ScenarioMCT

Sensitivity

Interest rates 1% increase (3) pts

Common share prices 10% decline (1) pts

Preferred share prices 5% decline (2) pts

U.S. dollar 10% decline (0) pts

We have a low sensitivity to capital markets volatility

Personal Property

24%

10

OneBeacon acquisitionStrong strategic rationale

= C$8.3 Bn in DPW

= C$9.9 Bn in DPW

Source: 2016 direct written premium as reported in MSA (Intact) and 10-K (OneBeacon), using April 26th exchange rate

Specialty8%

($628M)

Commercial24%

Personal Auto44%

Specialty23%

($2.3B)

Personal Auto37%

Commercial20%

Personal Property

20%

OneBeacon acquisitionStrong strategic rationale

� Creating a leading North American specialty insurer

� Focuses on small to mid-size businesses

� New growth pipeline

� New products and cross-border capabilities

� Brings high caliber management team

� Diversifies IFC’s business and geographic mix

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Accident

EnvironmentalEntertainment

Import expertise and expand product offering in Canada

Leverage Intact underwriting and pricing expertise to broaden offering in the US and drive profitable growth

Financial Institutions

Cross-Border1. Ability for both Intact and OneBeacon to service domestic

clients that do business in both countries2. Better compete with other North American insurers by

offering a seamless cross-border experience

Small to Mid-Size Commercial & Specialty Lines

Technology

OneBeacon acquisitionDriving cross market synergies

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OneBeacon acquisitionFinancially compelling & conservatively structured

� NOIPS neutral in year one and mid-single digit accretive in 24 months

� Immediately accretive to BVPS

� Attractive IRR estimated to be in excess of 15%1

� Maintains strong financial position and robust capitalization:

� MCT above 200%

� Debt-to-total capital ratio below 25% at closing and below target level of 20% within 24 months

� Significant downside protection against adverse reserve development

� Thorough reserve assessment factored in valuation

� Reinsurance coverage of up to US$200M

1 Internal rate of return based on equity returns per proposed financing plan. 2 Purchase price based on 94.041mm outstanding shares as at March 31, 20173 Price to book value based on book value as at March 31, 2017.4 Price to earnings based on consolidated earnings for year ended December 31, 2016

Selected financial highlights

billion total purchase price, in Canadian dollars, or US$1.7 billion2.$2.3P/BV3 purchase price, or 15.8x P/E4.1.65x

estimated MCT at close.>200%

internal rate of return (IRR) target is expected to be exceeded.15%

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OneBeacon acquisitionStrong financial position maintained

Debt

Preferred shares

Debt & Preferred shares

Excess capital

Equity

Total

$700 M

At announcement

$1,000 M

$700 M

$2,400 M

-

To date

$425 M

$150 M

$575 M

$754 M

$1,329 M

$600M - $700M

Balance

$350M - $450M

A1

Long term issuer ratings of IFC’s credit

Financial strength Outlook

AA-

AA (low)

A+ (superior)

Stable

Stable

Stable

Baa1

A-

A

a-

“IFC’s consistent profitability, successful track

record of acquisitions and moderate financial

leverage limits the company’s execution and

integration risks”.

“OneBeacon adds product and geographic

diversification to Intact. The acquisition represents

the first material acquisition outside Canada and will

establish a footprint in most US states”.

“The acquisition […] will likely improve the

franchise in the medium term”. “ Intact has

demonstrated good integration expertise in past

acquisitions”.

“Fitch's affirmation […] reflects a company that is

solidly capitalized, with a very strong reserve

position and earnings profile”.

Ratings affirmed on May 3rd (1)

Ratings affirmed on May 2nd

Ratings affirmed on May 2nd

Ratings affirmed on May 3rd

Stable

(1) Moody’s outlook has been changed to stable from positive 14

OneBeacon acquisitionAll credit ratings affirmed following the announcement

• Balance sheet optimization (20% debt-to-cap.)

• Acquisition financing

• Longer tenures preferred

• Strong credit profile

Debt profile

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$250M

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2039 2040 2041 2042 20612042 20422027 2042

MTN Series 1Coupon: 5.41%Maturity: 3-Sep-19

MTN Series 4Coupon: 4.70%Maturity: 18-Aug-21

MTN Series 6Coupon: 3.77%Maturity: 2-Mar-26

MTN Series 2Coupon: 6.40%Maturity: 23-Nov-39

MTN Series 5Coupon: 5.16%Maturity: 16-Jun-42

MTN Series 3Coupon: 6.20%Maturity: 8-Jul-61

$300M

$250M

$250M

$250M

$100M

US

$ 2

75M

OneBeaconSenior unsecured notesCoupon: 4.60%Maturity: 9-Nov-22

$425M

MTN Series 7Coupon: 2.85%Maturity: 7-Jun-27

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Key takeaways

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Consistent outperformance

Strong balance sheet capitalization

Embedded risk management culture

Performance

Risk Management

Financial Strength

Financially compelling &

conservatively structuredOneBeacon

Appendices

Source: OneBeacon1 Represents gross premiums written from continuing operations which excludes exited or discontinued lines and is further adjusted to exclude $11 million in fronting-

related premiums.2 Financial strength rating as of March 31, 2017

� OneBeacon is a Bermuda-domiciled company operating in the US and focused on specialty insurance

� Offers a range of specialty insurance products across 16 diversified business units

� Differentiated, multi-channel distribution approach with an attractive mix of retail (70% of GPW) and wholesale (30% of GPW) distribution

� Flexible and scalable technology platform

� 2016 GPW US$1.2bn | 2016 Net income US$107m | 2016 & 2017 Q1 combined ratio of 97.3% & 94.5% | Book value US$1bn

� Rated A by AM Best / A- by S&P / A3 by Moody’s / A by Fitch2

Operational objective to achieve a combined ratio in the low 90’s for OneBeacon.

Cross-border growth opportunity to better serve Canadian client base.

Total: US$1,190 million

2016 GPW1 by Line of Business

Accident12%

Technology11%

Ocean Marine

11%

Healthcare11%

Government Risks7% Entertainment

7%

Tuition Reimbursement

6%

Inland Marine

6%

Surety5%

Programs4%

Management Liability

4%

Financial Services4%

Specialty Property3%

Other Professional Lines3%

Environmental3%

Financial Institutions3%

OneBeacon is a unique pure-play specialty lines insurer

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19

46%

25%

29%

Personal Auto

Personal Property

Commercial Lines

41%

27%

18%

14%

Ontario

Quebec

Alberta

Rest of Canada

28%

48%

9%

15%

Intact Insurance - Affiliated brokers

Intact Insurance - Other brokers

BrokerLink

Direct to consumer

2016 DPW by Business Line

2016 DPW by Geography

2016 DPW by Distribution Channel

A strong and diversified base for growth

* Excluding pools, as of December 31, 2016¹Affiliated brokers are either those in which we hold an equity investment or provide financing.

Operational snapshot

1

Capital management framework Integrated decision making process

CapitalManagement

Target Leverage & Cap Structure

MCT% & Excess Capital level

Capital Allocation Decision

Maintain leverage ratio (target 20% debt-to-total capital)

Invest in growth initiatives

Maintain existing dividends

Increase dividends

Share buybacks

Excess c

apital

Strategic capital management

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Contact us

Media Inquiries

Stephanie Sorensen

Director, External Communications

1 (416) 344-8027

stephanie.sorensen@intact.net

General Inquiries

Intact Financial Corporation700 University AvenueToronto, ON M5G 0A1

1 (416) 341-1464

1-877-341-1464 (toll-free in N.A.)

info@intact.net

Investor Relations Inquiries

ir@intact.net

1 (416) 941-5336

1-866-778-0774 (toll-free in N.A.)

Ken Anderson

VP Investor Relations & Treasurer

1 (855) 646-8228, ext. 87383

kenneth.anderson@intact.net

Maida Sit

Director, Investor Relations

1 (416) 341-1464 ext. 45153

maida.sit@intact.net

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Forward-looking statementsCertain of the statements included in this presentation about the Company’s current and future plans, expectations and intentions, results, levels of activity, performance, goals or achievements or any other future events or developments constitute forward-looking statements. The words “may”, “will”, “would”, “should”, “could”, “expects”, “plans”, “intends”, “trends”, “indications”, “anticipates”, “believes”, “estimates”, “predicts”, “likely”, “potential” or the negative or other variations of these words or other similar or comparable words or phrases, are intended to identify forward-looking statements.

Forward-looking statements are based on estimates and assumptions made by management based on management’s experience and perception of historical trends, current conditions and expected future developments, as well as other factors that management believes are appropriate in the circumstances. Many factors could cause the Company’s actual results, performance or achievements or future events or developments to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, the following factors: the Company’s ability to implement its strategy or operate its business as management currently expects; its ability to accurately assess the risks associated with the insurance policies that the Company writes; unfavourable capital market developments or other factors which may affect the Company’s investments, floating rate securities and funding obligations under its pension plans; the cyclical nature of the P&C insurance industry; management’s ability to accurately predict future claims frequency and severity, including in the Ontario line of business, as well as the evaluation of losses relating to the Fort McMurray wildfires, catastrophe losses caused by severe weather and other weather-related losses; government regulations designed to protect policyholders and creditors rather than investors; litigation and regulatory actions; periodic negative publicity regarding the insurance industry; intense competition; the Company’s reliance on brokers and third parties to sell its products to clients and provide services to the Company; the Company’s ability to successfully pursue its acquisition strategy; the Company’s ability to execute its business strategy; the Company’s ability to achieve synergies arising from successful integration plans relating to acquisitions, as well as management's estimates and expectations in relation to resulting accretion, internal rate of return and debt-to-capital ratio; the Company’s participation in the Facility Association (a mandatory pooling arrangement among all industry participants) and similar mandated risk-sharing pools; terrorist attacks and ensuing events; the occurrence of catastrophe events, including a major earthquake; the Company’s ability to maintain its financial strength and issuer credit ratings; access to debt financing and the Company's ability to compete for large commercial business; the Company’s ability to alleviate risk through reinsurance; the Company’s ability to successfully manage credit risk (including credit risk related to the financial health of reinsurers); the Company’s ability to contain fraud and/or abuse; the Company’s reliance on information technology and telecommunications systems and potential failure of or disruption to those systems, including evolving cyber-attack risk; the Company’s dependence on key employees; changes in laws or regulations; general economic, financial and political conditions; the Company’s dependence on the results of operations of its subsidiaries; the volatility of the stock market and other factors affecting the Company’s share price; and future sales of a substantial number of its common shares.

All of the forward-looking statements included in this presentation are qualified by these cautionary statements and those made in the section entitled Risk management (Sections 17-21) of our MD&A for the year ended December 31, 2016. These factors are not intended to represent a complete list of the factors that could affect the Company. These factors should, however, be considered carefully. Although the forward-looking statements are based upon what management believes to be reasonable assumptions, the Company cannot assure investors that actual results will be consistent with these forward-looking statements. When relying on forward-looking statements to make decisions, investors should ensure the preceding information is carefully considered. Undue reliance should not be placed on forward-looking statements made herein. The Company and management have no intention and undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

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Disclaimer

This Presentation does not constitute or form part of any offer for sale or solicitation of any offer to buy or subscribe for any securities nor shall it or any part of it form the basis of or be relied on in connection with, or act as any inducement to enter into, any contract or commitment whatsoever.

The information contained in this Presentation concerning the Company does not purport to be all-inclusive or to contain all the information that a prospective purchaser or investor may desire to have in evaluating whether or not to make an investment in the Company. The information is qualified entirely by reference to the Company’s publicly disclosed information.

No representation or warranty, express or implied, is made or given by or on behalf of the Company or any of its the directors, officers or employees as to the accuracy, completeness or fairness of the information or opinions contained in this Presentation and no responsibility or liability is accepted by any person for such information or opinions. In furnishing this Presentation, the Company does not undertake or agree to any obligation to provide the attendees with access to any additional information or to update this Presentation or to correct any inaccuracies in, or omissions from, this Presentation that may become apparent. The information and opinions contained in this Presentation are provided as at the date of this Presentation. The contents of this Presentation are not to be construed as legal, financial or tax advice. Each prospective purchaser should contact his, her or its own legal adviser, independent financial adviser or tax adviser for legal, financial or tax advice.

The Company uses both International Financial Reporting Standards (“IFRS”) and certain non-IFRS measures to assess performance. Non-IFRS measures do not have any standardized meaning prescribed by IFRS and are unlikely to be comparable to any similar measures presented by other companies. Management analyzes performance based on underwriting ratios such as combined, expense, loss and claims ratios, MCT, and debt-to-capital, as well as other non-IFRS financial measures, namely DPW, Underlying current year loss ratio, Underwriting income, NOI, NOIPS, OROE, ROE, AROE, Non-operating results, AEPS, Cash flow available for investment activities, and Market-based yield. These measures and other insurance related terms are defined in the Company’s glossary available on the Intact Financial Corporation web site at www.intactfc.com in the “Investor Relations” section. Additional information about the Company, including the Annual Information Form, may be found online on SEDAR at www.sedar.com.