Intact Financial Corporation

Management Proxy Circular 2020

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Notice of Annual and Special Meeting of Shareholders May 6, 2020

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Building a Resilient Future

Table of Contents ESG Content Map

1. Voting Information 2. General Information

3. Business of the Meeting 4. Directors

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

6. Reports of the Committees

Your Vote Matters

Choose to vote in one of two ways:

A By proxy; or

B Online at the Meeting

Detailed voting instructions for non-registered and registered shareholders can be found starting on pages 9 to 12 of this Management Proxy Circular.

Location of Annual and Special Meeting of Shareholders

Virtual-only Meeting

The well-being and safety of our communities, shareholders, employees and other stakeholders is our top priority. As such, due to the unprecedented public health impact of the COVID-19 outbreak, we will hold our Meeting this year in a virtual-only meeting format, which will be conducted via live audio webcast . You will not be able to attend the Meeting physically. The webcast will be available at www.virtualshareholdermeeting.com/IFC2020 .

How to attend the virtual Meeting

You will be able to attend the Meeting as well as vote and submit your questions during the live webcast of the Meeting by visiting www.virtualshareholdermeeting.com/IFC2020 and entering the 16-digit control number included on the form of proxy or voting instruction form that accompanied your proxy materials.

Intact Financial Corporation | Management Proxy Circular 2020

Page i

Table of Contents ESG Content Map

1. Voting Information 2. General Information

3. Business of the Meeting 4. Directors

5. Corporate Governance Practices 6. Reports of the Committees

7. Statement on Executive Compensation 8. Approval of the Board of Directors

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April 3, 2020

Dear Shareholders,

On behalf of the board of directors and senior management team of Intact Financial Corporation, we are very pleased to invite you to join us at the 2020 Annual and Special Meeting of Shareholders of Intact Financial Corporation that will take place on May 6, 2020 at 12:30 p.m. (Eastern Time).

The well-being and safety of our communities, shareholders, employees and other stakeholders is our top priority. As such, due to the unprecedented public health impact of the COVID-19 outbreak, we will hold our Meeting this year in a virtual-only meeting format, which will be conducted via live audio webcast. The webcast will be available at www.virtualshareholdermeeting.com/IFC2020 . Detailed information on how to participate in the virtual Meeting is included in this Management Proxy Circular.

At this Meeting, you will have the opportunity to obtain first-hand information on Intact Financial Corporation, learn about our plans for the future, ask questions and hear your fellow shareholders’ questions and be called upon to vote on matters described in this Management Proxy Circular, as if you were physically present at the Meeting and regardless of your geographic location.

If you cannot attend the virtual Meeting, we invite you to exercise your vote by proxy, as described in the attached documents.

We also invite you to consult our website for information on our recent presentations to the investment community and on our results. Also available online is the full text of our 2019 Annual Report, 2019 Social Impact Report and other useful information.

As a valued shareholder, we appreciate and welcome your participation in the Annual and Special Meeting of Shareholders of Intact Financial Corporation.

Sincerely,

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Claude Dussault Charles Brindamour
Chair of the Board Chief Executive Officer
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Intact Financial Corporation | Management Proxy Circular 2020

Page ii

Table of Contents ESG Content Map

1. Voting Information 2. General Information

3. Business of the Meeting 4. Directors

5. Corporate Governance Practices 6. Reports of the Committees

7. Statement on Executive Compensation 8. Approval of the Board of Directors

Table of Contents
Letter to Shareholders	ii
Table of Contents	iii
ESG Content Map	iv
Notice of the Meeting	1
Our purpose, values and core belief	2
Summary	6
1. Voting Information	9
2. General Information	13
3. Business of the Meeting	14
3.1. Financial Statements	14
3.2. Appointment of Auditor	14
3.3. Election of Directors	15
3.4. Approval of the Amended and Restated Shareholder Rights Plans	15
3.5. Shareholder Advisory Vote on Approach to Executive Compensation	17
3.6. Other Business	17
4. Directors	18
4.1. Nominees	18
4.2. Director Compensation	32
4.3. Additional Information Regarding Directors	36
5. Corporate Governance Practices	39
5.1. Introduction	41
5.2. Code of Conduct and Ethics	41
5.3. Human Capital Management	43
5.4. Board of Directors	46
5.5. Diversity	60
5.6. Shareholder Engagement	64
5.7. Additional Information	66
6. Reports of the Committees	67
6.1. Compliance Review and Corporate Governance Committee	67
6.2. Audit Committee	72
6.3. Risk Management Committee	75
6.4. Human Resources and Compensation Committee	78
7. Statement on Executive Compensation	82
7.1. Introduction	83
7.2. Compensation Discussion and Analysis	84
7.3. CEO Compensation	102
7.4. Other NEO Compensation	104
7.5. Summary Compensation Table	108
7.6. Incentive Plan Awards	109
7.7. Pension Plan and Retirement Benefits	111
7.8. Termination and Change of Control Benefits	114
7.9. Compensation of Directors	117
7.10. Indebtedness of Directors and Executive Officers	117
7.11. Approval of the Statement on Executive Compensation	117
8. Approval of the Board of Directors	118
Glossary of Terms	119
Schedule A – Amended and Restated Shareholders Rights Plan	122
Schedule B – Mandate of the Board of Directors	125
How to contact us	129

This icon represents data relevant to environmental, social and governance (ESG) disclosure including its impact on our results where applicable.

Intact Financial Corporation | Management Proxy Circular 2020

Page iii

Table of Contents ESG Content Map

1. Voting Information

3. Business of the Meeting

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

6. Reports of the Committees

4. Directors

ESG Content Map

The Company’s disclosure with respect to Environmental, Social and Governance factors is included across our annual disclosure documentation:

2019 Annual Report (which includes the Company’s consolidated financial statements and management’s discussion and analysis for the fiscal year ended December 31, 2019)
2019 Annual Information Form
2020 Management Proxy Circular
2019 Social Impact Report

You will find below a quick and easy reference guide to our ESG content:

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Pages
2019 2019 2020 2019 Annual
Annual Social Impact Management Information
Report Report Proxy Circular Form
Public Accountability Statement 45 to 47
Principles of Sustainable Insurance 48 to 50
Environmental
Task-Force on Climate Related Financial Disclosure (TCFD) 20 to 22
Carbon emissions 22
Climate adaptation and resiliency 49 to 50, 73 20 to 31
Social
Workplace culture 41 to 45
Labour relations 13 to 19 43 to 45
Human capital management 13 to 19 43 to 45
Workforce demographics 19
Diversity and inclusion 13 to 19 60 to 64
Talent attraction and retention 13 to 19 43 to 45
Executive compensation 82 to 117
Employee compensation and benefits 17 to 18 43 to 45
Customer centric approach and complaints handling 8 to 10 41 to 43
Community engagement 30 to 39
Governance
Board of Directors
Structure and oversight functions 40 to 41 46 to 48
Director independence 51 to 52
Director nomination and renewal process 53 to 56
Orientation and continuing education 58 to 59
Ethical conduct and compliance framework 40 to 41 41 to 43
Risk management 67 to 86 13
Shareholder engagement 64 to 65
Data privacy and data security 10 to 12 42
Strategy 45 to 52 47
Investment management - proxy voting guidelines 44 4
Shareholder rights plan 15 to 16, 122 to 124 16
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Intact Financial Corporation | Management Proxy Circular 2020

Page iv

Table of Contents 1. Voting Information ESG Content Map 2. General Information

3. Business of the Meeting 4. Directors

5. Corporate Governance Practices 6. Reports of the Committees

7. Statement on Executive Compensation 8. Approval of the Board of Directors

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Notice of Annual and Special Meeting of Shareholders of Intact Financial Corporation

Date: Wednesday, May 6, 2020 Time: 12:30 p.m. (Eastern Time) Place: Virtual-only meeting via live audio webcast at www.virtualshareholdermeeting.com/IFC2020

Business of the Meeting:

Receive the consolidated financial statements for the year ended December 31, 2019 and the auditor’s report on those statements;
Appoint the auditor;
Elect Directors;
To consider and, if thought fit, to adopt a resolution to reconfirm, ratify and reapprove the Amended and Restated Shareholder Rights Plan of Intact Financial Corporation as set out in section 3 and Schedule A of the Management Proxy Circular;
Approve the non-binding advisory resolution to accept the approach to executive compensation disclosed in the Management Proxy Circular; and
Transact such other business as may properly be brought before the Meeting.

Holders of common shares of Intact Financial Corporation of record at 5:00 p.m. (Eastern Time) on March 16, 2020 are entitled to receive the Notice of Annual and Special Meeting of Shareholders and will be entitled to vote at the Meeting. On that date, 143,018,134 Common Shares were issued and outstanding. Each holder of Common Shares is entitled to cast one (1) vote per Common Share held.

The well-being and safety of our communities, shareholders, employees and other stakeholders is our top priority. As such, due to the unprecedented public health impact of the COVID-19 outbreak, we will hold our Meeting this year in a virtual-only meeting format, which will be conducted via live audio webcast. The webcast will be available at www.virtualshareholdermeeting.com/IFC2020 . Detailed information on how to participate in the virtual Meeting is included in the Management Proxy Circular .

As permitted by Canadian securities regulators, the Company is using “notice-and-access” to deliver the circular and its 2019 Annual Report to shareholders. Notice-and-access allows the Company to post the circular and annual report online instead of mailing it out to each shareholder, saving substantial printing and mailing costs and greatly reducing the Company’s paper consumption. Shareholders will receive a notice in the mail giving instructions on how to access the circular and the 2019 Annual Report on SEDAR (www.sedar.com) and on the Company’s website (www.intactfc. com) and how to request a paper copy of the circular and annual report free of charge. Please take the time to review the circular carefully before voting your shares.

By order of the Board of Directors,

Frédéric Cotnoir

Senior Vice-President, Corporate & Legal Services, and Secretary

April 3, 2020

Holders of Common Shares of Intact Financial Corporation who are unable to attend the virtual Meeting are invited to register their vote at www.proxyvote.com or by calling toll free at 1-800-474-7493 (English) or 1-800-474-7501 (French), or to complete, date and sign the enclosed form of proxy or voting instruction form, and return it by mail in the postage-paid envelope provided or fax it to Broadridge Investor Communications Corporation at 1-866-623-5305. In order to be valid, the form of proxy or voting instruction form must reach Broadridge Investor Communications Corporation by internet, phone, mail or fax at its office at Data Processing Center, P.O. Box 3700 STN Industrial Park, Markham, ON, L3R 9Z9, no later than 12:00 p.m. (Eastern Time) on May 4, 2020, or if the Meeting is adjourned, 24 hours (excluding Saturdays, Sundays and holidays) before any adjournment thereof. We encourage you to use the online platform www.proxyvote.com, instead of mail, to reduce the risk related to disruption that may occur during the current COVID-19 pandemic.

For any questions regarding the Management Proxy Circular, the form of proxy, the voting instruction form or the exercise of voting rights, please call the Intact Financial Corporation | Management Proxy Circular 2020 Office of the Corporate Secretary of Intact Financial Corporation at 1-877-341-1464, Ext. 45149 or 1-888-221-7111, Ext. 66365.

Table of Contents ESG Content Map

1. Voting Information 2. General Information

5. Corporate Governance Practices

5. Corporate Governance Practices 7. Statement on Executive Compensation 6. Reports of the Committees 8. Approval of the Board of Directors

4. Directors

3. Business of the Meeting

Our purpose, values and core belief

Our purpose is to help people, business and society prosper in good times and be resilient in bad times. We built a business with help in mind – it’s why we exist.

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Our values guide how we work with customers, employees, shareholders and defines our role in society.

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Our core belief is that insurance is about people, not things. This is why we’ve created a customer-driven approach and set clear expectations for our leaders with our leadership success factors.

Our values

Our values guide our decision making and emphasize our commitment to excel in all aspects of our business. We won’t compromise on our values because our values matter as much as our results.

Integrity

Be honest, open and fair
Set high standards
Stand up for what is right

Respect

Be kind
See diversity as a strength
Be inclusive and collaborate

Customer-driven

Listen to our customers
Make it easy, find solutions
Deliver second-to-none experiences

Excellence

Act with discipline and drive to outperform
Embrace change, improve every day
Celebrate success, yet remain humble

Generosity

Help others
Protect the environment
Make our communities more resilient

Our leadership success factors

Live our values | Care for people | Be open and honest | Take accountability | Drive change

Our objectives

Our customers are our advocates

3 out of 4 customers are our advocates
3 out of 4 customers actively engage with us digitally

Our people are engaged

Be a best employer
Be a destination for top talent and experts

Our company is one of the most respected

Exceed industry ROE by 500 bps
Grow NOIPS 10% yearly over time

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Intact Financial Corporation | Management Proxy Circular 2020

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Table of Contents ESG Content Map

1. Voting Information

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

6. Reports of the Committees

4. Directors

3. Business of the Meeting

2019 Developments

Our customers are our advocates

Being customer driven is one of our core values and is foundational to our success. We provide a customer experience that is second to none, by leveraging our capabilities in artificial intelligence and our leadership in claims and supply chain management. We made progress on this front in 2019:

On October 1, 2019, we completed the acquisition of On Side Developments Ltd., the parent company of On Side Restoration, a leading Canadian restoration firm, strengthening our supply chain network;
In 2019, we expanded our Data Lab by opening an office in Hong Kong. Our intent with this new office is to tap into a new pool of talent and ensure we have access to additional world-class expertise and other top universities in artificial intelligence. We officially started our operations in March 2020.

Our people are engaged

Our employees are essential to our success. We prioritize creating an inspiring and inclusive workspace where employees feel engaged and where they are rewarded for the difference they make. Below are a few examples of our progress in 2019:

In 2019, a new “Respect in the Workplace” internal learning program was developed and made available to support all employees and management in the understanding and application of the Company’s Respect in the Workplace Policy;
Our employee engagement score reached an all time high in 2019, making us a leader in the Canadian and U.S. insurance industry;
Enabling the generosity of our employees is a core tenant of our social impact strategy. In 2019, our employees volunteered over 16,000 hours to charities and donated over $400,000 to more than 600 charities, matched by the Intact Foundation;
The Company has been recognized as a top employer and among the best places to work in Canada and in the U.S. by many organizations:

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Our Company is one of the most respected

Strong governance and high ethical standards are key to being one of the most respected companies and to pursuing successfully the Company’s acquisition strategy. Between 1988 and 2019, the Company successfully completed 17 major acquisitions involving the integration of several P&C insurance businesses, including its most recent acquisition of The Guarantee and FCC as described below. The Company has also been consistently recognized over time by organizations examining our diversity, governance and disclosure practices. Below are a few examples of our achievements in 2019:

On December 2, 2019, we completed the acquisition of The Guarantee Company of North America, a specialty lines insurer in Canada and the U.S., and Frank Cowan Company Limited, a managing general agent focused on specialty insurance, for a cash consideration of approximately $1 billion. In Canada, this acquisition bolsters the Company’s position and adds new products for customers who have multiple or high valued property, cars or other assets. It also meaningfully advances the Company’s North American specialty lines platform;
We updated our Board and Senior Management Diversity Policy in order to align it with the recent amendments to the Canada Business Corporations Act . The CBCA Amendments, among other things, add new disclosure requirements for federal corporations with respect to the representation of Indigenous peoples, persons with disabilities and visible minorities on the board of directors and in senior management positions. See pages 60 to 62 for further details;
We continued to work with our 21 other global insurers cosignatories on the pilot project of the United Nations Environment Programme Finance Initiative focused on implementing the recommendations of the Task Force on Climate-Related Financial Disclosures Report. The project aims to develop a new generation of risk assessment tools designed to enable the insurance industry to better understand the impacts of climate change on its business;

Intact Financial Corporation | Management Proxy Circular 2020

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Table of Contents 1. Voting Information ESG Content Map 2. General Information

5. Corporate Governance Practices 6. Reports of the Committees

7. Statement on Executive Compensation 8. Approval of the Board of Directors

3. Business of the Meeting 4. Directors

Management of Intact Financial Corporation continued to regularly engage with the Company’s shareholders in 2019. In addition, the Chair of the Board of Directors met directly with shareholders discussing a number of matters of interest, including strategy, financial performance and ESG matters. See pages 64 to 65 for further details;
Intact Investment Management Inc. adopted new proxy voting guidelines, which integrate environmental, social and governance factors. The policy is available on the Company’s website (www.intactfc.com);
In early 2020, IFC adopted its data governance principles on how the Company collects and uses data;
Intact was awarded the Certification of Parity, Platinum level by Women in Governance ( La Gouvernance au Féminin ) for the third consecutive year, being one of only eight organizations to have received this highest-level award in 2019, recognizing our commitment to the advancement of women in business;
Intact was selected as a top 3 finalist in the Best Overall Governance – International Category at the 2019 Corporate Governance Awards organized by Corporate Secretary Magazine;
Intact placed first in the David and Sharon Johnston Centre for Corporate Governance Innovation - Board Shareholder Confidence Index 2019 with a maximum 150 points out of 150 for a fourth consecutive year. The David and Sharon Johnston Centre for Corporate Governance Innovation was established in 2019 to continue the previous work of the Clarkson Centre for Board Effectiveness in studying the governance of large public issuers;
Intact finished second in the 2019 edition of the Globe and Mail Report on Business – Board Games Index for a fourth consecutive year;
belairdirect and its media agency PHD received a silver award at the Festival of Media Global Awards in Rome, Italy, which rewards the most creative, strategic and innovative media campaigns worldwide.

Intact Financial Corporation | Management Proxy Circular 2020

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Table of Contents 1. Voting Information ESG Content Map 2. General Information

3. Business of the Meeting 4. Directors

5. Corporate Governance Practices 6. Reports of the Committees

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2019 Financial highlights

DPW[1] $11.0B 9% Underwriting income[1] $465M 2%

NOIPS[1] $6.16 7%

Net investment income $576M 6%

OROE[1] 12.5% 0.4%

Distribution EBITA and other[1] $209M 19%

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Underwriting performance
Combined ratio by line of business [1]
2019 2018
97.7% 99.5% 92.5% 88.3% 96.0% 94.6% 93.2% 94.8%
Personal Personal Commercial lines Commercial lines
auto property Canada US
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Combined ratio
by segment [1]
95.9%
95.4%
IFC
93.2%
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Investment portfolio

Investment mix (net exposure)

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8%
8% Fixed income
Common shares
$18.6B
Preferred shares
70%
Cash, cash equivalents,
short-term notes and loans
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Distribution EBITA and other[1] (in $ millions)

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209
175
158
134
123
2015 2016 2017 2018 2019
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Financial strength

Book value per share $53.97

Debt-to-total capital ratio Total capital margin 21.3% $1.2B

These are non-IFRS financial measures. See the glossary available in the “Investors“ section of our website at www.intactfc.com

Intact Financial Corporation | Management Proxy Circular 2020

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Table of Contents ESG Content Map

1. Voting Information 2. General Information

3. Business of the Meeting 4. Directors

5. Corporate Governance Practices 6. Reports of the Committees

7. Statement on Executive Compensation 8. Approval of the Board of Directors

Summary

Below are highlights of some of the important information you will find in this Management Proxy Circular. These highlights do not contain all the information that you should consider. You should therefore read the Management Proxy Circular in its entirety before voting.

Shareholder Voting Matters

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Board vote Page references
Voting matter recommendation for more information
Election of 12 Directors FOR each nominee 15, 18 to 31
Appointing Ernst & Young LLP as Auditors FOR 14 and 15
Approving the Amended and Restated Shareholders Rights Plan FOR 15 and 16
Advisory Resolution on Executive Compensation FOR 17
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Director Nominees at a Glance

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% Votes Board and
FOR at Committee Share
Independent Director 2019 Annual Committee attendance Other current Ownership
Occupation Age director since Meeting Memberships 2019 public boards Requirement
Charles Chief Executive 49 2008 99.88% – 6/6 (100%) Canadian Met
Brindamour Officer, Intact Imperial Bank of
Financial Commerce
Corporation
Janet De Silva President and CEO, 59 X 2013 99.45% CRCG, HRC 14/14 (100%) – Met
Toronto Region
Board of Trade
Claude Dussault President, ACVA 65 X 2000 97.18% – 6/6 (100%) Metro Inc. Met
Investing Corporation
Jane E. Kinney Corporate Director 62 X 2019 99.95% Audit, Risk 7/7 (100%) Cenovus Energy Has until
Inc. May 8, 2024
to comply
Robert G. Leary Corporate Director 59 X 2015 99.96% Audit, Risk 16/16 (100%) Citizens Met
Financial Group,
Inc.
Sylvie Paquette Corporate Director 60 X 2017 99.96% Audit, Risk 16/16 (100%) – Met
Timothy H. Penner Corporate Director 64 X 2010 99.39% CRCG, HRC 14/14 (100%) Jamieson Met
Wellness Inc.
Stuart J. Russell Professor of Electrical 58 X – – – – – If elected, has
Engineering and until May 6,
Computer Sciences, 2025 to comply
University of
California at Berkeley
Frederick Singer Chief Executive 57 X 2013 99.60% CRCG, Risk 15/15 (100%) – Met
Officer, Echo360
Stephen G. Snyder Corporate Director 70 X 2009 99.76% Audit, HRC 16/16 (100%) – Met
Carol Stephenson Corporate Director 69 X 2004 96.73% CRCG, HRC 14/14 (100%) Maple Leaf Met
Foods Inc.
General
Motors
Company
William L. Young Corporate Director 65 X 2018 99.95% CRCG, HRC 15/16 Magna Met
Chair, Magna (93.75%) International
International Inc.
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Including attendance at a joint meeting of the Audit Committee and the Risk Committee held in 2019.
** Mr. Leary is a candidate standing for election to the board of directors of Citizens Financial Group, Inc. at the upcoming annual meeting of shareholders on April 23, 2020.

Intact Financial Corporation | Management Proxy Circular 2020

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Table of Contents ESG Content Map

1. Voting Information

3. Business of the Meeting

5. Corporate Governance Practices 6. Reports of the Committees

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

4. Directors

Corporate Governance

The Board of Directors and Management of Intact Financial Corporation consider corporate governance and sound market practices to be essential components of its operations and integral in achieving the Company’s objective of enhancing value for its shareholders and in ensuring the Company’s long-term viability.

In 2019, the Company was once again ranked amongst the leaders in various annual examinations of the quality of the corporate governance practices of reporting issuers by organizations that monitor Canadian corporate governance trends.[1]

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1[st] place The David and Sharon Johnston Centre for Corporate Governance Innovation - Board Shareholder Confidence Index 2019 (fourth year in a row)[1]

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Top 3 Finalist

2[nd] place in the Best Overall Globe & Mail Report Governance – International on Business – category at the 2019 Board Games 2019 Corporate Governance (fourth year in a Awards organized by row) Corporate Secretary Magazine

96.96% 99.03% approval on advisory average vote resolution on executive in favour of the compensation (say-onelection of the pay) at 2019 annual director nominees meeting in 2019

Highlights of our Corporate Governance Practices

What We Do

Separation of CEO and Chair of the Board of Directors Independent Board and Chair: All members of the Board of Directors are independent, except the CEO Only independent directors on all committees of the Board of Directors

41.6% women representation on the Board of Directors and policy requiring a minimum of 30% representation each of women and men on the Board of Directors Minimum director share ownership requirements equivalent to 4x total annual retainer (and more than 8x annual cash retainer)

Private meetings of independent directors at all Board of Directors and committee meetings Robust Majority Voting Policy Board Renewal: Use of skills matrix, diversity matrix and evergreen list as part of Board of Directors renewal process Shareholder Engagement Policy providing for Management and Board of Directors directed shareholder engagement Strong Board of Directors Assessment Process Regular Continuing Education Programs for members of the Board of Directors Robust Risk Management Process

What We Don’t Do

No Director Interlock: No two Directors sit on more than one board of directors together

No Overboarding: No Director simultaneously sits on more than four (4) boards of publicly listed companies

No CEO or executives of a company on the HRC Committee

1 The David and Sharon Johnston Centre for Corporate Governance Innovation was established in 2019 to continue the previous work of the Clarkson Centre for Board Effectiveness in studying the governance of large public issuers.

Intact Financial Corporation | Management Proxy Circular 2020

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Table of Contents ESG Content Map

1. Voting Information

3. Business of the Meeting

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

6. Reports of the Committees

4. Directors

Compensation

Intact Financial Corporation’s compensation philosophy aims to ensure that its leaders focus on sustaining high levels of performance and growth in shareholder value, reinforcing the pay-for-performance philosophy.

The executive compensation package is designed to assist the Company in attracting and retaining the best available personnel for positions of substantial responsibility and align their interests with those of the Company’s shareholders. Each year, the Company reviews its compensation package to ensure alignment with its compensation philosophy.

The Company’s compensation components aim for an optimal balance between fixed and variable pay to encourage participation and behaviour that aligns with the longer-term interests of the Company and its shareholders.

What We Do

Say-on-Pay: Annual shareholder advisory vote on executive compensation

Strong link between pay and performance (see graphics below)

Look back table showing how much Mr. Brindamour has earned since he became CEO (January 1[st] , 2008)

Double-trigger vesting of stock incentives under the LTIP upon change of control

Robust Clawback Policy applicable to all variable compensation, including cash bonuses and equity compensation

Minimum director share ownership requirements equivalent to 4x total annual retainer (and more than 8x annual cash retainer)

What We Don’t Do

No stock option plan

No stock issued from treasury for stock-based compensation plans

Do not allow executives or directors to hedge their economic risk or reduce their exposure to changes in share price with respect to any securities of the Company

Minimum Executive share ownership requirements equivalent to 2x LTIP target and minimum retention periods for CEO and certain other executives

Employee engagement and customer initiative-related goals are included in the personal objectives of the CEO and other Senior Executives under the STIP

Retention of independent compensation consultant

Combined Ratio for STIP calculation

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85% 10
8
95%
6
105% 4
2
115%
0
2015 2016 2017 2018 2019
IFC Combined Ratio - Canada
Canadian P&C Industry Benchmark Combined Ratio
IFC Combined Ratio - U.S.
NEOs Realized STIP
Combined Ratio (inverted scale)
Aggregate NEOs STIP Payout ($ million)
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NEOs Target STIP
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Value of $100 investment ROE for
including dividends LTIP calculation
$300 25% 200%
180% 180%
$250 20% 145% 151% 144% 150%
$200 15%
100%
$150 10%
50%
$100 5%
$50 0% 0%
2014 2015 2016 2017 2018 2019 2013– 2014– 2015– 2016– 2017–
2015 2016 2017 2018 2019
Intact Financial Corporation 3-year Average ROE Cycles Intact Financial Corp
S&P/TSX Composite Index 3-year Average ROE Canadian P&C Industry
Percentage of Target Realized
PSU Vesting
3-year Average ROE
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Intact Financial Corporation | Management Proxy Circular 2020

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Table of Contents ESG Content Map

1. Voting Information

3. Business of the Meeting 4. Directors

5. Corporate Governance Practices 6. Reports of the Committees

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

1. Voting Information

This Management Proxy Circular is provided in connection with the solicitation of proxies to be used at the Annual and Special Meeting of Shareholders of Intact Financial Corporation, for the purposes indicated in the Notice of Meeting, to be held at 12:30 p.m. (Eastern Time) on Wednesday, May 6, 2020 via live audio webcast, and at any adjournment thereof.

Why is Intact holding a virtual-only Meeting?

The well-being and safety of our communities, shareholders, employees and other stakeholders is our top priority. As such, due to the unprecedented public health impact of the COVID-19 outbreak, we are taking extra health and safety precautions by holding our Meeting this year in a virtual-only meeting format, via live audio webcast. All shareholders will have equal opportunities to participate online in the virtual Meeting, engage with Management and Director nominees, ask questions and hear other shareholders’ questions and vote on matters described in this Circular, as if they were physically present at the Meeting and regardless of their geographic location.

Who is Soliciting my Proxy?

Employees, officers, Directors and agents of Intact Financial Corporation will solicit the proxies. The solicitation of proxies is done by mail, by fax or in person. The costs of such solicitation will be borne by the Company.

How can I attend the virtual Meeting?

The Meeting will be held in a virtual-only format via live audio webcast. You will not be able to attend the Meeting physically. You will be able to attend the Meeting as well as vote and submit your questions during the live webcast of the Meeting by visiting www.virtualshareholdermeeting.com/IFC2020 and entering the 16-digit control number included on the form of proxy or voting instruction form that accompanied your proxy materials. Online check-in will begin 15 minutes before the beginning of the Meeting. You should allow ample time for online check-in procedures. If your encounter any difficulties accessing the virtual Meeting during the check-in process or during the Meeting, please call the technical support number that will be posted on the virtual Meeting login page.

Who has the right to vote at the virtual Meeting?

If you hold Common Shares as at the close of business (5:00 p.m., Eastern Time) on March 16, 2020, (the record date established for receiving the Notice of Meeting and for voting in respect of the Meeting), you can cast one (1) vote for each Common Share you hold on all matters proposed to come before the Meeting. As at the close of business (5:00 p.m., Eastern Time) on March 16, 2020, 143,018,134 Common Shares were issued and outstanding. All the matters proposed before the Meeting require approval by a majority of votes cast by shareholders.

Who can vote?

Registered shareholder

You are a registered shareholder if you have a share certificate in your name.

We will prepare a list of the registered shareholders as of March 16, 2020, showing the names of all shareholders who are entitled to vote online at the Meeting and the number of shares each owns. Those wishing to consult a copy of the list during regular business hours should contact our transfer agent, Computershare Investor Services Inc., at 1-800-564-6253. You may also consult the list when you check-in to the Meeting.

Non-Registered shareholder

You are a non-registered shareholder if a bank, trust company, securities broker, clearing agency, other financial institution or other intermediary (your “Nominee”) holds your shares on your behalf.

As required by Canadian securities legislation, you will have received from your Nominee either a request for voting instructions or a proxy form for the number of Common Shares you hold.

Intact Financial Corporation | Management Proxy Circular 2020

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Table of Contents ESG Content Map

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

6. Reports of the Committees

4. Directors

1. Voting Information

3. Business of the Meeting

How do I vote my Common Shares?

You have two options to exercise your right to vote:

By proxy; or
Online at the Meeting

Option 1 – Voting by Proxy

Voting by proxy means giving someone else (the “Proxyholder”) the authority to attend the virtual Meeting and vote online for you in accordance with your instructions or as they see fit if you do not specify how you want to vote your Common Shares.

If there are any amendments to the items of business or any other matters that properly come before the Meeting (including where the Meeting will be reconvened if it was adjourned), your Proxyholder has the discretion to vote as they see fit, in each instance, to the extent permitted by law whether the amendment or other matter of business that comes before the Meeting is routine or contested.

Late proxies may be accepted or rejected by the chair of the Meeting at his or her discretion and the chair of the Meeting is under no obligation to accept or reject any particular late proxy. The chair of the Meeting may waive or extend the proxy cut-off without notice.

Shareholders are encouraged to vote in advance of the Meeting as described below. Even if you are planning to participate in the virtual Meeting, you should consider voting your shares by proxy in advance, to ensure your vote is counted if you later decide not to attend the virtual Meeting or in the event that you are unable to attend the Meeting for any reason.

Registered shareholders

Your package includes a proxy form. You may give your instructions in the following manner:

By Mail: Complete, sign and return the proxy form by mail in the postage-paid envelope provided;

By Fax: Complete, sign and return the proxy form by fax to Broadridge, at 1-866-623-5305;

Online: Go to www.proxyvote.com and follow the instructions. You will need your 16-digit control number located on your proxy form; or By Telephone: Call Broadridge toll free at 1-800-4747493 (English) or 1-800-474-7501 (French). You will need your 16-digit control number located on your proxy form.

Non-Registered shareholders

Your Nominee can only vote your Common Shares if they have received proper voting instructions from you. If you are a nonregistered shareholder, your package includes a Voting Instruction Form (“VIF”). Complete the VIF and follow the return instructions on the form. The VIF is similar to a proxy form, however it can only instruct your Nominee how to vote your Common Shares. You cannot use the VIF to vote your Common Shares directly.

Your Nominee is required by law to receive voting instructions from you before voting your Common Shares. Every Nominee has their own mailing procedures and instructions for returning the completed VIF, so be sure to follow the instructions provided on the VIF.

In order to be valid, the proxy form or VIF must be registered with Broadridge by internet, by mail, phone or by fax, no later than 12:00 p.m. (Eastern Time) on May 4, 2020, or, if the Meeting is adjourned, 24 hours (excluding Saturdays, Sundays and holidays) before the new date determined by adjournment of the Meeting. If you wish to return the proxy form by mail, you may use the postage-paid envelope provided. We however encourage you to use the online platform www.proxyvote.com, instead of mail, to reduce the risk related to mail disruption that may occur during the current COVID-19 pandemic.

Option 2 – Voting online at the virtual Meeting

Attending the Meeting online will give you an opportunity to hear directly from Management and the individuals who have been nominated to serve on our Board of Directors and ask questions in real time. You can vote online during the Meeting. Voting online at the Meeting will automatically cancel any proxy form or voting instruction form you completed and submitted earlier.

The webcast will be held at www.virtualshareholdermeeting.com/IFC2020 . To participate in the Meeting, you will need to login with the 16-digit control number on the form of proxy or VIF that accompanied your proxy materials. Online check-in will begin 15 minutes before the beginning of the Meeting. You should allow ample time to check-in to the Meeting and complete the check-in procedures. You will need to be connected to the internet at all times during the Meeting in order to vote when balloting commences. It is your responsibility to ensure internet connectivity for the duration of the Meeting. If your encounter any difficulties accessing the virtual Meeting during the check-in process or during the Meeting, please call the technical support number that will be posted on the virtual Meeting login page.

Intact Financial Corporation | Management Proxy Circular 2020

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Table of Contents ESG Content Map

1. Voting Information

3. Business of the Meeting 4. Directors

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

6. Reports of the Committees

Registered shareholders

You do not need to complete or return your proxy form. In order to attend and vote at the Meeting, go to the website www.virtualshareholdermeeting.com/IFC2020 and follow the instructions on the screen to login and vote during the Meeting. You will need your 16-digit control number on your form of proxy. Your voting instructions will then be conveyed electronically over the Internet during the Meeting.

If you have already submitted your voting instructions, you may still attend the Meeting as shareholder and may either choose to (i) vote your shares during the Meeting, revoking automatically your previous voting instructions or (ii) elect to maintain your voting instructions, and in this case, you will be able to participate in the Meeting and ask questions but you will not be able to vote again.

Non-Registered shareholders

If you want to attend the Meeting and vote yourself, you can appoint yourself as Proxyholder by printing your name in the space provided on the VIF and following the instructions provided.

If you have not appointed yourself as Proxyholder on the VIF, you may still attend the Meeting as shareholder and may either choose to (i) vote your shares during the Meeting, revoking automatically your previous Proxyholder appointment or (ii) elect to maintain your previous Proxyholder appointment, and in this case, you will be able to participate in the Meeting and ask questions but you will not be able to vote.

How will my common shares be voted if I return a proxy form/VIF?

Common Shares represented by a proxy form/VIF are to be voted for, against or withheld from voting by the Proxyholder designated in the proxy form/VIF as you instruct. If no instructions are given, the voting rights attached to the Common Shares will be exercised by any designated Proxyholder who is a Director and/or Officer of the Company by voting as follows:

FOR the appointment of the auditor;
FOR the election of each proposed Director nominated by Management;
FOR the approval of the resolution of the shareholders confirming the Amended and Restated Shareholder Rights Plan; and
FOR the approval of the non-binding advisory resolution of the shareholders to accept the approach to executive compensation disclosed in this Management Proxy Circular.

The proxy form/VIF confers on the designated Proxyholder discretionary authority with respect to any proposed amendments or variations to the matters set out therein and any other business which may properly come before the Meeting. As of April 3, 2020, Management of Intact Financial Corporation is not aware of any amendment or other matter which may properly come before the Meeting.

How do I appoint someone else to attend the virtual Meeting and vote my Common Shares online for me?

The Proxyholders designated in the proxy form/ VIF are Directors and/or officers of the Company. If you wish to appoint a Proxyholder other than one of the persons designated in the proxy form/VIF, you can do so online at www.proxyvote.com, by indicating the exact name of your appointee and creating a unique appointee identification number of eight characters (collectively the “Appointee Information”) which will allow your appointee to access the live webcast Meeting and vote your shares. The person you appoint does not need to be a Shareholder but must attend the virtual Meeting to vote your Common Shares.

You can also designate the Appointee Information by mail, telephone or fax, as described below. However, we encourage you to use the online platform of www.proxyvote.com to designate the Appointee Information, as this will reduce the risk related to mail disruption that may occur during the current COVID-19 pandemic.

You must provide your appointee the exact name and eight character appointee identification number that you created to access the Meeting. Appointees can only be validated at the virtual Meeting using the exact name and eight character appointee identification number you create.

If you do not designate the Appointee Information, or if you do not provide the exact appointee name and appointee identification number to the person who has been appointed to access and vote at the Meeting on your behalf, that other person will not be able to access the Meeting and vote on your behalf.

If the holder of Common Shares is a legal entity, an estate or trust, the proxy form/VIF must be signed by a duly authorized representative and accompanied by a certified resolution confirming such authorization.

Intact Financial Corporation | Management Proxy Circular 2020

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Table of Contents ESG Content Map

5. Corporate Governance Practices 6. Reports of the Committees

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

1. Voting Information

3. Business of the Meeting

4. Directors

In order to be valid, the proxy form or VIF must be registered with Broadridge by internet (www.proxyvote.com), by mail, phone at 1 800-474-7493 (English) or 1-800-474-7501 (French) or by fax at 1-866-623-5305, no later than 12:00 p.m. (Eastern Time) on May 4, 2020, or, if the Meeting is adjourned, 24 hours (excluding Saturdays, Sundays and holidays) before the new date determined by adjournment of the Meeting. If you wish to return the proxy form by mail, you may use the postage-paid envelope provided. We however encourage you to use the online platform www.proxyvote.com, instead related to mail, to reduce the risk related to mail disruption that may occur during the current COVID-19 pandemic.

What if I change my mind?

Registered Shareholders can revoke a proxy:

by delivering a written notice to that effect signed by you or your duly authorized representative(s) to Broadridge Investor Communications Corporation at Data Processing Centre, P.O. Box 3700 STN Industrial Park, Markham, ON, L3R 9Z9 no later than 12:00 p.m. (Eastern Time) on May 4, 2020, or if the Meeting is adjourned, 24 hours (excluding Saturdays, Sundays and holidays) before any continuation thereof after an adjournment;
by attending the virtual Meeting yourself and choosing to revoke your proxy following the instructions on the screen; or
in any other manner permitted by law.

If the shareholder is a legal entity, an estate or trust, the notice must be signed by an officer or attorney of the corporation duly authorized in writing by a resolution, a certified copy of which must be attached to the notice.

Non-Registered shareholders may revoke a VIF (or a waiver of the right to receive meeting materials and to vote) given to a Nominee at any time by written notice to the Nominee, except that a Nominee is not required to act on a revocation of a VIF (or of a waiver of the right to receive materials and to vote) that is not received by the Nominee at least seven (7) days prior to the Meeting. Non-Registered shareholders can also revoke their VIF by attending the virtual Meeting and choosing to revoke their VIF following the instructions on the screen.

Is my vote confidential?

Yes, in order to protect the confidential nature of voting by proxy, the votes exercised by proxy are received and compiled for the Meeting by Broadridge, the duly appointed service provider of the Company for the Meeting. Broadridge submits a copy of the proxy form to the Company only when a shareholder clearly wishes to communicate with Management or when there is a legal requirement to do so. The votes exercised during the virtual Meeting will also be kept confidential.

Intact Financial Corporation | Management Proxy Circular 2020

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Table of Contents ESG Content Map

1. Voting Information

3. Business of the Meeting

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

6. Reports of the Committees

4. Directors

2. General Information

Date of Information

The information contained in the Circular is given as at April 3, 2020, except where otherwise noted.

Glossary of Terms

Capitalized terms used in this Circular are defined in the glossary provided on page 119 of this Circular.

Currency

Unless indicated otherwise, all amounts are in Canadian dollars and “$” or “dollars” refer to Canadian dollars.

Non-IFRS financial measures

We use both IFRS and non-IFRS financial measures to assess our performance. Non-IFRS financial measures do not have standardized meanings prescribed by IFRS and may not be comparable to similar measures used by other companies in our industry. For additional information on the non-IFRS measures included in this Circular, please refer to Section 31 – Non-IFRS financial measures of the Management’s Discussion and Analysis for the year ended December 31, 2019 available on SEDAR (www.sedar.com).

Non-IFRS financial measures and other insurance-related terms used in this Circular are defined in the glossary available in the “Investors” section of our web site at www.intactfc.com.

Notice and Access

As permitted by the Canadian Securities Administrators, the Company is using the Notice and Access rules to deliver this Circular to shareholders. Notice and Access allows the Company to post the Circular and other relevant materials online instead of mailing it out to each shareholder, saving substantial printing and mailing costs and greatly reducing the Company’s paper consumption.

Shareholders will receive a Notice of Meeting, along with the proxy or voting instruction form, giving instructions on how to access this Circular and other relevant materials (including the 2019 Annual Report – see below) on SEDAR (www.sedar.com) and on the Company’s website (www.intactfc.com) and how to request a paper copy of the Circular free of charge.

The 2019 Annual Report, including the consolidated financial statements of the Company for the year ended December 31, 2019, together with the auditor’s report thereon, and Management’s Discussion and Analysis of the financial position and results of operations are also available online on SEDAR (www.sedar.com) and on the Company’s website (www.intactfc.com), in accordance with notice and access. No vote will be taken at the Meeting in respect of the Company’s 2019 Annual Report.

Share Capital and Principal Holders

The Company has an authorized share capital consisting of an unlimited number of Common Shares and an unlimited number of Class A Shares.

To the knowledge of the Directors and officers of the Company, no individual or corporation beneficially owns, directly or indirectly, or exercises control or direction over Common Shares carrying more than 10% of the voting rights attached to the Common Shares of the Company.

Shareholder proposals

The Canada Business Corporations Act permits certain eligible shareholders of the Company to submit shareholder proposals to the Company for inclusion in a management proxy circular for an annual meeting of shareholders. No shareholder proposals were submitted for consideration at the 2020 Annual and Special Meeting of Shareholders. The final date by which the Company must receive shareholder proposals for the annual meeting of shareholders of the Company to be held in 2021 is December 30, 2020.

Further information relating to Intact Financial Corporation may be obtained from its website at www.intactfc.com and from the SEDAR website at www.sedar.com. Financial information is provided in the Company’s consolidated financial statements and management’s discussion and analysis for the fiscal year ended December 31, 2019 and these documents are accessible through SEDAR.

Intact Financial Corporation | Management Proxy Circular 2020

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Table of Contents ESG Content Map

1. Voting Information 2. General Information

3. Business of the Meeting

5. Corporate Governance Practices 6. Reports of the Committees

7. Statement on Executive Compensation 8. Approval of the Board of Directors

4. Directors

3. Business of the Meeting

Where to find it

3.1	Financial Statements	14
3.2	Appointment of Auditor	14
3.3	Election of Directors	15
3.4	Approval of the Amended and Restated Shareholder
	Rights Plan	15
3.5	Shareholder Advisory Vote on Approach to Executive
	Compensation	17
3.6	Other Business	17

3.1 Financial Statements

You can find the Company’s consolidated financial statements for the year ended December 31, 2019 in our 2019 Annual Report.

3.2 Appointment of Auditor

On the advice of the Audit Committee, the Board of Directors recommends voting FOR the appointment of the accounting firm of Ernst & Young LLP as auditor of the Company for the financial year commencing January 1, 2020 and ending December 31, 2020 and to hold office until the next Annual Meeting of the Shareholders. EY has served as auditor of Intact Financial Corporation and its predecessor companies since 1993. Please note that the lead audit partner in charge of the services provided to the Company and its property and casualty insurance subsidiaries is replaced every seven (7) years.

EY was appointed as auditor of Intact Financial Corporation at the 2019 annual meeting of Shareholders of the Company. The detailed voting results of the past two years concerning the appointment of the auditor are set out below:

Year	Votes for	% of Votes for	Votes Withheld	% Votes Withheld
2019	102,579,460	95.10%	5,284,856	4.90%
2018	106,623,361	95.84%	4,629,927	4.16%

Pre-approval of External Auditor Services

As part of the Company’s corporate governance practices, the Audit Committee has adopted a policy restricting non-audit services that may be provided by EY to the Company or its subsidiaries. Prior to the engagement of the External Auditor for non-audit services, the Audit Committee must pre-approve the provision of such services with due consideration to avoiding an impact on auditor independence. This includes consideration of applicable regulatory requirements and guidance and the Company’s own internal policies. Fees paid to the External Auditor for 2018 and 2019 are as follows:

Intact Financial Corporation | Management Proxy Circular 2020

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Table of Contents ESG Content Map

1. Voting Information

3. Business of the Meeting 4. Directors

5. Corporate Governance Practices 6. Reports of the Committees

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

Auditor Fees

==> picture [488 x 64] intentionally omitted <==

----- Start of picture text -----

(in thousands of dollars) 2019 2018
Audit Fees [(1) ] 4,360 3,694
Audit-Related Fees [(2) ] 372 398
Tax Fees [(3) ] 147 789
All Other Fees – 4
Total 4,879 4,885
----- End of picture text -----

Notes:

(1) Audit fees are for professional services provided by the External Auditor for the audit and review of the Company’s financial statements or services that are normally provided by the External Auditor in connection with statutory and regulatory filings or engagements. Audit fees include fees in relation to the audit of the Company’s annual financial statements and those of its subsidiaries, review of the Company’s interim financial statements, consultations concerning financial accounting and reporting standards, prospectus services, as well as translation services related to financial statements and prospectuses. Audit fees for 2019 included those related to the audit of On Side acquired in October 2019 and The Guarantee and FCC acquired in December 2019.

(2) Audit-related fees are for assurance and related services performed by the External Auditor not reported as audit fees and include due diligence services, accounting consultation related to future accounting standards, employee benefit plan audits and translation services of information other than financial statements and prospectuses.

(3) Tax fees are mainly related to assistance on tax audit matters and tax advisory services.

Information regarding the Audit Committee as disclosed in the Company’s 2019 Annual Information Form at page 23 is hereby incorporated by reference. The AIF is available on SEDAR at www.sedar.com, and upon request, shareholders may obtain a copy delivered free of charge.

3.3 Election of Directors

Unless otherwise indicated, all nominees are now members of the Board of Directors and have been Directors of the Company since the dates indicated. Directors elected at the Meeting will hold office from the close of the Meeting until the next annual meeting or until their successors are elected or appointed.

If no instructions were given, any designated Proxyholder who is a Director and/or an officer of the Company will vote FOR the election of each proposed Director nominee listed in the Circular.

▶ See pages 18 to 31 for more information about the Director nominees

3.4 Approval of the Amended and Restated Shareholder Rights Plan

The Board of Directors of Intact Financial Corporation approved an amended and restated shareholder rights plan on April 19, 2017. The Amended and Restated Rights Plan was then adopted by the shareholders of Intact Financial Corporation at the annual and special meeting of shareholders held on May 3, 2017. Under its terms, the Amended and Restated Rights Plan must be reconfirmed by a resolution passed by more than 50% of the votes cast by all holders of Common Shares of the Company who vote in respect of such reconfirmation at every third annual meeting of shareholders of Intact Financial Corporation following the May 3, 2017 meeting.

On February 4, 2020, the Board of Directors, after examination, determined, for reasons more fully detailed below, that it is in the best interests of the Company and its shareholders to maintain a shareholder rights plan for another three-year term and adopted the Amended and Restated Rights Plan without any change. The Company asks that shareholders consider, and, if deemed advisable, approve the resolution (the text of which is set out below) ratifying, reconfirming and reapproving the Amended and Restated Rights Plan. If the Rights Plan Resolution is not passed, the Amended and Restated Rights Plan shall terminate and be void and of no further force and effect on and from the date of termination of the Meeting. If the Rights Plan Resolution is passed, the Amended and Restated Rights Plan will require reconfirmation by the shareholders at the 2023 annual meeting of shareholders.

Intact Financial Corporation | Management Proxy Circular 2020

Page 15

Table of Contents ESG Content Map

1. Voting Information

3. Business of the Meeting

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

6. Reports of the Committees

4. Directors

Background and Relevant Considerations

Unequal Treatment

While the May 2016 amendments to the Canadian take-over bid regime addressed many of the concerns that justified the adoption of the Company’s shareholder rights plan in the first place, there remains the possibility that control of a company may be acquired pursuant to private agreements in which a small group of shareholders disposes of shares at a premium to market price, which premium is not shared by the other shareholders. Also, a person may slowly accumulate Common Shares through stock exchange acquisitions which may result, over time, in the acquisition of control without payment of fair value for control or fair sharing of any control premium among all shareholders. The Amended and Restated Rights Plan aims to address such concerns, to require that bids be made to all shareholders and to prevent a potential acquirer from entering into lock-up agreements with existing shareholders prior to launching a take-over bid, except for permitted lock up agreements as specified in the Amended and Restated Rights Plan.

Other Considerations

The Amended and Restated Rights Plan does not inhibit shareholders from exercising their rights as shareholders under the Company’s corporate statute, the Canada Business Corporations Act . These rights include the right to solicit proxies to promote a change in the composition of the Board of Directors and to requisition a shareholders meeting to transact any proper business stated in the requisition. In addition, the Amended and Restated Rights Plan does not affect the financial condition of the Company. Finally, the issuance of rights has not changed and will not change the manner in which shareholders currently trade their Common Shares.

Summary of the Amended and Restated Rights Plan

The material terms of the Amended and Restated Rights Plan are summarized in Schedule “A” and have not been amended further since it was approved by the Board of Directors of the Company on April 19, 2017 and by the shareholders of the Company on May 3, 2017. This summary is qualified in its entirety by reference to the actual provisions of the Amended and Restated Rights Plan, a copy of which is available on the SEDAR website at www.sedar.com, or upon request from the Office of the Corporate Secretary of the Company. Certain definitions of the Amended and Restated Rights Plan have been summarized at the end of Schedule “A” for ease of reference.

Approval

As mentioned above, to be effective, the Rights Plan Resolution must be approved by more than 50% of the votes cast by all holders of Common Shares of the Company who vote in respect of such resolution.

If no instructions were given, any designated Proxyholder who is a Director and/or an Officer of the Company will vote FOR the approval of the Amended and Restated Rights Plan.

The Board of Directors recommends that shareholders approve the following resolution:

“BE IT RESOLVED, THAT:

(1) The Amended and Restated Shareholder Rights Plan Agreement dated April 19, 2017 between the Company and Computershare Investor Services Inc. be and is hereby ratified, reconfirmed and reapproved.

(2) Any director or officer of Intact Financial Corporation is authorized to do all such acts and things and to execute and deliver all such instruments, agreements and other documents as in such person’s opinion may be necessary or desirable in connection with the foregoing to give full effect to this resolution.”

Intact Financial Corporation | Management Proxy Circular 2020

Page 16

Table of Contents ESG Content Map

1. Voting Information

3. Business of the Meeting

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

6. Reports of the Committees

4. Directors

3.5 Shareholder Advisory Vote on Approach to Executive Compensation

The Board of Directors believes that shareholders should have the opportunity to fully understand the objectives, philosophy and principles that the Board of Directors has used to make executive compensation decisions. It is the Board of Directors’ intention that this shareholder advisory vote will form an important part of the ongoing process of engagement between shareholders and the Board of Directors on compensation.

97.5%

average approval on say-on-pay since first adopted in 2011.

The approach to Executive Compensation was accepted by a majority of shareholders in 2019. The detailed voting results of the past two years concerning the Advisory Resolution on the Approach to Executive Compensation are set out below:

Year 2019	Votes for 104,122,144	% of Votes for 96.96%	Votes Against 3,263,537	% Votes Against 3.04%
2018	104,693,958	94.14%	6,517,032	5.86%

The “Statement on Executive Compensation” section discusses the Board of Directors’ compensation philosophy, the objectives of the different elements of the Company’s compensation programs and the way the Board of Directors assesses performance and makes decisions. It explains how the Company’s compensation programs are centered on a pay-for-performance culture and are aligned with strong risk management principles and the long-term interests of shareholders. Furthermore, in the event that 25% or more of the shareholders vote against the approach to executive compensation disclosed in the Company’s Circular delivered in advance of the Meeting, the Board of Directors will engage with the shareholders to better understand and respond to their concerns. This disclosure has been approved by the Board of Directors on the recommendation of the HRC Committee with the support of the HRC Committee’s external consultant, Willis Towers Watson.

Please see the “Statement on Executive Compensation” ▶ If there are specific concerns you wish to discuss, section starting on page 82 of this Circular for more please consult the “How to contact us” section of the information on compensation matters. Circular for contact information.

If no instructions were given, any designated Proxyholder who is a Director and/or an officer of the Company will vote FOR the approval of the Advisory Resolution on the Approach to Executive Compensation.

The Board of Directors recommends that shareholders approve the following non-binding advisory resolution:

“BE IT RESOLVED, on a non-binding and advisory basis and not to diminish the role and responsibilities of the Board of Directors, that the shareholders accept the approach to executive compensation disclosed in the Company’s management proxy circular delivered in advance of the 2020 annual and special meeting of shareholders.”

3.6 Other Business

As of the date of this Circular, the Company is not aware of any changes to the items described above and does not expect any other items to be brought forward at the Meeting. If there are changes or new items, your Proxyholder can vote your shares on these items as he or she sees fit.

Intact Financial Corporation | Management Proxy Circular 2020

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Table of Contents ESG Content Map

1. Voting Information 2. General Information

3. Business of the Meeting 4. Directors

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

6. Reports of the Committees

4. Directors

Where to find it

4.1	Nominees	18
4.2	Director Compensation	32
	Total Compensation Paid to Directors in 2019	32
	Directors’ Compensation for 2019 and 2020	32
	Director Share Ownership Requirement Policy	34
	Information on DSU and Share Purchase Plan
	for Non-Related Directors	35
	Outstanding Director Share-Based Awards	36
4.3	Additional Information Regarding Directors	36
	Board of Directors and Committee Meetings in 2019	36
	Committee Composition and Director Independence	37
	Director Attendance	37
	Supplementary Information relating to Directors	38
	Attendance of Director whose term ended in 2019	38
	Attendance of Director whose term will end in 2020	38

4.1 Nominees

The twelve (12) nominees are profiled below, including their background and experience, key skills, meeting attendance, past annual meeting voting results, share ownership, and other public company boards served on during the past five years. Please note that, unless otherwise indicated, the information hereunder as to Common Shares and deferred share units beneficially owned or controlled, directly or indirectly, has been furnished by each of the nominees, as of December 31, 2019 and, with respect to non-executive Directors, includes Common Shares and DSUs received in early 2020 for services rendered in the fourth quarter of 2019. Unless otherwise indicated, all of the nominees are now members of the Board of Directors and have been Directors of the Company since the dates indicated.

Ms. Eileen Mercier, who has been a Director of the Company since 2004, will not be standing for re-election to the Board of Directors in 2020. Ms. Mercier has been a formidable presence on the Board of Directors of the Company and before that on its Advisory Board, offering the benefit of her extensive knowledge and experience in support of the Company’s significant growth and development over the last twenty years. Her skills in the areas of finance, corporate governance and risk management served the Company well through her leadership of our Audit and Compliance Review and Corporate Governance committees as well as her service on our Investment and Risk committees. Ms. Mercier has also been a trailblazer and model for women across Canada and in the Company, being recognized on multiple occasions as a Top 100 Most Powerful Women in Canada, culminating with her admission to the WXN Hall of Fame. The Company is very grateful for the time and energy she has contributed to advancing our vision and values and would like to reiterate its deepest thanks for her service.

Stuart J. Russell is a new Director nominee at this year’s Board of Directors election.

See page 53 for more information about Intact’s Majority Voting Policy for the election of Directors.

Management does not contemplate that any of the proposed nominees will be unable to serve as a Director but, if that should occur for any reason prior to the Meeting, the Board of Directors or Management representatives designated in the proxy form/VIF reserve the right to vote for another nominee at their discretion. All elected Directors of the Company will hold office until the next annual meeting of shareholders of the Company or until their successors are elected or appointed.

Intact Financial Corporation | Management Proxy Circular 2020

Page 18

Table of Contents 1. Voting Information ESG Content Map 2. General Information

5. Corporate Governance Practices 6. Reports of the Committees

7. Statement on Executive Compensation 8. Approval of the Board of Directors

3. Business of the Meeting

4. Directors

Should all twelve (12) nominees profiled below be elected, the geographic mix, gender diversity and average tenure of the Board of Directors for 2020 will be the following as compared to 2019:

Gender 2019

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Male 58%
Female 42%
2019
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Gender 2020

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Male 67%
Female 33%
2020
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Geographic mix 2019

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Canada 75%
U.S. 25%
2019
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Geographic mix 2020

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Canada 67%
U.S. 33%
2020
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Tenure 2019

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0–4 years 33%
5–8 years 17%
9–12 years 25%
Over 12 years 25% 2019
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Tenure 2020

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0–4 years 33%
5–8 years 25%
9–12 years 25%
Over 12 years 17% 2020
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See pages 55 and 56 as well as 60 to 64 for more information about Director tenure and diversity, respectively.

Intact Financial Corporation | Management Proxy Circular 2020

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Table of Contents ESG Content Map

3. Business of the Meeting

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

6. Reports of the Committees

4. Directors

1. Voting Information

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Québec City, Québec, Canada

Director since: 2000

Age: 65

Key Skills

Governance
Investment management
P&C operations
Risk management
Strategic leadership / Senior Executive

Claude Dussault, B.Sc. | Independent Director

Mr. Dussault is currently President of ACVA Investing Corporation which is a privately held investment company. Mr. Dussault has been Chair of the Board of Directors of Intact Financial Corporation since January 1, 2008 and was President and Chief Executive Officer of the Company from 2001 to the end of 2007. Mr. Dussault has been a director of Intact Financial Corporation and its P&C insurance subsidiaries since 2000. He is a Fellow of the Canadian Institute of Actuaries and the Casualty Actuarial Society; he graduated from Université Laval with a Bachelor of Actuarial Sciences degree and has completed the Advanced Executive Education Program at the Wharton School of Business.

Board and Committee Membership 2019 Meeting Attendance	Board and Committee Membership 2019 Meeting Attendance
Board(Chair) 6/6(100%)

Past Annual Meeting Voting Results
Year Votes for % of Votes fo	r Votes Withheld % Votes Withheld
2019 104,355,310 97.18%	3,030,371 2.82%
2018 107,882,087 97.01%	3,328,903 2.99%

Securities Held – 2018	Securities Held – 2019
Common Shares 32,411 DSUs 13,349 Total Common Shares and DSUs 45,760	Common Shares 32,411
	DSUs 15,374
	Total Common Shares and DSUs 47,785

Director Share Ownership Requirement
4x Annual Retainer in Common Shares and/or DSUs Met

Other Public Company Board Memberships During the Last Five (5) Years
Metro Inc. 2005 topresent
Cominar REIT 2017 to 2019

Intact Financial Corporation | Management Proxy Circular 2020

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Table of Contents ESG Content Map

1. Voting Information

3. Business of the Meeting

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

6. Reports of the Committees

4. Directors

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Toronto, Ontario, Canada

Director since: 2008

Age: 49

Key Skills

International Markets
P&C operations
Risk management
Strategic leadership / Senior Executive
Talent Management / Executive Compensation

Charles Brindamour, B.Sc. | Chief Executive Officer

Charles Brindamour is Chief Executive Officer of Intact Financial Corporation, the largest provider of property and casualty insurance in Canada and a leading provider of specialty insurance in North America. He began his career with Intact in 1992 and has held progressively senior roles, in Canada and abroad, within Intact and its former affiliates, including Senior Vice President of Personal Lines, Executive Vice President and Chief Operating Officer. Mr. Brindamour was appointed President and CEO in January 2008.

Under Mr. Brindamour’s leadership, the company became an independent and widely-held Canadian company in 2009 and two years later, acquired AXA Canada; the largest acquisition in the history of Canada’s property and casualty insurance (P&C) industry. In 2017, Mr. Brindamour grew the company’s presence further into the United States with the acquisition of OneBeacon Insurance Group, Ltd., creating a North American leader in specialty insurance with over $2 billion of annual premiums.

Mr. Brindamour is a graduate of Université Laval in Actuarial Science and an Associate of the Casualty Actuarial Society. In May 2019, Mr. Brindamour received an honorary PhD from HEC Montréal. He is Chair of the Board of the Geneva Association and a board member of Intact Financial Corporation, the Canadian Imperial Bank of Commerce, Branksome Hall and the Business Council of Canada.

Board and Committee Membership	2019 Meeting Attendance
Board	6/6(100%)

Past Annual Meeting Voting Results
Year Votes for % of Votes fo	r Votes Withheld % Votes Withheld
2019 107,258,559 99.88%	127,122 0.12%
2018 109,992,489 98.90%	1,218,501 1.10%

Securities Held – 2018	Securities Held – 2019
Common Shares 234,790 RSUs 38,870 PSUs* 90,696 Total Common Shares,RSUs and PSUs 364,356	Common Shares 264,356
	RSUs* 45,265
	PSUs** 105,617
	Total Common Shares,RSUs and PSUs 415,238

Senior Executive Share Ownership Requirement
2x Annual LTIP target in Common Shares	Met

Other Public Company Board Memberships During the Last Five (5) Years
Canadian Imperial Bank of Commerce 2020 topresent
Hydro One Limited 2015 to 2018

Refers to Restricted Share Units that automatically vest three years following grant on a one for one basis into Common Shares of Intact Financial Corporation. Restricted Share Units are uniquely granted to members of Management of the Company. See pages 94 to 96 for further details.

** Refers to Performance Share Units which reward operational excellence. The PSU payouts are based on IFC’s threeyear average ROE relative to the industry. Unvested PSUs are not included in the ownership calculation for purposes of the senior executive share ownership policy.

Intact Financial Corporation | Management Proxy Circular 2020

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Table of Contents ESG Content Map

1. Voting Information 2. General Information

3. Business of the Meeting 4. Directors

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

6. Reports of the Committees

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Toronto, Ontario, Canada

Director since: 2013

Age: 59

Key Skills

Financial Services
Governance
Government / Public affairs
International markets
Talent Management / Executive Compensation

Janet De Silva, MBA | Independent Director

In 2015, Ms. De Silva was named President & CEO of the Toronto Region Board of Trade, one of the largest and most influential business organizations in North America. Prior to this role, she had 14 years of international CEO experience in Asia leading Sun Life Financial’s businesses in Hong Kong and Mainland China. She co-founded and later sold Retail China Limited, a company that worked with international retail brands operating their retail stores and managing their franchises in China. Ms. De Silva was also Dean of Ivey Asia, leading the Hong Kong campus and mainland China operations of Ivey Business School at Western University. She presently serves as a board member of Blue Umbrella Limited, a global compliance technology company headquartered in Hong Kong. She is a past member of the board of the Asian Corporate Governance Association. She has served terms both as Chair and President of the Canadian Chamber of Commerce in Hong Kong and Chair of the Canada China Business Council, Beijing. In 2019, Ms. De Silva was appointed by Prime Minister Justin Trudeau to represent Canada on the APEC Business Advisory Council. Ms. De Silva holds an MBA from the Ivey Business School at Western University and a Doctor of Law honoris causa from Thompson Rivers University.

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Board and Committee Membership 2019 Meeting Attendance
Board 6/6 (100%)
Compliance Review and Corporate Governance Committee 4/4 (100%)
Human Resources and Compensation Committee 4/4 (100%)
Past Annual Meeting Voting Results
Year Votes for % of Votes for Votes Withheld % Votes Withheld
2019 106,795,737 99.45% 589,944 0.55%
2018 108,209,856 97.30% 3,001,134 2.70%
Securities Held – 2018 Securities Held – 2019
Common Shares 5,310 Common Shares 5,310
DSUs 6,409 DSUs 8,401
Total Common Shares and DSUs 11,719 Total Common Shares and DSUs 13,711
Director Share Ownership Requirement
4x Annual Retainer in Common Shares and/or DSUs Met
Other Public Company Board Memberships During the Last Five (5) Years
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Intact Financial Corporation | Management Proxy Circular 2020

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Table of Contents ESG Content Map

1. Voting Information 2. General Information

3. Business of the Meeting

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

6. Reports of the Committees

4. Directors

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Toronto, Ontario, Canada

Director since: 2019

Age: 62

Key Skills

Financial expertise
Financial services
Governance
Legal and regulatory affairs
Risk management

Jane E. Kinney, FCPA, FCA | Independent Director

With over 30 years of experience in the financial services sector, Ms. Kinney is a recognized leader in governance, risk management, regulatory compliance and internal audit services. She is a recently retired Vice Chair of Deloitte and a former member of its leadership team. Prior to that role, she occupied various positions at Deloitte including that of Canadian Managing Partner, Quality & Risk and of Global Chief Risk Officer. She is also a former member of Deloitte’s Board of Directors and Risk Committee. Ms. Kinney’s governance and risk experience includes numerous reviews and independent evaluations of organizations responding to regulator findings. A substantial portion of her practice has focused in the evolving areas of Risk Governance and Risk Appetite.

Ms. Kinney is an active member of the community and a member of various boards, including the Perimeter Institute for Theoretical Physics, Women’s College Hospital Foundation and Toronto Finance International where she is Chair of the Board. She also is a long-time supporter and the current Chair of the Patron’s Council of the Alzheimer Society of Toronto. Since 2019, she is a board member of Cenovus Energy Inc. She is a leader of her profession and has been recognized as a Fellow of the Chartered Professional Accountants of Ontario in addition to being a frequent speaker at conferences focusing on Regulatory Compliance, Internal Audit, Corporate Governance and Enterprise Risk Management. Ms. Kinney has a Mathematics degree from the University of Waterloo and was recognized with an Alumni Achievement Award in 2013. She has been an advocate for women throughout her career and was recognized as one of Canada’s Most Powerful Women in 2014.

Board and Committee Membership 2019 Meeting Attendance	Board and Committee Membership 2019 Meeting Attendance
Board 3/3(100%)*
Audit Committee 2/2(100%)**
Risk Management Committee 2/2(100%)***

Past Annual Meeting Voting Results
Year Votes for % of Votes fo	r Votes Withheld % Votes Withheld
2019 107,335,542 99.95%	50,139 0.05%

Securities Held – 2018	Securities Held – 2019
Common Shares 500 DSUs – Total Common Shares and DSUs 500	Common Shares 500
	DSUs 1,134
	Total Common Shares and DSUs 1,634

Director Share Ownership Requirement
4x Annual Retainer in Common Shares and/or DSUs Has until May8,2024 to comply

Other Public Company Board Memberships During the Last Five (5) Years
Cenovus EnergyInc. 2019 - Present

Ms. Kinney was elected a member of the Board of Directors effective May 8, 2019. She attended every meeting held in 2019 following her election.
** Ms. Kinney was appointed a member of the Audit Committee effective May 8, 2019. She attended every meeting held in 2019 following her appointment. *** Ms. Kinney was appointed a member of the Risk Management Committee effective May 8, 2019. She attended every meeting held in 2019 following her appointment.

Intact Financial Corporation | Management Proxy Circular 2020

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Table of Contents ESG Content Map

1. Voting Information 2. General Information

3. Business of the Meeting

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

6. Reports of the Committees

4. Directors

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North Palm Beach, Florida, USA

Director since: 2015

Age: 59

Key Skills

Corporate social responsibility
Investment management
Financial expertise
Risk management
Strategic leadership / Senior Executive

Robert G. Leary, J.D. | Independent Director

Mr. Leary is a corporate director. He was previously CEO of The Olayan Group, a private international investor and a diverse commercial and industrial group with operations globally. Mr. Leary was also previously CEO of Nuveen, a U.S. based investment management firm that was acquired in 2014 by TIAA-CREF (Teachers Insurance & Annuity Association – College Retirement Equities Fund), now known as TIAA. Mr. Leary had joined TIAA-CREF in 2013 and was instrumental in the acquisition and invigoration of Nuveen as well as its integration with TIAA’s pre-existing asset management business. In that role, Mr. Leary oversaw the expansion of TIAA / Nuveen’s socially responsible and ESG assets under management. Mr. Leary began his career as a lawyer for White & Case in New York, and then moved into the financial services arena with J.P. Morgan & Co., where he led the development of fixed-income derivative applications and investment strategies for pension plans and other investment managers. In the course of more than 20 years in the industry, Mr. Leary helped build AIG Financial Products’ investment business and led all of its client-facing businesses from marketing to distribution globally, and later was CEO of ING Investment Management Americas and ING Insurance U.S. At ING U.S., he was responsible for the investment management, retirement, insurance and annuity businesses, as well as operations, IT and marketing in the U.S. He has been a frequent speaker or panelist at numerous industry conferences and has appeared in major financial media. He earned his bachelor’s degree in political science at Union College and his law degree from Fordham University School of Law.

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Board and Committee Membership 2019 Meeting Attendance
Board 6/6 (100%)
Audit Committee 5/5 (100%)
Risk Management Committee (Chair) 4/4 (100%)
Joint Meeting - Audit and Risk Management Committee 1/1 (100%)
Past Annual Meeting Voting Results
Year Votes for % of Votes for Votes Withheld % Votes Withheld
2019 107,342,376 99.96% 43,305 0.04%
2018 110,862,672 99.69% 348,318 0.31%
Securities Held – 2018 Securities Held – 2019
Common Shares 2,645 Common Shares 2,645
DSUs 7,732 DSUs 9,862
Total Common Shares and DSUs 10,377 Total Common Shares and DSUs 12,507
Director Share Ownership Requirement
4x Annual Retainer in Common Shares and/or DSUs Met
Other Public Company Board Memberships During the Last Five (5) Years
Citizens Financial Group, Inc. Standing for election at the upcoming annual
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Standing for election at the upcoming annual meeting of shareholders on April 23, 2020

Intact Financial Corporation | Management Proxy Circular 2020

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Table of Contents ESG Content Map

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

6. Reports of the Committees

4. Directors

1. Voting Information

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Québec City, Québec, Canada

Director since: 2017

Age: 60

Key Skills

Financial expertise
P&C Operations
Risk management
Strategic leadership / Senior Executive
Talent Management / Executive Compensation

3. Business of the Meeting

Sylvie Paquette, B.Sc. | Independent Director

Sylvie Paquette has spent her entire career in the P&C insurance industry in Canada. She joined Desjardins Group in 1984 and held a variety of progressively senior roles within the organization before being promoted in 2008 to Senior Executive Vice-President and General Manager of the Group’s P&C insurance division as well as President and Chief Operating Officer of Desjardins General Insurance Group (DGIG). During Ms. Paquette’s tenure as President and COO, she spearheaded Desjardins’ acquisition of State Farm’s Canadian operations in 2015. She retired from Desjardins Group in December 2016.

Ms. Paquette has been actively involved in key industry associations. In recent years, she was a Board member of the Insurance Bureau of Canada (Chair in 2015 and 2016), of the General Insurance Statistical Agency, of the Institute for Catastrophic Loss Reduction and of the Centre for Insurance and Financial Services Development (Chair from 2009 to 2014). Throughout her career, Ms. Paquette has co-chaired major fundraising campaigns and she now sits on the Board of Laval University’s Foundation. Ms. Paquette is a graduate of the Actuarial Science program at Laval University. She is also certified as a corporate director (Administrateur de sociétés certifié (ASC)) by the Collège des administrateurs de sociétés .

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Board and Committee Membership 2019 Meeting Attendance
Board 6/6 (100%)
Audit Committee 5/5 (100%)
Risk Management Committee 4/4 (100%)
Joint Meeting - Audit and Risk Management Committee 1/1 (100%)
Past Annual Meeting Voting Results
Year Votes for % of Votes for Votes Withheld % Votes Withheld
2019 107,343,751 99.96% 41,930 0.04%
2018 111,098,306 99.90% 112,684 0.10%
Securities Held – 2018 Securities Held – 2019
Common Shares 2,000 Common Shares 2,000
DSUs 3,646 DSUs 5,602
Total Common Shares and DSUs 5,646 Total Common Shares and DSUs 7,602
Director Share Ownership Requirement
4x Annual Retainer in Common Shares and/or DSUs Met
Other Public Company Board Memberships During the Last Five (5) Years
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Intact Financial Corporation | Management Proxy Circular 2020

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Table of Contents ESG Content Map

1. Voting Information

3. Business of the Meeting

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

6. Reports of the Committees

4. Directors

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Toronto, Ontario, Canada

Director since: 2010

Age: 64

Key Skills

Governance
International Markets
Marketing / Brand awareness
Strategic leadership / Senior Executive
Talent Management / Executive Compensation

Timothy H. Penner, BBA | Independent Director

Tim Penner served as President of Procter & Gamble Inc. (Canada) from 1999 to 2011, when he retired after 33 years with the company. He has extensive international experience, as Vice President of P&G’s Health and Beauty Care business in the UK and Ireland, and later as Vice President of P&G’s North American Tissue/Towel business in Cincinnati, Ohio. He is currently a member of the boards of Jamieson Wellness Inc., SickKids Hospital, Club Coffee, The Beer Store and Notch Therapeutics. Mr. Penner is past Chair of the YMCA of Greater Toronto, GS-1, Food & Consumer Products of Canada as well as the Toronto Innovation Acceleration Partners (at the time named “MaRS Innovation”). He served on the boards of the Youth Challenge Fund and Career Bridge and was Chair of the United Way of Greater Toronto 2007 Campaign, after serving as Deputy Chair for 2006. Mr. Penner holds a bachelor’s degree in business administration from Wilfrid Laurier University.

Board and Committee Membership 2019 Meeting Attendance	Board and Committee Membership 2019 Meeting Attendance
Board 6/6(100%)
Compliance Review and Corporate Governance Committee 4/4(100%)
Human Resources and Compensation Committee(Chair) 4/4(100%)

Past Annual Meeting Voting Results
Year Votes for % of Votes for Votes Withheld % Votes Withheld
2019 106,726,944 99.39%	658,737 0.61%
2018 107,980,144 97.09%	3,230,846 2.91%

Securities Held – 2018	Securities Held – 2019
Common Shares 18,352 DSUs 0 Total Common Shares and DSUs 18,352	Common Shares 18,765
	DSUs 0
	Total Common Shares and DSUs 18,765

Director Share Ownership Requirement
4x Annual Retainer in Common Shares and/or DSUs	Met

Other Public Company Board Memberships During the Last Five (5) Years
Jamieson Wellness Inc. 2019 topresent

Intact Financial Corporation | Management Proxy Circular 2020

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Table of Contents ESG Content Map

1. Voting Information 2. General Information

3. Business of the Meeting

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

6. Reports of the Committees

4. Directors

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Berkeley, California, USA

Age: 58

Key Skills

Technology
Talent Management / Executive Compensation
Corporate social responsibility
Strategic leadership / Senior Executive
Risk Management

Stuart J. Russell, Ph.D. | New Director Nominee (Independent)

Mr. Russell is a pioneer researcher in Artificial Intelligence (“AI”) who co-authored in the mid1990s Artificial Intelligence: A Modern Approach , the leading textbook in the field. His research on AI covers a broad range of topics including machine learning, probabilistic reasoning, knowledge representation, planning and real-time decision making. He joined the faculty of the University of California at Berkeley in 1986 and is a Professor (and formerly Chair) of Electrical Engineering and Computer Sciences and holder of the Smith-Zadeh Chair in Engineering. Mr. Russell also served as Vice-Chair of the World Economic Forum’s Council on AI and Robotics, and he is a co-founder and Vice-President of Bayesian Logic, Inc., a data analysis start-up under contract with the United Nations Comprehensive Nuclear-Test-Ban Treaty Organization. Mr. Russell is also a member of the advisory boards of Varo Money, Inc., ReciTAL SAS, Planet Labs Inc., Faculty Science Ltd. and Semiotic Labs BV.

Mr. Russell is a recipient of the Presidential Young Investigator Award of the National Science Foundation, the IJCAI Computers and Thought Award, the World Technology Award (Policy category), the Mitchell Prize of the American Statistical Association and the International Society for Bayesian Analysis, the Feigenbaum Prize of the Association for the Advancement of Artificial Intelligence, the ACM Karlstrom Outstanding Educator Award, and the AAAI/EAAI Outstanding Educator Award. Mr. Russell holds a Bachelor of Arts degree with first-class honors in Physics from the University of Oxford and a Ph.D. in Computer Science from Stanford University. He is a Fellow of the American Association for Artificial Intelligence, the Association for Computing Machinery, and the American Association for the Advancement of Science, and an Honorary Fellow of Wadham College, Oxford.

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Securities Held
Common Shares 0
DSUs 0
Total Common Shares and DSUs 0
Director Share Ownership Requirement
4x Annual Retainer in Common Shares and/or DSUs If elected, has until May 6, 2025 to comply
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Other Public Company Board Memberships During the Last Five (5) Years —

As of April 3, 2020

Intact Financial Corporation | Management Proxy Circular 2020

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Table of Contents ESG Content Map

1. Voting Information 2. General Information

3. Business of the Meeting

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

6. Reports of the Committees

4. Directors

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Great Falls, Virginia, USA

Director since: 2013

Frederick Singer, BA, B.Comm, LL.B, MA, MBA | Independent Director

Mr. Singer is an Internet pioneer and entrepreneur whose career and philanthropic accomplishments have spanned a broad range of sectors from media, education, arts, science and veteran affairs. He is currently CEO of Echo360 which provides a next generation educational software platform to help over 1,200 schools in 20 countries deliver better educational outcomes. Previously, Mr. Singer was a Senior Advisor to Masayoshi Son, President and CEO of Softbank Corporation in Japan and was also active as a venture partner at Softbank Capital in the U.S. Prior to Softbank, Mr. Singer held a number of senior roles at AOL including Chief Operating Officer of AOL Studios, Chief Operating Officer for ICQ (instant messaging) and Senior Vice President of Emerging Products. Prior to AOL, he was a founder of the Washington Post Online Service (now WashingtonPost.com) and a consultant with Bain & Company. Mr. Singer has served on a number of business, charitable and educational boards including DoubleClick, Motley Fool Company, Kennedy Center for the Performing Arts (International Committee), Queen’s University School of Business, Upper Canada College, The Langley School and “Warrior to Cyber Warrior” which focuses on providing distance learning training in the field of cybersecurity to wounded veterans. He was named one of Washingtonian Magazine’s “Tech Titans” in 2013 and 2015. He has also funded pioneering research in autism with the Children’s National Medical Center and Stanford University. Mr. Singer holds an MBA from Harvard University, as well as an LLB, MA in Philosophy, BA with Distinction in Philosophy, and a Bachelor of Commerce (Honours) from Queen’s University in Canada. He is also a recipient of the Tricolour award at Queen’s University.

Age: 57

Key Skills

Technology
Strategic leadership / Senior Executive
Talent Management / Executive Compensation
Marketing / Brand awareness
International Markets

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Board and Committee Membership 2019 Meeting Attendance
Board 6/6 (100%)
Risk Management Committee 4/4 (100%)
Compliance Review and Corporate Governance Committee 4/4 (100%)
Joint Meeting - Audit and Risk Management Committee 1/1 (100%)
Past Annual Meeting Voting Results
Year Votes for % of Votes for Votes Withheld % Votes Withheld
2019 106,952,484 99.60% 433,197 0.40%
2018 111,043,071 99.85% 167,919 0.15%
Securities Held – 2018 Securities Held – 2019
Common Shares 1,380 Common Shares 1,380
DSUs 12,255 DSUs 14,402
Total Common Shares and DSUs 13,635 Total Common Shares and DSUs 15,782
Director Share Ownership Requirement
4x Annual Retainer in Common Shares and/or DSUs Met
Other Public Company Board Memberships During the Last Five (5) Years
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Intact Financial Corporation | Management Proxy Circular 2020

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Table of Contents ESG Content Map

1. Voting Information

3. Business of the Meeting

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

6. Reports of the Committees

4. Directors

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Calgary, Alberta, Canada

Director since: 2009

Age: 70

Key Skills

Strategic leadership / Senior Executive
Financial expertise
Government / Public affairs
Talent Management / Executive Compensation
Governance

Stephen G. Snyder, B.Sc., MBA | Independent Director

Mr. Snyder was formerly President and CEO of TransAlta Corporation, a position he held from 1996 until his retirement on January 1, 2012. Previously, he was President & CEO of Noma Industries Ltd., GE Canada Inc. and Camco, Inc. He is Honorary Consul General (Calgary) for the Government of New Zealand. Mr. Snyder was also a member of the Board of TransAlta Corporation until January 1, 2012 and is a past Director of Anaergia Inc., the Canadian Imperial Bank of Commerce and CCEMC. He is the past Chair of the following organizations: the Calgary Stampede Foundation Campaign, Alberta Secretariat for Action on Homelessness, the Calgary Committee to End Homelessness, the Calgary Homeless Foundation, the Canada-Alberta ecoEnergy Carbon Capture & Storage Task Force, the Conference Board of Canada, the Calgary Zoological Society, the Canadian Electrical Association, the United Way Campaign of Calgary and Area, and the Calgary Zoo’s “Destination Africa” capital campaign. He was awarded the Alberta Centennial Medal in 2005, the Conference Board of Canada 2008 Honorary Associate Award, the Chamber of Commerce Sherrold Moore Award of Excellence in 2009, the Canadian Energy Person of the Year Award by the Energy Council of Canada in 2010 and was Alberta Oil magazine’s CEO of the year for 2011.

Mr. Snyder holds a Bachelor of Science in chemical engineering from Queen’s University as well as an MBA from the University of Western Ontario. In addition, he has honorary degrees from the University of Calgary (LLD) and the Southern Alberta Institute of Technology (Bachelor of Applied Technology).

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Board and Committee Membership 2019 Meeting Attendance
Board 6/6 (100%)
Audit Committee 5/5 (100%)
Human Resources and Compensation Committee 4/4 (100%)
Joint Meeting - Audit and Risk Management Committee 1/1 (100%)
Past Annual Meeting Voting Results
Year Votes for % of Votes for Votes Withheld % Votes Withheld
2019 107,130,130 99.76% 255,551 0.24%
2018 108,509,171 97.57% 2,701,819 2.43%
Securities Held – 2018 Securities Held – 2019
Common Shares 47,209 Common Shares 48,210
DSUs 333 DSUs 342
Total Common Shares and DSUs 47,542 Total Common Shares and DSUs 48,552
Director Share Ownership Requirement
4x Annual Retainer in Common Shares and/or DSUs Met
Other Public Company Board Memberships During the Last Five (5) Years
—
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Intact Financial Corporation | Management Proxy Circular 2020

Page 29

Table of Contents ESG Content Map

1. Voting Information 2. General Information

3. Business of the Meeting

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

6. Reports of the Committees

4. Directors

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London, Ontario, Canada

Director since: 2004

Age: 69

Key Skills

Corporate social responsibility
Governance
Strategic leadership / Senior Executive
Talent Management / Executive Compensation
Technology

Carol Stephenson, O.C. | Independent Director

Ms. Stephenson served as the Dean of the Ivey Business School at Western University from July 2003 until her retirement in September 2013. She worked for more than 30 years in the telecommunications and technology industries, most recently as President and Chief Executive Officer of Lucent Technologies Canada. Ms. Stephenson currently serves on the board of directors for several top Canadian and U.S. companies. She is the former Chair of the Government of Canada’s Advisory Committee on Senior Level Retention and Compensation, a position she held for more than 10 years. From 2005 to 2007, Ms. Stephenson served as a Member of the Prime Minister’s Advisory Council on Science and Technology. In November 2006, she was appointed by the Federal Government to serve on the Board of Directors of the Vancouver Olympic Games Organizing Committee (VANOC). In 2008, she was inducted into Canada’s Telecommunications Hall of Fame. In 2009, Ms. Stephenson was given one of the highest honours a Canadian civilian can achieve and was appointed an Officer of the Order of Canada for her contributions to the development of our national telecommunications industry and for her work at the Ivey Business School. In 2011, she was ranked one of Canada’s Top 25 Women of Influence. In 2016, she was recognized by the National Association of Corporate Directors as one of the top 100 directors in North America.

Ms. Stephenson is a graduate of the University of Toronto. She has also completed the Executive Program at the Graduate School of Business Administration, University of California at Berkeley, and the Advanced Management Program at Harvard University. She was awarded an honorary doctorate from both Ryerson Polytechnic University and Western University. Ms. Stephenson was appointed a member of the Company’s former Advisory Board in 1999 and was previously a member of our Board of Directors in 1999. She has also been a director of the Company’s P&C insurance subsidiaries since 2002.

Board and Committee Membership 2019 Meeting Attendance	Board and Committee Membership 2019 Meeting Attendance
Board 6/6(100%)
Human Resources and Compensation Committee 4/4(100%)
Compliance Review and Corporate Governance Committee 4/4(100%)

Past Annual Meeting Voting Results
Year Votes for % of Votes for Votes Withheld % Votes Withheld
2019 103,874,087 96.73% 3,511,594 3.27%
2018 103,988,108 93.51% 7,222,882 6.49%

Securities Held – 2018	Securities Held – 2019
Common Shares 7,192 DSUs 13,942 Total Common Shares and DSUs 21,134	Common Shares 7,813
	DSUs 14,281
	Total Common Shares and DSUs 22,094

Director Share Ownership Requirement
4x Annual Retainer in Common Shares and/or DSUs	Met

Other Public Company Board Memberships During the Last Five (5) Years
General Motors Company 2009 topresent
Maple Leaf Foods Inc. 2016 topresent
Ballard Power Systems Inc. 2012 to 2017
Manitoba Telecom Services Inc. 2008 to 2016

Intact Financial Corporation | Management Proxy Circular 2020

Page 30

Table of Contents ESG Content Map

1. Voting Information 2. General Information

3. Business of the Meeting

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

6. Reports of the Committees

4. Directors

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Lexington, Massachusetts, USA

Director since: 2018

Age: 65

Key Skills

Financial expertise
Governance
International Markets
Strategic leadership / Senior Executive
Talent management / Executive compensation

William L. Young, P. Eng., MBA | Independent Director

Mr. Young is a corporate director with extensive public company board experience. He has been a member of the Magna International Board of Directors since 2011 and has chaired that Board since 2012. He also has extensive experience in the private equity sector. He co-founded and was a partner of Monitor Clipper Partners, a private equity firm established in 1998. He is also a founding partner of Westbourne Management Group (1988) and was a partner in the European practice of Bain & Company (1981 to1988). Mr. Young possesses significant operational experience, as well as extensive mergers and acquisitions experience. He is Chair Emeritus of the Board of Trustees of Queen’s University, which he chaired from 2006 to 2012 and he is chair of the board of the Canadian Institute for Advanced Research (CIFAR). Mr. Young has significant private company board and board leadership experience over the last 20 years, including a number of European and U.S.-based companies. He is a professional engineer (P.Eng. – Ontario) with a B.Sc (Honours) in chemical engineering (Queen’s) and a MBA with distinction (Harvard).

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Board and Committee Membership 2019 Meeting Attendance
Board 6/6 (100%)
Audit Committee 3/3 (100%)
Human Resources and Compensation Committee 4/4 (100%)
Compliance Review and Corporate Governance Committee (Chair) 2/2 (100%)
Joint Meeting - Audit and Risk Management Committee 0/1 (0%)
Past Annual Meeting Voting Results
Year Votes for % of Votes for Votes Withheld % Votes Withheld
2019 107,329,524 99.95% 56,157 0.05%
2018 111,124,751 99.92% 86,239 0.08%
Securities Held – 2018 Securities Held – 2019
Common Shares 8,200 Common Shares 8,200
DSUs 1,448 DSUs 2,441
Total Common Shares and DSUs 9,648 Total Common Shares and DSUs 10,641
Director Share Ownership Requirement
4x Annual Retainer in Common Shares and/or DSUs Met
Other Public Company Board Memberships During the Last Five (5) Years
Magna International Inc. 2011 to present
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Mr. Young ceased to be a member of the Audit Committee effective May 8, 2019.

** Mr. Young was appointed a member of the Compliance Review and Corporate Governance Committee effective May 8, 2019. He attended every meeting held in 2019 following his appointment.

Intact Financial Corporation | Management Proxy Circular 2020

Page 31

Table of Contents ESG Content Map

1. Voting Information

3. Business of the Meeting 4. Directors

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

6. Reports of the Committees

4.2 Director Compensation

Total Compensation Paid to Directors in 2019

The total compensation paid to Directors of the Company during the year ended December 31, 2019, other than Directors who also serve as officers of Intact Financial Corporation or its affiliates, is set out in the table below. Directors’ compensation is not and has not been in the past, paid to Directors who serve as officers of the Company or its affiliates.

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Share-Based Share-Based Percentage of
Fees earned Awards Awards (Common Fees in Cash/
in cash [(3)] (DSUs) [(1),(2)] Shares) DSUs/Shares [(7)] Total
Name ($) ($) ($) (%) ($)
Robert W. Crispin 107,294 [(4)] 37,920 0 63/37/0 145,214
Janet De Silva 0 232,000 0 0/100/0 232,000
Claude Dussault 249,918 [(5)] 215,000 0 46/54/0 464,918
Jane E. Kinney 0 153,011 0 0/100/0 153,011
Robert G. Leary 0 253,301 0 0/100/0 253,301
Eileen Mercier 140,344 [(6)] 137,000 0 46/54/0 277,344
Sylvie Paquette 0 236,000 0 0/100/0 236,000
Timothy H. Penner 142,000 0 107,000 57/0/43 249,000
Frederick Singer 0 233,582 0 0/100/0 233,582
Stephen G. Snyder 0 0 236,000 0/0/100 236,000
Carol Stephenson 79,170 0 158,500 33/0/67 237,670
William L. Young 157,286 107,000 0 60/40/0 264,286
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Notes:

(1) Share-based awards to Directors of the Company are made in the form of DSUs or Common Shares as discussed more fully under the heading “Information on DSU and Share Purchase Plan for Non- Related Directors” below.
(2) The number of DSUs granted to each Director in 2019 is disclosed in the table entitled “Outstanding Director Share-Based Awards” at page 36.
(3) The cash component of our U.S. Directors’ compensation is paid in U.S. dollars without adjustments to reflect the exchange rate. For the purpose of the table above, the cash component of our U.S. Directors’ compensation has been converted to Canadian dollars using the exchange rate as at December 31, 2019, which was 1.29835.
(4) The amount also includes compensation for service on the Company’s U.S. Advisory Board as well as the board of an international operating subsidiary of the Company, for the period during which Mr. Crispin was a Director of the Company (i.e. until May 8, 2019). Such compensation was paid in U.S. dollars and has been converted to Canadian dollars for the purpose of the table above, using the exchange rate as at December 31, 2019 which was 1.29835.
(5) The amount also includes compensation for service on the Company’s U.S. Advisory Board. Such compensation is paid in U.S. dollars and has been converted to Canadian dollars for the purpose of the table above, using the exchange rate as at December 31, 2019 which was 1.29835.
(6) The amount also includes compensation for service on the board of an international operating subsidiary of the Company . Such compensation was paid in U.S. dollars and has been converted to Canadian dollars for the purpose of the table above, using the exchange rate as at December 31, 2019, which was 1.29835.
(7) The percentages above reflect the proportion of Fees in Cash, DSUs and Common Shares received by each Director of the Company as compensation for their service as Director of the Company (excluding any compensation received for service on the Company’s U.S. Advisory Board or on the boards of the Company’s international operating subsidiaries, if applicable), pursuant to the election made by each Director as described on page 33.

Directors’ Compensation for 2019 and 2020

The responsibility for Directors’ compensation is part of the mandate of the Company’s Compliance Review and Corporate Governance Committee.

Based on a comparative analysis of Directors’ compensation with a peer group of Canadian public corporations carried out independently by WTW in 2015:

the CRCG Committee reconfirmed its policy of aligning the Company’s total director compensation to that of the median of its comparable market, and the Board of Directors approved the recommendation of the CRCG Committee to eliminate the per meeting attendance fees and replaced them by annual flat fees, determined by the positions occupied on the committees of the Board of Directors, as a flat fee structure is simpler to administer and disclose and aligns better with the role of a director at the Company.

In 2017, the CRCG Committee retained WTW to review the composition of the comparator group used to benchmark Directors’ compensation in the context of the Company’s expansion into the U.S. following the acquisition of OneBeacon. WTW completed this review and recommended that the comparator group approved by the Board of Directors for the 2018 compensation of Canadian Executives and Canadian Senior Executives with North American oversight also be used for Directors’ compensation purposes. This recommendation was approved by the CRCG committee.

Intact Financial Corporation | Management Proxy Circular 2020

Page 32

Table of Contents 1. Voting Information ESG Content Map 2. General Information

5. Corporate Governance Practices 6. Reports of the Committees

7. Statement on Executive Compensation 8. Approval of the Board of Directors

3. Business of the Meeting 4. Directors

In early 2018, WTW independently carried out a comparative analysis of Directors’ compensation using the North American Comparator Group. As a result of this comparative analysis, the CRCG Committee recommended to the Board of Directors changes to the Director compensation, which were approved by the Board of Directors to further align with the comparator group’s median compensation. In late 2018, the composition of the North American Comparator Group was reviewed once again and it was determined that it was still appropriate for Director’s compensation purposes. Please see pages 87 to 89 for more information on the comparator groups.

In 2019, changes to the North American Comparator Group were approved by the Board of Directors, as further described at page 88 of this Circular. It was determined that the revised composition of the North American Comparator Group was still appropriate for Director’s compensation purposes, to be used for the 2020 compensation. In late 2019, Management completed an internal review of Director compensation and upon the recommendation of the CRCG Committee, the Board of Directors approved the Director compensation for 2020 without changes from 2019.

Since the last external review of Director compensation was completed in 2018, the CRCG recommended and the Board of Directors approved in 2019 that a fulsome review of the Company’s Director compensation be undertaken in 2020 by WTW in order to establish and approve the Director compensation for 2021.

The fees payable in 2019 and 2020 and approved by the Board of Directors are described in the table below.

Description of fees

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2019 2020 (unchanged from 2019)
Annual Retainer fee $210,000: $210,000:
– $107,000 payable in DSUs or – $107,000 payable in DSUs or
Common Shares Common Shares
– $103,000 payable in cash, DSUs or – $103,000 payable in cash, DSUs or
Common Shares Common Shares
Members of the CRCG Committee $9,000 $9,000
Members of the Audit Committee $13,000 $13,000
Members of the HRC Committee $13,000 $13,000
Members of the Risk Committee $13,000 $13,000
Chair Retainer fees $400,000: $400,000:
Chair of the Board – $215,000 payable in DSUs or – $215,000 payable in DSUs or
Common Shares Common Shares
– $185,000 payable in cash, DSUs or – $185,000 payable in cash, DSUs or
Common Shares Common Shares
Chair of the CRCG Committee $25,000 $25,000
Chair of the Audit Committee $30,000 $30,000
Chair of the HRC Committee $30,000 $30,000
Chair of the Risk Committee $30,000 $30,000
Other fees
All reasonable travel expenses incurred to attend meetings Included Included
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The compensation above covers the function of a Director of the Board of Directors of Intact Financial Corporation and of its Canadian P&C insurance companies.

The cash component of our U.S. Directors’ compensation will be paid in U.S. dollars without adjustments to reflect the exchange rate, while the equity component payment will be based on the Canadian dollar value.

Part of the compensation must be paid in Common Shares or DSUs. In addition, each Director may elect to receive the remainder of their compensation, in total or in part, in cash, DSUs or in Common Shares at his or her discretion.

Intact Financial Corporation | Management Proxy Circular 2020

Page 33

Table of Contents ESG Content Map

1. Voting Information

5. Corporate Governance Practices 6. Reports of the Committees

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

4. Directors

3. Business of the Meeting

The Company has created a U.S. Advisory Board to assist with strategy and provide informed guidance to the Board of Directors or Senior Management, as appropriate, with respect to the management and affairs of the Company’s operations in the United States. Directors of the Company serving on the boards of the Company’s international operating subsidiaries or as members of the U.S. Advisory Board will receive additional compensation in accordance with the following tables:

Member Chair U.S. AdvisoryBoard $50,000 $75,000	If additional travel is required If no additional travel is required*
	International operatingsubsidiaries $25,000 $12,500

*Given other IFC Board commitments or pre-existing travel arrangements

In 2019, compensation for service on the U.S. Advisory Board and on the boards of the Company’s international operating subsidiaries was paid in U.S. dollars for all Directors.

Director Share Ownership Requirement Policy

In accordance with the Company’s minimum share ownership requirement policy, the minimum share ownership requirement for independent Directors has been set to Common Shares or DSUs valued at four (4) times the total annual IFC Board of Directors retainer (excluding fees received for service on a committee of the Board of Directors, on the Company’s international operating subsidiaries, or on the U.S. Advisory Board) received in cash, DSUs or Common Shares. This is equivalent to more than eight (8) times the annual cash retainer paid to independent Directors in 2019. Newly appointed Directors are required to reach this level within five (5) years from their election to the Board of Directors or becoming independent and starting to receive Director compensation.

Based upon the annual Board of Directors retainer of $210,000 in 2019, the minimum director share ownership requirement in 2019 was $840,000 worth of Common Shares and/or DSUs ($1,600,000 for the Chair of the Board of Directors). The market or payout value of DSUs/Common Shares outstanding is based on the closing share price of $140.42 on the TSX as of December 31, 2019.

▶ Each Independent Director must hold at least four (4) times his/her total annual retainer in Common Shares and/or DSUs ($840,000 in 2019 – equivalent to more than eight (8) times total annual cash retainer).

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Common Shares DSUs Total value of all
held held [(1)] equity holdings Conformity with Director
(#) (#) ($) Share Ownership Policy
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	Common Shares held (#)	DSUs held(1) (#)	Total value of all equity holdings ($)	Conformity with Director Share Ownership Policy
Claude Dussault	32,411	15,374	6,710,036	Yes
Janet De Silva	5,310	8,401	1,925,297	Yes
Jane E. Kinney	500	1,134	229,424	Has until May8,2024 to comply
Robert G. Leary	2,645	9,862	1,756,219	Yes
Eileen Mercier	2,192	19,639	3,065,457	Yes
Sylvie Paquette	2,000	5,602	1,067,521	Yes
TimothyH. Penner	18,765	0	2,634,981	Yes
Stuart J. Russell	0	0	0	If elected,will have until May6,2025 to comply
Frederick Singer	1,380	14,402	2,216,148	Yes
Stephen G. Snyder	48,210	342	6,817,607	Yes
Carol Stephenson	7,813	14,281	3,102,402	Yes
William L. Young	8,200	2,441	1,494,260	Yes

Note:

(1) The number of DSUs is rounded to the nearest whole number.

As of January 1, 2019, the minimum director share ownership requirement was increased from $800,000 to $840,000 for members of the Board of Directors. Unless a Board of Directors member has already met the revised level of minimum ownership requirement, the additional retainer must be received in DSUs or Common Shares until the new requirements are reached.

Intact Financial Corporation | Management Proxy Circular 2020

Page 34

Table of Contents ESG Content Map

1. Voting Information

3. Business of the Meeting

5. Corporate Governance Practices 6. Reports of the Committees

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

4. Directors

Information on DSU and Share Purchase Plan for Non-Related Directors

To ensure that Directors’ compensation is aligned with shareholders’ interests, the following program has been put into place:

$107,000, effective since 2019, of the compensation of Directors is in DSUs issued or Common Shares; and
the remainder of the Board of Directors and Committee annual retainers may be received by a Director in total or in part in cash or in DSUs or in Common Shares at his or her discretion.

A DSU is a bookkeeping entry that represents an amount owed by the Company to the Director having the same value as one (1) Common Share of the Company, but that will not be settled until such time as the Director leaves the Board of Directors. Payment of DSUs is made in cash at the time of settlement, equal in amount to the number of DSUs held by the Director multiplied by the closing Common Share price on the TSX as of the redemption date. Canadian Directors may choose the redemption date, the final redemption date being at least three (3) months after a Director terminates his/ her directorship with the Company, but no later than December 15 of the first calendar year commencing after the year in which the termination date occurred. Our U.S. Directors are not entitled to choose a redemption date, the final redemption date being December 15 of the first calendar year commencing after the year in which the U.S. Director terminated his or her directorship.

DSUs provide a notional ongoing equity stake in the Company, therefore ensuring alignment of the interests of the Directors with those of the shareholders of the Company. A total of 14,903 DSUs and 2,035 Common Shares were granted to eligible Directors in 2019.

Those Directors who elect to receive all or a portion of their compensation in DSUs are credited such amounts on record in quarterly instalments with the DSUs being granted within 15 days of the end of the quarter based on the closing Common Share price on the TSX on the fourteenth (14th) day of the month following the end of such quarter (or where such day is not a business day, the preceding business day when Common Shares are publicly traded).

In addition to their compensation in DSUs, in the event that any cash dividend is declared and paid by the Company on Common Shares, the Directors will be credited with additional DSUs. The number of such additional DSUs is calculated by dividing the total amount of dividends that would have been paid to a Director if his/her outstanding DSUs had been Common Shares on the dividend record date, by the closing Common Share price on the TSX on the dividend payment dates.

When a Director elects to receive his/her compensation in Common Shares, such Common Shares are not subject to a vesting requirement and are purchased in the market by Computershare as agent of the Company on the fifteenth (15th) day (or where such day is not a business day, the preceding business day when Common Shares are publicly traded) of the month following the end of a quarter[(1)] .

In 2012, the Board of Directors approved a policy whereby Directors may not resell their Common Shares acquired through the Deferred Share Unit and Share Purchase Plan for Non-Related Directors for at least three (3) months after a member leaves the Board of Directors.

DSUs provide a notional ongoing equity stake in the Company, therefore ensuring alignment of the interests of the Directors with those of the shareholders of the Company.

(1) In 2019, the quarterly instalments for the second quarter were delayed by one day

Intact Financial Corporation | Management Proxy Circular 2020

Page 35

Table of Contents ESG Content Map

1. Voting Information

3. Business of the Meeting 4. Directors

5. Corporate Governance Practices 6. Reports of the Committees

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

Outstanding Director Share-Based Awards

	Number of Common Shares granted in 2019(1) (#)	Market or Payout Value of Common Shares granted in 2019 at year-end(3),(5) ($)	Number of DSUs granted in 2019 that have not vested(2),(7) (#)	Market or Payout Value of DSUs Granted in 2019 that have not vested(3),(6) ($)	Number of DSUs Outstanding that have not vested(7) (#)	Market or Payout Value of DSUs Outstanding at year-end that have not vested(4) ($)	Payout Value of Vested DSUs ($)
Robert W. Crispin	0	0	654	91,801	13,786	1,935,813	N/A
Janet De Silva	0	0	1,992	279,689	8,401	1,179 667	N/A
Claude Dussault	0	0	2,026	284,474	15,374	2,158,883	N/A
Jane E. Kinney	0	0	1,134	159,214	1,134	159,214	N/A
Robert G. Leary	0	0	2,130	299,037	9,862	1,384,808	N/A
Eileen Mercier	0	0	1,524	214,052	19,639	2,757,656	N/A
Sylvie Paquette	0	0	1,956	274,716	5,602	786,681	N/A
TimothyH. Penner	413	57,993	0	0	0	0	N/A
Frederick Singer	0	0	2,148	301,577	14,402	2,022,368	N/A
Stephen G. Snyder	1,001	140,560	8	1,136	342	47,959	N/A
Carol Stephenson	621	87,201	338	47,511	14,281	2,005,300	N/A
William L. Young	0	0	993	139,479	2,441	342,816	N/A

Notes:

(1) The number of Common Shares granted in 2019 is equal to the number of Common Shares available for purchase on the open market by the Company’s share agent in consideration of the amount equal to the director’s elected percentage of Common Shares to be received under the Director compensation plan, multiplied by the director’s annual retainers and committee retainers.

(2) The number of DSUs granted in 2019 was paid quarterly in four (4) equal instalments and is equal to the director’s elected percentage of DSUs to be received under the Director compensation plan, multiplied by the director’s annual retainers and committee retainers, divided by the closing Common Share price on the TSX as of the last trading day preceding the fifteenth (15th) day following the end of a quarter (or where such day is not a business day, the preceding business day when Common Shares are publicly traded) the whole in accordance with the Director compensation plan. In the event that any cash dividend was declared and paid on the Common Shares, an amount equal to the number of DSUs in the director’s account divided by the closing Common Share price on the TSX on the dividend payment dates was credited as DSUs to the director’s account.

(3) The market or payout value of DSUs/Common Shares granted in 2019 is based on the closing Common Share price of $140.42 on the TSX as of December 31, 2019.

(4) The market or payout value of DSUs outstanding is based on the closing Common Share price of $140.42 on the TSX as of December 31, 2019.

(5) The value of the Common Shares reflects the after-tax amount due to the immediate vesting of the Common Shares.
(6) The value reflects the before-tax amount due to the vesting period until the departure of the Director.
(7) The number of DSUs is rounded to the nearest whole number.

4.3 Additional Information Regarding Directors

Board of Directors and Committee Meetings in 2019

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Number of Meetings
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Board Meetings	6
Committee Meetings
Audit Committee	5
Compliance Review and Corporate Governance Committee	4
Human Resources and Compensation Committee	4
Risk Management Committee	4
Joint Committee Meetings
Audit Committee and Risk Management Committee	1

Intact Financial Corporation | Management Proxy Circular 2020

Page 36

Table of Contents ESG Content Map

3. Business of the Meeting

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

6. Reports of the Committees

4. Directors

1. Voting Information

Committee Composition and Director Independence

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Audit Committee CRCG Committee HRC Committee Risk Committee Independent Director
Claude Dussault
Charles Brindamour
Janet De Silva
Jane E. Kinney
Robert G. Leary
Eileen Mercier
Sylvie Paquette
Timothy H. Penner
Frederick Singer
Stephen G. Snyder
Carol Stephenson
William L. Young
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Chair Member

Director Attendance

Directors are expected to attend all Board of Directors and committee meetings in person, although attendance by video-conference or telephone is also accepted in appropriate circumstances. Directors are also expected to prepare in advance of each meeting in order to positively contribute to discussions and decisions and to participate in the Company’s education programs, both by attending sessions and suggesting topics of interest.

The table below shows the record of attendance by Director at meetings of the Board of Directors and its committees during the 12-month period ended December 31, 2019.

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Number and % of meetings attended
Joint Audit
Board of Audit CRCG HRC Risk and Risk Committees Overall
Director Directors Committee Committee Committee Committee Committee (Total) attendance
Claude Dussault 6/6 – – – – – – 6/6
(100%) (100%)
Charles Brindamour 6/6 – – – – – – 6/6
(100%) (100%)
Janet De Silva 6/6 – 4/4 4/4 – – 8/8 14/14
(100%) (100%) (100%) (100%) (100%)
Jane E. Kinney 3/3 2/2 – – 2/2 – 4/4 7/7
(100%) (100%) (100%) (100%) (100%)
Robert G. Leary 6/6 5/5 – – 4/4 1/1 10/10 16/16
(100%) (100%) (100%) (100%) (100%) (100%)
Eileen Mercier 6/6 5/5 – – 4/4 1/1 10/10 16/16
(100%) (100%) (100%) (100%) (100%) (100%)
Sylvie Paquette 6/6 5/5 – – 4/4 1/1 10/10 16/16
(100%) (100%) (100%) (100%) (100%) (100%)
Timothy H. Penner 6/6 – 4/4 4/4 – 8/8 14/14
(100%) (100%) (100%) (100%) (100%)
Frederick Singer 6/6 – 4/4 – 4/4 1/1 9/9 15/15
(100%) (100%) (100%) (100%) (100%) (100%)
Stephen G. Snyder 6/6 5/5 – 4/4 – 1/1 10/10 16/16
(100%) (100%) (100%) (100%) (100%) (100%)
Carol Stephenson 6/6 – 4/4 4/4 – 8/8 14/14
(100%) (100%) (100%) (100%) (100%)
William L. Young 6/6 3/3 2/2 4/4 – 0/1 9/10 15/16
(100%) (100%) (100%) (100%) (0%) (90%) (93.75%)
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Intact Financial Corporation | Management Proxy Circular 2020

Page 37

Table of Contents ESG Content Map

1. Voting Information

3. Business of the Meeting

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

6. Reports of the Committees

4. Directors

Supplementary information relating to Directors

To the knowledge of the Company, no proposed Director of the Company is or has been, within the last 10 years, a director, chief executive officer or chief financial officer of any company that (a) was subject to a cease trade or similar order or an order that denied the relevant company access to any exemption under securities legislation, for a period of more than 30 consecutive days, that was issued while the proposed Director was acting in the capacity of director, chief executive officer or chief financial officer; or (b) was subject to a cease trade or similar order or an order that denied the relevant company access to any exemption under securities legislation, for a period of more than 30 consecutive days, that was issued after the proposed Director ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while the proposed Director was acting in that capacity. Moreover, to the knowledge of the Company, no proposed Director is or has been, within the last 10 years, (a) bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or became subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold his/her assets; or (b) a director or executive officer of any company that, while the proposed Director was acting in that capacity, or within a year of the proposed Director ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets, except for the following:

William L. Young was a director of Pharmetics Inc., a private company, until he resigned in connection with its sale in September 2017. Approximately five months after the sale, in February 2018, Pharmetics filed a Notice of Intention to Make a Proposal under the Bankruptcy and Insolvency Act (Canada).

Attendance of Director whose term ended in 2019

The term of Mr. Crispin as Director of the Company ended on May 8, 2019. From January 1, 2019 to May 8, 2019, his attendance record as a Director was as follows:

Board	2/3	(66%)
Compliance Review and Corporate Governance Committee	2/2	(100%)
Risk Management Committee	2/2	(100%)
Joint Meeting- Audit and Risk Management Committee	1/1	(100%)

Attendance of Director whose term will end in 2020

The term of Ms. Eileen Mercier as Director of the Company will end on May 6, 2020. From January 1, 2020 to April 1, 2020, her attendance record as a Director was as follows:

Board	4/4	(100%)
Audit Committee	2/2	(100%)
Risk Management Committee	2/2	(100%)

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3. Business of the Meeting 4. Directors

5. Corporate Governance Practices 6. Reports of the Committees

7. Statement on Executive Compensation 8. Approval of the Board of Directors

5.	Corporate Governance Practices	Corporate Governance Practices
Where to find it
5.1	Introduction	41
5.2	Code of Conduct and Ethics Relationship with customers	41 43	1st place David and Sharon
5.3	Human Capital Management	43	Johnston Centre for
	Strategy Values and culture	43 44	Corporate Governance Innovation - Board
	Oversight	44	Shareholder Confidence
	Risks Benefts	44 45	Index 2019
	Recognition	45
5.4	Board of Directors	46
	Structure	46
	Size of the Board of Directors	46
	Board of Directors and Committee Mandates	46
	Board Oversight Responsibilities	47
	Strategy Oversight ESG Oversight	47 47	2nd place
	Risk Management Oversight	48	Globe and Mail Report
	Risk Management Committee Structure	49	on Business – Board
	Position Descriptions	50	Games 2019
	Chair of the Board of Directors	50
	Chief Executive Ofcer	50
	Oversight Functions	51
	Director Independence	51
	Independence of the Chair of the Board of Directors	52
	Policy on External Positions and Interlocking	52
	Private Meetings of Directors Nomination of Directors	52 53	Top 3 Finalist
	Majority Voting for Directors	53	in the Best Overall
	Board of Directors’ Skills Matrix	53	Governance –
	Director Term Limits and Other Mechanisms of Board of		International Category
	Directors Renewal	55	at the 2019 Corporate
	Advance Notice By-law	56	Governance Awards
	Board of Directors and Board Member Assessment	57	organized by Corporate
	Orientation and Continuing Education of our Directors	58	Secretary Magazine
5.5	Diversity	60
	Board and Executive Committee Diversity	60
	Board of Directors Diversity	61
	Executive Committee Diversity	62
	Executive and Workforce Diversity	62
	Vice President and Higher and Managerial Positions Diversity	63
	Diversity and Inclusion Council and Team	63
	Employee Networks	63
	Trans Inclusion Guide	64
	Mentoring Program for Women	64
5.6	Shareholder Engagement	64
5.7	Additional Information	66

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7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

Highlights of our Corporate Governance Practices

What We Do

Separation of CEO and Chair of the Board of Directors

Independent Board and Chair: All members of the Board of Directors are independent, except the CEO

Only independent Directors on all committees of the Board of Directors

41.6% women representation on the Board of Directors and policy requiring a minimum 30% representation of men and women on the Board of Directors

Minimum director share ownership requirements equivalent to 4x total annual retainer (and more than 8x annual cash retainer)

Private meetings of independent Directors at all Board of Directors and committee meetings

What We Don’t Do

No Director interlock: No two Directors sit on more than one board of directors together

No overboarding: No Director simultaneously sits on more than four (4) boards of publicly listed companies

No CEO or executives of a company on the HRC Committee

Robust Majority Voting Policy

Board of Directors Renewal: Use of skills matrix, diversity matrix and evergreen list as part of Board of Directors renewal process

Shareholder Engagement Policy providing for Management and Board of Directors directed shareholder engagement

Strong Board of Directors Assessment Process

Regular continuing education programs for members of the Board of Directors Robust risk management process

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7. Statement on Executive Compensation 8. Approval of the Board of Directors

5.1 Introduction

In establishing its governance practices, the Board of Directors of the Company has adopted principles, structures and processes to enable it to carry out its responsibilities more effectively and that are focused on the implementation, development and maintenance of a sound corporate governance and compliance culture throughout the Company. The Company’s corporate governance practices are reviewed regularly to ensure they support the achievement of the Company’s purpose to help people, businesses and society prosper in good times and be resilient in bad times. Intact Financial Corporation considers corporate governance and sound market practices to be essential components of its operations. As a Canadian reporting issuer with securities listed on the TSX, the Company has corporate governance practices that meet or exceed the requirements of the TSX and the applicable rules of the Canadian Securities Administrators.

This statement of Corporate Governance Practices is responsive to the rules and guidelines adopted by the Canadian securities regulatory authorities, as set out in National Instrument 58-101 – Disclosure of Corporate Governance Practices , National Policy 58-201 – Corporate Governance Guidelines and National Instrument 52-110 – Audit Committees , among others. In addition, this statement provides additional disclosure that complies with and exceeds various recommended best practices.

5.2 Code of Conduct and Ethics

The Company adopted its Code of Conduct entitled “Living Our Values” in December 2009 and refreshed its values in 2019 as part of the 10[th] anniversary of the Company.
Policies and procedures, including a whistleblower process, make up a robust compliance framework.
The CRCG Committee as well as the Audit Committee are notified in the event of complaints or fraudulent conduct.

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The Company has a complete compliance program that includes a code of conduct and business principles document entitled “Living Our Values,” along with related Company policies, in addition to maintaining an ombudsman’s office and a privacy office headed by the Compliance Department.

“Living Our Values” was adopted by the Board of Directors in December 2009 and is available on SEDAR (www.sedar.com). In 2019, as part of the 10[th] anniversary of the Company, we refreshed our values to ensure that they reflect the Company’s evolution and growth. Moreover, focus groups of employees were consulted in this review, and their comments were considered in the formulation of the revised document. We strive to create an environment where our employees live our values every day. Our values define our culture and provide a framework for who we are, how we behave as we strive to achieve our purpose and how we maintain our excellent reputation. The values we live by each day are organized according to five core themes, defined as follows:

Integrity

We demonstrate the highest ethical standards of personal conduct and stand up for what is right. We behave with honesty, integrity, openness and fairness when working with each other, customers, partners and governments.

Excellence

We are disciplined in our approaches and our actions, which is why we excel in all of our businesses. We embrace change and the opportunities it creates, encourage innovative thinking and always seek to improve. We celebrate and reward high performance and success. We provide value to our stakeholders.

Respect

We see diversity as a strength. We create an inclusive environment where we are encouraged to collaborate in order to meet our potential. We welcome a diversity of ideas, approaches and styles. Our differences make us stronger.

Customer Driven

We listen to the needs of each customer and consistently deliver solution-driven, second-to-none experiences. We make it easy for customers to deal with us and we go beyond expectations. We are transparent, fair, prompt and consistent.

Generosity

We are committed to building a resilient and prosperous future for our employees, our customers and our communities by helping others. We respect and protect the environment. We encourage the involvement and responsible citizenship of all our employees. We seek to be generous in everything we do and strive to be a trusted corporate citizen.

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4. Directors

“Living Our Values” promotes the highest levels of personal conduct and ethical standards in compliance with applicable law while promoting a spirit of fairness and honesty; it promotes respect for privacy and confidential information and fosters open and honest communication and disclosure.

Our governance and compliance structures and processes include the following:

our Living Our Values code of conduct that details our high ethical standards, and which is embedded into our internal training programs;
the support of a dedicated Compliance team that follows legislative, governance, regulatory and compliance rules, trends and best practices and strives to maintain a high level of good governance and a compliance mindset across our companies;
robust policies and reporting mechanisms including whistleblower and incident reporting procedures that protect anonymity and confidentiality;
an Ombudsman’s office and Privacy office that provide services mainly to insureds who have queries in this regard or wish to file a complaint;
data governance principles on how the Company collects and uses data; and
strict policies on conflicts of interest, disclosure of material information and insider trading.

By virtue of our code of conduct, the Company has endorsed high ethical and compliance principles to promote integrity, respect, customer driven actions, excellence and generosity. These principles shape the Company’s activities globally and apply to all of our employees, officers and Directors. They include abiding by the law, respecting confidentiality, avoiding conflicts of interest, prioritizing respect in the workplace, acting in a socially-responsible manner, using the Company’s resources and opportunities appropriately and engaging in sound market conduct, meanwhile emphasizing the personal accountability of all employees, officers and Directors. Together with related compliance programs, the Living Our Values code of conduct provides mechanisms to detect and deter wrongdoing and encourage good corporate citizenship.

The Living Our Values code of conduct has also been adopted by OneBeacon and BrokerLink, which have made some minor adaptations to reflect their realities. The compliance programs and systems are managed by the Company’s full-time dedicated Compliance team which reports to the Senior Vice President, Corporate and Legal Services, and Secretary, who is the Company’s Chief Compliance Officer and reports to the Board of Directors and its committees and acts independently from the operations of the Company. In addition, 31 representatives from the operational, corporate and Human Resources departments across North America also act as compliance and risk ambassadors throughout the Company.

We provide a whistleblower hotline to report incidents or issues that might breach the Living Our Values code of conduct, policies, laws or regulations, or any other potential misconduct. Employee reports are thoroughly investigated with oversight by the Compliance team and results are communicated to the Audit and CRCG Committees, when relevant and required. The process is confidential and anonymous.

A number of policies have been adopted over the years and are amended from time to time to take into account new trends in best practices and legal requirements. Such policies deal with, among other subjects, conflicts of interest, media, respect in the workplace, proper use of the Company’s assets, incident reporting, whistleblowing procedures and use of data. These policies provide guidelines on how to address various situations. For example, the Board of Directors’ Conflict of Interest Policy ensures that Directors exercise independent judgment in considering transactions and agreements in which a Director or Executive Officer may have a material interest by excluding such person from the decision-making process in relation to a transaction giving rise to a conflict of interest. The procedures also allow reporting on a confidential and anonymous basis: complaints can be made via the Whistleblower Hotline, email or direct communications through Corporate Audit Services, the Legal and Compliance Department or Human Resources. Complaints can also be brought to the CRCG Committee or to the Board of Directors.

All compliance issues are reported to the Legal and Compliance team, which makes a determination as to the most appropriate forum to deal with each issue. The Senior Vice-President, Corporate and Legal Services, and Secretary, who is also the Company’s Chief Compliance Officer, reports to the CRCG Committee on a quarterly basis which in turn also the Company’s Chief Compliance Officer, reports to the Board of Directors on a quarterly basis. An annual report is also presented to the CRCG Committee for review. Such reports cover compliance programs, material compliance issues, customer complaints handling process and statistics, performance for the past year and the action plan for the next 12 to 15 months. The Audit Committee is also notified by the Chief Internal Auditor if a complaint relates to accounting, internal controls or audit matters or if fraudulent conduct is involved. In such instances, Corporate Audit Services or the Audit Committee determines how the case will be handled.

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2. General Information

By virtue of our Living Our Values code of conduct, the Company has endorsed high ethical and compliance principles to promote integrity, respect, customer driven actions, excellence and generosity.

Relationship with customers

Over the years, the Company has also developed policies and processes related to the fair treatment of customers and adopted a national policy based on our core value of being customer driven. This policy formalizes the roles and responsibilities of all employees and various stakeholders in putting forward initiatives that will benefit customers and promote their fair treatment across the Company. The CRCG Committee oversees the policies relating to customer relations, ensuring that they are aligned with our culture and purpose.

In the midst of the COVID-19 outbreak, we are focused on supporting our customers through these challenging times and maintaining our customer service quality despite the disruption. We have introduced payment relief mechanisms and coverage adjustments for our customers directly impacted by COVID-19 and are leveraging our digital tools to further support our customers.

5.3 Human Capital Management

Human capital is a key component of the Company’s strategy and central to its success.
The Company prioritizes creating an inspiring and inclusive workplace where employees feel engaged and where they can contribute their best every day.
The Board of Directors has strategic oversight of the Company’s human capital management and is assisted in this regard by its HRC Committee and CRCG Committee.
Human capital management risks are integrated into the Company’s overall risk management program and relate to, amongst others, retention of key employees, design of Management’s compensation programs and succession planning.

Human capital management and talent development are crucial to our success and constitute key drivers that enable us to deliver value to our stakeholders. We are committed to providing a workplace where employees are surrounded by a strong, diverse and inclusive team that will inspire them, and are given the opportunities to do their best and flourish.

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54.1% 18.2%
67.9% of Managerial of employees
Approximately of manager, team Positions were held identified as a visible
16,000 lead and director by women on minority in 2019
employees on positions in Canada December 31, 2019
December 31, 2019 were filled internally in 2019 Excluding On Side and FCC’s Managerial response to our annual employee engagement Based on employees’
Positions survey
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Strategy

Human capital is a key component of the Company’s strategy and central to the success of our customer driven initiatives. We seek to have a highly engaged workforce and set out to achieve this by:

Being a best employer;
Being a destination for top talent and experts; and
Helping employees adapt to automation and AI by anticipating the future of work.

Increasingly people are expressing concern related to the impact of technology on jobs and whether workers can get ahead of the expected changes. Our goal is to help employees navigate this uncertainty and gain new skills while continuing to provide good job opportunities into the future.

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7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

4. Directors

Values and culture

The Company prioritizes creating a workplace where employees feel engaged and that they can contribute their best every day. Our values are at the heart of everything we do and form the basis for a corporate culture that emphasizes integrity, respect, generosity, excellence and a focus on the customer. We believe that a diverse workforce fosters broader exchanges of perspectives and enriches discussions at every level of the Company and welcome different approaches, ideas and styles.

We place significant importance on the highest ethical standards of personal conduct and to this end, the Company conducts regular compliance training among employees, emphasizing workplace policies including the Living our Values code of conduct and the Respect in the Workplace Policy. Senior Executives are also provided with training on diversity and inclusion. Employees are encouraged to report any misconduct or breaches of our Living our Values code of conduct, including via the whistleblower hotline.

As part of creating an environment where employees can contribute their best every day, the Company’s operations and compliance team are tasked with ensuring full compliance with applicable workplace health and safety regulations and these are monitored on an ongoing basis.

In light of the unprecedented public health impact of the COVID-19 outbreak, protecting the health and well-being of our employees and their families is our top priority. To this effect, the Company acted quickly by increasing its system capacity to allow the vast majority of its employees across North America to work from home and by offering variable work hours to help employees take care of their relatives during these challenging times. Additional safety measures were also taken in our offices to reinforce social distancing, including the facilitation of quarantine measures and the closure of building reception areas and cafeterias. In addition, we introduced a $2 million relief fund for cancellation costs incurred by our employees from changing their travel plans due to the pandemic. We are focused on supporting our employees, their relatives and the communities as much as we can during this crisis.

As a recognized Best Employer in both Canada and the U.S., the Company prides itself on excellent relations with its employees. The Company’s offices are all governed by applicable North American labour standards. Similarly, the Company abides by all pay equity and human rights legislation at the federal, state and provincial level.

The cumulative result of the Company’s policies and processes is to reinforce a culture of ethical conduct and excellence that is aligned with and promotes the Company’s strategic objectives. This extends to the Company’s executive compensation program designed to include incentives to increase employee engagement and drive an improved customer experience. Our executive compensation program also takes into consideration principles of risk management to moderate potential behaviour that may incur excessive risk.

Oversight

The Board of Directors has strategic oversight of the Company’s human capital management and is assisted in this regard by its HRC Committee and CRCG Committee. This includes overseeing organization effectiveness, succession planning and compensation, and the alignment of compensation with the Company’s philosophy and programs consistent with its overall business objectives.

The HRC Committee is responsible for oversight of the Company’s human resources policies and programs, ensuring that they foster the proper culture within the organization and meet goals with respect to diversity and fairness. The CRCG Committee retains primary oversight responsibility for the policies and programs of the Company relating to market conduct and our relationship with customers.

Risks

Human capital management risks are integrated into the Company’s overall risk management program and relate to, amongst others, retention of our key employees, design of Management’s compensation programs and succession planning.

The loss of the services of our key employees, or the inability to identify, attract, hire and retain highly qualified personnel in the future, could adversely affect the quality and profitability of our business operations. In order to manage this risk, we are dedicated to creating a workspace where employees feel highly engaged and valued, and as such, the Company maintains and reviews each year its Engagement Action Plan, which outlines the actions taken by the Company to apply feedback received by its employees.

With respect to the Company’s compensation programs, they are founded on principles and processes that support the management of risk, ensuring Management’s plans and activities are prudent and focused on generating shareholder value within an effective risk control environment. Such programs are designed to align the interests of the Company’s shareholders and Management, and to provide for incentive awards that are appropriately calibrated with risk outcomes. For additional information on the Company’s executive compensation programs, please see the Statement on Executive Compensation starting at page 82 of this Circular.

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4. Directors

With respect to succession, the Company has a comprehensive succession planning program at various levels within the organization to ensure we are developing talent for future roles and that we are prepared for unplanned departures and retirements.

For additional information on the Company’s overall risk management strategy and its top and emerging risks, please refer to section 22 to 24 - Risk Management of our Management’s Discussion and Analysis for the year ended December 31, 2019, available on SEDAR (www.sedar.com).

Benefits

In order to mitigate our people risk, the Company aims to have a highly engaged workforce. To this end, we offer a competitive benefits package to our full-time employees with medical and dental, retirement and life insurance benefits. Our benefits package provides resources and tools to ensure the well-being of our employees and their families. They are available to permanent employees who work at least 21 hours per week.

The Company also offers flexible work arrangements, to help employees balance their personal commitments and their work and to meet the needs of employees who have responsibilities outside the office that are not easily managed within the traditional nine-to-five, five-day work week. In 2019, we expanded our flexible working arrangements to further help employees manage work and personal life. The program allows employees to work remotely several days per week. The Company also offers a parental leave and benefits program which provides financial support to new parents during their leave of absence. This program was updated in 2017 to provide parental leave support regardless of an employee’s identified gender.

The Company provides employee training and career development tools and opportunities to guide and facilitate development of future leaders. Training is offered through the internal training and development program of the Company and the Company also reimburses certain costs incurred with respect to external courses and professional development training. We offer leadership programs and training programs that are both technical and help develop business skills for employees at all levels.

In line with its values, the Company sponsors various employee networks that promote diversity and inclusion within the Company’s entire workforce. These networks are forums enabling professional and personal growth, and leadership skills development for employees, while also promoting diversity and inclusion in the workplace. Additional information on our employee networks is provided on pages 63 and 64 of this Circular.

Recognition

The Company has been recognized as a top employer and among the best places to work in Canada and in the U.S. Organizations that have recognized the Company include:

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5.4 Board of Directors

Structure

Size of the Board of Directors

The Board of Directors is composed of 12 members. Biographical details with respect to the members can be found at pages 20 to 31 of this Circular. We consider that the size of the Board of Directors and its committees in 2019 was appropriate.

Board of Directors and Committee Mandates

The Board of Directors is responsible for stewardship of the Company.
The Board of Directors and its committees have independent access to external consultants and experts.
The Board of Directors holds strategic sessions during all its regularly scheduled meetings to discuss positioning of the Company, its long-term objectives and overall business strategy. It also holds a specific meeting focused on the Company’s strategy.

The Board of Directors, either directly or through its committees, explicitly assumes responsibility for the stewardship of the Company. It is responsible for the supervision of the management of the business and affairs of the Company, including its pension funds. In carrying out its duties, the Board of Directors will provide direction to Management to pursue the best interests of the Company.

The mandate of the Board of Directors (reproduced in Schedule B of this Circular), which is reviewed at least annually by the CRCG Committee and approved by the Board of Directors, sets out the responsibilities of the Board of Directors, which can be summarized as follows:

reviewing and approving the strategic plan and material transactions;
overseeing the Company’s strategy, including reviewing and approving all major strategy and policy recommendations in light of the opportunities and risks pertaining to the Company and monitoring of the Company’s performance against the strategic plan using appropriate metrics and milestones at separate and dedicated strategy meetings and discussions with Management throughout the year;
ensuring that the Company has effective risk management programs and evaluating the Company’s risk culture;
setting the tone for the integrity, ethics and compliance culture throughout the organization;
supervising Senior Management, oversight functions and human capital management matters as well as compensation and succession planning, including the appointment of the Chief Executive Officer and oversight functions and ensuring that other executives with complementary skills are in place to ensure sound management of the Company;
monitoring of the Company’s pension plans;
overseeing and monitoring the Company’s environmental, social and governance as well as corporate social responsibility initiatives, including with respect to diversity;
overseeing financial reporting, including ensuring the accuracy of financial statements and returns, that the Company has appropriate internal controls in place and that reporting and disclosure is done in a timely manner; and
assessing its own effectiveness and that of its committees, committee chairs and members.

The mandates of the Board of Directors and all its committees confirm independent access of the Board of Directors and its committees to external consultants.

The full-text version of the mandates of the Board of Directors and its committees are available in the “Corporate Governance” section of the Company’s website at www.intactfc.com.

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Board Oversight Responsibilities

Strategy oversight, ESG oversight and risk management oversight are some of the Board of Directors’ key responsibilities, as described below.

Strategy Oversight

The Board of Directors assumes responsibility for the oversight of the overall business strategy of the Company. In accordance with its mandate, the Board of Directors reviews and approves, at least annually, the strategic plan and the long-term objectives of the Company and oversees their execution. This oversight includes reviewing and approving the Company’s risk appetite statement, major strategies, resource allocation and policy recommendations as well as monitoring the Company’s performance against its strategic plan, using appropriate metrics and milestones. Furthermore, ESG factors of material value or risk to the Company are incorporated into the longterm strategic objectives of the Company, with oversight by the Board of Directors.

The Board of Directors monitors Management’s progress throughout the year and strategic sessions are held at all its regularly scheduled meetings, along with a specific meeting focused on the Company’s overall strategy, during which the Company is repositioned in its various markets and its long-term objectives and overall business strategy are discussed. Discussions typically include a review of the macro environment and the Company’s place in it, as well as an analysis of the changes and deeper trends on the horizon, including those with a disruptive effect. The role of Management in this context is also reviewed, to ensure appropriate staffing, compensation and incentives are in place to realize strategic objectives. As required, the Board of Directors will oversee adjustments Management makes to the medium-and long-term plans to reflect new conditions, environmental or market factors.

ESG Oversight

IFC was built to help people, businesses and society prosper in good times and be resilient in bad times. We are guided by our values to deliver for our customers, employees, shareholders and communities. Having a clear purpose and values enables ESG performance to be naturally integrated into our strategy.

The Board of Directors ensures key ESG issues are accounted for in the strategic objectives of the Company, monitors the Company’s ESG performance progress and approves related public disclosure. The Board of Directors also receives regular internal training, updates and information on ESG matters, including with respect to industry trends and the Company’s ESG performance.

The Board of Directors delegates certain of its ESG oversight functions to its committees, which report their findings and provide recommendations to the Board of Directors:

The CRCG Committee oversees the Company’s governance and compliance framework, ensuring that internal policies and controls are in place to protect and act in the best interest of all stakeholders.
The Risk Committee oversees the assessment and monitoring of the occurrence and severity of natural disasters that may be affected by climate change.
The Audit Committee oversees the Company’s governance and control practices related to accounting and financial disclosure and reporting.
The HRC Committee oversees the Company’s policies and initiatives related to human capital management, including diversity and inclusion as well as workplace culture.

For further details, please refer to the “Reports of the Committees” section beginning at page 67.

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Risk Management Oversight

The Board of Directors has adopted a risk appetite statement for the Company.
Dedicated Risk Management Committee.
Risk metrics adapted to the Company’s context.

Throughout the 2019 fiscal year, we continued to foster an enterprise-wide culture of compliance, to improve our risk management practices and to achieve even better corporate governance standards. We continued to improve policies and procedures in light of the recommendations of the Office of the Superintendent of Financial Institutions as set out in its Corporate Governance Guideline (issued in January 2013 and revised in September 2018). This guideline sets out OSFI’s expectations on corporate governance in federally regulated financial institutions and aims to help boards of directors and senior management of FRFIs identify and manage risks being undertaken by their companies.

The Board of Directors is ultimately responsible for overseeing the identification and monitoring of the principal risks affecting the Company’s business which will vary depending on the prevailing economic climate and the specific nature of the Company’s activities at the relevant time. The Board of Directors’ functions include annually evaluating the Company’s risk management culture, overseeing the Company’s risk-taking activities and risk management programs and establishing mitigation strategies. It is supported by its committees to ensure that risks are being properly measured, monitored and reported throughout the Company.

The Board of Directors is responsible for ensuring that the Company’s business strategies and allocation of capital are in line with the Company’s risk appetite and tolerance and must ensure that the Company has effective risk management programs and practices in place. To this end, the Board of Directors has adopted a risk appetite statement in order to ensure the sustainability of the Company’s activities through a prudent approach to managing risk.

Risk appetite statement principles:
We focus on our core competencies.
We keep our overall risk profile in check.
We protect ourselves against extreme events.
We promote a strong risk management culture.
We maintain our ability to access capital markets at reasonable costs.

The Board of Directors has created a committee dedicated to assisting the Board of Directors with its risk oversight role in order to build a sustainable competitive advantage, by fully integrating the Enterprise Risk Management Policy, which is reviewed at least annually, into all business activities and strategic planning of the Company and its subsidiaries and operations, including its pension funds.

A list of the top and emerging risks applicable to the Company and how they are mitigated is provided in the 2019 Management’s Discussion and Analysis for the year ended December 31, 2019, available on SEDAR (www.sedar.com).

With respect to the current COVID-19 outbreak, the Board of Directors is monitoring closely the Company’s response to the crisis, holding special meetings to discuss the situation and receiving frequent updates from Senior Management. Our strong risk management framework allowed the Company to take action quickly in response to the pandemic: our business continuity and major health and crisis plans have been activated to ensure the safety and well-being of our employees and the continuity of our operations. Our Crisis Management Committee has also been meeting regularly since January 1[st] , 2020 and daily since March 1[st] , 2020 to review the situation and determine actions and strategies. The Company’s progress on our action plans is monitored by the Board of Directors as the situation continues to evolve, to ensure appropriate actions are taken by the Company to face the crisis.

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1. Voting Information

2. General Information

3. Business of the Meeting

4. Directors

Risk Management Committee Structure

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Board of Directors
Risk Management Compliance Review and Human Resources and Audit Committee
Committee Corporate Governance Compensation
Committee Committee
Enterprise Risk Committee
Operational Committee Executive Committee
Review all aspects related to operations Discuss organization structure, objectives and plans
Operational Investment Committee Profitability Committee
Review investment strategies, performance and discuss Review results and performance
investment risks
Reserve Review Committee Large Loss Committee
Review the adequacy of our financial reserves and Discuss claims related to large losses and potential
the variation of our losses class actions
Fraud Prevention and Management Committee Disclosure Committee
Oversee and monitor the fraud prevention and Ensure all disclosures are complete, accurate
detection activities and timely
Capital Management Committee
Review capital allocation decisions
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See pages 75 to 77 of this Circular for information on the members of the Risk Committee, its responsibilities and activities.

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4. Directors

3. Business of the Meeting

Position Descriptions

Position descriptions have been developed for the Chair of the Board of Directors, committee Chairs and the CEO.
The positions of Chair of the Board of Directors and CEO are separate.
The Chair is an independent member of the Board of Directors.
Mandates have been implemented for oversight functions within the Company: Chief Risk Officer, Chief Compliance Officer, Chief Financial Officer, Chief Internal Auditor, Group Chief Actuary and Canadian Appointed Actuary. See page 51 for more details.

The Board of Directors Mandate and the position descriptions of the Chair of the Board of Directors and of the committee Chairs define the roles and responsibilities of the Board of Directors, its committees and their Chairs. The description of the functions of the CEO as well as principal oversight functions delineate Management’s responsibilities. These mandates, the by-laws of the Company and Board of Directors resolutions that are adopted from time to time, including signature authority limits, clearly define the limits to Management’s authority.

Chair of the Board of Directors

The Chair of the Board of Directors is responsible for the management, development and effective performance of the Board of Directors and its committees. The Chair of the Board of Directors assumes his leadership with a view to ensuring that the Board of Directors and its committees fully execute their mandate and that Directors clearly understand and respect the boundaries between the Board of Directors and its committees and management responsibilities. The key responsibilities of the Chair of the Board of Directors include:

managing the affairs of the Board of Directors to ensure it is organized properly, functions effectively and meets its obligations and responsibilities;
facilitating the Board of Directors’ independent functioning;
acting as a liaison between the Board of Directors, the CEO and Management; and
interfacing with the CEO on performance and governance issues and leading the Board of Directors in the execution of its obligations and responsibilities to the Company for the benefit of all the shareholders.

The Chair of the Board of Directors may not serve as Chair of the Risk Committee.

Chief Executive Officer

The description of functions of the CEO has been developed with the input of the CEO and has been approved by the Board of Directors. This description of functions includes:

leadership;
strategic planning;
financial results and overall performance;
succession planning; and
board relations.

The CEO is responsible for defining, communicating and implementing the strategic direction, goals and core values of the Company with a view to ensuring the long-term success of the Company.

The roles of the Chair of the Board of Directors and CEO of the Company are separate. Claude Dussault was elected Chair of the Board of Directors of the Company, effective January 1, 2008.

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7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

4. Directors

Oversight functions

The Board of Directors has implemented mandates for oversight functions within the Company, namely:

The Chief Risk Officer whose general responsibility is to implement the Enterprise Risk Management Policy which is designed to oversee the Company’s risks and ensure that appropriate actions are taken to protect the Company’s clients, employees, shareholders and other stakeholders. The CRO may call a meeting of the Board of Directors or the Risk Committee at any time;
The Chief Compliance Officer who is the Senior Vice President, Corporate & Legal Services, and Secretary whose general responsibility is to support the Company’s Code of Conduct through disciplined management and oversight of compliance risks and to develop the compliance vision of a world-class organization aimed at identifying, managing and mitigating compliance risks;
The Chief Financial Officer whose general responsibility is to support the Company’s strategic goals through disciplined management and oversight of the financial affairs of the Company;
The Chief Internal Auditor whose general responsibility is to provide independent oversight of the effectiveness of, and adherence to, the Company’s organizational and procedural controls;
The Group Chief Actuary whose general responsibility is the corporate oversight of actuarial practices Company-wide and to provide leadership and direction for the Company’s actuarial community. All of the Company’s Appointed Actuaries report directly to the Group Chief Actuary, including the Canadian Appointed Actuary and the actuary for the Company’s U.S. P&C Subsidiaries, whose general responsibility is to value the actuarial and other policy liabilities of our U.S. P&C Subsidiaries and support the Company’s strategic goals through establishing and implementing sound and appropriate reserving practices; and
The Canadian Appointed Actuary whose general responsibility is to value the actuarial and other policy liabilities of the Company’s Canadian P&C subsidiaries and support the Company’s strategic goals through establishing and implementing sound and appropriate reserving practices.

Director Independence

Eleven (11) of the twelve (12) Directors in 2019 were independent.
Policy on Director Independence.
New Director nominee is independent.
The Audit Committee, HRC Committee (responsible for executive compensation), CRCG Committee (responsible for nomination and compensation of Directors) and the Risk Committee are composed exclusively of independent Directors.
Additional disclosure regarding Directors standing for election is available on pages 18 to 31 of this Circular.

The Company is subject to various disclosure rules, guidelines and requirements governing the independence of the Board of Directors and its committees.

The Board of Directors has approved a Director Independence Policy establishing the standards and procedures determining the independence of Directors and proposed Directors as it relates to the Board of Directors and its committees which are aligned with the requirements for independence set out in National Instrument 52-110 – Audit Committees .

A Director is considered to be independent if that Director, or an immediate family member, has no direct or indirect material relationship with the Company, its subsidiaries or its auditor, and is not a partner, officer or significant shareholder of an entity that has a material relationship with the Company.

The CRCG Committee determines, at least annually, whether a Director is independent, based on information provided by each Director on a conflict of interest questionnaire that lists his/her personal business and other relationships and dealings with the Company or its affiliates and our External Auditor. The conflict of interest questionnaire also requires disclosure of all entities with which a Director is involved.

Additional information relating to each Director standing for election, including the name(s) of any other reporting issuer(s) on whose board the Director serves and the attendance record for each Director, may be found on pages 18 to 31 of this Circular.

Eleven (11) of the twelve (12) candidates proposed for election qualify as unrelated and independent, as they are independent from Management and free from any interest, function, business or other relationship that could, or could reasonably be perceived to, materially interfere with the Director’s ability to act in the Company’s best interest. Only the Company’s CEO is considered a non-independent Director.

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2. General Information

4. Directors

Independence of the Chair of the Board of Directors

The Chair of the Board of Directors is responsible for providing leadership that enhances the effectiveness and independence of the Board of Directors. He manages the Board of Directors’ affairs to assist the Directors in carrying out their responsibilities and helps the Board of Directors operate cohesively by working closely with the chairs of the different committees. He brings a deep-seated knowledge of the Company, substantial leadership experience and a notable level of industry and business expertise.

The Chair of the Board of Directors is an independent director in accordance with our Director Independence Policy as well as all applicable legal, regulatory and securities exchange requirements, including the CSA’s corporate governance rules and guidelines. He does not have any direct or indirect relationship with the Company, its subsidiaries or its auditor that could reasonably be expected to interfere with his ability to exercise independent judgment. Furthermore, the roles of Chair of the Board of Directors and CEO are separated to promote independent leadership and oversight by the Board of Directors.

Policy on External Positions and Interlocking

The Board of Directors has adopted a Policy on External Positions and Interlocking which sets out a procedure to be followed before a Director can be appointed to a high-profile position at another organization and includes a limitation on the number of public company board directorships that can be held by Directors of the Company at one time. The policy sets out that no Director may simultaneously sit on more than four (4) boards of publicly listed companies, including their service as a Director of the Company.

If a Director’s circumstances change significantly in the course of the year such that he/she may potentially have a material relationship with the Company, the Director shall promptly advise the Chair of the Board of Directors, the Chair of the CRCG Committee or the Corporate Secretary, who shall make the necessary inquiries and report to the CRCG Committee if warranted. The CRCG Committee may consider whether any action is required to be taken before the next annual meeting or during the year and if so, make a recommendation to the Board of Directors in this regard.

▶ There are no Director Interlocks among the candidates proposed for election.

It is the Company’s view that Directors should be independent of Management but also of each other. If two (2) Directors sit on more than one (1) board of directors together, this is referred to as a “Director Interlock”.

A Director Interlock results in a perceived risk of decisions being made in the interest of another company and suggests a degree of inter-related interests that might be detrimental to director independence. Interlocking relationships can also raise concerns when there is an imbalance of power between two Directors such as when one of the Directors is an executive on the first board and is evaluated and remunerated by his/her fellow Director. In such a situation, on the second board where he/she is expected to serve as an independent non-executive director, his/her independence may be compromised.

No Director may simultaneously sit on more than four (4) boards of publicly listed companies, including their service as a Director of the Company.

The Chair of the Board of Directors or the Chair of the CRCG Committee will take into account any Director Interlocks before accepting that a Director be appointed to the board of another organization, whether a private or publicly listed company, or a not-forprofit organization.

No Director Interlock will be accepted should there be an actual conflict of interest or appearance of a conflict of interest.

The Secretary’s Office will provide the CRCG Committee with a register of the existing interlock relationships on an annual basis.

The Board of Directors has also adopted a policy providing that no more than one-third of the members of the HRC Committee shall be sitting chief executive officer(s) of another company.

Private Meetings of Directors

Independent Directors met in camera at all meetings of the Board of Directors and also met in camera at all committee meetings.

In 2019, an in camera meeting of the independent Directors was held at all meetings of the Board of Directors.

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2. General Information

It is also the practice of each committee of the Board of Directors to meet in camera immediately following each of its meetings. Topics discussed at these meetings include, but are not limited to, Board processes and contexts, succession planning, executive assessments, organizational changes, and strategy. Each committee held a private meeting following each of its meetings in 2019.

Nomination of Directors

The CRCG Committee acts as the nominating committee of the Board of Directors.
Term of office and Board of Directors tenure framework in place.
Majority Voting Policy in place.
A Skills Matrix as well as a Diversity Matrix has been developed to help identify talent and Board requirements of current and potential Directors.
An evergreen list of Director candidates is maintained. It is one of the tools used to enhance diversity on the Board of Directors. In 2019, specific candidates continued to be identified to fill vacancies that will likely be left by retiring Directors.
Directors may sit on no more than four (4) public company boards at one time and Director Interlocks are reviewed before recommending a new Director nominee to the shareholders.

The CRCG Committee is the nominating committee of the Board of Directors. As such, this committee is responsible for the review of the nomination policy for the Board of Directors and committee members and for its implementation once it is approved by the Board of Directors. The CRCG Committee also reviews the nomination process as well as the orientation and education programs for new members and for current members.

The recruitment process includes references, verification of reputation and ethics as well as background checks (credit and criminal); external consultants are called upon from time to time to give additional support to the recruitment and verification process.

The Board of Directors has adopted a robust majority voting policy for the election of Directors.

Majority Voting for Directors

The Board of Directors believes that each Director should have the confidence and support of the shareholders of the Company. To this end, the Board of Directors has approved a written policy stipulating that a Director nominee who receives more votes against their election than votes in his or her favour at an election of Directors at an annual and/or special meeting of shareholders will be considered not to have received the support of the shareholders and will be required to forthwith submit his or her resignation to the Board of Directors. Such resignation will be referred to the CRCG Committee for consideration.

The Board of Directors will promptly accept the resignation unless the CRCG Committee determines that there are extraordinary circumstances relating to the composition of the Board of Directors or the voting results that should delay the acceptance of the resignation or justify rejecting it. The Board of Directors will act on the CRCG Committee’s recommendation within ninety (90) days of the shareholder meeting at which the election took place. Following the Board of Directors’ decision on the resignation, its decision shall promptly be disclosed by press release and shall include the reasons for its decision.

This policy does not apply to contested meetings. A “contested meeting” shall mean a meeting at which the number of Directors nominated for election is greater than the number of seats available on the Board of Directors.

Board of Directors’ Skills Matrix

In 2017, a new Skills Matrix was developed for use by the CRCG Committee to identify the talent and Board requirements of current and potential Directors.

The Board of Directors’ Skills Matrix sets out the selection criteria and reflects the current strengths of the Board of Directors as a whole. Board of Directors member selection criteria include the following for each candidate: availability, personality, good judgment, ethics and reputation. In addition, Management and the Board of Directors aim to develop a diversified Board of Directors composition that includes the following skills and strengths which are in line with the needs of the Company, its mission and future development. The skills of each of the Directors are identified within the Skills Matrix.

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6. Reports of the Committees

4. Directors

	Claude Dussault Charles Brindamour Janet De Silva Jane E. Kinney Robert G. Leary Eileen Mercier (outgoing director) Sylvie Paquette Timothy H. Penner Stuart J. Russell (new nominee) Frederick Singer Stephen G. Snyder Carol Stephenson William L. Young
Skills(1)
Corporate social responsibility
Financial expertise
Financial services
Governance
Government / Public afairs
International markets
Investment management
Legal and regulatory afairs
Marketing / Brand awareness
P&C operations
Risk management
Strategic leadership / Senior executive
Talent management / Executive compensation
Technology

(1) Definition of skills:

Corporate social responsibility – Experience or knowledge in corporate social responsibility practices and impacts on various stakeholders at a major organization or acquired in a consulting, academic or not-for-profit context.
Financial expertise – Experience in financial accounting, corporate finance and reporting. Experience with Canadian or U.S. Generally Accepted Accounting Principles or International Financial Reporting Standards and knowledge of financial and accounting controls.
Financial services – Oversight, advisory or operational experience in the financial services industry other than serving as a director of the Company.
Governance – Experience with corporate governance practices and principles at a major organization.
Government/Public affairs – Experience in government relations and public policy.
International markets – Experience acquired in the management of an entity with international operations or the management of an entity based outside of Canada.
Investment management – Experience and/or oversight experience with investment and management of investment portfolios.
Legal and regulatory affairs – Experience as a lawyer within a public or major private corporation or in private practice or experience with complex legal and regulatory regimes.
Marketing/Brand awareness – Experience as a senior executive in a major retail customer products, services or distribution company or experience with brand development and awareness as a senior executive of a public or major private corporation.
P&C operations – Operational experience in the P&C insurance industry.
Risk management – Experience with internal risk controls and risk assessment, management and mitigation.
Strategic leadership/Senior executive – Experience in strategic management, planning and development acquired as a senior officer of a public or major private corporation.
Talent management/Executive compensation – Experience and knowledge of human resource practices and principles, with an emphasis on compensation, benefit plans, pension plans, executive remuneration, talent management and succession planning.
Technology – Knowledge or experience relating to information technologies, other technological developments related issues and security needs of a major organization.

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6. Reports of the Committees

4. Directors

Director Term Limits and Other Mechanisms of Board of Directors Renewal

The Board of Directors has determined that a mandatory retirement age is not appropriate for the Company, however, the CRCG Committee has established a planned retirement schedule for all Directors, as part of the succession planning process for the Board of Directors.

Furthermore, it believes that the current average tenure of its members constitutes an adequate balance between established directors with experience with the Company, and recent directors with new perspectives. In 2015, the Board of Directors implemented a tenure and term of office framework which states the maximum period of service for new Directors (excluding the CEO) as 12 years, to be served in successive one (1) year terms, though this term remains open to extension. However, term limits do not provide Directors with a guarantee of tenure. The Company is continuing to transition to the tenure and term of office framework and aims to fully comply with the maximum period of service of 12 years as new directors are named and the Board of Directors is refreshed.

The CEO shall serve as a Director so long as he or she holds the office of CEO. Thereafter, he or she may be retained as a Director in accordance with the framework. Where a former CEO of the Company is elected to serve as a Director, other than in his or her capacity as CEO, tenure will be counted as of the first annual meeting where such former CEO is so elected.

The CRCG Committee is responsible for reviewing the composition of the Board of Directors on an annual basis, proposing new directors and administering the tenure limit and term of office framework. The CRCG Committee will exercise discretion judiciously to ensure that the Board of Directors remains composed of independent directors, possessing the required skills and in-depth knowledge of the Company.

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Average Tenure Average Tenure
(current) (post-election)
8.2 years 7.8 years
Tenure (current) Tenure (post-election)
0–4 years 33% 0–4 years 33%
5–8 years 17% 5–8 years 25%
9–12 years 25% 9–12 years 25%
Over 12 years 25% 8.2 year Over 12 years 17% 7.8 year
average average
----- End of picture text -----

Should all proposed Director nominees be elected.

The Board of Directors may extend such term where it determines that it is in the best interests of the Company to do so. Among the factors that may influence the decision to recommend the nomination of a director with a tenure over 12 years are the institutional experience and key competencies of said director. When evaluating its composition, the Board of Directors always aims to balance various criteria between its independent members, including the representation of the Designated Groups, as well as skills, age, gender, tenure, linguistic background and residency. The ultimate objective is ensuring its fundamental responsibility of providing stewardship and good governance for the Company. We believe that our high governance standards, policies and procedures effectively maintain the independence of longer-tenured directors.

Rotation of membership on the Board of Directors committees is discretionary and may be used by the Board of Directors to ensure continuity. Directors are elected to a committee for a term of one (1) year. At the end of each year, the CRCG Committee shall review the lists of Board of Directors committee members and make recommendations on their composition to the Board of Directors.

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5. Corporate Governance Practices 6. Reports of the Committees

7. Statement on Executive Compensation 8. Approval of the Board of Directors

The CRCG Committee is also responsible for ensuring assessment of the Board of Directors and the members of the Board of Directors and its committees on an ongoing basis. As part of the process, the CRCG Committee considers the competencies and skills of the Board of Directors, as a whole, and required competencies and skills from new members. In addition to reflecting on diversity of skills, age, gender, tenure, linguistic background and residency, the CRCG Committee will screen candidates to ensure they have the following attributes:

integrity;
judgment;
financial literacy;
excellent communication skills;
ability to act as a team player; and
adherence to the values of the Company.

Furthermore, the Chair of the Board of Directors and the Chair of the CRCG Committee will take into account any Director Interlock before accepting that a candidate be proposed for nomination.

The CRCG Committee uses the Board of Directors Skills Matrix in identifying the best Director candidates.

In 2019, specific candidates continued to be identified to fill potential vacancies or vacancies that will likely be left by retiring Directors. The CRCG Committee reviewed its evergreen list for 2019 in consultation with the Board of Directors, identifying potential candidates with diverse experience and expertise to deepen the Board of Directors’ and each of the committees’ bench strength, and discussed how to use this tool as a means to enhance diversity, in all its forms, on the Board of Directors. Furthermore, members of the CRCG Committee met with a number of candidates in an effort to identify individuals with the skills and competencies that are likely to be needed to fill vacancies that are likely to occur in upcoming years.

The Nomination Policy process also provides for verification and monitoring of conflicts of interest and relationships with the Company and its affiliates, as well as the independence of Directors. Finally, the Nomination Policy and Diversity Policy provide for diversity criteria. For further details, please refer to the “Diversity” section on page 60.

These board renewal mechanisms, along with the formal Board of Directors and committee assessment process discussed below, aim to ensure ongoing Board of Directors renewal and to assemble a diverse Board of Directors putting forward an effective balance between fresh perspectives and experienced Directors.

Advance Notice By-law

In 2017, shareholders adopted By-Law No. 2 of the Company, a By-law relating to Advance Notice of Nominations of Directors of the Company which establishes a framework for advance notice of nominations of persons for election to the Board of Directors. By-law No. 2 sets deadlines for a certain number of days before a shareholders’ meeting for a shareholder to notify the Company of his, her or its intention to nominate one or more directors, and lists the information that must be included with the notice for such nominations to be valid. By-Law No. 2 applies at an annual meeting of shareholders or a special meeting of shareholders that was called to elect directors (whether or not also called for other purposes), may be waived by the Board and does not interfere with the ability of shareholders to requisition a meeting or nominate directors by way of shareholder proposal in accordance with the Canada Business Corporations Act . The purpose of this requirement is to treat all shareholders fairly by ensuring that all shareholders, including those participating in a meeting by proxy rather than in person, receive adequate notice of director nominations and sufficient information with respect to all director nominees in connection with any annual or special meeting of shareholders. The Board of Directors believes that this requirement establishes a transparent and fair process for all shareholders to follow if they intend to nominate directors, and for all shareholders to have sufficient time and information before they vote for the election of directors. By-law No. 2 is also intended to facilitate an orderly and efficient meeting process. By-Law No. 2 is available on our website at www.intactfc.com and on SEDAR at www.sedar.com.

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2. General Information

4. Directors

Board of Directors and Board Member Assessment

The evaluation of the Board of Directors is overseen by the CRCG Committee with assistance from the Secretary’s Office of the Company and with the support of an external consultant, as required.
The CRCG Committee is responsible for ensuring assessment of the Board of Directors, committees, the Chair of the Board of Directors and each of the committees and individual Directors.
A self-assessment questionnaire is completed by all Directors.
Committee Chairs also complete a self-assessment questionnaire and meet with the Chair of the Board of Directors to discuss their performance.
The Chair of the Board of Directors is assessed by all Directors. The Chair of the CRCG Committee meets with the Chair of the Board of Directors to discuss his/her assessment.
The Chair of the Board of Directors meets each member of the Board of Directors and obtains his or her comments in relation to peer review.

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Who Undergoes Who Performs the Assessment?
Assessment?
The Directors • The Directors themselves (self-assessment)
Board of Directors • All Directors
The Board of
Directors and
Directors assessment
process is overseen
Chair of the Board • All Directors by the CRCG
of Directors Committee and the
Secretary’s Office of
the Company, with
the support of an
Committees • All members of the committee in question external consultant,
as required.
Chairs of the • The Chairs of the committees themselves (self-assessment)
Committees
• All members of the committee in question
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2. General Information

Since the Company became publicly listed, the Board of Directors has been proceeding with its self-assessment. A self-assessment questionnaire is completed by all Directors. The results are analyzed by the Secretary’s Office of the Company for the benefit of the CRCG Committee and the Board of Directors.

The CRCG Committee monitors the Board of Directors self-assessment process and reports to the Board of Directors which also receives a summary report and analysis that includes all of the comments received from the Directors. The CRCG Committee also reviews and approves an action plan to address comments from the Directors with a view to improving Board of Directors and committee processes, documentation and performance.

Questionnaires and processes adapted to the particular context of the Company have been put into place for the self-assessment of each individual Director. Both the process and the questionnaires are reviewed annually to make sure they continue to be adapted to our particular context and to take into account new trends and best practices. The self-assessment process includes completion of a selfassessment questionnaire by all of the Directors, who return it on a confidential basis to the Secretary’s Office for analysis and reporting to the Chair of the Board of Directors, with recommendations. Each Director will then meet with the Chair of the Board of Directors to discuss his or her contribution to the Board of Directors and its committees, any views on the performance of his or her peers, as well as his or her own competencies and skills and what he or she is expected to bring to the Board of Directors. The Directors will also give their comments and feedback on the assessment and peer review process and the Chair of the Board of Directors will follow up with each Director in this regard. The report is presented to the CRCG Committee.

The CRCG Committee monitors the Board of Directors self-assessment process and reports to the Board of Directors

Committee Chairs are assessed in a similar manner. Each committee Chair must complete a self-assessment and then meet with the Chair of the Board of Directors to discuss his or her performance.

Finally, the Chair of the Board of Directors is assessed by each Director who gives his or her comments to the Chair of the CRCG Committee; the Chair of the CRCG Committee then discusses their assessment with the Chair of the Board of Directors.

Orientation and Continuing Education of our Directors

Directors are provided with regular briefings regarding industry developments, new legislation as well as industry, economic, political and ESG trends.
Information sessions for specific subjects are also held.
Directors have the opportunity to meet one-on-one with key executives.
The Board of Directors also holds a special meeting focused specifically on the corporate strategy of the Company.
The Board of Directors had the opportunity to visit the operations of OneBeacon in Minnesota in 2019.

The CRCG Committee is responsible for ensuring that all Directors:

Fully understand the nature of their roles, responsibilities and duties as Directors; and
Are knowledgeable about the nature and operation of the company’s business.

Directors receive individual orientation that reflects their knowledge, skills, experience and education. Each new Director receives a copy of onboarding materials which include information on the corporate and organizational structures of the Company and its subsidiaries, a description of the Board of Directors and its committees, their mandates and composition, the corporate governance and compliance programs of the Company, Living our Values, and relevant policies of the organization. Each Director also receives periodic updates of these materials.

Programs for new Directors also include one-on-one meetings with executives holding key functions at the Company.

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Strategic sessions are held at all the regularly scheduled meetings of the Board of Directors to reposition the Company in its various markets and to discuss its long-term objectives and overall business strategy. In addition, all Directors receive verbal reports by the Committee Chairs on the proceedings of each Committee of the Board of Directors. Furthermore, special subjects are also covered with a view to keeping the Directors informed and up-to-date in relation to industry developments, new legislation that affects operations and distribution, major files and projects, as well as economic, political and ESG trends.

▶ In 2019, the Board of Directors held strategic sessions at all its regularly scheduled meetings to discuss positioning of the Company, its long-term objectives and overall business strategy. It also held a meeting specifically focused on the Company’s overall corporate strategy.

Each year, the Board of Directors holds dedicated strategic planning meetings or discussions, at which an overview of the industry is provided to the Directors together with an assessment of the risks, opportunities and market trends. Threats and opportunities as well as strengths and weaknesses are presented and discussed with the Board of Directors, who are expected to give their points of view and provide input on the assessment of such risks. Senior Management is also invited to present its vision of the main aspects affecting the Company’s sectors of activity.

On an ongoing basis, the Company:

Ensures that Directors have timely access to materials and information required to properly discharge their responsibilities;
Maintains a secure Directors’ portal for prompt dissemination of information and provides published information, industry publications, articles of interest and other relevant materials to Directors in between meetings; and
Canvasses Directors for suggestions as to topics and issues for which they would like to receive a presentation, briefing or report.

Finally, site visits and training sessions are organized from time to time. Training sessions cover various aspects related to the Company and its subsidiaries, including subjects such as industry information, interpretation of financial information, marketing programs, distribution programs, corporate governance, risk management and other pertinent subjects.

Some of the presentations and publications provided to the Board of Directors and its committees in 2019 are set out below:

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Educational Event Presenter Date Attendees
Financial market and economic reviews IIM’s operational February 4 All Risk Committee members
investment team May 6
July 29
November 4
Strategic sessions and developments updates Management February 5 All Directors
May 7
July 29
July 30
November 5
Corporate governance best practices and industry benchmarking report, including a Legal and February 4 All CRCG Committee members
presentation on current issues and emerging trends in relation to the Annual Meeting Compliance team
of Shareholders of the Company of 2019
Presentation on populism and government External consultant May 6 11 of 12 Directors
Presentation of an overview of the changes to the legislation relating to the tax WTW July 29 All HRC Committee members
treatment of stock options
Presentation on the Company’s shareholder activist preparedness Management May 8 9 of 11 independent Directors
Presentation on cyber environment and operational defense, including the Management May 8 9 of 11 independent Directors
technologies used to protect the Company, the various attack vectors and the
priorities for 2019-2020
Presentation on the Company’s cyber insurance coverage and modeling Management May 8 9 of 11 independent Directors
Presentation of an overview of cyber risk from an insurance perspective, the Management May 8 9 of 11 independent Directors
Canadian and U.S. landscapes and the Company’s cyber risk products in this area
Presentation on industry environment and progress of the Company Management July 29 All Directors
Presentation on U.S. specialty lines distribution Management July 29 All Directors
Presentation on Brand architecture and transition plan Management July 29 All Directors
Presentation on political landscape External consultant November 4 All Directors
Development updates on IFRS 17 Management February 4 All Audit Committee members
May 6
July 29
November 4
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3. Business of the Meeting

5. Corporate Governance Practices 6. Reports of the Committees

7. Statement on Executive Compensation 8. Approval of the Board of Directors

4. Directors

5.5 Diversity

We are a company that values diversity. We believe in inclusion and embracing all dimensions of diversity because it makes us stronger and drives innovation and creativity.
The Diversity Policy adopted by the Board of Directors provides for consideration of criteria including gender diversity, background, ethnic and cultural diversity, sexual orientation diversity, individuals with disabilities and diversity of skills, experiences and expertise as part of the nomination process for Directors and members of the Executive Committee.
The Diversity Policy mandates the representation of at least 30% each of women and men on the Board of Directors.
The current female representation on the Board of Directors is 41.6%, and will be 33.3% should Director nominee Stuart J. Russell be elected.
35.5% of Executive Committee members are women.
We promote diversity through various initiatives including our employee networks, diversity and inclusion training for managers, celebration of our Diversity and Inclusion Day and more.

The Company recognizes the value of a diverse and inclusive environment, as it enables broader exchanges of perspectives and enriches discussions at all levels of the business. We welcome a diversity of ideas, approaches and styles and ensure we live our values of respect and integrity. This is enshrined in our Living Our Values code of conduct.

The Board of Directors and Management monitor the Company’s actions on diversity on an ongoing basis and make recommendations for improvements throughout the organization.

Diversity information and data is presented in this section for members of the Board and for the following management groups:

Executive Ofcers	has the meaning provided for under securities legislation, and targets, among other positions,
	individuals who areperforming policy-makingfunctions in respect of the Company.
Executive Committee	refers to the most senior management committee of the Company, comprised of the Senior Executives
	of the Company. All Executive Ofcers are members of the Executive Committee.
Vice President and Higher	means all Executives and Senior Executives, as defned hereunder, which represent Vice Presidents
	and higherpositions. All members of the Executive Committee are included in thisgroup.
Managerial Positions	means all managerial level positions, including team leaders, and higher positions within the Company.
	All members of the Vice President and Highergroupare included in thisgroup.

Board and Executive Committee Diversity

The Company’s Diversity Policy highlights various facets of diversity including gender diversity, background, ethnic and cultural diversity, sexual orientation diversity, individuals with disabilities and diversity of skills, experiences and expertise. In 2019, this policy was amended in order to align it with the enacted amendments to the Canada Business Corporations Act , which require the disclosure of additional information regarding the representation of Designated Groups at the level of the Board of Directors and Executive Committee members. The diversity criteria provided for in the Diversity Policy are considered in the selection process of new Directors and Executive Committee members, to ensure the broader exchange of perspectives and balance brought by diversity of thought, experience and background.

When recruiting or selecting new Directors or new Executive Committee members, the Board of Directors and Senior Management, with the Diversity Policy in mind, always strive to recruit candidates who are highly qualified based on their experience, functional expertise and personal skills. The CRCG and HRC Committees retain oversight responsibility for monitoring the implementation and effectiveness of the Diversity Policy with respect to the Board of Directors and Executive Committee members, respectively, and recommending changes to the Board of Directors.

The Company has signed the Catalyst Accord 2022, which calls on Canadian boards and CEOs to pledge to accelerate the advancement of women in business by increasing the average percentage of women on boards and in executive positions to at least 30% by 2022.

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4. Directors

Board of Directors Diversity

The Board of Directors applies the diversity criteria through its Nomination Policy and the Diversity Policy. In addition to its own search, the Board of Directors, from time to time, engages qualified independent external advisors to conduct searches for new Directors. These independent advisors are instructed to present a slate of potential Directors based on the criteria discussed above.

The Board of Directors has adopted a Board of Directors composition target providing that women and men will each represent at least 30% of the Board of Directors, while continuing to ensure optimal representation of skills and expertise to help serve the Company’s and our stakeholders’ best interests.
The Company was an early signatory to the 30% Club Canada, reaffirming its continued support of the notion that it is a good business practice to have women holding at least 30% of the seats on the Board of Directors as well as having strong representation in senior management.

Through its long-standing actions, the Board of Directors has proven that it remains committed to gender diversity and will continue to strive to achieve balance in this regard. In 2019, our Board of Directors was composed of twelve (12) Directors. Five (5) of the twelve (12) Directors were women representing 41.6% of the total with one being Chair of a Board committee. In 2020, should Director nominee Stuart J. Russell be elected, women will represent 33.3% of its membership.

Gender – Board of Directors (current)

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Male 58%
Female 42%
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**Gender – Board of Directors (post-election*)**

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Male 67%
Female 33%
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Should all proposed Director nominees be elected.

The age range, tenure, gender, languages spoken and residency of our Directors are listed in the diversity matrix below:

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Languages
Age Tenure Gender spoken Residency
Claude Dussault
Charles Brindamour
Janet De Silva
Jane E. Kinney
Robert G. Leary
Eileen Mercier (outgoing director)
Sylvie Paquette
Timothy H. Penner
Stuart J. Russell (new nominee)
Frederick Singer
Stephen G. Snyder
Carol Stephenson
William L. Young
45 – 60 61 – 70 >70 0 – 4 Years 5 – 8 Years 9 – 12 Years >12 Years Male Female English French Ontario Québec Alberta USA
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7. Statement on Executive Compensation 8. Approval of the Board of Directors

While the Board of Directors does not currently include Directors who identify as visible minorities, Indigenous peoples or persons with disabilities, the Diversity Policy highlights various facets of diversity and these criteria are taken into consideration in succession planning. The Company has not adopted formal targets for representation of members of visible minorities, Indigenous peoples or persons with disabilities on the Board of Directors, because although these diversity criteria are considered in the context of Board renewal, as further described on page 55 of this Circular, new Directors are recruited and selected based on their experience, functional expertise and personal skills to ensure good stewardship and governance of the Company.

Executive Committee Diversity

The diversity criteria provided for in the Diversity Policy are considered in the selection process of members of the Executive Committee. As at March 1, 2020, the Executive Committee of the Company was composed of 31 Senior Executives; of those, 11 or 35.5% of the total were women.

Beyond gender, the Company places importance on other facets of diversity. To this end, the Company has begun to collect data on a self-identification basis from members of the Executive Committee, to determine whether they identify as belonging to one or more of the following groups: visible minorities, Indigenous peoples and persons with disabilities. As at March 1, 2020, the Executive Committee included one (1) Senior Executive (representing 3.2% of the Executive Committee members) who identified as a visible minority but did not include any Senior Executives who identified as Indigenous peoples or persons with disabilities.

Executive Officer Diversity

The composition of our Executive Officers group, as defined under securities regulations, was reviewed in 2019. The number of positions - covered by this definition was reduced from twenty nine (29) executive officer positions in 2018 to sixteen (16) positions in 2019. We believe that the revised composition is more in line with the definition provided in the securities regulations, which targets, among other positions, individuals who are performing policy-making functions in respect of the Company. All Executive Officers are members of the Executive Committee.

As at March 1, 2020, IFC had a total of sixteen (16) Executive Officer positions and of those 5 or 31.3% were held by women. Executive Officer positions do not currently include individuals identifying as visible minorities, Indigenous peoples or persons with disabilities. The Company has not adopted formal targets for representation of women, members of visible minorities, Indigenous peoples or persons with disabilities in Executive Officer positions, as we always strive to recruit candidates who are highly qualified based on their experience, functional expertise and personal skills. However, diversity is taken into account in the context of succession planning pursuant to the Diversity Policy.

Executive and Workforce Diversity

The Company is committed to investing in its employees to develop an appropriate talent pool aligned with the Company’s needs and goals at all levels of the business.

In addition to skills, talent, experience and expertise, a number of other factors contributing to diversity are taken into consideration when assessing possible candidates for all positions, whether as employees, managers, Executives and Senior Executives.

The Company’s commitment to diversity is demonstrated in several ways, including the work of its Diversity and Inclusion Council and initiatives, such as diversity and inclusion training, employee networks and a structured mentoring program and workshops for identified women successors.

For the third year in a row, Women in Governance ( La Gouvernance au Féminin ), a not-for-profit organization that supports women in their leadership development, career enhancement and access to board seats, gave the Company the Certification of Parity for our actions towards the advancement of women in business. Intact was also one of the eight organizations that achieved Platinum Level certification in recognition of our commitment to advancing the cause of women.

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7. Statement on Executive Compensation 8. Approval of the Board of Directors

4. Directors

Vice President and Higher and Managerial Positions Diversity

The Company believes that, through its various initiatives, tools and recognition of the importance of the role played by women, it is developing a pipeline of leadership talent that will represent a significant constituency at senior levels of management over time.

As at December 31, 2019, Vice President and Higher positions within the organization represented 156 positions; 56 of those positions or 35.9% were held by women. When considering all Managerial Positions (except those of On Side and FCC), women held 54.1% of such positions within the Company. The proportion of women in Managerial Positions, as well as in Vice President and Higher positions has kept pace as the Company has grown in recent years, as shown in the table below.

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Proportion of women in Vice President Proportion of women in Managerial
Year and Higher positions Positions
----- End of picture text -----

2019	35.9%	54.1%(1)
2018	37.2%	54.2%(2)
2017	32.7%	no data(3)
2016	33.9%	53.7%
2015	32.8%	53.5%

(1) Proportion of women in 2019 Managerial Positions excludes On Side and FCC’s employees, due to the recent acquisitions and the unavailability of data

(2) Due to a realignment of management levels post-acquisition of OneBeacon, this figure has been revised from previous disclosure.

(3) Proportion of women in 2017 Managerial Positions was not calculated for 2017 due to the OneBeacon acquisition.

Moreover, as part of its succession planning, the Company maintains a “Female Future Leaders” list, identifying key women talents across the organization developing the required skills and expertise to be nominated to Vice President and Higher positions in the future.

The role played by women within the Company and their presence in Vice President and Higher positions are of great importance. The Company will continue to promote diversity, including the advancement of women, in the organization.

For further information regarding the Company’s diversity initiatives, please refer to the Company’s Social Impact Report which is available on the Company’s website at www.intactfc.com.

Diversity and Inclusion Council and Team

The Diversity and Inclusion Council is comprised of 14 senior leaders from all areas of the Company. These leaders act as ambassadors who support the execution of diversity and inclusion initiatives across the Company and promote strategies that create an inclusive environment that is respectful of all individuals at every level of the Company to go along with a culture that attracts, retains and develops our current and future high performing individuals from the broadest talent pool.

To achieve its goals, the Diversity and Inclusion Council aims to:

advise on the strategic direction of diversity and inclusion initiatives;
raise awareness among leaders about the ways diversity improves performance and impacts the bottom line;
influence other leaders to drive change;
support new and existing employee networks;
challenge existing practices when a need is identified; and
offer mentoring and coaching to develop and retain diverse team members.

The Company has also built out a Diversity and Inclusion team within the human resources function. This team is dedicated to supporting the Diversity and Inclusion Council and the Company more broadly in implementing measures designed to promote diversity and inclusion in the workplace.

Employee Networks

The Company values its employees for who they are and encourages them to contribute to their full potential. It sponsors various employee networks which aim to create an inclusive environment for all employees.

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2. General Information

4. Directors

3. Business of the Meeting

Key examples of such employee networks include:

Womentum Women’s Network, a network designed and lead by women to enable professional and personal growth and development, leadership skills development and forging of new business relationships; and
The national LGBT and Allies Network, a resource for lesbian, gay, bisexual and transgender employees and their allies in creating a sense of community and inclusiveness. They participate in community events like Pride, partner with charitable organizations like EGALE Human Rights Trust and engage employees nationally with various activities like this year’s “How to be an Ally” workshop educating employees on how to support colleagues who identify as LGBTQ+. The national LGBT and Allies Network acts as a catalyst in the creation of a LGBTQ+ inclusive workplace.

In 2019, we launched the WoMIN & Allies Employee Network, a new forum for visible minority women providing education, assisting with career development and improving employee engagement. The new network’s mandate is to advocate for visible minorities in the workplace, ensure the Company emphasizes the value that diversity and inclusion brings to the organization, and provide a strong voice that can be heard by leadership.

Trans Inclusion Guide

In 2019, we released our Trans Inclusion Guide, which contains information on what it means to transition and how to support a colleague who is transitioning. It also exists to support questioning individuals and those who have yet to come out to their coworkers about their transition, so they understand the resources available to them.

Mentoring Program for Women

The Company has a structured mentoring program for identified women successors. As part of its succession planning, the Company matches mentors to female employees who demonstrate potential in leadership skills and qualities.

5.6 Shareholder Engagement

The Board of Directors has adopted a Shareholder Engagement Policy in order to facilitate an open dialogue and the exchange of ideas between the Board of Directors and Management and shareholders.
The Board of Directors has also adopted a Shareholder Engagement Plan setting forth the engagement actions that Management and the Board undertake with existing and prospective shareholders, as well as the objectives of such engagement.

The Board of Directors and Management welcome interaction with shareholders and believe that it is important to have direct regular and constructive engagement with them in order to allow and encourage open dialogue and the exchange of ideas.

We communicate with our shareholders and other stakeholders through various channels, including our annual report, management proxy circular, annual information form, quarterly reports, social impact report, news releases, website, presentations at investor and industry conferences and other meetings. In addition, our quarterly earnings call is open to all and we hold our annual meeting of shareholders at different locations across Canada so that all our shareholders have the opportunity to participate. Our website also provides extensive information about the Company.

Other examples of engagement practices at the Company include meetings with institutional investors and organizations representing a group of shareholders, an annual say-on-pay vote in relation to executive compensation, creating conduits for communication with smaller shareholders on an ongoing basis, as well as addressing any shareholder proposal submitted before our annual meeting of shareholders.

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4. Directors

3. Business of the Meeting

The following is a summary of shareholder engagement actions that Senior Management and the Board of Directors undertake with existing and prospective shareholders pursuant to the Company’s Shareholder Engagement Plan:

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Type of engagement Frequency Who engages Who we engage with, what we talk about
Conference calls Quarterly Senior Management With the investment community to review the Company’s most recently
released financial and operating results.
Investor Day Every 18 to Senior Management Chair of the Select analysts, portfolio managers and shareholders are invited to attend
24 months Board (and other Directors as may each year and Directors are present to discuss governance and strategy.
be identified by the Chair)
Annual Meeting of Annually Board of Directors and Senior Holders of Common Shares are invited to attend the annual meeting of
Shareholders Management shareholders and are entitled to vote and discuss the business of the
meeting with the Board and Senior Management.
News releases As required Senior Management Released to the media throughout the year to disclose selected issues.
Non-deal investor road Continuous Senior Management Individual meetings with key shareholders to discuss the Company’s
shows business and operations, answer questions and obtain feedback.
Conferences Continuous Senior Management Speak at industry conferences, bank sponsored conferences, about our
business and operations, key industry topics.
Meetings, calls and As required Investor Relations With investment advisors and non-institutional shareholders to address any
discussions shareholder-related concerns and to provide public information.
Direct Board and Continuous Chair of the Board (and other Meetings with Company’s significant shareholders to address pre-identified
shareholder engagement Directors as may be identified by subject matter(s) or related issues raised by the shareholder.
the Chair)
Ad hoc meetings as Annually Chair of the Board and Chair of With shareholder advocacy groups and proxy advisory firms to discuss any
requested HRC, Chair of CRCG or Chair of issues, concerns or to obtain feedback on a particular subject matter.
Risk Committee
Senior Management
Brendan Woods Survey Quarterly External Consultant Investor intelligence report – anonymized survey of shareholders met by
senior management in the previous three months in order to obtain feedback
on their perception of our performance (absolute and relative to our peers).
----- End of picture text -----

In 2019, direct engagement between the Chair and shareholders increased significantly. The Chair engaged in private meetings with significant shareholders representing approximately 20% of the ownership of the Company, to hear their feedback. Various topics were discussed during these meetings, including long-term strategy and the Company’s approach to potential disruptions in the industry, ESG matters, M&A opportunities, operational issues and management compensation. We learned from those meetings that shareholders support the Company’s approach to compensation and appreciate the transparency and diversity of the Board of Directors.

On November 19, 2019, we also held an investor day during which a presentation was held featuring a panel of board members comprised of the Chairs of the Audit Committee and CRCG Committee. The Directors discussed corporate governance and strategy, as well as the role of the Board in overseeing these matters.

In 2020, we intend on continuing board shareholder engagement through meetings between our significant shareholders, the Chair of the Board of Directors and other Directors. We believe such outreach is of high value to our shareholders and to the Board of Directors and will continue to demonstrate a high level of transparency.

The Board of Directors recognizes that shareholder engagement is an evolving practice in Canada and globally and will review the policy and its practices periodically to ensure that they are effective in achieving its objectives.

The Board of Directors believes the procedures described in our Shareholder Engagement Policy and Shareholder Engagement Plan reflect best practices in shareholder engagement and we encourage our shareholders to reach out to our Directors and Management to discuss matters of significance. A copy of the Shareholder Engagement Policy and further information on our shareholder engagement events are available on our website at www.intactfc.com.

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7. Statement on Executive Compensation 8. Approval of the Board of Directors

5.7 Additional Information

The Board of Directors has approved the above Statement of Corporate Governance Practices on the recommendation of its CRCG Committee.

Additional information about our governance programs may be found on SEDAR (www.sedar.com) where our Code of Conduct document is filed, on our website at www.intactfc.com, and in this Statement of Corporate Governance Practices.

To communicate directly with the Board of Directors and Management, please see the contact details in the “How to contact us” section on page 129 of this Circular.

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2. General Information

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6. Reports of the Committees

The main responsibility of the Board of Directors is to oversee the management of the business and affairs of the Company, including its pension funds. In carrying out its duties and responsibilities and discharging its obligations, the Board will, directly and through its committees, provide direction to management to pursue the best interests of the Company.

More specifically, the mandate of the Board of Directors is to review and approve strategic planning and the corporate objectives of the Company, including by reviewing and approving all major strategy and policy recommendations and monitoring the Company’s performance against the strategic plan, to supervise Senior Management including oversight functions, compensation, succession planning and talent development, to identify risks and assess their impact on the business and affairs of the Company, to oversee and monitor the Company’s corporate social responsibility initiatives and the integration of ESG principles throughout the Company, including with respect to diversity, and to ensure that adequate controls exist in relation to ethics, compliance and corporate governance, including monitoring of conflicts of interest.

Furthermore, the Board of Directors reviews and approves the Company’s significant disclosure documents including financial statements, oversees and monitors the integrity and effectiveness of the Company’s internal controls and management information systems and ensures that the Company adopts appropriate policies and procedures that provide for timely and accurate disclosure to regulators, shareholders, employees, analysts and the public, that meet all applicable legal and regulatory requirements and that facilitate feedback from stakeholders and shareholder engagement.

To this end, the Board of Directors delegates certain of its functions to committees and these committees are responsible for reviewing the above aspects more closely and reporting their findings to the Board of Directors. The Board of Directors, the committees and their members may retain independent consultants to advise them. In order to fulfill their mandates, the Board of Directors and the committees may request access to Company records or meetings with any employees of the Company at any time.

The reports of the committees of the Board of Directors are reproduced hereunder.

6.1 Compliance Review and Corporate Governance Committee

Composed exclusively of independent directors
Met four (4) times in 2019
Preparatory sessions before the CRCG Committee meetings were held by the Chair of the CRCG Committee with the CCO and other functions in the Company
In camera sessions held at all meetings of the CRCG Committee

Role of the Compliance Review and Corporate Governance Committee

The CRCG Committee is responsible for ensuring a high standard of ethics, compliance and governance in the Company, including its pension funds, and that the Company meets its legal requirements and engages in best practices as determined by the Board of Directors. The CRCG Committee plays a crucial role in the integration of ESG principles throughout the Company’s practices, particularly with respect to governance matters, ensuring that internal policies and controls are in place to protect and act in the best interest of all stakeholders.

The CRCG Committee oversees (i) the governance framework of the Company and of its pension plans, (ii) the compliance framework, and (iii) the compliance programs of the Company which includes related party transactions, market conduct programs and policies, as well as the implementation of corporate compliance initiatives.

As part of its mandate, the CRCG Committee reviews the Company’s policy on appointment of Board of Directors and committee members and identifies and recommends candidates for nomination to the Board of Directors. The CRCG Committee is also responsible for the implementation and review of the nomination process as well as the implementation and review of orientation and education programs for Board of Directors members. It is responsible for assessing the Board of Directors, its members and its committees on an ongoing basis.

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4. Directors

1. Voting Information

3. Business of the Meeting

2. General Information

The CRCG Committee reviews the Company’s practices and approach in relation to Directors’ compensation and makes its recommendation to the Board of Directors. It assists the Company in defining director compensation that attracts and retains key members, with a view towards enhancing the Company’s strategic planning process and attaining its corporate objectives.

The full mandate of the CRCG Committee is available in the Corporate Governance section of the Company’s website (www.intactfc.com).

Composition of the Compliance Review and Corporate Governance Committee

The CRCG Committee is composed of a minimum of three (3) Directors, and is currently composed of five (5) Directors, all of whom are independent, and none of whom is a member of Management nor an employee of the Company or its P&C insurance subsidiaries.

The CRCG Committee met four (4) times in 2019. Members of Management participated in meetings at the invitation of the Chair of the CRCG Committee. Detailed materials were distributed in advance of each meeting, containing information which allowed the CRCG Committee to make informed decisions. In camera sessions were held at every meeting. All of the CRCG Committee members attended all of the 2019 meetings.

Board of Directors Appointment and Assessment Processes

The CRCG Committee is the nominating committee for Board member appointment and is responsible for the Board succession process in general. As such, the Committee is responsible for the implementation and review of the nomination process as well as the implementation and review of orientation and education programs for Board members. The CRCG Committee recommends candidates for appointment or election as members of the Board, as members of committees of the Board, as Chair of the Board or as Chair of the Board’s committees.

In 2019, the CRCG Committee reviewed the self-assessment process of Directors, which includes selfassessments by each Director and each Chair of the Board of Directors and its committees, and a private meeting with the Chair of the Board of Directors to discuss such self-assessments.

The above processes of the Board of Directors were managed by the Secretary’s Office of the Company for 2019.

The Chair of the Board of Directors also privately discusses peer review with each member of the Board of Directors, and the Chair of the CRCG Committee discusses the performance of the Chair of the Board of Directors with each member of the Board of Directors and then reviews such performance with the Chair of the Board of Directors.

Every year, the Secretary’s Office reviews the results of the assessment of the Board of Directors, of its committees and of its members, including the Chair of the Board, and proposes an action plan in view of continued improvement and enhancement of the functions and efficiency of the Board of Directors and its committees. Such action plan is reviewed and approved by the CRCG Committee and the Board of Directors, and realization of the action plan is also commented on by the Board of Directors members the following year.

Corporate Governance

The CRCG Committee monitors ongoing developments regarding corporate governance and identifies potential conflicts of interest among Directors. The CRCG Committee also reviews governance topics that it identifies or are referred at the request of the Board of Directors, other committees of the Board of Directors or the Company, including policies in relation to Director and executive compensation, conflicts of interest, diversity and human rights.

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William L. Young

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Janet De Silva

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Timothy H. Penner

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Frederick Singer

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Carol Stephenson

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2. General Information

4. Directors

Pension Plan Governance Framework

The CRCG Committee approves the framework of the compliance programs of the Company’s pension plans and any material amendments thereof.

Compliance and Market Conduct Programs

The CRCG Committee reviews the Company’s various compliance programs which include corporate and operational compliance, public company compliance, investment compliance, legislative compliance, the ombudsman’s office, the privacy office, market conduct standards, as well as key compliance risks, incidents and compliance projects, and the Company’s relationships with clients, brokerages and regulatory authorities.

Related Party Transactions and Conflicts of Interest

The CRCG Committee reviews the related party transactions during the year in accordance with applicable legislation to ensure that when any of the Company’s Canadian P&C Insurance Companies engage in related party transactions, the terms and conditions of such transactions are at fair market value or at least as favourable as prevailing market terms and conditions, or fair value if fair market value references do not exist. It also reviews the Company’s procedures to ascertain their effectiveness in complying with insurance legislation and their effectiveness in identifying related party transactions that may have a material effect on the stability and solvency of the Company and its subsidiaries. The CRCG Committee also approves related party transactions except those that the CRCG Committee must recommend to the Board of Directors for approval by law.

Compliance Function

The CRCG Committee reviews and recommends to the Board of Directors for approval the appointment or dismissal, if deemed appropriate, of the CCO. The CRCG Committee periodically approves the mandate of the compliance function and obtains assurances that this function has the necessary budget and resources to meet its mandate and reports to the Board of Directors any issue in relation thereto before the Board of Directors approves the budget and plans of the Company.

Independent Engagement of External Consultants

The CRCG Committee has procedures for the engagement of external consultants. While the Board of Directors, its committees and individual members of the Board of Directors are authorized to engage consultants at the expense of the Company, the CRCG Committee is responsible for approving such engagements in certain circumstances that could occur, such as where there may be conflicts of interest or disagreements in relation to the hiring of consultants. The Board of Directors, the Audit Committee, the CRCG Committee and the HRC Committee independently retained external consultants in 2019 occasionally or on a recurring basis for certain recurring subjects. Please see the reports of the Audit Committee, the CRCG Committee and the HRC Committee below, in this regard.

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Activities of the Compliance Review and Corporate Governance Committee in 2019

In 2019, the CRCG Committee, in accordance with its mandate, accomplished the following key functions:

Board of Directors	•Conducted the assessments of the Board of Directors, the Chair of the Board of Directors and committee
Appointment and	Chairs and its individual members;
Assessment	•Reviewed and approved the Board of Directors and committee self-assessment and conflict of interest
	questionnaire process for 2019;
	•Reviewed and approved the Board Chair Assessment Process for 2019;
	•Reviewed the evergreen list of possible candidates to the Board of Directors and the succession plan of
	the Chair of the Board;
	•Recommended the nomination of a new director nominee;
	•Reviewed the Internal Auditor’s report on Directors and Officers questionnaires on conflicts of interest
	and identified no concerns in this regard;
	•Recommended to the Board of Directors the appointment of the members and Chairs of the Board and
	committees;
	•Reviewed and recommended for approval by the Board of Directors, the Directors’ compensation for
	2019 and 2020;
	•Reviewed and recommended for approval by the Board of Directors the compensation for Directors
	sitting on the boards of the Company’s international operating subsidiaries, U.S. Advisory Board, IIM US
	and Split Rock Insurance Ltd.;
	•Reviewed and recommended for approval by the Board of Directors the composition and the mandate of
	the U.S. Advisory Board;
	•Recommended the nomination of a new member of the U.S. Advisory Board;
Corporate	•Reviewed and recommended for approval by the Board of Directors changes to the Board and Senior
Governance	Management Diversity Policy;
	•Reviewed and recommended to the Board of Directors for approval the Pension Funds Governance
	Framework;
	•Reviewed best practices and benchmarking and assessed policies in light of the Company’s public
	company status;
	•Reviewed and recommended for approval by the Board of Directors the mandate of the CCO, the Chair
	of the Board and the Compliance Review and Corporate Governance Committee;
	•Reviewed the IFC Shareholder Engagement Plan;
	•Reviewed IIM Proxy Voting Policy;

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3. Business of the Meeting 4. Directors

5. Corporate Governance Practices 6. Reports of the Committees

7. Statement on Executive Compensation 8. Approval of the Board of Directors

Compliance,	•Reviewed the quarterly reports on related party transactions;
Regulation and RPT	•Reviewed the reports on human resources, legal, compliance and governance matters and matters
	related to litigation, regulatory inspections and investigations;
	•Reviewed and approved the annual report to OSFI and to the AMF on the activities of the CRCG
	Committee in 2018;
	•Reviewed related party transactions between the Intact companies, including inter-company reinsurance
	agreements, inter-company charges, inter-company service agreements and transactions;
	•Reviewed compliance reports indicating the key ongoing compliance risks, the key incidents, the key main
	issues, regulatory matters, the key compliance projects and objectives for 2019;
	•Reviewed the Annual Report on Political Donations;
	•Reviewed and recommended to the Board of Directors for approval modifications to the Corporate
	Disclosure and Insider Trading Policy;
	•Reviewed and recommended to the Board of Directors for approval the 2019 Compliance and Governance
	Compendium;
	•Reviewed and recommended to the Board of Directors for approval the investment fee assessment for
	the Company and Pension Funds;
	•Reviewed and recommended to the Board of Directors for approval the Distributors Financing, Equity
	Participation & Acquisition Policy;
	•Recommended to the Board of Directors for approval various integration items relating to the acquisition
	of The Guarantee and FCC, including the compliance structure;
Strategies and	•Reviewed the Company’s Compliance Management Framework;
Mandate of the	•Obtained assurances from the CCO that this function has sufficient resources to meet its mandate and act
CRCG Committee	independently from the operations and reviewed and discussed his 2019 objectives;
	•Reviewed and recommended for approval by the Board of Directors the CRCG Committee report and
	Statement of Corporate Governance Practices sections of the 2019 Management Proxy Circular; and
	•Reviewed and recommended for approval by the Board of Directors the mandates of (i) the CRCG
	Committee, (ii) the Executive Vice President with oversight over the governance functions, (iii) the CCO,
	(iv) the Chair of the Board and (v) the President of Canadian Operations.

The CRCG Committee is satisfied that it has appropriately fulfilled its mandate in 2019.

(Signed) Compliance Review and Corporate Governance Committee

Willliam L. Young (Chair) Janet De Silva Timothy H. Penner Frederick Singer Carol Stephenson

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3. Business of the Meeting 4. Directors

5. Corporate Governance Practices 6. Reports of the Committees

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

6.2 Audit Committee

Composed exclusively of independent Directors
Met five (5) times in 2019 and held one (1) joint meeting with the Risk Committee
Preparatory sessions before the Audit Committee meetings were held by the Chair of the Audit Committee with the CFO, the Chief Internal Auditor and other functions in the Company
Reviewed and recommended to the Board of Directors for approval the mandate of the Audit Committee
In camera sessions held at all meetings of the Audit Committee

Role of the Audit Committee

The Audit Committee assists the Board of Directors in its oversight of (i) the integrity, fairness and completeness of the Company’s financial statements and financial information; (ii) the accounting and financial reporting process; (iii) the qualifications, performance and independence of the external auditors; (iv) the performance of the internal finance function and audit function; (v) the quality and integrity of internal controls and; (vi) actuarial practices of the Company.

In performing these functions, the Audit Committee assists the Board of Directors in ESG matters by monitoring and implementing governance practices related to accounting and financial disclosure and reporting.

The Audit Committee acts as audit committee for each of the Canadian P&C insurance companies and each of the U.S. P&C insurance companies.

It is also responsible for reviewing the certification process and the certifications by the CEO and the CFO of the financial statements of the Company, as required by applicable legislation.

The Audit Committee meets periodically with the Risk Committee in furtherance of their respective mandates. On May 8, 2019, the Audit Committee and the Risk Committee held a joint meeting in addition to their respective meetings.

The full mandate of the Audit Committee is presented in the Company’s AIF for the most recently completed financial year. It is also available in the Corporate Governance section of the Company’s website (www.intactfc.com).

Composition of the Audit Committee

The Audit Committee meets the legal requirements for independence. The Audit Committee is composed of at least three (3) Directors, each of whom must be independent, and is currently composed of five (5) Directors, all of whom are independent Directors, and none of whom is a member of Management or an employee of the Company or its P&C insurance subsidiaries. Each Audit Committee member is “financially literate” within the meaning of the rules of the Canadian Securities Administrators relating to audit committees.

The Audit Committee met five (5) times in 2019. Members of Management participated in meetings at the invitation of the Chair of the Audit Committee. Detailed materials were distributed in advance of each meeting, containing information which allowed the Audit Committee to make informed decisions. In camera sessions were held at every meeting. All Audit Committee members attended all of the meetings of the Audit Committee held in 2019.

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Eileen Mercier

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Jane E. Kinney

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Robert G. Leary

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Sylvie Paquette

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Stephen G. Snyder

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3. Business of the Meeting 4. Directors

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

6. Reports of the Committees

Oversight of the Chief Financial Officer, Chief Internal Auditor, Group Chief Actuary and Canadian Appointed Actuary Functions

The Audit Committee reviews and may recommend to the Board of Directors for approval the appointment or dismissal, if deemed appropriate, of the CFO, the Chief Internal Auditor, the Group Chief Actuary and the Canadian Appointed Actuary. The Audit Committee periodically reviews the mandate of these functions and obtains the assurances that each function has the necessary budget and resources to meet its mandate and is able to act independently from the operations. It reports any issue to the Board of Directors in relation thereto before the Board of Directors approves the budget and plans of the Company.

Activities of the Audit Committee in 2019

In line with its mandate, the Audit Committee has performed the following key functions in 2019:

Financial Review	•Reviewed on a continuing basis the best practices in relation to new laws and rules that apply to the
	Company. In this regard, the CEO and the CFO continued to certify the Company’s consolidated financial
	statements as required under National Instrument 52-109 –Certification of Disclosure in Issuer’s Annual
	and Interim Filings;
	•Reviewed the impact of accounting rules changes (including with respect to IFRS 17 and IFRS 9) and
	status of key deliverables to implement such changes;
	•Reviewed financial disclosure documentation, including interim and annual financial statements,
	Management’s Discussion and Analysis, press releases, AIF and either approved such documents or
	recommended them for approval to the Board of Directors, with or without changes;
	•Reviewed and approved the 2018 Combined Statutory financial statements of Atlantic Specialty
	Insurance Company;
	•Reviewed and recommended to the Board of Directors for approval the audited financial statements of
	the Canadian P&C Companies of IFC as at December 31, 2018;
	•Reviewed the CFO’s quarterly reports;
	•Reviewed the Corporate Finance updates, which include investment results;
	•Reviewed the Group Chief Actuary and Canadian Appointed Actuary reports;
	•Reviewed the 2019 actuarial peer review report;
Internal Controls	•Reviewed the Regulatory Inspections and Investigations Report;
and Disclosure Controls	•Reviewed OSFI’s annual supervisory letter and related action items;
	•The Chair of the Audit Committee met with OSFI as part of OSFI’s regular supervisory activities;
	•Reviewed the quarterly Internal Audit report;
	•Reviewed the 2020-2022 Internal Audit Plan and recommended to the Board of Directors for approval
	the 2020 Internal Audit Plan;
External Auditor	•Reviewed and recommended to the Board of Directors for approval and assessed the External Auditor’s
	2019 Canadian and U.S. Audit plan and execution thereof;
	•Reviewed quarterly reports of the External Auditor;
	•Reviewed all audit and permitted non-audit services performed by the External Auditor, as well as related
	fees and recommended their approval to the Board of Directors (see details regarding fees at pages 14
	and 15 of this Circular);
	•Assured itself of the qualifications, performance and independence of the External Auditor (External
	Auditor Assessment);
	•Recommended to the Board of Directors for approval the appointment of the Company’s External Auditor;
	•Approved the appointment of OneBeacon’s U.S. insurance company subsidiaries external auditor;
	•Met regularly with the External Auditor without the presence of Management;

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3. Business of the Meeting 4. Directors

5. Corporate Governance Practices 6. Reports of the Committees

7. Statement on Executive Compensation 8. Approval of the Board of Directors

Strategies and	•Reviewed and recommended to the Board of Directors for approval the Audit Committee report of the
Mandate of the	2019 Management Proxy Circular;
Audit Committee	•Reviewed and recommended to the Board of Directors for approval the mandates of (i) the Audit
	Committee (including suggested changes), (ii) the CFO (including suggested changes), (iii) the Group
	Chief Actuary and (iv) the Canadian Appointed Actuary;
	•Reviewed and recommended to the Board of Directors for approval the Corporate Audit Services Charter
	(including suggested changes);
	•Obtained assurances from the Chief Internal Auditor, the External Auditor, the Group Chief Actuary and
	the CFO that these functions have sufficient resources to meet their mandates and act independently
	from the operations;
	•Reviewed and discussed the 2019 objectives of the Chief Internal Auditor, the Group Chief Actuary and
	the CFO; and
	•Reviewed and recommended to the Board of Directors for approval various integration items relating to
	the acquisition of The Guarantee.

Independent Engagement of External Consultants

The Audit Committee has authority with respect to, and has procedures for, the engagement of external consultants at the expense of the Company.

Private Meetings

The Audit Committee regularly held private meetings with each of the CFO, the Chief Internal Auditor, the External Auditor and the Group Chief Actuary, and Management.

The Audit Committee is satisfied that it has appropriately fulfilled its mandate in 2019.

(Signed) Audit Committee

Eileen Mercier (Chair) Jane E. Kinney Robert G. Leary Sylvie Paquette Stephen G. Snyder

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7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

3. Business of the Meeting 4. Directors

6.3 Risk Management Committee

Composed exclusively of independent Directors
Met four (4) times in 2019 and held one (1) joint meeting with the Audit Committee
Preparatory sessions before the Risk Committee meetings were held by the Chair of the Risk Committee with the CRO and other functions in the Company
In camera sessions held at all meetings of the Risk Committee

Role of the Risk Management Committee

The Risk Committee has an oversight role with respect to the management of the Company in order to build a sustainable competitive advantage, by fully integrating the Enterprise Risk Management Policy into all business activities and strategic planning of the Company and its subsidiaries and operations, including its pension funds.

The Risk Committee defines the Company’s risk appetite while also monitoring the risk profile and performance of the Company relative to its risk appetite. The Risk Committee also oversees the identification and assessment of the principal risks facing the Company and the development of strategies to manage those risks and reviews and approves significant risk management policies at least annually. Furthermore, the Enterprise Risk Management Policy and the corresponding risk appetite framework is reviewed annually by the Risk Committee and recommended to the Board of Directors for approval. The principal risks include strategic risk, insurance risk, financial risk and operational risk.

With respect to ESG matters, the Risk Committee assists the Board of Directors in assessing and monitoring the risks related to climate change, including the potential impact of insured losses resulting from damage to property and assets arising from climate related natural catastrophe events, and in developing strategies to manage these risks. The Risk Committee also oversees additional initiatives to promote awareness of the potential impact of climate change and provide practical solutions for society in general. An example of these initiatives is the Intact Centre on Climate Adaptation at the University of Waterloo, which focuses on key areas that will mitigate climate change and extreme weather risk for homeowners, governments and businesses through resiliency and adaptation initiatives.

The Risk Committee monitors compliance with risk management policies implemented by the Company while ensuring an appropriate balance of risk and return in pursuit of the Company’s strategic business objectives.

The Risk Committee meets periodically with the Audit Committee in furtherance of their respective mandates and the CRO may call a meeting of the Board of Directors or the Risk Committee at any time. On May 8, 2019, the Audit Committee and the Risk Committee held a joint meeting in addition to their respective meetings.

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Robert G. Leary

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Jane E. Kinney

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Eileen Mercier

The full mandate of the Risk Committee is available in the Corporate Governance section of the Company’s website (www.intactfc.com).

Composition of the Risk Management Committee

The Risk Committee meets the legal requirements for independence. It is composed of a minimum of three (3) Directors, each of whom must be independent, and is currently composed of five (5) Directors, all of whom are independent Directors and non-executives of the Company or its P&C insurance subsidiaries. Each Risk Committee member has sufficient knowledge of the risk management of financial institutions as that term is defined in applicable legislation.

The Risk Committee met four (4) times in 2019 and members of Management participated in meetings at the invitation of the Chair of the Risk Committee. Detailed materials were distributed in advance of each meeting, containing information which allowed the Risk Committee to make informed decisions. In camera sessions amongst the Risk Committee members and amongst the Risk Committee members and the CRO as well as the Senior Vice President and Managing Director of IIM were held at all meetings of the Risk Committee and regularly with the Deputy Senior Vice President and Chief Investment Officer of IIM and the Group Chief Actuary, respectively. All Risk Committee members attended all of the meetings of the Risk Committee held in 2019.

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Sylvie Paquette

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Frederick Singer

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5. Corporate Governance Practices 6. Reports of the Committees

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

Risk Management Function

The Risk Committee reviews and recommends to the Board of Directors for approval the appointment or dismissal, if deemed appropriate, of the CRO. The Risk Committee periodically approves the mandate of the Enterprise Risk Management function and annually obtains assurances that this function has the necessary budget and resources to meet its mandate and that the oversight of the risk management activities of the Company is independent from operational management, is adequately resourced, and has appropriate status and visibility throughout the Company and reports any issue in relation thereto to the Board of Directors. A list of our principal risks can be found in our annual Management’s Discussion & Analysis for the year ended December 31, 2019, available on our website at www.intactfc.com and on SEDAR at www.sedar.com.

Activities of the Risk Management Committee in 2019

In line with its Mandate, the Risk Committee has performed the following key functions in 2019:

Oversight of Risk	•Reviewed the Quarterly Enterprise Risk Management Reports as well as the reports of the CRO on risk
Management	management, reinsurance programs and implementation plans, including on a continual basis the risk
	matrix identifying the top enterprise and emerging risks;
	•Reviewed and recommended to the Board of Directors for approval the revised Enterprise Risk
	Management Policy;
	•Reviewed the market and economy risks that could affect the Company;
	•Reviewed a report on IIM US Investment Strategy;
	•Reviewed the Quarterly Results and Investment Reports;
	•Reviewed and recommended to the Board of Directors for approval various changes to the IFC Investment
	Policy and the Intact P&C Companies Investment Policy, including with respect to the acquisition of The
	Guarantee and FCC;
	•Reviewed an update on cybersecurity plans and related IFC policies, and a case study on a high-profile
	data breach of another public company including lessons learned;
	•Reviewed stress tests on a quarterly basis and discussed potential remediation measures;
	•Reviewed reports on Dynamic Capital Adequacy Testing (DCAT);
	•Reviewed the 2019 Reinsurance programs and a preview of the 2020 Reinsurance programs;
	•Reviewed and recommended to the Board of Directors for approval new internal target capital ratios for
	all P&C Companies;
	•Reviewed and recommended for approval to the Board of Directors amendments to the Own Risk and
	Solvency Assessment (ORSA) Policy;
	•Reviewed a report on disaster recovery for critical systems;
	•Reviewed a report on earthquake risk and mitigating measures;
	•Reviewed a defined benefit plan testing analysis report and the impact of a low interest rate environment;
	•Reviewed OSFI’s annual supervisory letter and related action items;
	•The Chair of the Risk Committee met with OSFI as part of OSFI’s regular supervisory activities;
Responsibility for	•Obtained assurances from the CRO that this function has sufficient resources to meet its mandate and
Oversight Function	act independently from the operations;
	•Reviewed and approved the 2019 objectives of the CRO;
	•Reviewed and recommended to the Board of Directors for approval various integration items relating to
	the acquisition of The Guarantee;

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3. Business of the Meeting 4. Directors

5. Corporate Governance Practices 6. Reports of the Committees

7. Statement on Executive Compensation 8. Approval of the Board of Directors

Compliance with	•Reviewed and recommended for approval to the Board of Directors risk management policies, including
Risk Policies	the revised Reinsurance Risk Management Policy and the Pension Fund Statement of Investment
	Policies and Procedures;
Strategies and	•Reviewed and recommended to the Board of Directors for approval the Risk Committee report of the
Mandate of the Risk	2019 Management Proxy Circular;
Committee	•Reviewed and recommended to the Board of Directors for approval the mandates of (i) the Risk
	Management Committee, (ii) the CRO (including suggested changes) and (iii) the Group Chief
	Actuary; and
	•Reviewed and recommended for ratification by the Board of Directors the composition of the Enterprise
	Risk Committee.

The Risk Management Committee is satisfied that it has appropriately fulfilled its mandate in 2019.

(Signed) Risk Management Committee

Robert G. Leary (Chair) Jane E. Kinney Eileen Mercier Sylvie Paquette Frederick Singer

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5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

6. Reports of the Committees

4. Directors

6.4 Human Resources and Compensation Committee

Composed exclusively of independent Directors
Met four (4) times in 2019
Preparatory sessions before the HRC Committee meetings were held by the Chair of the HRC Committee with the Chief Human Resources Officer and other functions in the Company
In camera sessions held at all meetings of the HRC Committee

Role of the Human Resources and Compensation Committee

The HRC Committee assists the Board of Directors in fulfilling its governance supervisory responsibilities for strategic oversight of the Company’s human capital, including organization effectiveness, succession planning and compensation of employees, managers, Executives and Senior Executives. The HRC Committee also oversees the performance assessment of the CEO and Senior Executives, and the alignment of compensation with the Company’s philosophy and programs consistent with the overall business objectives of the Company.

The role of the HRC Committee is to oversee Senior Executives in defining a comprehensive human resources policy that:

Supports the Company’s overall strategy and objectives;
Attracts and retains talent and key executives;
Fosters talent advancement through effective succession planning;
Links total compensation to:
Financial performance;
The attainment of strategic objectives; and
The achievement of value-driven goals;
Provides competitive total compensation at a reasonable cost;
Enhances the ability of the Company to fulfill its objectives;
Fosters a positive organizational culture that promotes diversity, fairness and inclusion; and
Encourages high performance of all employees.

With respect to ESG matters, the HRC Committee assists the Board of Directors in overseeing and implementing programs and internal policies promoting diversity and inclusion within the Company and fostering a positive work environment engaging the employees. The HRC Committee also oversees the activities of the Diversity and Inclusion Council.

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5. Corporate Governance Practices 6. Reports of the Committees

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

Regarding compensation, the HRC Committee periodically reviews the overall market positioning of employees and the salary budget increase envelope for the year. It also periodically reviews the total remuneration of Executives in relation to pre-established objectives of the Company and reviews at least annually the individual compensation of the Senior Executives of the Company, which it approves in relation to pre-established corporate and personal objectives. It also periodically reviews the Total Compensation Policy of the Company.

The HRC Committee reviews the CEO’s objectives and the CEO’s performance assessment once a year and provides its comments to the Board of Directors. The HRC Committee makes recommendations to the Board of Directors for its approval of the CEO’s total compensation for the year in relation to pre-established, measurable performance goals and objectives.

The HRC Committee is also responsible for reviewing the Company’s Pension and Incentive Plans and recommends them to the Board of Directors for approval. The HRC Committee approves non-material amendments to the Plans or recommends changes to the Board of Directors if the design of the Plans is fundamentally changed or if they are replaced with new Plans. The HRC Committee is also responsible for approving the actuarial valuation reports.

The HRC Committee reviews and assesses proposals for major reorganizations of the Company that affect the Senior Executive structure and its composition and makes recommendations to the Board of Directors. It also reviews and recommends to the Board of Directors the annual Statement on Executive compensation included in this Circular that is filed with regulators and communicated to the Company’s shareholders.

The full mandate of the HRC Committee is available in the Corporate Governance section of the Company’s website (www.intactfc.com).

Composition of the Human Resources and Compensation Committee

The HRC Committee meets the best practice requirements for independence. It is composed of five (5) Directors, all of them being independent and none of whom is an officer or employee of the Company. In early 2014, the Board of Directors adopted a policy providing that no more than one-third of the members of the HRC Committee shall be sitting chief executive officer(s) of another company. None of the HRC Committee members are eligible to participate in the Company’s executive compensation programs.

The HRC Committee met four (4) times in 2019. The CEO and other members of Management participated in meetings at the invitation of the Chair of the HRC Committee. Detailed materials were distributed in advance of each meeting, containing information which allowed the HRC Committee to make informed decisions. In camera sessions were held at every meeting. All HRC Committee members attended all of the 2019 meetings.

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Timothy H. Penner

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Janet De Silva

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Stephen G. Snyder

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Carol Stephenson

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William L. Young

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5. Corporate Governance Practices 6. Reports of the Committees

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

Activities of the Human Resources and Compensation Committee in 2019

The HRC Committee, in accordance with its mandate, performed the following key functions in 2019:

Executive	•Reviewed the market compensation positioning of the Company and conducted an annual Senior
Compensation	Executive compensation review, including that of the CEO;
	•Reviewed and approved changes to the North American Comparator Group;
	•Reviewed and recommended for approval to the Board of Directors amendments to the LTIP performance
	metrics such that starting in 2019, the 3-year average ROE of the Company is compared to the weighted
	average ROE of the North American industry;
	•Reviewed and recommended for approval to the Board of Directors amendments to the LTIP to authorize
	the Board of Directors to make discretionary adjustments in case of extraordinary events;
	•Reviewed and approved the 2020 Short-Term Incentive Plan performance metrics for Executives and
	Senior Executives, bonus plans for employees and Long-Term Incentive Plan performance metrics for
	2020, including plans for Canadian Executives, Canadian Senior Executives and IIM participants;
	•Reviewed and approved 2019 STIP and LTIP payouts for Executives and Senior Executives and bonus
	payouts for employees;
	•Reviewed and approved the overall remuneration grant envelope for Executives and Senior Executives;
	•Reviewed and approved the CEO’s STIP, LTIP and total compensation, as well as his 2019 objectives
	and reported to the Board of Directors its recommendations for the CEO’s 2020 target compensation;
	•Reviewed the CRO Report relating to the application of risk management policies on the STIP and LTIP;
	•Monitored executive share ownership and retention policies;
	•Reviewed the Company’s approach to the management of its pension plans (legislation, funding and
	actuarial valuation reports);
	•Reviewed current and emerging market trends and best practices, as well as related regulatory
	developments and proxy voting guidelines and reports issued by various institutional investors and proxy
	advisory firms;
	•Reviewed all Human Resources matters related to the integration of The Guarantee and FCC following
	their acquisition by the Company;
Assessments and	•Reviewed the 2018 performance assessment of the CEO and the CEO’s performance objectives for
Succession Planning	2019;
	•Reviewed the Succession Plans of the CEO, Senior Executives and Executives;
	•Reviewed the talent pool available for succession at management and Executive levels;
	•Reviewed the Company’s strategy for becoming a destination for top talent and experts for 2018 to 2020;
Strategies and	•Reviewed and approved the Human Resources sections of the 2019 Management Proxy Circular;
Mandate of the HRC Committee	•Reviewed the results related to the 2019 employee engagement survey;
	•Reviewed and approved organizational structure changes;
	•Reviewed the reports regarding respect in the workplace and the 2019 people plan;
	•Reviewed the Human Resources Reports presented by the Chief Human Resources Officer;
	•Reviewed the Diversity and Inclusion Council report and action plans related to diversity in the workplace;
	and
	•Reviewed and recommended for approval to the Board of Directors amendments to the Company’s
	Board and Senior Management Diversity Policy.

Succession Planning

The Board of Directors is responsible for ensuring that the Company is supported by an appropriate organizational structure including a CEO and other executives who have complementary skills and expertise to ensure the sound management of the business and affairs of the Company and its long-term profitability.

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2. General Information

To play its role, the Board of Directors is supported in this function by the HRC Committee, which makes recommendations on the appointment, assessment, compensation and termination (if applicable) of the CEO and other Senior Executives, sees to the assessment of Senior Executives and presents an annual Senior Executives succession plan. The HRC Committee advises Management in relation to its succession planning including the appointment, development and monitoring of Senior Executives.

The Company aims to leverage succession planning as a tool to make progress on the diversity of the management team.

To limit the chances that the Company’s operations suffer from a talent gap, succession planning is reviewed at least annually and implemented continuously to facilitate talent renewal and smooth leadership transitions. Furthermore, the Company aims to leverage succession planning as a tool to make progress on the diversity of the management team. Each year, the Chief Human Resources Officer reviews succession plans and prepares a succession plan report covering a number of critical positions, including Senior Executives and the CEO. For each critical position, a pool of “Ready Now”, “Ready in 1-3 Years”, “Ready in 3-5 Years” and “Emergency Replacement” candidates is identified. Where a talent gap or risk is observed, a development plan is established to identify and develop potential successors. Individualized development plans may include lateral movements to diversify exposure, leadership training, mentoring and other special programs.

The annual succession plan report is presented to the HRC Committee for review, analysis, discussion and reporting to the Board of Directors. Committee members and Directors actively participate in ongoing discussions with Management relating to succession planning year-round. The members of the HRC Committee and the entire Board of Directors ensure they are exposed to, have direct interactions with, and get to know, the candidates identified in the succession plans and can appreciate their skills and expertise first hand, including through presentations by such individuals at regular meetings, through presentations made at annual training sessions and by meeting and discussing with candidates at social events. The members of the HRC Committee firmly believe that they, and the Board of Directors in its entirety, have a comprehensive and deep knowledge of succession planning and identified successors within the organization.

Role of certain Executive Officers in Compensation Decisions

The Chief Human Resources Officer works with the CEO to prepare presentations for each meeting of the HRC Committee and assists the CEO in developing and presenting to the HRC Committee recommendations and supporting material regarding the compensation of Senior Executives. Supporting material is also provided to the HRC Committee for the CEO position, but without any recommendations. The recommendation to the Board of Directors regarding the CEO’s compensation is determined in camera by the HRC Committee with the support of our independent advisor. The Secretary’s Office separately manages the assessment process of the CEO by the members of the Board of Directors and reports the results of such assessment to the HRC Committee and to the Board of Directors, such assessment being part of the assessment of the CEO in relation to attainment of the Company’s financial objectives, his own personal objectives, his total compensation and his performance against the responsibilities outlined in the CEO description of functions approved by the Board of Directors.

The CRO works with the CEO to review the personal objectives of Senior Executives to ensure that, individually as well as in aggregate, they do not provide incentive for excessive risk taking. The CFO supplies the HRC Committee with analyses that support decision-making regarding the design, calibration and administration of our incentive plans.

The HRC Committee is satisfied that it has appropriately fulfilled its mandate in 2019.

(Signed) Human Resources and Compensation Committee

Timothy H. Penner (Chair) Janet De Silva Stephen G. Snyder Carol Stephenson William L. Young

Intact Financial Corporation | Management Proxy Circular 2020

Page 81

Table of Contents ESG Content Map

1. Voting Information 2. General Information

3. Business of the Meeting 4. Directors

5. Corporate Governance Practices 6. Reports of the Committees

7. Statement on Executive Compensation 8. Approval of the Board of Directors

7. Statement on Executive Compensation

Where to find it

7.1	Introduction	83
7.2	Compensation Discussion and Analysis	84
	Compensation Philosophy	84
	Objectives of Executive Compensation	84
	Alignment of compensation with risk management principles	85
	Share Ownership Policy and Restrictions on Trading	85
	Anti-Hedging Policy	86
	Clawback Policy	86
	Alignment of compensation with ESG factors	87
	Benchmarking and Comparator Group for Executives and Senior Executives	87
	Comparator Group for select Canadian Executives and Canadian Senior
	Executives with North American Oversight	87
	Comparator Group for Canadian Executives and Canadian Senior Executives	88
	Comparator Group for U.S. Executives and U.S. Senior Executives	89
	Target Total Compensation Position Relative to the Comparator Group	89
	Executive Compensation Framework and its Components	90
	Base Salary	91
	Short-Term Incentive Plan	91
	IFC Long-Term Incentive Plan	94
	OneBeacon Long-Term Incentive Plans	96
	Group and Retirement Benefts	97
	Perquisites	97
	Pay-for-Performance	98
	Pay-Performance Linkages	98
	Combined ratio for STIP Calculation	99
	Return On Equity (ROE) for LTIP calculation	100
	Non-IFRS Financial measures in STIP and LTIP Calculations	101
	OneBeacon Legacy Plans Calculation	101
	Compensation Consultant Independent Advice	101
7.3	CEO Compensation	102
7.4	Other NEO Compensation	104
7.5	Summary Compensation Table	108
7.6	Incentive Plan Awards	109
	Outstanding Share-Based Awards	109
	Incentive Plan Awards - Value Vested or Earned During the Year	110
7.7	Pension Plan and Retirement Benefts	111
	IFC Base Plan and SERP	111
	OneBeacon Defned Contribution Plan	113
7.8	Termination and Change of Control Benefts	114
7.9	Compensation of Directors	117
7.10	Indebtedness of Directors and Executive Ofcers	117
7.11	Approval of the Statement on Executive Compensation	117

Intact Financial Corporation | Management Proxy Circular 2020

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Table of Contents ESG Content Map

1. Voting Information

3. Business of the Meeting

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

6. Reports of the Committees

4. Directors

7.1 Introduction

This Statement on Executive Compensation is meant to provide a comprehensive and transparent disclosure of the Company’s executive compensation, as well as explanations regarding the objectives and implementation of the Company’s executive compensation framework.

The HRC Committee oversees the overall compensation framework of the Company’s employees, including Executives and Senior Executives. It continuously ensures that pay is competitive and linked with performance, and that it enables the Company to attract and retain key talent. Over the last several years, actual pay has tracked the Company’s performance very well:

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Combined ratio for STIP calculation ROE for LTIP calculation
85% 10
25% 200%
180% 180%
95% 8 20% 145% 151% 144% 150%
6 15%
100%
105% 4 10%
50%
5%
2
115% 0% 0%
0 20132015– 20142016– 20152017– 20162018– 20172019–
2015 2016 2017 2018 2019
IFC Combined Ratio - Canada 3-year Average ROE Cycles Intact Financial Corp
Canadian P&C Industry Benchmark Combined Ratio 3-year Average ROE Canadian P&C Industry
IFC Combined Ratio - U.S. Percentage of Target Realized
NEOs Realized STIP
NEOs Target STIP
PSU Vesting
3-year Average ROE
Combined Ratio (inverted scale)
Aggregate NEOs STIP Payout ($ million)
----- End of picture text -----

Combined ratio for STIP calculation

For all Canadian Executives and Canadian Senior Executives, target total compensation is anchored to the median of our comparator group, as described hereunder, and actual pay is:

Above target when the Company performs well (above its outperformance objectives) relative to an industry benchmark, as described hereunder;
Below target when the Company does not attain its outperformance objectives relative to such industry benchmark; and
Certain components of the incentive programs do not pay out if the Company’s performance is inferior to that of the industry benchmark.

For U.S. Executives and U.S. Senior Executives, target total compensation is based on the Company’s U.S. absolute performance, against goals that have been set based on the OneBeacon acquisition economics. Therefore, actual pay may be above or below target compensation based on the Company’s U.S. performance relative to those objectives.

For Executives and Senior Executives with North American oversight functions, target total compensation is established based upon a mix of the metrics used for Canadian and U.S. Executives and Senior Executives.

Our incentive programs reward financial accomplishments in line with our corporate strategy as well as non-financial achievements derived from our commitment to “Living Our Values”, the Company’s Code of Conduct. We further align the interests of our Executives and Senior Executives with those of shareholders with share ownership guidelines and trading restrictions including maintaining minimum share ownership post-termination for Senior Executives.

We believe the Company’s executive compensation framework is key to supporting the Company’s strategy and promoting its values.

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Table of Contents ESG Content Map

1. Voting Information

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

6. Reports of the Committees

4. Directors

3. Business of the Meeting

Highlights of our Compensation Governance Practices

What We Do

Say on Pay: Annual shareholder advisory vote on executive compensation Strong link between pay and performance

Look back table showing how much Mr. Brindamour has earned since he became CEO (January 1[st] , 2008)

Double-trigger vesting of stock incentives under the LTIP upon change of control Robust Clawback Policy applicable to all variable compensation, including cash bonuses and equity compensation

Minimum director share ownership requirements equivalent to 4x total annual retainer (and more than 8x annual cash retainer)

What We Don’t Do

No stock option plan

No stock issued from treasury for stock-based compensation plans

Do not allow executives to hedge their economic risk or reduce their exposure to changes in share price with respect to any securities of the Company

Minimum Executive share ownership requirements equivalent to 2x LTIP target and minimum retention periods for CEO and certain other executives

Employee engagement and customer initiative-related goals are included in the personal objectives of the CEO and other Senior Executives under the STIP

Retention of independent compensation consultant

7.2 Compensation Discussion and Analysis

Compensation Philosophy

Our compensation philosophy is based on the following key objectives:

Attract, retain and motivate key talent in a highly competitive business environment
Align the objectives of Executives and Senior Executives with those of the Company and the long-term interests of the shareholders
Link the Executives and Senior Executives short-term and long-term incentives to the Company’s financial and strategic performance and its relative performance compared to the insurance industry.

Supporting each of Intact Financial Corporation’s products and services is a team of motivated, intelligent and hard-working employees. To be successful and sustain its position as the largest provider of P&C insurance in Canada and one of the leading providers of specialty insurance in North America, the Company must attract, retain and motivate talented Executives and Senior Executives in a highly competitive business environment. The HRC Committee wants Intact Financial Corporation’s leaders to focus on sustaining high levels of performance and growth in shareholder value, reinforcing the pay-for-performance philosophy. Executives and Senior Executives play a key role in the Company meeting its objectives. The review, assessment and approval of Senior Executives’ compensation is one of the main functions of the HRC Committee, while the review, assessment and approval of the compensation package of Executives is performed by Senior Executives. Each year, the compensation package of Executives and Senior Executives is reviewed to ensure alignment with the Company’s compensation philosophy. The HRC Committee also reviews the compensation philosophy periodically.

Objectives of Executive Compensation

The following constitute the objectives of the executive compensation package:

Attract, retain and motivate talented Executives and Senior Executives in a highly competitive business environment;
Align the objectives of Executives and Senior Executives with those of the Company and the long-term interests of shareholders;
Link Canadian Executives’ and Canadian Senior Executives’ short-term incentives to (i) the achievement of the Company’s financial and strategic results on growth and profitability in Canada relative to the financial results of the 20 largest comparable companies in the Canadian P&C insurance industry, (ii) IFC’s performance measured by its net operating income per share (for Canadian Senior Executives only) and (iii) individual performance. Since 2018, short-term incentives of Canadian Executives and Senior Executives with a North American scope of responsibilities are based on a weighted average of the metrics used for Canadian and U.S. Executives and Senior Executives;

Intact Financial Corporation | Management Proxy Circular 2020

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Table of Contents 1. Voting Information ESG Content Map 2. General Information

3. Business of the Meeting 4. Directors

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

6. Reports of the Committees

Link long-term incentives of all Canadian Executives and Canadian Senior Executives (with or without a North American scope of responsibilities) to the Company’s financial results relative to the financial results of a weighted benchmark composed of 80% of Canadian industry results and 20 % of U.S. industry results, reflecting the Company’s own capital allocation across North America[1] ;
Link U.S. Executives’ and U.S. Senior Executives’ short-term incentives and long-term incentives to the achievement of the Company’s U.S. financial and strategic results on profitability relative to set objectives and individual performance. Since 2018, IFC’s net operating income per share is a component of the STIP calculation for U.S. Senior Executives;
Since 2018, short-term and long-term incentives of U.S. Executives and Senior Executives with a North American scope of responsibilities are based on a weighted average of the metrics used for Canadian and U.S. Executives and Senior Executives.

The executive compensation package applies to all Executives and Senior Executives of IFC and its subsidiaries.

To achieve the above objectives, the HRC Committee:

Sets target total compensation levels (including base salary, short-term and long-term incentives, perquisites, benefits and pension) aligned to the market median of the relevant comparator group (see detailed comparator groups below);
Implements share ownership guidelines as appropriate; and
Awards additional incentive compensation that rewards performance and recognizes special achievements, as appropriate.

Alignment of compensation with risk management principles

Risk management is at the heart of our daily operations. Consequently, the Company’s compensation programs are founded on principles and processes that support the management of risk, ensuring Management’s plans and activities are prudent and focused on generating shareholder value within an effective risk control environment. The HRC Committee continuously monitors emerging best practices that relate to compensation and HRC program design with the support of our independent advisor and recommends changes to our plans as appropriate. Following approval by the HRC Committee and effective since April 2018, the two (2) year postvesting restriction period applies to, among others, (i) the CEO and the most highly compensated Canadian Executives, (ii) the Oversight Functions and (iii) the Vice-Chairman. Please refer to page 95 for additional details.

In addition, the HRC Committee formally meets periodically with the CRO to discuss how the Company’s compensation approach and programs align with sound risk management principles, including the Financial Stability Board Principles for Sound Compensation Practices, and how the compensation structure and design result in incentive awards that are appropriately calibrated with risk outcomes.

Share Ownership Policy and Restrictions on Trading

The HRC Committee has adopted share ownership policies applicable to all Executives and Senior Executives including the NEOs. Executives and Senior Executives are expected to accumulate and own Intact Financial Corporation Common Shares over time. This practice, designed to more closely align Management’s and shareholders’ interests, is common for public companies and consistent with the principles of the Canadian Coalition for Good Governance, among others. Executives and Senior Executives are expected to accumulate two (2) times their annual LTIP target in IFC shares. There are prescribed mechanisms to satisfy this expected share ownership:

Senior Executives are expected to satisfy the requirements within five (5) years of their date of appointment as Senior Executives and they cannot sell any shares until they have met the target ownership; and
There is no specific time frame for Executives to satisfy the requirements, however, they must retain a minimum of 50% of their after-tax LTIP gains in IFC shares until they reach their target ownership.

Senior Executives and Executives who meet the requirements of target ownership will be able to sell Common Shares as long as they continue to meet the target ownership requirements after such sale.

IFC shares for purposes of the share ownership policy includes shares currently owned, IFC shares bought on the market, or acquired through the LTIP, as well as non-vested RSUs granted under the LTIP and common shares subject to the two-year post-vesting restriction period. Unvested PSUs are not included in the ownership calculation, however for Mr. Miller’s ownership, 75% of the Special Award PSUs are included in the calculation as the Special Award PSUs have a 75% minimum vesting condition.

1 For LTIP performance cycles that started before 2019, Canadian Executives’ and Canadian Senior Executives’ long-term incentives are linked to the Company’s financial results relative to the financial results of the Canadian P&C insurance industry, and long-term incentives of Canadian Executives and Senior Executives with a North American scope of responsibilities are based on a weighted average of the metrics used for Canadian and U.S. Executives and Senior Executives.

Intact Financial Corporation | Management Proxy Circular 2020

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Table of Contents 1. Voting Information ESG Content Map 2. General Information

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

6. Reports of the Committees

3. Business of the Meeting 4. Directors

The CEO has been required to comply with the share ownership policy applicable to him and with an additional retention period that continues for two (2) years following voluntary termination or retirement. All other Senior Executives are required to comply with the share ownership policy for one (1) year following voluntary termination or retirement. The objective of post-termination ownership requirements is to further align the interests of the CEO and all Senior Executives with those of shareholders.

All NEOs comply with the share ownership policies since the implementation of the requirements and they have already met their target ownership level. Below is a table representing the NEOs share ownership as a multiple of salary and their participation status, as of December 31, 2019.

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Named Executive Target
Officer Ownership Shareholdings as at December 31, 2019 Status
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							Total	Share
							Holdings	Ownership
	Multiple of	Multiple of	Common	Unvested	Total	Total	as a Multiple	Requirement
	salary (#)	salary ($)	Shares($)	RSUs($)	Holdings($)	Holdings(#)	of salary	(SOR)
Charles Brindamour	9.00	11,349,000	37,120,870	6,356,111	43,476,981	309,621	34.48	Met
Louis Marcotte	2.80	1,260,000	2,445,274	1,005,830	3,451,104	24,577	7.67	Met
T. Michael Miller(¹)	9.34	9,094,942	–	3,907,240	17,274,609(2)	123,021	17.74	Met
Louis Gagnon	4.50	3,150,000	8,955,145	1,744,270	10,699,415	76,196	15.28	Met
Mathieu Lamy	3.00	1,417,500	2,107,002	711,549	2,818,551	20,072	5.97	Met

Based on Intact Financial Corporation’s December 31, 2019 closing share price of $140.42.

(1) Mr. Miller’s base salary of US$750,000 has been converted to Canadian dollars using the exchange rate as at December 31, 2019, which was 1.29835.

(2) Includes an amount equal to 75% of the Special Award PSUs as the award has a 75% minimum vesting condition.

Anti-Hedging Policy

The HRC Committee has adopted a policy to align more closely with the Financial Stability Board’s principles for sound compensation practices. More specifically, the Company’s Corporate Disclosure and Insider Trading Policy prohibits insiders, which includes all NEOs and Directors, from entering into derivative-based transactions, including hedging techniques under any form that involve, directly or indirectly, securities of Intact. Hedging techniques and other derivative-based transactions, and equity monetization transactions in particular, which allow an investor to transfer part or all of the economic risk and/or return associated with securities, without formally transferring the legal and beneficial ownership of such securities, are strictly prohibited. Examples of such prohibited transactions on the securities of Intact by insiders include, but are not limited to, the entering into of future contracts, short sales, put options, call options and equity swaps.

Clawback Policy

IFC’s long-term incentive plan agreement includes provisions that provide for the reimbursement of previously received STIP or LTIP remuneration should the Corporation discover that an executive could or should have been terminated for cause after such payment has been made. This clawback is included in the LTIP agreement that must be signed by each executive to be entitled to become a participant.

In early 2018, IFC expanded its Clawback and Readjustment of Compensation Policy for LTIP participants, to align more closely with the Financial Stability Board’s principles for sound compensation practices and emerging best practices. In the event of misconduct, and whether or not there is a subsequent financial restatement, including fraud, negligence, or material non-compliance with legal requirements, in each case for which the participant was terminated for cause or could have been terminated for cause had IFC known of the misconduct at the time of the termination of the LTIP participant’s employment, IFC can adjust an LTIP participant’s compensation, recoup all variable compensation, including cash bonuses and equity compensation, that have already been paid or vested, as well as cancel unvested long-term incentive awards. The misconduct look-back period is indefinite while the compensation that can be clawed back is limited to that received in the 24 months preceding the date on which the Board of Directors determined misconduct occurred, except in cases where the misconduct contributed to a financial restatement, in which case the clawback period is indefinite.

Intact Financial Corporation | Management Proxy Circular 2020

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Table of Contents ESG Content Map

1. Voting Information

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

6. Reports of the Committees

4. Directors

3. Business of the Meeting

Alignment of compensation with ESG factors

Our purpose is to help people, businesses and society prosper in good times and be resilient in bad times. The Company’s Code of Conduct, “Living Our Values”, sets out our commitment to acting with integrity and with the highest of ethical standards when we deliver for our customers, employees, shareholders and society. In light of our purpose and values, ESG performance is therefore naturally embedded into our strategy.

One of the objectives of the executive compensation package is to align the compensation of Executives and Senior Executives with the achievement of the Company’s financial and strategic objectives, including ESG performance. Demonstrably Living Our Values is a necessary condition for career advancement and pay progression at all levels in the Company. To further reinforce this commitment, our Canadian and US Senior Executives’ individual/personal goals in the STIP include objectives derived directly from Living Our Values. For instance, the STIP goals of the CEO and other Senior Executives include employee engagement and customer-driven initiative goals for which success is assessed using surveys. Furthermore, respectful of the environment and its finite resources, the Company incentivizes Executives and Senior Executives eligible for a car under its perquisites to select vehicles with lower fuel consumption, as well as hybrid and electric vehicles.

Benchmarking and Comparator Group for Executives and Senior Executives

Comparator Group for select Canadian Executives and Canadian Senior Executives with North American Oversight

With the expansion of Intact in the U.S. through the acquisition of OneBeacon, the HRC Committee reviewed the competitive landscape for select Canadian-based Executive and Senior Executive positions whose role and responsibilities were expanded to reflect the increased complexity associated with managing a company with a North American scope of operations. In that context, the HRC Committee recommended that, in 2018, a new comparator group be used for these Executives and Senior Executives with North American oversight. Further to this recommendation, the Board of Directors approved the new North American comparator group, effective as of fiscal year 2018.

The NEOs and a number of other Senior Executive positions have consequently been benchmarked using the North American Comparator Group.

There are 16 companies included in the North American Comparator Group which were selected according to the following criteria:

Listed companies headquartered in Canada with a North American/International scope of operations
Large listed Canadian insurance companies
Other financial services institutions with annual revenues between 0.5 and 2 times those of Intact
General industry comparators:
Excluding primary resource sectors given the high volatility of such industries (oil and gas, energy, pulp and paper, metals and mining)
With annual revenues between 0.5 and 2 times those of Intact

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Table of Contents ESG Content Map

1. Voting Information

3. Business of the Meeting

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

6. Reports of the Committees

4. Directors

The North American Comparator Group is comprised of the following companies:

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----- Start of picture text -----

Geographic Total Market
Industry Scope Revenues Capitalization
Financial Sector (in millions) (in millions)
General Intl / North- December December 31, Number of
Company Name Description Insurance Banking Industry America 31, 2019 2019 Employees
Large Canadian Insurance
Companies
Great-West Lifeco Inc. Life and Health Insurance ✓ ✓ $44,711 $30,895 24,000
Manulife Financial Life and Health Insurance ✓ ✓ $77,822 $51,381 35,000
Corporation
Sun Life Financial Inc. Life and Health Insurance ✓ ✓ $39,679 $34,801 22,719
Canadian Financial
Services Companies
Bank of Montreal Banking ✓ ✓ $24,611 $64,332 45,513
Canadian Imperial Bank of Banking ✓ ✓ $17,325 $48,143 45,083
Commerce
National Bank of Canada Banking ✓ ✓ $ 7,085 $24,089 26,314
Canadian General Industry
Companies of Similar Size
Air Canada Airlines ✓ ✓ $19,131 $12,846 32,800
Canadian National Railway Railroads ✓ ✓ $14,917 $84,035 25,975
Company
Canadian Pacific Railway Railroads ✓ ✓ $ 7,792 $45,404 12,694
Limited
Celestica Inc. Electronic Manufacturing ✓ ✓ $ 7,637 $ 1,383 21,500
Services
CGI Group Inc. IT Consulting and Other ✓ ✓ $12,202 $29,149 77,500
Services
Finning International Inc. Trading Companies and ✓ ✓ $ 7,817 $ 4,132 13,146
Distributors
Nutrien Ltd. Fertilizers and Agricultural ✓ ✓ $24,974 $35,617 22,300
Chemicals
Saputo Inc. Packaged Foods and Meats ✓ ✓ $14,461 $16,398 16,800
SNC-Lavalin Group Inc. Construction and ✓ ✓ $ 9,516 $ 5,258 46,490
Engineering
Thomson Reuters Financial Exchanges and ✓ ✓ $ 7,660 $46,433 24,400
Corporation Data
Industry Prevalence Statistical Distribution
25th Percentile $7,811 $15,510 22,100
• [L&H Insurance] 19%
Median $14,689 $32,848 25,188
• [Banking] 19%
• [General Industry] 62% 75th Percentile $24,702 $46,860 37,521
Intact $11,308 $20,083 14,000
percentile rank 38th 30th 8th
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Comparator Group changes for 2020

In 2019, the HRC Committee completed its annual review of the North American Comparator Group and found there to be appropriate additions and deletions to bring the Company into closer alignment with the median of our peers in terms of revenues. As such, the Board of Directors approved the addition of Waste Connections, Inc. and WSP Global Inc. and the removal of Nutrien Ltd. in the North American Comparator Group. This revised North American Comparator Group will be used in 2020 for Executives and Senior Executives with North American oversight.

Comparator Group for Canadian Executives and Canadian Senior Executives

Another Canadian comparator group is maintained for benchmarking certain Canadian domestic and insurance-specific roles of Canadian Executives and Canadian Senior Executives without North American responsibilities. No NEO compensation has been benchmarked using this comparator group since all NEOs have North American responsibilities.

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Table of Contents ESG Content Map

1. Voting Information

5. Corporate Governance Practices 6. Reports of the Committees

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

4. Directors

3. Business of the Meeting

Comparator Group for U.S. Executives and U.S. Senior Executives

Effective as of fiscal year 2018, upon the recommendation of the HRC Committee, the Board of Directors approved a comparator group for U.S. Executives and U.S. Senior Executives, including Mr. Miller. There are 14 Companies included in the U.S. Comparator Group which were selected according to the following criteria:

P&C Companies with at least 50% of revenues from specialty and commercial lines of business combined;
U.S.-based companies that are listed or participate in the Willis Towers Watson / Mercer Databank;
Companies with annual revenues above US $500 million and assets above US $1 billion

No cap was applied on each company’s annual revenues and assets in order to gather the maximum number of relevant companies. However, regression analyses were performed to adjust market compensation levels and account for company size based on the scope of each executive’s role at OneBeacon.

The U.S. Comparator group is comprised of the following companies:

Allied World	Markel Corporation
American Financial Group,Inc.	RLI Corp.
Argo Group	Selective Insurance Group
Aspen Insurance Holdings Limited	The Navigators Group,Inc.
Chubb	The Travelers Companies,Inc.
Cincinnati Financial Corp.	W.R. BerkleyCorporation
Loews Corporation(CNA)	Zurich North America

Target Total Compensation Position Relative to the Comparator Group

The Company’s policy is to set target total compensation for Executives and Senior Executives in line with the median of the comparator group. Other factors such as experience, individual contribution and internal equity are also considered when finalizing individual total compensation opportunities. Actual total compensation further depends on individual and corporate performance relative to set objectives.

The CEO’s target total compensation is established in camera by the HRC Committee. For 2019, the long-term incentive target for Mr. Brindamour was established at 450% of his base salary. The HRC Committee believes that such incentive provides a proper link between Mr. Brindamour’s long-term interests and those of the Company’s shareholders. Such level of the long-term incentive target reflected the practices of large Canadian publicly traded organizations and brought Mr. Brindamour’s target total compensation at 107% of the median of the comparator group.

Intact Financial Corporation | Management Proxy Circular 2020

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Table of Contents ESG Content Map

1. Voting Information

3. Business of the Meeting

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

6. Reports of the Committees

4. Directors

Executive Compensation Framework and its Components

The Company’s compensation components aim for an optimal balance between fixed and variable pay to encourage participation and behavior that aligns with the longer-term interests of the Company and its shareholders. The following illustrates the executive compensation framework for 2019:

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Total Direct Compensation Indirect Compensation
Short-term
Compensation Element Base salary Incentive Plan Long-term Incentive Plan (LTIP) Group benefits Retirement benefits Perquisites
(STIP)
▼ ▼ ▼ ▼ ▼ ▼
Link
Pay for the
compensation
RationaleMission/ responsibilities and accountabilities of the role including to a combination business units of individual, align rewards with performance and Pay for future with health and well-Provide executives Provide financial executives after security of competitive market Aligned with
performance of the experience and and financial shareholder value creation being support retirement practices
individual in the role performance
objectives
For RSUs:
Unrelated to IFC’s
financial performance
For PSUs:
Canadian (with or
Financial and without North American
Individual goals responsibilities): IFC’s
Individual 3-year average ROE
Performance contribution, Those with relative to the Weighted
Criteria competencies and North American responsibilities North American Benchmark * Unrelated to performance
performance have a mix of
Canadian and US U.S. : U.S. Combined
metrics ratio vs absolute
targets
U.S. with North
American
responsibilities have a
mix of Canadian and
U.S. metrics
Vesting of share
units with settlement
in common shares Canadian: Value
(restricted shares of perquisites
Performance Salary increase and for, among others, increases with
Outcome position within the Cash payment CEO + other most Some benefits increase in proportion to salary salary
salary structure
highly compensated US: no perks
Canadian executives program
+ Oversight Functions
and Vice Chairman)
3 years (plus 2-year
restricted period post-
Performance/ vesting for, among
others, CEO + most
Reference Annual 1 year Annual Career Annual
Period highly compensated
Canadian executives
+ Oversight Functions
and Vice Chairman)
Impact on Pay Career-long Annual Multi year Career-long Annual
▼
----- End of picture text -----

Variable pay-for-performance

For LTIP performance cycles that started before 2019, the payout of the PSUs component for the LTIP of Canadian Executives and Senior Executives (without a North American scope of responsibilities) is based on IFC’s 3-year average ROE relative to the Canadian P&C insurance industry, and the payout of the PSUs component for the LTIP of Canadian Executives and Senior Executives with a North American scope of responsibilities is based on a weighted average of the metrics used for Canadian and U.S. Executives and Senior Executives.

Intact Financial Corporation | Management Proxy Circular 2020

Page 90

Table of Contents ESG Content Map

1. Voting Information

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

6. Reports of the Committees

4. Directors

3. Business of the Meeting

Base Salary

Objective:

To provide fixed compensation based on the external market as well as internal equity with respect to the role, scope, responsibilities and accountabilities within IFC, and the experience and performance of the individual in the role.

Compensation Element	Type	Audience	Performance	Adjustments Based on
Base salary	Cash	Executives and Senior Executives	Annual	Individualperformance and market trends

Base salaries of Senior Executives are reviewed once a year by the HRC Committee. Market data is available for all positions.

Short-Term Incentive Plan

Objective:

To reward employees who help IFC achieve its business goals
To attract and retain the talent essential to our success

Compensation Element	Type	Audience	Performance	Payouts Based on
Short-Term Incentive Plan	Cash	Executives and Senior Executives	1 year	Achievement of Company’s strategic fnancial and non-fnancial objectives,and individualgoals.

All Executives and Senior Executives participate in the STIP. Awards are earned on the achievement of the Company’s strategic financial and non-financial objectives and the personal performance of individual participants, linked to the Company’s corporate values.

At the beginning of each year, a target incentive opportunity is communicated to each participant, based on the internal value of the position as well as alignment to the market median of the relevant market. This target incentive opportunity is expressed as a percentage of the participant’s salary and reflects the competitive practices among Intact’s reference market for comparable positions. The target incentive is made up of several components, or objectives, and is paid at target for each specific target component, each with its own weight, if met. The target performance criteria are based on a composite of some or all of the following, depending on the particular position: combined ratio, net operating income per share, direct premiums written growth, leadership, overall performance, and execution of strategic and value-driven priorities. For each component, minimum and maximum levels are also set, allowing a sliding scale to be used, from zero at minimum level to twice the targeted amount at maximum level. Actual performance results can lie between these two levels, in which case the payout is calculated based upon the linear relationship between the minimum and maximum levels.

Financial objectives represent 75% of the weight of the overall target incentive for Senior Executives, and 50% of the weight of the overall target incentive for Executives. Individual performance objectives represent 25% of the weight of the overall target incentive for Senior Executives and 50% for the Executives and include “Living Our Values”-related goals, as well as operational goals consistent with the individual’s role.

The CEO and other Senior Executives also have two specific ESG-related goals as part of their individual/personal objectives under the STIP: increase employee engagement and accelerate customer-driven initiatives. These two goals form an integral part of our objectives of remaining one of the best employers in North America and being recognized as one of the most respected companies in North America. We achieved our goal again this year by being certified as a Kincentric 2019 Best Employer in Canada for the fifth consecutive year and for the first time in the U.S, in addition to being recognized by other organizations as a leading place to work. For more information on the Company’s awards and recognition in 2019, please see pages 3, 4 and 45 of this Circular.

Intact Financial Corporation | Management Proxy Circular 2020

Page 91

Table of Contents 1. Voting Information ESG Content Map 2. General Information

3. Business of the Meeting 4. Directors

5. Corporate Governance Practices 6. Reports of the Committees

7. Statement on Executive Compensation 8. Approval of the Board of Directors

The 2019 STIP targets as a percentage of base salary for NEOs are as follows:

Name & Position	STIP Target (%)	STIP Maximum (%)
Charles Brindamour — Chief Executive Ofcer	125	250
Louis Marcotte — Senior Vice President & Chief Financial Ofcer	60	120
T. Michael Miller — President,U.S. and SpecialtySolutions	100	200
Louis Gagnon — President,Canadian Operations	100	200
Mathieu Lamy— Executive Vice President & Chief OperatingOfcer	80	160

The following tables set forth the 2019 Performance Metrics that are applied under the STIP to determine the amount of the award to Senior Executives.

Canadian Senior Executives

	Weight (%)	STIP Minimum (level below which the participant will not receive a bonus amount) (% points below target)	STIP Maximum (level at which the participant will receive twice the targeted amount) (% points above target)
Canada Financial Metrics – Relative to the Industry Benchmark
IFC’s Growth in Canada(in DPW)	16.7	2	2
IFC’s Proftabilityin Canada(Combined Ratio)	33.3	2	2
Other Metrics
IFC Net OperatingIncomeper Share	25	22	22
Individual/Personal Goals	25	—	—
TOTAL	100	—	—

U.S. Senior Executives

	Weight (%)	STIP Minimum (level below which the participant will not receive a bonus amount) (% points below target)	STIP Maximum (level at which the participant will receive twice the targeted amount) (% points above target)
U.S. Financial Metrics – Absolute Measure
IFC’s Proftabilityin the U.S.(Combined Ratio)	50	4	4
Other Metrics
IFC Net OperatingIncomeper Share	25	22	22
Individual/Personal Goals	25	—	—
TOTAL	100	—	—

Intact Financial Corporation | Management Proxy Circular 2020

Page 92

Table of Contents ESG Content Map

1. Voting Information

3. Business of the Meeting

5. Corporate Governance Practices 6. Reports of the Committees

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

4. Directors

Senior Executives with North American Oversight

A mix of Canadian and U.S. financial metrics apply for Senior Executives with cross-border responsibilities as follows:

Canadian Senior Executives with North American Oversight (75% Canada financial metrics and 25% U.S financial metrics)

	Weight (%)	STIP Minimum (level below which the participant will not receive a bonus amount) (% points below target)	STIP Maximum (level at which the participant will receive twice the targeted amount) (% points above target)
Canada Financial Metrics – Relative to the Industry Benchmark
IFC’s Growth in Canada(in DPW)	12.5	2	2
IFC’s Proftabilityin Canada(Combined Ratio)	25	2	2
U.S Financial Metrics – Absolute Measure
IFC’s Proftabilityin the U.S.(Combined Ratio)	12.5	4	4
Other Metrics
IFC Net OperatingIncomeper Share	25	22	22
Individual/Personal Goals	25	—	—
TOTAL	100	—	—

U.S. Senior Executives with North American Oversight (75% U.S. financial metrics and 25% Canada financial metrics)

	Weight (%)	STIP Minimum (level below which the participant will not receive a bonus amount) (% points below target)	STIP Maximum (level at which the participant will receive twice the targeted amount) (% points above target)
U.S Financial Metrics – Absolute Measure
IFC’s Proftabilityin the U.S.(Combined Ratio)	37.5	4	4
Canada Financial Metrics – Relative to the Industry Benchmark
IFC’s Growth in Canada(in DPW)	4.18	2	2
IFC’s Proftabilityin Canada(Combined Ratio)	8.32	2	2
Other Metrics
IFC Net OperatingIncomeper Share	25	22	22
Individual/Personal Goals	25	—	—
TOTAL	100	—	—

The following table represents the STIP payout for each NEO based on 2019 results that will be paid in the second quarter of 2020:

Name & Title	2019 STIP Target ($)	2019 STIP Canadian Financial Results (%)(1)	2019 STIP US Financial Results (%)(1)	2019 Total STIP Result (%)(2)	2019 Total STIP ($)
Charles Brindamour — Chief Executive Ofcer	1,576,250	109.7	96.4	115.6	1,821,849
Louis Marcotte — Senior Vice President & Chief Financial Ofcer	270,000	109.7	96.4	113.5	306,534
T. Michael Miller — President,U.S. and SpecialtySolutions³	973,763	109.7	96.4	108.3	1,089,733
Louis Gagnon — President,Canadian Operations	700,000	109.7	96.4	113.5	794,719
Mathieu Lamy— Executive Vice President & Chief OperatingOfcer	378,000	109.7	96.4	114.8	433,873

(1) 2019 STIP Financial Results are comprised of 66.67% national financial results and 33.33% Net Operating Income per Share results.

(2) 2019 Total STIP Result is comprised of 50% national financial results, 25% Net Operating Income per Share results, and 25% based on results achieved against personal goals and objectives.

(3) For the purpose of the table above, Mr. Miller’s base salary of US$750,000 has been converted to Canadian dollars using the exchange rate as at December 31, 2019, which was 1.29835. For the purpose of the table above, the 2019 Total STIP amounts for M. Miller has been converted to Canadian dollars using the exchange rate as at the payment date of March 5, 2020, which was 1.34170.

Intact Financial Corporation | Management Proxy Circular 2020

Page 93

Table of Contents ESG Content Map

1. Voting Information 2. General Information

3. Business of the Meeting

5. Corporate Governance Practices 6. Reports of the Committees

7. Statement on Executive Compensation 8. Approval of the Board of Directors

4. Directors

IFC Long-Term Incentive Plan

Objective:

To align the rewards of Executives and Senior Executives with IFC shareholder value creation
To communicate to the investor community that IFC Executives and Senior Executives have a stake in the success of the Company
To reinforce the pay-for-performance philosophy
To encourage participants to focus on sustaining high performance levels and growth in shareholder value
To provide competitive levels of total compensation
To retain key talent

LTIP Components

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PSUs 70%
RSUs 30%
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Payouts Based on

Performance Share units (PSU)

For Canadian Executives and Canadian Senior Executives (with or without North American responsibilities):

IFC’s 3-year average ROE relative to the 3-year average ROE of the Weighted North American Benchmark. Payouts in the form of Common Shares[1] .

For LTIP performance cycles that started before 2019, the payout of the PSUs component for Canadian Executives and Senior Executives is based on IFC’s 3-year average ROE relative to the Canadian P&C insurance industry. The payout of the PSUs component for Canadian Executives and Senior Executives with North American responsibilities is based on a weighted average of such Canadian metrics and of the U.S. metrics applicable to U.S. Executives and Senior Executives without North American responsibilities (as described below), in the proportion of 75% Canadian/25% U.S.

For U.S. Executives and U.S. Senior Executives:

IFC’s 3-year average U.S. Combined Ratio relative to set objectives. Payouts in the form of Common Shares[1] .

U.S. Executives and Senior Executives with North American responsibilities have a mix of such U.S. metrics and of the Canadian metrics applicable to Canadian Executives and Senior Executives without North American responsibilities (as described above), in the proportion of 75% U.S./25% Canadian.

Restricted Share units (RSU)

Vesting not linked to performance. Vesting based on passage of time. Payouts in the form of Common Shares[1] .

Subject to the Company’s right to make payouts in whole or in part in cash. In 2019, the payouts were partially settled in cash.

On January 1, 2019, the awards made under the LTIP for the 2016 to 2018 performance cycle vested. Intact Financial Corporation’s three (3) year average ROE was 11.93%, and the Canadian P&C industry’s three (3) year average ROE for that same period was 4.72%. Intact Financial Corporation therefore outperformed the industry by 7.21%, which, according to the LTIP performance objectives, resulted in a payout of 180% of the initial PSUs allocated in 2016.

On January 1, 2020, the awards made under the LTIP for the 2017 to 2019 performance cycle vested. Intact Financial Corporation’s three (3) year average ROE was 12.07%, and the Canadian P&C industry’s three (3) year average ROE for that same period was 4.87%. Intact Financial Corporation therefore outperformed the industry by 7.2%, which, according to the LTIP performance objectives, results in a payout of 180% of the initial PSUs allocated in 2017. The delivery of the final number of Common Shares related to the RSU component occurred on January 9, 2020. The delivery and confirmation of the final number of Common Shares related to the PSU component to participants will occur in April or May 2020. Participants are entitled to cash dividend payments once the delivery of Common Shares has occurred.

Intact Financial Corporation | Management Proxy Circular 2020

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Table of Contents ESG Content Map

1. Voting Information

5. Corporate Governance Practices 6. Reports of the Committees

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

4. Directors

3. Business of the Meeting

The 2019 LTIP framework is described in the following table:

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Element RSUs PSUs
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Shareholder interest alignment While both PSUs and RSUs align the interests of participants with those of shareholders due to the link between their ultimate value and the Company’s Common Share price, PSUs are predominantly used to reward operational excellence while RSUs are used to increase the LTIP’s ongoingretentionpower.	Shareholder interest alignment While both PSUs and RSUs align the interests of participants with those of shareholders due to the link between their ultimate value and the Company’s Common Share price, PSUs are predominantly used to reward operational excellence while RSUs are used to increase the LTIP’s ongoingretentionpower.
Payout range (as a % of thegrant award) 100%	0 – 200%
Term Threeyears	Threeyears
Vesting Date for 2019grants January1,2022	January1,2022
Vesting criteria Automatically vest three (3) years from the year of the grant, provided that the employee stays with the Company. Vesting for RSUs is not linked to Intact Financial Corporation’s performance.	Based on a specifc performance goal determined by the HRC Committee. Efective in 2019, the Board is authorized to make discretionary adjustments with respect to attainment of performance targets to deal with extraordinary events that materially afect (positively or negatively) the fnancial results or the fairness of the performance targets. For Canadian Executives and Canadian Senior Executives (with or without North American responsibilities): Based on the diference between the three-year average ROE of the Company and that of the Weighted North American Benchmark. There is no payout if the average ROE of the Company is less than the average of the industry, as reported to the regulatory authorities, and twice the target level if the average ROE of the Company is eight (8) or more percentage points above the average of the industry. For U.S. Executives and U.S. Senior Executives: Based on IFC’s 3-year average U.S. Combined Ratio relative to set objectives. There is no payout if the actual combined ratio performance is more than four points inferior to the target and a maximum payout is achieved if the actual combined ratio performance is four points superior to the target U.S. Executives and Senior Executives with North American responsibilities have a mix of the Canadian metrics (described above) and U.S. metrics,in theproportion of 75% U.S./25% Canadian.
Restrictionperiod1 2years	2years
Dividend Equivalents Units awarded under the LTIP are credited with divid Common Shares.	end equivalents on the same basis as dividends declared on the
Methods of Payment2 The payment is in the form of Common Shares subject to the Company’s right, in its sole discretion, to settle any entitlements of PSUs or RSUs in whole or in part in cash as provided by the LTIP. The HRC Committee has adopted an LTIP delivery mechanism for Senior Executives (which currently excludes participants in the 2-year post-vesting restricted plan). Under this mechanism, Senior Executives (except those subject to the 2-year restriction period) may elect to have the vested RSUs and PSUs settled in cash rather than Common Shares. The Board of Directors makes a fnal decision, approving or denying the elections. In order to be eligible for the cash settlement, Senior Executives must have accumulated at least four (4) times their annual LTIP target (200% of the minimum share ownership requirement)in IFC shares or unvested RSUs.
Pricing at time of grant The number of units allocated to each participant is determined by dividing the economic value, which is a percentage of base salary for Canadian Executives and Senior Executives and a fxed dollar amount for U.S. Executives and Senior Executives (see LTIP payout target table below), by the average value of a Common Share during the last quarter of the most recently completed fnancial year. The average price of one Common Share during the last quarter of 2018 was $102.36. At the time of delivery, one (1) unit (PSU or RSU) is converted to one (1) Common Share of Intact Financial Corporation (these Common Shares are purchased on the secondary market subject to the Company’s right, in its sole discretion, to settle any entitlements under PSUs or RSUs in whole or in part in cash as provided in the LTIP). The market median long-term incentive practices for comparable positions are considered when determining the size of target individual awards.

1 Following approval by the HRC Committee and effective since April 2018, the two (2) year post-vesting restriction period applies to, among others, (i) the CEO and the most highly compensated Canadian Executives, and (ii) the Oversight Functions and (iii) the Vice-Chairman. As such, these participants can elect to (i) receive all Common Shares subject to the additional two (2) year restriction and pay taxes in cash immediately, or (ii) receive a reduced number of Common Shares with the balance used to cover taxes. No cash payment option is available to these participants.

2 Senior Executives made their election in June 2019 for the 2020 deliveries. Elections were reviewed and approved by the Board of Directors in July 2019 and are irrevocable.

Intact Financial Corporation | Management Proxy Circular 2020

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Table of Contents 1. Voting Information ESG Content Map 2. General Information

3. Business of the Meeting 4. Directors

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

6. Reports of the Committees

A total of 449,601 units (309,647 PSUs and 139,954 RSUs) were awarded in 2019 to LTIP participants. The 2019 LTIP targets, expressed as a percentage of salary, and unit awards for NEOs are detailed as follows:

Name & Title	2019 LTIP Target (%)	2019 PSU Awarded (#)	2019 RSU Awarded (#)	2019 Total Award (#)
Charles Brindamour — Chief Executive Ofcer	450	38,806	16,631	55,437
Louis Marcotte — Senior Vice President & Chief Financial Ofcer	140	4,309	1,847	6,156
T. Michael Miller — President,U.S. and SpecialtySolutions¹	467	32,303	13,844	46,147
Louis Gagnon — President,Canadian Operations	225	10,771	4,616	15,387
Mathieu Lamy— Executive Vice President & Chief OperatingOfcer	150	4,847	2,077	6,924

(1) For the purpose of the table above, Mr. Miller’s LTIP target of US$3,500,000 has been converted to Canadian dollars using the exchange rate as of the Award date of May 28, 2019, which was 1.3496.

The following table sets forth the Performance Measures that are applied under the LTIP to determine the payout for the PSU component to Executives and Senior Executives.

Canadian Executives and Canadian Senior Executives

The performance measure used is IFC’s consolidated three (3) year average ROE relative to the three (3) year average ROE of the Weighted North American Benchmark. For LTIP performance cycles that started before 2019, the performance measure used is IFC’s consolidated three (3) year average ROE relative to the three (3) year average ROE of the Canadian P&C insurance industry (excluding IFC) as reported by MSA Research Inc. (or such other source as the HRC Committee determines to be appropriate in the circumstances).

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IFC’s three (3) year ROE versus Industry Average PSU Payout
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IFC’s three (3) year ROE versus Industry Average	PSU Payout
8percentagepoints of out-performance	200%(maximum)
4percentagepoints of out-performance	100%(target)
Equal to industryaverage	50%(threshold)
Below industryaverage	0%

U.S. Executives and U.S. Senior Executives

The performance measure used is IFC’s 3-year average U.S. Combined Ratio relative to set objectives with a spread of greater than -4% of target resulting in a 0% payout, –4% of target resulting in a 50% payout, achievement of target resulting in a 100% payout and +4% of target resulting in a 200% payout. If actual performance results lie between these levels, the payout is calculated based upon the linear relationship between the minimum and maximum levels.

OneBeacon Long-Term Incentive Plans

The OneBeacon Legacy Plans provided for the possibility to grant options, restricted stock, restricted stock units, performance compensation awards, performance shares, performance units and other incentive awards (including cash awards and stock appreciation rights) to any eligible OneBeacon employee, at the discretion of its compensation committee.

Following the acquisition of OneBeacon, awards granted under the OneBeacon Legacy Plans were treated as follows:

The restricted stock and restricted stock units were converted into the right to receive cash consideration calculated in accordance with the provisions of the Agreement and Plan of Merger between OneBeacon and the Company for each OneBeacon common share subject to such award, and such amounts are payable upon satisfaction of the service-based vesting conditions that applied under the existing terms of such awards; and
The performance units granted under the 2017-2019 performance cycle vested on December 31, 2019 and were subject to certain adjustments to performance measures to take into account the OneBeacon acquisition, namely the operational objective to achieve a combined ratio in the low 90s for OneBeacon.

Mr. Miller has no further outstanding grants under the OneBeacon Legacy Plans. Please see page 110 for more information on Mr. Miller’s grants vested in 2019 and early 2020 under the OneBeacon Legacy Plans.

Intact Financial Corporation | Management Proxy Circular 2020

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Table of Contents ESG Content Map

1. Voting Information

3. Business of the Meeting

5. Corporate Governance Practices 6. Reports of the Committees

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

4. Directors

Group and Retirement Benefits

Objective:

To guarantee each participant competitive benefits and a retirement income, in order to retain the Company’s Executives and Senior Executives.

IFC’s Canadian Executives and Canadian Senior Executives benefit from two (2) pension plans: a base plan, which is a defined benefits plan with pensionable earnings to the annual limits allowed by the Canada Revenue Agency; and a supplementary executive retirement plan that is capped to the difference between the limits established by the CRA and the Executive’s or Senior Executive’s pensionable earnings. Please refer to the Pension Plan and Retirement Benefits section at page 111 of this Circular for details on these plans. In conjunction with a pension risk management strategy, the HRC Committee submitted a recommendation to the Board of Directors in order to remove the automatic indexation provision in the registered pension plans for pension benefits accrued on or after January 1, 2012.

No U.S. Executives or U.S. Senior Executives participate in any pension plan nor are they eligible to participate in or receive payments under any of the previously terminated or frozen U.S. legacy pension plans.

All U.S. employees as well as Executives and Senior Executives may participate in the qualified OneBeacon 401(k) Savings Plan. The OneBeacon 401(k) Savings Plan offers tax advantages, savings incentives and investment options to help employees achieve their financial goals. U.S. employees are immediately eligible for participation on their first day of employment. They may elect to contribute on a pre-tax, after-tax or Roth basis up to 40% of salary. Employees aged 50 or older are also eligible for pre-tax and Roth catch-up contributions. In all cases, IRS limits apply to maximum contribution amounts. New hires who do not enroll after 60 days are automatically enrolled in pre-tax contributions at 6% of pay, with an automatic 1% increase each April. The default for their investments is the age appropriate target retirement fund. Employees who are eligible to participate in the plan receive a bi-weekly company contribution of 3% of eligible earnings. OneBeacon also makes an annual fixed contribution of 3% of compensation for employees who are active on the last business day of the plan year. Employees who do not participate in the LTIP are also eligible for an annual variable contribution, set at management discretion, based on financial results that can vary between 0% and 6%, with a target at 3%.

In terms of company benefits, Canadian Executives and Senior Executives benefit from the same plan as employees, which provides a number of options so each individual can design the medical, dental, life, disability and other insurance coverage that he or she wants for himself or herself and his or her dependents. U.S Executives and U.S Senior Executives are entitled to the OneBeacon benefits offering which includes two consumer driven health plans; one with a Health Reimbursement Account (HRA) and the other with a Health Savings Account (HSA). In addition, OneBeacon offers comprehensive, dental, prescription drug, vision coverage, life insurance, disability coverage, pretax commuter benefits and tuition reimbursement

Perquisites

Objective:

To provide Canadian Executives and Canadian Senior Executives with a market-competitive group of perquisites that best meet their needs and lifestyle.

The goal of our perquisites is to provide Canadian Executives and Canadian Senior Executives with a market-competitive group of perquisites that best meet their needs and lifestyle, including the lease of a company car, a club membership, deposits in a Health Care Spending Account (HCSA), taxable cash, and a comprehensive medical examination. At Intact Financial Corporation, we respect the environment and its finite resources, and in that context, we encourage Executives and Senior Executives eligible for a company car to select vehicles with lower fuel consumption, as well as hybrid and electric vehicles. Except for Mr. Miller (see below), no perquisites are offered to U.S. Executives and U.S. Senior Executives.

All IFC’s Canadian Executives and Canadian Senior Executives are provided with a taxable allowance equal to 5% of their base salary, plus $7,500. Canadian Executives and Canadian Senior Executives can either elect to receive a cash allowance or use the allowance through the selection of various perquisites in the program. The perquisite year runs from April 1 to March 31. The eligible base salary for the purpose of calculating the allowance is capped at $800,000.

Intact Financial Corporation | Management Proxy Circular 2020

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Table of Contents ESG Content Map

1. Voting Information

3. Business of the Meeting

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

6. Reports of the Committees

4. Directors

Under the previous ownership of OneBeacon, Mr. Miller had access to a corporate aircraft for personal use as part of his benefits package. This benefit has been maintained under the Company’s ownership. The HRC Committee established an annual cap on such personal use of a corporate aircraft at US$125,000. Other trips are reimbursed by Mr. Miller at their full cost to the Company and are not considered a perquisite. The amount of the actual out-of-pocket costs to the Company of the personal flights in 2019 was $162,294[1] and is included in the Summary Compensation Table at page 108. From time to time, Mr. Miller may take his spouse or other family members with him on a business trip. In this instance, we do not include any amounts for the flight in the Summary Compensation Table because the additional passenger(s) do not increase the aggregate incremental cost of the flight.

Pay-for-Performance

Pay-Performance Linkages

The Company’s performance-based compensation is intended to align the objectives of executives with those of the Company and the long-term interests of shareholders. For Canadian Executives and Canadian Senior Executives, short-term incentives are linked both to individual performance and to the achievement of the Company’s financial and strategic results in Canada relative to that of the rest of the Canadian P&C insurance industry, while long-term incentives are linked to the Company’s consolidated ROE relative to that of the Weighted North American Benchmark over three (3) years[2] . For U.S. Executives and U.S. Senior Executives, short-term incentives are linked to target annual combined ratio of IFC’s U.S. operations and additional goals depending on the current challenges or opportunities in any given year, while long-term incentives are linked to the achievement of a target average combined ratio of IFC’s U.S. operations over three (3) years.

Short-term incentives of Executives and Senior Executives with North American responsibilities are based on a weighted average of the Canadian and U.S. metrics described above. Long-term incentives of U.S. Executives and Senior Executives with North American responsibilities are also based on a weighted average of Canadian and U.S. metrics (whereas long-term incentives of Canadian Executives and Senior Executives with or without North American responsibilities are linked to the Company’s consolidated ROE relative to that of the Weighted North American Benchmark over three (3) years). See pages 91 to 96 for more information on the performance metrics applied under the STIP and LTIP for our Canadian and U.S. Executives and Senior Executives.

The Company’s total shareholder return (including dividends) for 2019 of 45.11% was higher than the S&P/TSX Composite Index’s total return of 22.88%. Over a five-year period Intact’s performance is 55% higher than the Index. The following graph compares the total cumulative return for $100 invested in Common Shares of the Company with the total cumulative return of the S&P/TSX Composite Index for the 5-year period from December 31, 2014 through December 31, 2019.

Cumulative Value of a $100 investment assuming Reinvestment of Dividends

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$300
Intact Financial Corporation
$250
S&P/TSX Composite Index
$200
$150
$100
$50
2014 2015 2016 2017 2018 2019
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Year Ending December 31	2014	2015	2016	2017	2018	2019
Intact Financial Corp.	100.0	108.3	120.4	135.0	131.1	190.3
S&P/TSX Composite Index	100.0	91.7	111.0	121.1	110.3	135.6

1 The actual amount for 2019 was converted to Canadian dollars using the exchange rate as at December 31, 2019 of 1.29835.
2 For LTIP performance cycles that started before 2019, Canadian Executives’ and Canadian Senior Executives’ long-term incentives are linked to the Company’s financial results relative to the financial results of the Canadian P&C insurance industry, and long-term incentives of Canadian Executives and Senior Executives with a North American scope of responsibilities are based on a weighted average of the metrics used for Canadian and U.S. Executives and Senior Executives.

Intact Financial Corporation | Management Proxy Circular 2020

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Table of Contents ESG Content Map

1. Voting Information

3. Business of the Meeting

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

6. Reports of the Committees

4. Directors

Combined ratio for STIP calculation

All Executives and Senior Executives participate in the STIP. For Canadian Executives and Canadian Senior Executives, awards are earned on the achievement of the Company’s strategic financial objectives (which include premium growth, underwriting profitability and net operating income per share) and non-financial objectives and the personal performance of individual participants. Growth and profitability for the incentive payment are based on the performance of the Canadian operations of the Company relative to the 20 largest comparable companies in the Canadian P&C insurance industry[1] . For U.S. Executives and U.S. Senior Executives, awards are based on the achievement of the Company’s strategic financial objectives (which include underwriting profitability and net operating income per share) and non-financial objectives and the personal performance of individual participants. Profitability for the incentive payment is based on the performance of the U.S. operations of the Company (measured with IFC’s U.S. combined ratio) relative to set objectives. For Executives and Senior Executives with a North American scope of responsibilities, awards are based on a weighted average of the Canadian metrics and U.S. metrics described above.

The graph below illustrates the Company’s track record of outperforming the 20 largest comparable companies in the Canadian P&C insurance industry from a combined ratio perspective and highlights the 3.6% positive gap in 2019. Based on the strength of the Company’s performance in 2019 compared to that of the 20 largest comparable companies in the Canadian P&C insurance industry, the level of STIP award payout was above target. The graph below also shows that over time, NEO STIP payouts are generally above target when the Company’s Canadian combined ratio, an important performance component of the STIP, is better than that of the industry. The NEO STIP payouts are also based on other performance metrics, as described on pages 91 to 93, but correlation between the performance of the Company on those metrics and the NEO STIP payouts is less apparent because of the weight of such components on their overall target STIP.

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Combined Ratio Aggregate NEOs STIP
(inverted scale) Payout ($ million)
85% 1 0
8 IFC Combined Ratio - Canada
95%
Canadian P&C Industry Benchmark
Combined Ratio
6
IFC Combined Ratio - U.S.
105% 4.2 4.0 4.2 4.0 4.2 3.9 4
NEOs Realized STIP
2.8 3.0 2.9 2.7
NEOs Target STIP
2
115%
0
2015 2016 2017 2018 2019
Year Ending December 31 2015 2016 2017 2018 2019
IFC’s Combined Ratio – Canada 92.8% 95.2% 93.7% 95.0% 97.6%
Combined Ratio Canadian P&C Industry Benchmark 98.0% 99.9% 100.3% 103.3% 101.2%
Percentage Points better than Benchmark 5.2% 4.7% 6.6% 8.3% 3.6%
IFC’s Combined Ratio – U.S. – – – 94.9% 93.0%
Aggregate NEOs STIP vs Target 1.51 x 1.35 x 1.06 x 1.05 x 1.07 x
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1 Consists of the 20 largest comparable companies in the Canadian P&C insurance industry based on MSA Research Inc., excluding Lloyd’s Underwriters Canada, Insurance Corporation of British Columbia, Saskatchewan Government Insurance, Saskatchewan Auto Fund, Genworth Financial Mortgage Insurance Company Canada, Canada Guaranty Mortgage Insurance Company and IFC.

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Table of Contents ESG Content Map

1. Voting Information

3. Business of the Meeting

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

6. Reports of the Committees

4. Directors

Return on Equity (ROE) for LTIP calculation

One of the key goals of the Company is to consistently outperform its P&C industry peers. For the 2016-2018 period, for which the units vested on January 1, 2019, the average consolidated ROE of the Company was higher than that of the Canadian P&C insurance industry’s average for that same period. Consequently, there was a 180% PSU payout under the Canadian metrics of the LTIP. Please refer to pages 94 to 96 of this Circular for details on the LTIP payment.

For the 2017-2019 period, the three-year average consolidated ROE of the Company was higher than that of the Canadian P&C insurance industry’s three-year average by 7.2%. This results in a PSU payout of 180% of target under the Canadian metrics of the LTIP. The graph below shows how Canadian LTIP vesting is above target when the Company’s three (3) year average ROE exceeds that of the Canadian industry by more than 4%.

Beginning with the 2019-2021 LTIP cycle, the payout of the PSUs component for the LTIP of all Canadian Executives and Canadian Senior Executives (with or without a North American scope of responsibilities) will be based on IFC’s 3-year average ROE relative to the Weighted North American Benchmark.

3-year Average ROE					PSU Vesting
25%					200%
			180%	180%		3-year Average ROE Cycles
20% ~~145%~~	151%	~~144%~~			150%	Intact Financial Corp 3-year Average ROE Canadian P&C Industry
15%
					100%	Percentage of Target Realized
10%
					50%
5%
0%					0%
2013–2015	2014–2016 2015–2017 2016–2018 2017–2019
3-year Average ROE Cycles		2013-2015	2014-2016	2015-2017	2016-2018	2017-2019
Vested on:		Jan 1, 2016 Jan 1, 2017 Jan 1, 2018			Jan 1, 2019	Jan 1, 2020
IFC’s consolidated 3-year Average	ROE	13.80%	14.03%	12.77%	11.93%	12.07%
3-year average ROE Canadian P&C Industry** 8.00%			8.00%	7.00%	4.72%	4.87%
Percentage Points Above/Below Benchmark +5.8%			+6.0%	+5.8%	+7.2%	+7.2%
PSU Vesting		145%	151%	144%	180%	180%

** Based on MSA Research Inc., excluding Lloyd’s Underwriters Canada, Insurance Corporation of British Columbia, Saskatchewan Government Insurance, Saskatchewan Auto Fund, Genworth Financial Mortgage Insurance Company Canada, Canada Guaranty Mortgage Insurance Company and IFC.

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Table of Contents ESG Content Map

1. Voting Information

3. Business of the Meeting

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

6. Reports of the Committees

4. Directors

Non-IFRS Financial measures in STIP and LTIP Calculations

We use both IFRS and non-IFRS financial measures to assess the Company’s performance under the STIP and LTIP calculations. Non-IFRS financial measures do not have any standardize meaning prescribed by IFRS and are unlikely to be comparable to any similar measures presented by other companies. The non-IFRS measures used to calculate the STIP and LTIP are direct premium written (DPW), combined ratio, net operating income per share and adjusted return on equity. The definition of these measures and reconciliation to the most comparable IFRS measures can be found in Section 31 – Non-IFRS financial measures of our Management’s Discussion and Analysis for the year ended December 31, 2019 available on SEDAR. These measures are also defined in the glossary available in the “Investors” section of our web site at www.intactfc.com.

OneBeacon Legacy Plans Calculation

Please see page 96 for more information on the OneBeacon Legacy Plans.

Compensation Consultant Independent Advice

The HRC Committee receives the assessments and recommendations from Management taking into consideration all shareholders’ interests. To this end, the HRC Committee works with Management and the compensation team to review employment and compensation practices in the Canadian and U.S. markets in order to ensure that the Company’s employees, managers, Executives and Senior Executives are competitively compensated. The HRC Committee may also consult directly with independent experts to fulfill its mandate.

Willis Towers Watson has provided consulting services to the Company since 2005 on matters related to executive compensation and on other human resources advisory services. Since 2018, Willis Towers Watson provides consulting services exclusively on matters related to executive and non-executive compensation. Willis Towers Watson’s role mainly consists of conducting a yearly market analysis of the Company’s Senior Executive positions and advising the HRC Committee on market trends, program structure and design. The market analysis includes comparisons with peer group companies; the comparisons are included by the Company in the Senior Executive compensation review summary sheet presented to the HRC Committee in order to make informed pay decisions. However, the HRC Committee does not solely rely on market data surveys to determine compensation levels. Individual performance and internal equity are also taken into account.

In 2019, fees paid to Willis Towers Watson for market analysis and other compensation advice totaled $267,395. Other divisions of Willis Towers Watson were also paid $32,594 in 2019 and $46,334 in 2018 for consulting services related to Intact pension, post-employment and post-retirement non-pension benefit plans (including services related to risk management, plan design, actuarial valuations, investment, performance and manager evaluation, employee communication, board compensation evaluation and governance). Such services are not subject to pre-approval by the HRC Committee.

Willis Towers Watson’s fees for the 2018 and 2019 fiscal years regarding such services were as follows:

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Fees paid to Willis Towers Watson Fiscal Years
2019 2018
Executive compensation-related fees $267,395 $564,875
All other fees $32,594 $46,334
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1. Voting Information

3. Business of the Meeting

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

6. Reports of the Committees

4. Directors

7.3 CEO Compensation

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Charles Brindamour | Chief Executive Officer

Mr. Brindamour’s key areas of responsibility include the establishment of, in consultation with Management and the Board of Directors, the purpose, the values and the long-term objectives and vision of the Company as well as its strategies and strategic priorities. He oversees the development of guidelines and practices relating to the Human Resources of the Company, including with respect to employee engagement and well-being. As Chief Executive Officer, Mr. Brindamour is responsible for the development and implementation of the strategic plan and corporate objectives of the Company, including the establishment, in consultation with Management, the Board of Directors and the Enterprise Risk Committee, of the risk appetite framework. He establishes appropriate annual and longer-term financial objectives and is responsible for meeting these objectives and ensuring reliable mechanisms are in place for asset protection and effective control of operations. Mr. Brindamour ensures the Company has a robust succession plan in place for the executive team and his direct reports and is responsible for developing and implementing policies and programs related to succession planning, talent development and management development. The Chief Executive Officer also ensures close communication with the Board of Directors and its committees and keeps the directors informed of the important aspects of the status and development of the Company and facilitates the Board of Directors governance, composition, and committee structure.

Senior Executive Share Ownership Requirement

2x Annual LTIP target in Common Shares Met

Actual Pay Mix

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2019 2018 2017
($) ($) ($)
Salary 1,260,285 1,229,423 1,197,115
At-Risk Compensation
Annual Incentive Plans 1,821,849 1,584,009 1,625,625
Share-based Awards 5,674,500 5,227,500 3,600,000
Total At-Risk Compensation 7,496,349 6,811,509 5,225,625
Pension & Other Compensation 363,300 475,910 1,363,270
Total Compensation 9,119,934 8,516,842 7,786,010
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2019 At-Risk Compensation

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• [Salary] 14%
• [Annual incentive plan] 20%
• [Share-based award] 62%
• [Pension and other] 4%
• [At-risk] 82%
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Intact Financial Corporation | Management Proxy Circular 2020

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Table of Contents ESG Content Map

1. Voting Information 2. General Information

5. Corporate Governance Practices 6. Reports of the Committees

7. Statement on Executive Compensation 8. Approval of the Board of Directors

4. Directors

3. Business of the Meeting

2019 Look-Back Table

One of the HRC Committee’s priorities is to ensure that pay is aligned with shareholders’ interests and that employees whose impact on corporate results is the greatest have total compensation packages that are the most sensitive to corporate performance over the short as well as the long-term. The table below illustrates the alignment of Mr. Brindamour’s pay with the Company’s performance since he became CEO of the Company on January 1, 2008.

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CEO Value of $100
Total Target Realizable Total
Year Compensation [(1)] Compensation CEO [(2)] Period Shareholder [(3)]
2008 $2 636 792 $ 1 981 108 $ 75 01/01/08 to 12/31/19 $497
2009 $2 479 478 $ 5 746 443 $232 01/01/09 to 12/31/19 $602
2010 $3 446 764 $ 7 471 978 $217 01/01/10 to 12/31/19 $493
2011 $3 312 637 $ 7 367 136 $222 01/01/11 to 12/31/19 $350
2012 $4 025 948 $ 6 326 035 $157 01/01/12 to 12/31/19 $295
2013 $4 075 246 $ 6 102 168 $150 01/01/13 to 12/31/19 $260
2014 $4 796 350 $ 7 331 345 $153 01/01/14 to 12/31/19 $236
2015 $5 499 330 $ 7 965 112 $145 01/01/15 to 12/31/19 $190
2016 $6 468 110 $ 9 557 152 $148 01/01/16 to 12/31/19 $176
2017 $7 701 730 $12 688 451 $165 01/01/17 to 12/31/19 $158
2018 $8 515 381 $10 318 384 $121 01/01/18 to 12/31/19 $141
2019 $8 918 618 $11 277 398 $126 01/01/19 to 12/31/19 $145
Average Over CEO Tenure $159 $295
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(1) Includes salary, target STI and LTI awarded during the year, pension and other compensation

(2) Represents the realizable value for each $100 awarded in total target compensation for the year of service

(3) Represents, as of December 31, 2019, the cumulative value of a $100 investment in shares made on the first trading day of the period indicated, assuming reinvestment of dividends

Realizable total compensation includes salaries paid, actual STIP awards paid, actual PSU and RSU payouts, the compensatory value of pension arrangements and all other compensation paid, as well as the value, as of December 31, 2019 of unvested PSUs and regular RSUs. The Company has no stock option program.

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Table of Contents ESG Content Map

1. Voting Information

3. Business of the Meeting 4. Directors

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

6. Reports of the Committees

7.4 Other NEO Compensation

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Louis Marcotte | Senior Vice President & Chief Financial Officer

The Chief Financial Officer provides financial and business leadership and perspective to senior management and to the Board of Directors. He actively participates in the crafting and evolution of the corporate strategy and establishes an annual and three-year financial plan aligned with the Company’s strategic plan and assesses financial performance against that plan. He promotes strong governance and financial control and oversees the adoption of appropriate policies and procedures to ensure completeness and accuracy of financial statements, management discussion and analysis and regulatory financial returns. Mr. Marcotte evaluates and optimizes the Company’s capital position and sources of funding within the Company’s regulatory and rating agency framework and ensures investments are properly structured and executed to deliver the expected returns, to maintain the Company’s financial strength and to respect regulatory requirements.

Senior Executive Share Ownership Requirement

2x Annual LTIP target in Common Shares Met

Actual Pay Mix

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2019 2018 2017
($) ($) [(1)] ($)
Salary 449,077 409,585 387,731
At-Risk Compensation
Annual Incentive Plans 306,534 268,817 234,187
Share-based Awards 630,000 742,000 310,728
Total At-Risk Compensation 936,534 1,010,817 544,915
Pension & Other Compensation 207,439 170,639 162,127
Total Compensation 1,593,050 1,591,041 1,094,773
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2019 At-Risk Compensation

•	Salary	28%
•	Annual incentive plan	20%
•	Share-based award	39%
•	Pension and other	13%
•	At-risk	59%

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(1) Mr. Marcotte was granted a special RSU award in 2018 to recognize the consistency of outstanding performance over many years in terms of results, corporate values and personal engagement. See the Outstanding ShareBased Awards table on page 109 for more details.

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3. Business of the Meeting 4. Directors

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

6. Reports of the Committees

1. Voting Information 2. General Information

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T. Michael Miller | President, U.S and Specialty Solutions

The President, U.S. and Specialty Solutions, a new position created in 2017 in connection with the OneBeacon acquisition, is primarily responsible for the profitability and growth of the Company’s North American specialty insurance business, including OneBeacon, its U.S based specialty insurance provider, and Intact Specialty Solutions, which focuses on the Canadian specialty market. Mr. Miller assumed this role following the Company’s acquisition of OneBeacon in September 2017 and is responsible for developing the strategies, approaches and plans for profitability, growth and the development in general of the Company’s specialty line of business.

Senior Executive Share Ownership Requirement

2x Annual LTIP target in Common Shares

Met

Actual Pay Mix

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2019 2018 2017
($) [(1)] ($) [(2)] ($)
Salary 973,763 1,023,675 224,863
At-Risk Compensation
Annual Incentive Plans 1,089,733 1,076,540 241,622
Share-based Awards 4,723,600 4,538,450 12,437,500
Total At-Risk Compensation 5,813,333 5,614,990 12,679,122
Pension & Other Compensation 178,729 186,299 12,626,321
Total Compensation 6,965,825 6,824,964 25,530,306
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2019 At-Risk Compensation

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• [Salary] 14%
• [Annual incentive plan] 15%
• [Share-based award] 68%
• [Pension and other] 3%
• [At-risk] 83%
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(1) Compensation for Mr. Miller for 2019 has been converted to Canadian dollars, please see the Summary Compensation table on page 108 for more details.
(2) Compensation for Mr. Miller for 2018 and for 2017 has been converted to Canadian dollars, please see the Summary Compensation table on page 108 for more details. Salary for Mr. Miller in 2017 has been prorated for the period from September 28, 2017, the date of the closing of the acquisition of OneBeacon, to December 31, 2017.

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Table of Contents ESG Content Map

3. Business of the Meeting 4. Directors

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

6. Reports of the Committees

1. Voting Information 2. General Information

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Louis Gagnon | President, Canadian Operations

The President, Canadian Operations is responsible for all Canadian-based business entities (Intact Insurance, belairdirect, Anthony Insurance and BrokerLink), in addition to overseeing Personal Lines (including the Company’s new “Intact Prestige” division), Commercial Lines and Marketing functions. He provides leadership in the development and implementation of strategic plans, ensures appropriate risk management and monitors Company policies with respect to market conduct, customer relations and people management.

Senior Executive Share Ownership Requirement

2x Annual LTIP target in Common Shares Met

Actual Pay Mix

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2019 2018 2017
($) ($) ($)
Salary 699,423 674,377 642,358
At-Risk Compensation
Annual Incentive Plans 794,719 676,451 518,578
Share-based Awards 1,575,000 1,518,750 899,640
Total At-Risk Compensation 2,369,719 2,195,201 1,418,218
Pension & Other Compensation 336,051 344,342 172,212
Total Compensation 3,405,193 3,213,920 2,232,788
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2019 At-Risk Compensation

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• [Salary] 21%
• [Annual incentive plan] 23%
• [Share-based award] 46%
• [Pension and other] 10%
• [At-risk] 69%
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Table of Contents ESG Content Map

1. Voting Information 2. General Information

3. Business of the Meeting 4. Directors

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

6. Reports of the Committees

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Mathieu Lamy | Executive Vice President and Chief Operating Officer

The Executive Vice President and Chief Operating Officer has North American accountability for Claims, Technology and Human Resources functions, and is also responsible for the Company’s innovation initiatives through oversight of the operations of the Intact Lab, the Data Lab and Intact Ventures. He provides strategic leadership in the development and implementation of the Company’s operational priorities.

Senior Executive Share Ownership Requirement

2x Annual LTIP target in Common Shares

Met

Actual Pay Mix

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2019 2018 2017
($) ($) ($)
Salary 471,981 449,524 424,861
At-Risk Compensation
Annual Incentive Plans 433,873 384,390 247,628
Share-based Awards 708,750 585,000 340,200
Total At-Risk Compensation 1,142,623 969,390 587,828
Pension & Other Compensation 199,067 324,062 184,193
Total Compensation 1,813,671 1,742,976 1,196,882
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2019 At-Risk Compensation

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• [Salary] 26%
• [Annual incentive plan] 24%
• [Share-based award] 39%
• [Pension and other] 11%
• [At-risk] 63%
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Table of Contents ESG Content Map

1. Voting Information

3. Business of the Meeting

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

6. Reports of the Committees

4. Directors

7.5 Summary Compensation Table

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Non-equity
Incentive Plan
Compensation
($)
Share-
based Annual Pension All Other Total
Salary Awards Incentive Value Compensation Compensation
Name and Principal Position Year ($) [(2)] ($) [(3)] Plans [(4)] ($) [(5)] ($) ($)
Charles Brindamour 2019 1,260,285 5,674,500 1,821,849 363,300 0 9,119,934
Chief Executive Officer 2018 1,229,423 5,227,500 1,584,009 475,910 0 8,516,842
2017 1,197,115 3,600,000 1,625,625 1,363,270 0 7,786,010
Louis Marcotte 2019 449,077 630,000 306,534 207,439 0 1,593,050
Senior Vice President & 2018 409,585 742,000 268,817 170,639 0 1,591,041
Chief Financial Officer 2017 387,731 310,728 234,187 162,127 0 1,094,773
T. Michael Miller [(1)] 2019 973,763 4,723,600 1,089,733 16,435 162,294 [(6)] 6,965,825
President, U.S. and 2018 1,023,675 4,538,450 1,076,540 15,686 170,613 6,824,964
Specialty Solutions 2017 224,863 12,437,500 241,622 2,350 12,623,971 25,530,306
Louis Gagnon 2019 699,423 1,575,000 794,719 336,051 0 3,405,193
President, Canadian Operations 2018 674,377 1,518,750 676,451 344,342 0 3,213,920
2017 642,358 899,640 518,578 172,212 0 2,232,788
Mathieu Lamy 2019 471,981 708,750 433,873 199,067 0 1,813,671
Executive Vice President & Chief 2018 449,524 585,000 384,390 324,062 0 1,742,976
Operating Officer 2017 424,861 340,200 247,628 184,193 0 1,196,882
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(1) Compensation for Mr. Miller has been converted to Canadian dollars using the following exchange rates:

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Exchange rate
2019 Salary 1.29835 (as at December 31, 2019)
Share-based Awards 1.3496 (as at the time of grant of the 2019-2021 LTIP)
Annual Incentive Plans 1.34170 (as of the date of payment of the STIP on March 5, 2020)
All Other Compensation 1.29835 (as at December 31, 2019)
2018 Salary 1.36490 (as at December 31, 2018)
Share-based Awards 1.2967 (as at the time of grant of the 2018-2020 LTIP)
Annual Incentive Plans 1.3462 (as of the date of payment of the STIP on March 7, 2019)
All Other Compensation 1.36490 (as at December 31, 2018)
2017 Salary 1.2573 (as at December 31, 2017)
Share-based Awards 1.24375 (as at the date of grant of the Special Award PSUs)
Annual Incentive Plans 1.28865 (as of the date of payment of the OneBeacon Management Incentive Plan on March 2,
2018)
All Other Compensation 1.2573 (as at December 31, 2017)
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(2) The salaries reported in the Summary Compensation Table are the actual base salaries paid in the 2019, 2018 and 2017 financial years. For Mr. Miller, base salary of US$750,000 in 2017 is prorated for the period of employment with Intact between September 28, 2017 and December 31, 2017 and converted to Canadian dollars. Actual amounts were paid to Mr. Miller in U.S. dollars. The 2019, 2018 and 2017 figures include an adjustment for the first days of the first pay period that was paid respectively at the 2018, 2017 and 2016 salary rate. The 2019, 2018 and 2017 annual base salaries for the NEOs are listed in the table below:

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Name Basic Salary
2019 2018 2017
Charles Brindamour – Chief Executive Officer 1,261,000 1,230,000 1,200,000
Louis Marcotte – Senior Vice President & Chief Financial Officer 450,000 410,000 388,410
T. Michael Miller – President, U.S. and Specialty Solutions 973,763 1,023,675 942,975
Louis Gagnon – President, Canadian Operations 700,000 675,000 642,600
Mathieu Lamy – Executive Vice President & Chief Operating Officer 472,500 450,000 425,250
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(3) In terms of equity-based compensation, the NEOs were awarded a number of PSUs and RSUs for the financial year 2019 under the LTIP. Each NEO receives an economic value equivalent to a percentage of their base salary. These percentages are determined based on market trends and individual merit. Please refer to the LTIP component in the Compensation Discussion & Analysis on pages 94 to 96 for individual LTIP percentages and the number of PSUs and RSUs into which this translates. Following the acquisition of OneBeacon in 2017, Mr. Miller received Special Award PSUs valued at US$10M. In 2018, Mr. Marcotte was granted a special RSU award, see the Outstanding Share-Based Awards table below for more details.

Intact Financial Corporation | Management Proxy Circular 2020

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Table of Contents 1. Voting Information ESG Content Map 2. General Information

7. Statement on Executive Compensation 8. Approval of the Board of Directors

3. Business of the Meeting 4. Directors

5. Corporate Governance Practices

6. Reports of the Committees

(4) Annual incentive plans is comprised of the STIP. The amounts disclosed in the Summary Compensation Table for 2019 are the annual STIP awards to be paid in the second quarter of 2020 for the performance year 2019. The 2019 STIP payment for Mr. Miller was US$ 818,391 and was paid on March 5, 2020. The amount has been converted to Canadian dollars using the exchange rate on the date of payment of March 5, 2020, which was 1.34170. The amounts disclosed in the Summary Compensation Table for 2018 are the annual STIP awards paid in the second quarter of 2019 for the performance year 2018. The 2018 STIP payment for Mr. Miller was U$S 799,688 and was paid on March 7, 2019. The amount has been converted to Canadian dollars using the exchange rate on the date of payment of March 7, 2019, which was 1.3462. The amounts disclosed in the Summary Compensation Table for 2017 are the annual STIP awards paid in the second quarter of 2018 for the performance year 2017. For Mr. Miller, the amounts disclosed in the Summary Compensation Table for 2017 represent the portion of the 2017 OneBeacon Management Incentive Plan for the period between September 28, 2017 and December 31, 2017, using the exchange rate on the date of payment of March 2, 2018, which was 1.28865.
(5) The pension value disclosed for each NEO is the compensatory value of registered and non-registered defined benefits plans. The compensatory value includes the service cost, net of employee contributions, if any, plus differences between actual and estimated earnings, and any additional changes that have a retroactive impact. For Mr. Miller the value reflects contributions made by OneBeacon under OneBeacon 401(k) Savings Plan. Actual contributions were made in U.S. dollars.
(6) The amount reported for Mr. Miller in 2017, 2018 and 2019 corresponds to the personal use of a corporate aircraft with a maximum value of US$125,000 (actual cost included for the period of employment since September 28, 2017 and converted to Canadian dollars) and an amount of US$10M corresponding to the retention bonus to be paid in U.S. dollars to Mr. Miller in light of a Retention Agreement entered into by Mr. Miller and OneBeacon prior to closing of the acquisition of OneBeacon to ensure Mr. Miller’s continued employment with OneBeacon on and after its acquisition by the Company. This Retention Agreement provides for a first payment of US$4M (which occurred on October 3, 2017) and a payment of US$3M in each of 2018 (which occurred on September 27, 2018) and 2019 (which occurred on September 26, 2019). Details of the retention bonus can be found on page 115.

In aggregate, the NEOs 2019 compensation represents 2.82% of 2019 adjusted net income to common shareholders of $802 million.

7.6 Incentive Plan Awards

The following table provides information on all outstanding awards for each NEO at the end of the most recently completed financial year. PSUs are presented based on vesting at target. However, the ultimate vesting of PSUs depends on performance and may range from 0% to 200% of target.

Outstanding Share-Based Awards

Name	Share-Base	d Awards
	Number of Shares or Units of Shares that Have not Vested (#)(1)	Market or Payout Value of Share- based Awards that Have not Vested ($)(2)
	PSUs RSUs	PSUs RSUs
Charles Brindamour	100,619 43,123	14,128,920 6,055,332
Louis Marcotte	9,915 6,843	1,392,264 960,894
T. Michael Miller	182,252 26,794	25,591,826 3,762,413
Louis Gagnon	27,632 11,843	3,880,085 1,662,994
Mathieu Lamy	11,294 4,840	1,585,903 679,633

Notes:

(1) The total number of Common Shares that have not vested represent the total number of PSUs (based on vesting at target) and RSUs allocated to NEOs under the LTIP for the performance cycles 2017/2019, 2018/2020 and 2019/2021. The number of RSUs indicated for Mr. Marcotte for the 2018-2020 performance cycle include a special RSU award of 2,593 RSUs to recognize the consistency of outstanding performance over many years in terms of results, corporate values and personal engagement. The number of PSUs indicated for Mr. Miller for the 2017-2019 performance cycle corresponds to the Special Award PSUs valued at US$10M. The details with respect to the number of PSUs and RSUs are as follows:

Performance	cycle Charles Brindamour	Louis Marcotte	T. Michael Miller	Louis Gagnon	Mathieu Lamy
2017/2019	38,586	3,330	119,733	9,642	3,646
2018/2020	49,719	7,272	43,166	14,446	5,564
2019-2021	55,437	6,156	46,147	15,387	6,924

(2) With the exception of Mr. Miller’s Special Award PSUs, which are subject to a minimum vesting target of 75%, the minimum payout under the plan is 0% for the PSUs. The RSU component is not based on performance; therefore the minimum payout is the number of RSUs awarded multiplied by the Common Share price at vesting. The values of the unvested share-based awards represent the total number of PSUs that have not vested, multiplied by the Common Share price at closing on December 31, 2019, which was $140.42 assuming a performance at target (100%), and the total number of RSUs that have not vested, multiplied by the Common Share price at closing on December 31, 2019, which was $140.42.

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1. Voting Information 2. General Information

3. Business of the Meeting 4. Directors

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

6. Reports of the Committees

Incentive Plan Awards-Value Vested or Earned During the Year

Name	Share-based Awards-Value Vested During the Year ($)(1)	Non-equity Incentive Plan Compensation- Value Earned During the Year ($)(2)
Charles Brindamour	5,833,860	1,821,849
Louis Marcotte	523,029	306,534
T. Michael Miller	0(3)	1,089,733
Louis Gagnon	1,516,913	794,719
Mathieu Lamy	600,100	433,873

Notes:

(1) a) RSUs

The RSUs allocated under the LTIP for the performance cycle 2016/2018 vested on January 1, 2019. The value indicated in the table represents the number of Common Shares allocated to each NEO, including dividend equivalents, multiplied by the price of the Common Share at closing on the vesting date, which was $99.19 (December 31, 2018). The number of Common Shares allocated to each NEO, including dividend equivalents, is as follows:

Name	Common Shares Allocated (#)	Value at Delivery (January 10, 2019) ($)
Charles Brindamour	11,310	1,136,429
Louis Marcotte	1,014	101,887
T. Michael Miller	0	0
Louis Gagnon	2,941	295,512
Mathieu Lamy	1,164	116,959

Where applicable, the Common Shares were delivered to participants on January 10, 2019. The price of the Common Share at closing on January 9, 2019 was $100.48. Participants electing to receive Common Shares are entitled to dividend payments as of the delivery date. Following approval by the HRC Committee and effective since April 2018, a restriction period is applicable to, among others, (i) the CEO and the most highly compensated Canadian Executives, (ii) the Oversight Functions and (iii) the Vice-Chairman. Such restriction period prohibits the sale of Common Shares received upon the conversion of RSUs and PSUs for a period of two (2) years following vesting of the award.

b) PSUs

The PSUs allocated under the LTIP for the performance cycle 2016/2018 vested on January 1, 2019. Participants received the equivalent of 180% of their initial award, based on Intact Financial Corporation’s average three (3) year ROE performance relative to the industry (please refer to the description of the LTIP on pages 94 to 96). The value indicated in the table represents the number of Common Shares allocated to each NEO, including dividend equivalents, multiplied by the price of a Common Share at closing on the vesting date, which was $99.19 (December 31, 2018). The number of Common Shares allocated to each NEO, including dividend equivalents, is as follows:

Name	Number of Common Shares Allocated (#) (= 180% of original number of PSUs awarded)	Value at Delivery (April 30, 2019) ($)
Charles Brindamour	47,505	5,173,770
Louis Marcotte	4,259	463,848
T. Michael Miller	0	0
Louis Gagnon	12,352	1,345,256
Mathieu Lamy	4,886	532,134

The Common Shares were delivered to participants on April 30, 2019. The price of the Common Share at closing on April 29, 2019 was $108.91. Participants electing to receive Common Shares are entitled to dividend payments as of the delivery date. Following approval by the HRC Committee and effective since April 2018, a restriction period is applicable to, among others, (i) the CEO and the most highly compensated Canadian Executives, (ii) the Oversight Functions and (iii) the Vice-Chairman. Such restriction period prohibits the sale of Common Shares received upon the conversion of RSUs and PSUs for a period of two (2) years following vesting of the award.

(2) The value represents the amounts to be paid in the second quarter of 2020 for the STIP performance year 2019. For Mr. Miller, the amounts were paid on March 5, 2020 in U.S. dollars. Amounts shown for them have been converted to Canadian dollars using the exchange rate at the date of payment of 1.34170.
(3) Under the OneBeacon Legacy Plans, Mr. Miller’s last outstanding awards vested as follows :
26,250 Performance Units granted for the 2017-2019 performance cycle vested December 31, 2019 and resulted in a payment of US$832,125 on March 5, 2020 ($1,116,462 using the exchange rate as of the date of payment, which was 1.34170); and
47,800 Restricted Shares vested on January 1, 2020 and resulted in a payment of US$865,180 on January 2, 2020 ($1,123,653 using the exchange rate as of the date of payment, which was 1.29875).

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1. Voting Information

3. Business of the Meeting 4. Directors

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

6. Reports of the Committees

7.7 Pension Plan and Retirement Benefits

IFC Base Plan and SERP

IFC’s Canadian Executives and Canadian Senior Executives benefit from two (2) pension plans: a registered defined benefit plan (“Base Plan”) and a SERP.

1. Base Plan

The pension benefit under the Base Plan is determined at retirement using a formula combining average earnings and service, where average earnings is defined as the average of the best 60 consecutive months of earnings during the last 120 months and earnings are comprised of base salary.

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Charles Louis Louis Mathieu
Formula for each service period Brindamour [(1)] Marcotte [(1)] Gagnon [(1)] Lamy [(2)]
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Formula for each service period Bri	ndamour(1)	Marcotte(1)	Gagnon(1)	Lamy(2)
For service on and after January 1, 2000, the pension accrual is 2% of average	X	X	X	X
earnings multiplied bythe number ofyears of service
For service from January 1, 1997 to December 31, 1999, the pension accrual is	X	N/A	N/A	N/A
1.3% of average earnings up to the average year’s maximum pensionable earnings
(“YMPE”), plus 2% of the excess
For service up to December 31, 1996, the pension accrual is 1.35% of average	X	N/A	N/A	N/A
earnings upto the average YMPE, plus 2% of the excess

(1) Participant under the “Régime de retraite des employés d’Intact et de ses compagnies affiliées (regroupant les régimes enregistrés au Québec le 30 juin 2012)” (2) Mr. Lamy is a participant under the “Régime de retraite des employés d’Intact et de ses compagnies affiliées (regroupant les régimes enregistrés au Québec le 30 juin 2012)” since July 1, 2012. For his service up to June 30, 2012, Mr. Lamy participated in the Former AXA Base Plans (as described below)

The benefit payable shall not exceed the maximum pension amount as may be permitted under the Income Tax Act (Canada).

The pension benefit is payable at normal retirement age (age 65). Early retirement is available as of age 55.

For the pension in respect of credited service up to December 31, 2018:

Participants are eligible to receive an unreduced pension benefit when they reach age 60 and have at least twenty (20) years of service. Accrued normal pension benefit is then reduced by 6% for each year between the early retirement date and the earlier of the date the participant reaches the age of 60, if such participant has twenty (20) or more years of service, or the normal retirement date.
At retirement, the normal form of pension benefit payable to single participants is a lifetime pension benefit with provision that at least sixty (60) monthly payments will be made in any event. Participants with a spouse will receive a lifetime pension benefit with a joint and 60% survivor form benefit, with provision that at least sixty (60) monthly payments will be made in any event.

For the pension in respect of credited service from January 1, 2019:

Accrued normal pension benefit will be reduced by 4% for each year between the early retirement date and the normal retirement date.
At retirement, the normal form of pension benefit will be a lifetime pension benefit with provision that at least sixty (60) monthly payments will be made in any event.

Pension benefits accrued prior to January 1, 2012 are indexed annually based on the higher of 50% of the CPI and CPI minus 3%, up to a maximum of 4%. There is no indexation for pension benefits accrued on or after January 1, 2012.

The Base Plan is a contributory plan and since January 1, 2014 Senior Executives are required to contribute to the plan. No contributions were required from Senior Executives prior to that date.

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3. Business of the Meeting

5. Corporate Governance Practices 6. Reports of the Committees

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

4. Directors

2. SERP Plan

A SERP where the pension benefit is equal to the excess of (a) over (b), as follows:

(a) the amount of annual pension which would be determined in accordance with the terms of the Base Plan if the tax limits as to the maximum pension payable, as set out in the Base Plan, were not applicable; and
(b) the amount of annual pension actually payable from the Base Plan.

For purposes of determining the pension benefit payable under the SERP, earnings also include 25% of the maximum STIP payout.

SERP benefits are not indexed.

The SERP serves as a retention tool for all Canadian Executives and Canadian Senior Executives and vests when the Executive or Senior Executive has completed two (2) years of continuous service with the Company.

Mr. Mathieu Lamy

For service from July 1, 2012, Mr. Lamy benefited and still benefits from two (2) pension plans: the Base Plan and the SERP plan, as described above.

For service up to June 30, 2012, Mr. Lamy benefited from multiple pension plans: the Former AXA Base Plans and the Former AXA SERP, as described below.

1. Former AXA Base Plans

The Former AXA Base Plans consisted of the (2) following registered plans:

Le régime de retraite des employés d’Intact et de ses compagnies affiliées (anciennement le régime des employés d’AXA Assurances), (the “AXA Employees Plan”); and
Le régime de retraite de la direction d’Intact et de ses compagnies affiliées (anciennement le régime des cadres supérieurs d’AXA Assurances), (the “AXA Senior Management Plan”).

The Former AXA Base Plans were merged effective July 1, 2012 into the “Régime de retraite des employés d’Intact et de ses compagnies affiliées (regroupant les régimes enregistrés au Québec le 30 juin 2012)”.

Pension benefits under the Former AXA Base Plans are determined at retirement using formulas combining earnings or average earnings and service, where earnings are comprised of base salary and average earnings is defined as the average of (i) the best 60 consecutive months of earnings under the AXA Employees Plan and (ii) the best 36 consecutive months of earnings under the AXA Senior Management Plan.

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Formula for each service period AXA Employees Plan AXA Senior Management Plan
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For service from February 1, 1998 to June 30, 2012, the pension accrual is 2% of average	N/A	X
earnings,less 0.7% of average YMPE from age 65,multiplied bythe number ofyears of service
For service from January 1, 1991 to January 31, 1998, the pension accrual is 1% of average	X	N/A
earnings multiplied bythe number ofyears of service
For service from July 1, 1989 to December 31, 1990, the pension accrual is the greater of 2% of	X	N/A
1999 earnings and 2.25% of 1994 earnings multiplied bythe number ofyears of service

The pension benefit payable shall not exceed the maximum pension amount as may be permitted under the Income Tax Act (Canada).

The pension benefit is payable at normal retirement age (age 65). Early retirement is available as of age 55. If the member has thirty (30) years of service or ninety (90) points (i.e. sum of age plus service) under the AXA Senior Management Plan, the accrued normal pension benefit is reduced by 5% for each year before age 60. Under the AXA Employees Plan, the accrued normal pension benefit is reduced by 6% for each year before the normal retirement date.

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7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

4. Directors

1. Voting Information

3. Business of the Meeting

6. Reports of the Committees

At retirement, the normal form of pension benefit under the AXA Employees Plan for service before 1996 is a lifetime pension benefit with the provision that at least sixty (60) monthly payments will be made in any event. For service accrued in and after 1996, the normal form of pension benefit payable to single participants is a lifetime pension benefit with the provision that at least one hundred twenty (120) monthly payments will be made in any event; participants with a spouse will receive a lifetime pension benefit with a joint and 60% survivor form benefit. For service under the AXA Senior Management Plan, the normal form of pension benefit is a lifetime pension benefit with the provision that at least one hundred twenty (120) monthly payments will be made in any event.

Pension benefits accrued under the Former AXA Base Plans are not indexed.

2. Former AXA SERP:

The Former AXA SERP plan consisted of the following supplementary executive retirement plan:

Le régime de retraite supplémentaire de la direction d’Intact et de ses compagnies affiliées (anciennement le régime supplémentaire des cadres supérieurs d’AXA Assurances).

The Former AXA SERP was merged effective July 1, 2012 into the SERP, as defined above.

The pension benefit under the Former AXA SERP is equal to the excess of (a) over (b), as follows:

(a) the amount of annual pension which would be determined in accordance with the terms of the applicable Former AXA Base Plans if the tax limits as to the maximum pension payable, as set out in the applicable Former AXA Base Plans, were not applicable; and
(b) the amount of annual pension actually payable from the applicable Former AXA Base Plans.

Former AXA SERP benefits are not indexed.

The following table provides information on the NEOs participation in the Base Plan and SERP:

Name Number of years of credited service (#)	Annual benefts payable(6) Compensatory Change ($)(3) Non compensatory change ($)(4) Closing present value of defned beneft obligation ($)(5) At year end ($) At age 65 ($)(1) Opening present value of defned beneft obligation ($)(2)
Charles Brindamour 24.6712	852,492 1,431,120 10,953,464 363,300 2,840,777 14,157,541
Louis Marcotte 13.1923	130,332 230,192 1,516,801 207,439 357,038 2,081,278
Louis Gagnon 12.9231	241,175 379,762 2,867,913 336,051 629,617 3,833,581
Mathieu Lamy(8) 30.5083(7)	246,975 319,008 3,365,202 199,067 628,191 4,192,460

Notes:

(1) The information shown in this column was determined based on the final average earnings of each participant as of December 31, 2019 and years of credited service projected up to age 65 (assuming full-time employment).

(2) The information shown in this column was determined by using the same assumptions and methods as those used for 2018 financial statement reporting purposes. In particular, the discount rate used to value the obligation is 3.87% per year for benefits accrued under the Base Plan and Former AXA Base Plans and 3.84% per year for benefits accrued under the SERP and Former AXA SERP.
(3) Includes the service cost, net of employee contributions, if any, plus the impact on the obligation of differences between actual and estimated earnings, and any additional changes that have a retroactive impact. The service cost was determined using the same assumptions and methods as those used for 2018 financial statement reporting purposes. In particular, the discount rate used to value the service cost under the Base Plan, Former AXA Base Plans, SERP and Former AXA SERP is 3.91% per year.

(4) Includes all items that are not compensatory, such as changes in actuarial assumptions and interest cost.

(5) The information shown in this column was determined by using the same assumptions and methods as those used for 2019 financial statement reporting purposes. In particular, the discount rates used are 3.16% per year for benefits accrued under the Base Plan and Former AXA Base Plans and 3.14% per year for benefits accrued under the SERP and Former AXA SERP.

(6) Pension benefit is payable at normal retirement age (age 65). In respect of benefits under the Base Plan and SERP, participants are eligible to receive an unreduced pension benefit in respect of their credited service up to December 31, 2018 when they reach age 60 and have at least twenty (20) years of service. In respect of benefits accrued under the AXA Senior Management Plan as well as under the Former AXA SERP for the same period of service, participants are eligible to receive an unreduced pension benefit when they reach age 60 if they have at least thirty (30) years of service or the sum of their age and service total at least ninety (90).

(7) Includes one year of credited service that was bought back which is not included for the purposes of the SERP.

(8) The information provided for Mr. Lamy includes his participation to the Former AXA Base Plans and Former AXA SERP for his service up to June 30, 2012.

OneBeacon Defined Contribution Plan

Mr. Miller participates in the OneBeacon 401(k) Savings Plan, which has the following features:

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3. Business of the Meeting 4. Directors

5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

6. Reports of the Committees

OneBeacon makes bi-weekly contributions equal to 3% of an employee’s compensation. For this purpose, compensation is limited to the annual IRS limit (US$ 280,000 in 2019).
OneBeacon also makes an annual fixed contribution of 3% of compensation for employees who are active on the last business day of the plan year. For this purpose, compensation is limited to the annual Social Security ceiling (US$ 132,900 in 2019).
OneBeacon also makes a variable contribution – 0% to 6% of eligible compensation up to the IRS defined compensation limit (US$ 280,000 in 2019). The variable contribution is determined based on to what extent the company has achieved its annual financial goals. All employees are eligible for the fixed contribution. Employees who participate in any long-term incentive plans are not eligible to receive a variable contribution.
Employees may also make contributions to the plan in the form of deferred wages up to certain limits.

Compensation under the plan includes base salary and overtime and excludes bonuses and other incentive compensation.

The following table provides information on Mr. Miller’s participation in the OneBeacon 401(k) Savings Plan:

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Accumulated Non Accumulated
value at Compensatory compensatory value at
start of year Change change year end
Name ($) ($) [(2)] ($) [(3)] ($)
T. Michael Miller [(1)] 777,945 16,435 133,327 927,707
----- End of picture text -----

Notes:

(1) Figures are expressed in Canadian dollars.

(2) Contributions made by OneBeacon between January 1, 2019 and December 31, 2019.

(3) Contributions made by the NEO, if any, plus investment earnings, net of benefit payments and refunds, and including the effect of changes in the exchange rates.

7.8 Termination and Change of Control Benefits

The Company does not have employment contracts with its NEOs, except for Mr. Miller. Hiring documents include confirmation of total compensation, a copy of the Company’s policies, and the requirement for each Executive or Senior Executive to sign the IFC Living Our Values Code of Conduct, as well as a Confidentiality and Non-Solicitation Agreement.

Mr. Miller Employment Agreement with Intact Financial Corporation

The Company entered into an employment agreement with Mr. Miller following the acquisition of OneBeacon. Under the terms of the agreement, in the event the Company terminates Mr. Miller’s employment without cause (defined as termination for reasons other than (i) Mr. Miller’s death or Disability or (ii) cause) or Mr. Miller experiences a “Constructive Termination” (termination at Mr. Miller’s initiative which follows (i) a material decrease in total annual compensation opportunity, (ii) a material diminution in the authority, duties or responsibilities of Mr. Miller’s position (iii) a relocation of Mr. Miller’s principal place of employment by more than 35 miles), the Company will provide Mr. Miller with the following:

A cash payment equal to two times the sum of (i) his base salary and (ii) his annual target IFC U.S. STIP, payable in equal monthly installments over a period of 24 months;
Continued participation in the Company’s welfare benefit plans for a period of 24 months; and
In respect of outstanding PSUs (including the Special Award PSUs) and RSUs, the Pro-Rata LTIP Treatment (as each such term is defined below); provided, that solely with respect to Special Award PSUs, if such termination occurs before July 1, 2020, the payment with respect to the Special Award PSUs shall be the greater of US$5 million or the pro-rated amount calculated in accordance with the Pro-Rata LTIP Treatment, in each case plus accrued dividends converted to PSUs.

Except as provided above, upon Mr. Miller’s termination of employment for any reason, outstanding PSUs and RSUs shall be forfeited; provided however, that if Mr. Miller Retires (as such term is defined below) on or prior to December 31, 2022, his outstanding PSUs (other than the Special Award PSUs) and RSUs will vest on a pro-rated basis (the numerator of which will be the number of completed whole months in the performance period prior to Mr. Miller’s termination and the denominator of which will be the number of months in the performance period) based on the actual level of performance achievement for completed years of the performance cycle and target level of performance achievement for future years of the performance cycle (the “Pro-Rata LTIP Treatment”); provided further that if Mr. Miller Retires on January 1, 2023 or later, his outstanding PSUs (other than the Special Award PSUs) and RSUs shall vest and be paid on the original payment date(s) subject to the actual level of performance achievement.

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5. Corporate Governance Practices

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

6. Reports of the Committees

3. Business of the Meeting

4. Directors

The term “Retire” means (a) a voluntary termination of employment as mutually agreed between Mr. Miller and the Company prior to December 31, 2022, (b) a voluntary termination of employment on or following January 1, 2023, (c) Mr. Miller’s death or (d) the Company terminates Mr. Miller’s employment due to Disability as defined in the OneBeacon 2017 Long-Term Incentive Plan.

Except as provided above, upon Mr. Miller’s termination of employment for any reason, outstanding Special Award PSUs shall be forfeited; however, upon (i) Mr. Miller’s death, (ii) the Company terminating Mr. Miller’s employment due to Disability or (iii) a Change in Control (as defined below) following the closing of the OneBeacon acquisition, the Special Award PSUs shall vest and be paid without proration related to the duration of the employment on the original payment date(s) based on the actual level of performance achievement for completed years of the performance cycle and target level of performance achievement for future years.

Mr. Miller Retention Agreement with OneBeacon prior to closing of the acquisition

OneBeacon entered into a retention agreement with Mr. Miller prior to closing of the acquisition of OneBeacon. The Retention Agreement was essential from the perspective of OneBeacon and White Mountains Insurance Group, Ltd. (the previous owner of OneBeacon) in order to retain Mr. Miller and ensure a successful sale process.

Under the terms of the Retention Agreement Mr. Miller is entitled to a cash retention bonus in the aggregate amount of US$10M (the “Bonus”) payable on the following schedule:

(a) 40% as of the closing date, subject to continued employment with OneBeacon. The US$4M was paid to Mr. Miller on October 3, 2017.
(b) 30% as of each of the first and second anniversaries of the closing date, subject to continued employment with the Company through such dates. The first US$3M was paid to Mr. Miller on September 27, 2018.The last installment of US$3M was paid to Mr. Miller on September 26, 2019.

General Rule for NEOs who do not have employment contracts

The Company is required to provide “reasonable notice” upon termination of employment. The length of reasonable notice required varies with the facts and circumstances of the individual situation and jurisdiction.

Finally, the Company provides the minimum compliance requirement under common law or the Civil Code of Quebec. Generally, the severance package for Executives and Senior Executives increases with the following factors, as well as industry general practices: age, length of service, base salary and benefits, level of responsibility and difficulty in finding alternative employment.

Consequences of a Change of Control under the LTIP

If a Change of Control occurs, then the vesting of stock incentives under the LTIP shall be subject to double-trigger change of control provisions.

The LTIP contains a provision, which was reviewed and took effect as of 2018, relating to the consequences of a change of control of the Company, as described below:

If a Change of Control occurs, then the vesting of stock incentives under the LTIP shall be subject to double-trigger change of control provisions. As such, an involuntary termination of employment without cause or resignation of employment with good reason (with good reason triggers consisting of a substantial reduction in responsibilities or scope of authority in the terms of employment, in either case, without the participant’s consent) on or within 24 months following the occurrence of a Change of Control of the Company, will result in the accelerated vesting of stock incentives granted under the LTIP and outstanding as of the date of termination. PSU vesting is calculated based on actual performance for years for which results are known and at target for years for which results are not known.

In addition, in connection with a Change of Control, the surviving, successor or acquiring entity is required to assume or fairly substitute outstanding awards. Alternatively, in the context where the agreements effectuating the Change of Control do not provide, as determined by the HRC Committee, for the fair assumption or substitution of all stock incentives granted under the LTIP, then the HRC Committee may decide to accelerate the vesting of outstanding LTIP awards and/or to cancel such awards in exchange for a payment in cash or shares, in all cases, in connection with the Change of Control.

Upon resignation or termination with cause, all stock incentives granted under the LTIP are forfeited. A Change of Control is generally defined under the LTIP as:

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3. Business of the Meeting

5. Corporate Governance Practices 6. Reports of the Committees

7. Statement on Executive Compensation 8. Approval of the Board of Directors

2. General Information

4. Directors

(a) a person (broadly defined) or group of persons acting in concert directly or indirectly becoming the beneficial owner(s) of 35% or more of the Company’s voting securities; or
(b) the shareholders of the Company approving a reorganization, amalgamation or arrangement of the Company with any other company, where holders of record of the voting securities of the Company immediately before these transactions hold less than 50% of the voting securities of the Company or the continuing entity; or
(c) the shareholders of the Company approving a plan of liquidation, dissolution or winding-up of the Company, or an agreement for the sale or disposition by the Company of 50% or more of the net book value of the Company’s assets to a person other than an affiliate; or
(d) a change of more than 50% in the directors on the Board of Directors; or
(e) any transaction that the Board of Directors determines to be a change of control;

and, in each case, all governmental and regulatory consents and approvals required, necessary or desirable in connection therewith having been obtained and not being subject to appeal, further review or modification. The HRC Committee periodically reviews the terms of the change of control arrangements under the Company’s LTIP as part of its review of current governance trends and market practices.

Estimated payments to NEOs upon termination of employment as at December 31, 2019

Executives’ and former executives’ outstanding equity-based incentives may be subject to reduction or recoupment, under the terms of our clawback policy. See page 86 for more information on our clawback policy.

The Company does not have employment contracts with its NEOs, except for Mr. Miller.

The Outstanding Share-Based Awards table in section 7.6 above of this Circular summarizes the NEOs’ outstanding LTIP awards that would vest in the event of termination scenarios and application of double-trigger change of control provisions under the LTIP as at December 31, 2019.

The table below summarizes estimated incremental payments, payables and benefits which Mr. Miller would be contractually entitled to at, following, or in connection with each of the termination scenarios below as at December 31, 2019 (including the accelerated vesting of LTIP awards as described above).

Amounts do not include any potential greater common law entitlements. For equity-based compensation, the values represent the value of any awards (as of December 31, 2019) that would have been eligible for accelerated vesting as a result of termination. These values are based on a share price of $140.42, the closing price of our common shares on December 31, 2019 and U.S. dollar amounts have been converted to Canadian dollars using the exchange rate on December 31, 2019, which was 1.29835.

We do not gross up any compensation to cover the impact of income taxes.

The actual amounts that Mr. Miller would receive if his employment were terminated can only be determined at the time of termination. Many factors could affect the nature and amount of the benefits and the actual amounts may be higher or lower than the amounts shown below. PSUs have been valued assuming a performance factor of 100%, which may not reflect the actual payouts.

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6. Reports of the Committees

4. Directors

Name	Compensation component Retirement (early or normal) ($) Termination with cause/Resignation ($) Termination without cause /Constructive termination ($) Termination without cause following a change of control ($)
T. Michael Miller	Salaryand Annual Incentives — — 3,895,050 3,895,050
	Equity-Based Incentives — — 14,254,135 29,354,239(1)
	Value of beneftsplans — — 23,557 23,557
	Total — — 18,172,741 33,272,846

(1) There is a difference in payouts between the termination without cause/constructive termination scenario and the termination without cause following a change of control scenario because, following a change of control, Mr. Miller would be entitled to receive the full value of the Special Awards PSUs and of the IFC LTIP for the performance cycles 2018-2020 and 2019-2021, both of which are subject to double-trigger change of control provisions.

7.9 Compensation of Directors

Please refer to the “Director Compensation” section at page 32 of this Circular.

7.10 Indebtedness of Directors and Executive Officers

To the knowledge of the Company, there is no outstanding indebtedness to the Company or to its subsidiaries incurred by Directors, Executive Officers, employees or former Directors, Executive Officers or employees of the Company, except under a loan program for the acquisition of computer equipment and software that is available to all the employees of the Company. Advances to a person under the computer loan program are of a nominal value (average: $3,500).

7.11 Approval of the Statement on Executive Compensation

The statement on executive compensation has been approved by the HRC Committee, of which the members are:

Timothy H. Penner, Chair Janet De Silva William L. Young Stephen G. Snyder Carol Stephenson

(Signed) Human Resources and Compensation Committee

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8. Approval of the Board of Directors

The Board of Directors has approved the contents and the distribution of this Management Proxy Circular to the shareholders of the Company.

Frédéric Cotnoir Senior Vice-President, Corporate and Legal Services and Secretary

April 3, 2020

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Glossary of Terms

“AMF”

means the Autorité des marchés financiers ;

“AIF”

means the Company’s Annual Information Form dated March 30, 2020, in respect of the financial year ended December 31, 2019;

“Amended and Restated Rights Plan”

means the amended and restated shareholder rights plan approved by the Board of Directors on April 19, 2017;

“Audit Committee”

“Common Shares”

means the common shares of the Company;

“Company”

means Intact Financial Corporation;

“Computershare”

means the Company’s transfer agent, Computershare Investor Services Inc.;

“CPI”

means the Consumer Price Index;

means the Audit Committee of the Board of Directors;

“CRA”

“AXA Employees Plan”

means Le régime de retraite des employés d’Intact et de ses compagnies affiliées (anciennement le régime des employés d’AXA Assurances) ;

means the Canada Revenue Agency;

“CRCG Committee”

means the Compliance Review and Corporate Governance Committee of the Board of Directors;

“AXA Senior Management Plan”

means Le régime de retraite de la direction d’Intact et de ses compagnies affiliées (anciennement le régime des cadres supérieurs d’AXA Assurances) ;

“Base Plan”

means the Company’s registered defined benefits plan for Canadian Executives and Canadian Senior Executives;

“CRO”

means the Chief Risk Officer of the Company;

“Designated Groups”

means Indigenous peoples, persons with disabilities and visible minorities;

“Directors”

“Board of Directors” or “Board”

refers to the board of directors of the Company;

“Bonus”

means the cash retention bonus T. Michael Miller is entitled to under the Retention Agreement;

“Broadridge”

means Broadridge Investor Communications Corporation;

“CBCA Amendments”

means the recent amendments to the Canada Business Corporations Act related to board and senior management diversity disclosure, effective January 1, 2020;

“CCO”

means the Chief Compliance Officer of the Company, who is also the Senior Vice President, Corporate & Legal Services, and Secretary;

“CEO”

means the Chief Executive Officer of the Company;

“CFO”

means the Chief Financial Officer of the Company;

“Circular”

means this Management Proxy Circular dated April 3, 2020, together with all schedules hereto, prepared in connection with the Meeting;

means members of the Board of Directors of the Company;

“Diversity Policy”

means the Board and Senior Management Diversity Policy of the Company;

“DSUs”

means deferred share units granted by the Company as part of the Directors’ compensation;

“ESG”

means environmental, social and governance;

“Executives”

means the Vice Presidents and Deputy Senior Vice Presidents of the Company;

“Executive Committee”

refers to the most senior management committee of the Company, comprised of the Senior Executives of the Company. The Senior Executives who were members of the Executive Committee as of March 1, 2020 are identified on page 13 of our 2019 Annual Report;

“Executive Officers”

has the meaning provided for under securities legislation, and targets, among other positions, individuals who are performing policy-making functions in respect of the Company. All Executive Officers are members of the Executive Committee. As of March 1, 2020, the Executive Officers were the individuals listed on page 22 of the AIF;

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2. General Information

“External Auditor” or “EY”

means Ernst & Young LLP, the external auditor of the Company;

“FCC”

means Frank Cowan Company Limited;

“Former AXA SERP”

means Le régime de retraite supplémentaire de la direction d’Intact et de ses compagnies affiliées (anciennement le régime supplémentaire des cadres supérieurs d’AXA Assurances) ;

“Former AXA Base Plans”

means the AXA Employees Plan and the AXA Senior Management Plan;

“FRFIs”

means federally regulated financial institutions;

“HRC Committee”

means the Human Resources and Compensation Committee of the Board of Directors;

“IFC”

means Intact Financial Corporation;

“IIM”

means Intact Investment Management Inc. and Intact Investment Limited Partnership;

“IIM US”

means Intact Investment Management US LLC;

“Indigenous peoples”

has the meaning given to the expression “Aboriginal peoples” in the Employment Equity Act ;

“North American Comparator Group”

means the comparator group approved by the Board of Directors for the compensation of Canadian Executives and Canadian Senior Executives with North American oversight;

“On Side”

means On Side Developments Ltd.;

“OneBeacon”

means OneBeacon Insurance Group, Ltd.;

“OneBeacon 401(k) Savings Plan”

means OneBeacon Defined Contribution Plan;

“OneBeacon Legacy Plans”

means the OneBeacon Long-Term Incentive Plans;

“OSFI”

means the Office of the Superintendent of Financial Institutions;

“Oversight Functions”

means the oversight functions as determined under OSFI’s Corporate Governance Guideline (the CFO, CRO, Group Chief Actuary, Canadian Appointed Actuary, Chief Internal Auditor and CCO);

“P&C”

means property and casualty insurance;

“Plans”

means the Company’s pension and incentive plans;

“Proxyholder”

means a person having the authority to attend the Meeting and vote Common Shares of the Company on behalf of shareholders;

“Intact”

means Intact Financial Corporation;

“LTIP”

means the Company’s Long-Term Incentive Plan;

“Management” or “Managerial Positions”

means all managerial level positions, including team leaders, and higher positions within the Company;

“Meeting”

means the annual and special meeting of shareholders of the Company to be held on May 6, 2020;

“Nomination Policy”

means the nomination policy for the Board of Directors and committee members;

“PSUs”

means performance share units granted by the Company to Executives and Senior Executives under the LTIP;

“Retention Agreement”

means the retention agreement between OneBeacon and T. Michael Miller entered into prior to the closing of the acquisition of OneBeacon;

“Rights Plan Resolution”

means the resolution that will be submitted to the Company’s shareholders at the Meeting to ratify, reconfirm and reapprove the Amended and Restated Rights Plan;

“Risk Committee”

means the Risk Management Committee of the Board of Directors;

“Nominee”

means, with respect to a Non-Registered shareholder of the Company, its bank, trust company, securities broker, clearing agency or other financial institution or intermediary holding shares in its behalf;

“ROE”

means return on equity. For the purpose of the Statement on Executive Compensation included in this Circular and for industry comparison purposes, IFC’s ROE corresponds to IFC’s adjusted return on equity (AROE), which is more comparable to the industry;

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“RSUs”

means restricted share units granted by the Company to Executives and Senior Executives under the LTIP;

“Senior Executives” or “Senior Management”

means the CEO, Presidents, Executive Vice Presidents, Senior Vice Presidents, Vice Chair and equivalent positions within the Company;

“SERP”

means the Company’s supplementary executive retirement plan for Canadian Executives and Canadian Senior Executives;

“STIP”

6. Reports of the Committees

“VIF”

means the Voting Instruction Form to be completed by NonRegistered shareholders of the Company to instruct their respective Nominee on how to vote their Common Shares;

“Weighted North American Benchmark”

means a weighted benchmark composed of 80% of Canadian industry results and 20 % of U.S. industry results, reflecting the Company’s own capital allocation across North America;

“WTW”

means Willis Towers Watson, the Company’s external consultant on matters related to executive compensation and on other human resources advisory services;

means the Company’s Short-Term Incentive Plan;

“The Guarantee”

means The Guarantee Company of North America;

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Schedule A Amended and Restated Shareholders Rights Plan

Issue of Rights

One right (a “Right”) has been issued in respect of each Common Share outstanding immediately following the close of business on February 9, 2011 (the ‘‘Record Time’’) and one Right has been and shall be issued in respect of each Common Share issued after the Record Time and prior to the earlier of the Separation Time and the Expiration Time.

The Rights

Each Right will entitle the holder, subject to the terms and conditions of the Amended and Restated Rights Plan, to purchase additional Common Shares after the Separation Time.

Exercise of Rights

The Rights may not be exercised before the Separation Time.

After the Separation Time and before the Expiration Time, each Right entitles the holder to acquire one Common Share for an exercise price equal to four times the market price of the Common Shares as determined at the Separation Time (subject to certain anti-dilution adjustments).

If a Flip-in Event occurs before the Expiration Time, each Right (other than the Rights held by an Acquiring Person which become null and void on the occurrence of the Flip-in Event) may be exercised to purchase that number of Common Shares having an aggregate market price equal to twice the exercise price for an amount in cash equal to the exercise price (subject to certain anti-dilution adjustments).

Redemption of Rights

All (but not less than all) of the Rights may be redeemed by the Company with the prior approval of the shareholders at any time before a Flip-in Event occurs at a redemption price of $0.00001 per Right (subject to adjustment). In addition, if a Permitted Bid, a Competing Permitted Bid or a bid in respect of which the Board of Directors has waived the operation of the Amended and Restated Rights Plan is completed, the Company will immediately, and without further formality, redeem the Rights at the redemption price.

Waiver

The Board of Directors may, at any time before an acquisition of Common Shares under a take-over bid made by a take-over bid circular to all registered holders of Common Shares that would trigger a Flip-in Event, waive the application of the ‘‘Flip-in’’ provisions of the Amended and Restated Rights Plan to the acquisition.

The Board of Directors may, with the prior approval of the shareholders, at any time before any other acquisition of Common Shares that would trigger a Flip-in Event, waive the application of the ‘‘Flip-in’’ provisions of the Amended and Restated Rights Plan to the acquisition.

Term of the Amended and Restated Rights Plan

Unless otherwise terminated, the Amended and Restated Rights Plan will expire at the Expiration Time.

Fiduciary Duties of the Board of Directors

The Amended and Restated Rights Plan will not detract from or lessen the duty of the Board of Directors to act honestly and in good faith with a view to the best interests of the Company and its shareholders. The Board of Directors will continue to have the duty and power to take such actions and make such recommendations to the Company’s shareholders as are considered appropriate.

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Amending Power

If the Amended and Restated Rights Plan is reconfirmed by the shareholders of the Company, all amendments to the Amended and Restated Rights Plan, other than amendments to correct clerical or typographical errors and amendments to maintain the validity of the Amended and Restated Rights Plan as a result of a change of applicable legislation or applicable rules or policies of securities regulatory authorities, must be approved by a majority of the votes cast by shareholders, other than an offeror under a take-over bid or an Acquiring Person (or any associate or affiliate of the offeror or the Acquiring Person or any other person acting jointly or in concert with the offeror or the Acquiring Person). In addition, all amendments to the Amended and Restated Rights Plan require the written concurrence of the Rights Agent and prior written consent of the Toronto Stock Exchange (as applicable).

Definitions

Acquiring Person

Subject to certain exceptions, an Acquiring Person is a person who becomes the Beneficial Owner of 20% or more of the outstanding Common Shares.

Beneficial Owner

A person is a Beneficial Owner of Common Shares if the person (or any associate or affiliate of the person or any other person acting jointly or in concert with the person) legally or beneficially owns Common Shares or has the right to acquire (immediately or within 60 days) Common Shares upon the exercise of any convertible securities or pursuant to any agreement, arrangement or understanding.

A person is not a Beneficial Owner of Common Shares if the person is engaged in the management of mutual funds, investment funds or public assets for others (e.g., a fund manager, trust company, pension fund administrator, trustee or a registered broker or dealer administering non-discretionary client accounts), as long as the person:

(a) holds the Common Shares in the ordinary course of its business for the account of others; and
(b) is not making a take-over bid or acting jointly or in concert with a person who is making a take-over bid.

Separation Time

The Separation Time occurs on the tenth trading day after the earliest of:

(a) the first date of a public announcement that a person has become an Acquiring Person;
(b) the date of the commencement or announcement of the intent of a person to commence a take-over bid, other than a Permitted Bid or Competing Permitted Bid; and
(c) the date on which a take-over bid ceases to be a Permitted Bid or Competing Permitted Bid; (or, in the case of (b) or (c), such later date as the Board may determine in good faith).

Expiration Time

If the shareholders reconfirm the Amended and Restated Rights Plan, the Expiration Time will occur on the earliest of:

(a) the time at which the right to exercise the Rights terminates in accordance with the Amended and Restated Rights Plan;
(b) immediately after the annual meeting of shareholders to be held in 2023 and every third year thereafter unless the Amended and Restated Rights Plan is reconfirmed at that meeting; and
(c) the tenth anniversary of the date the Amended and Restated Rights Plan was adopted by the Board of Directors.

Flip-in Event

A Flip-in Event occurs when a person becomes an Acquiring Person. Upon the occurrence of a Flip-in Event, any Rights that are legally or beneficially owned by an Acquiring Person, will become null and void. As a result, the Acquiring Person’s ownership interest in Intact Financial Corporation will be greatly diluted if a substantial portion of the Rights are exercised after a Flip-in Event occurs.

Permitted Bid

A Permitted Bid is a take-over bid that satisfies the following conditions:

(a) the bid is made to all holders of Common Shares (other than the offeror);
(b) the offeror agrees that no Common Shares will be taken up or paid for under the bid for at least 105 days following the commencement of the bid or such shorter period that a take-over bid must remain open for deposits of securities thereunder pursuant to Canadian securities laws;

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(c) the offeror agrees that no Common Shares will be taken up or paid for under the bid unless, at the time of take-up or payment, more than 50% of the outstanding Common Shares held by shareholders, other than the offeror (or any associate or affiliate of the offeror or any other person acting jointly or in concert with the offeror), have been deposited pursuant to the bid and not withdrawn;
(d) the offeror agrees that the Common Shares may be deposited to and withdrawn from the bid at any time before Common Shares are taken up and paid for; and
(e) if, on the date specified for take-up and payment, condition (c) is satisfied, the bid will remain open for an additional period of at least 10 days to permit the remaining shareholders to tender their Common Shares.

Competing Permitted Bid

A Competing Permitted Bid is a take-over bid that satisfies the following conditions:

(a) the bid is made after the commencement and before the expiry of a Permitted Bid or another Competing Permitted Bid;
(b) the bid satisfies all the conditions of a Permitted Bid other than Permitted Bid condition (b); and
(c) the offeror agrees that no Common Shares will be taken up or paid for under the bid before the close of business on a date that is the last day of the minimum initial deposit period that such take-over bid must remain open for deposits of securities thereunder pursuant to Canadian securities laws after the date of the take-over bid constituting the Competing Permitted Bid.

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Schedule B Mandate of the Board of Directors

Intact Financial Corporation and its Canadian P&C Insurance Companies (jointly called the “Company”)

I. Purpose

The main responsibility of the Board of Directors (“the Board”) is to oversee the management of the business and affairs of the Company, including its pension funds. In carrying out its duties and responsibilities and discharging its obligations, the Board will, directly and through its committees, provide direction to management to pursue the best interests of the Company.

II. Composition and Qualifications

i) The composition of the Board and qualifications of its members is determined based on applicable legal requirements and best practices as determined by the Board.
ii) Directors must have complementary knowledge, skills and expertise, including an appropriate representation of financial industry and risk management skills, to enable them to positively contribute to the achievement of the Company’s corporate objectives.
iii) The Board of Directors Policies and Procedures, as approved from time to time by the Board, serves as a guide to determining the composition of the Board and qualifications of its members.

III. Process and Operations

1. Meetings

i) The Board meets at least four times per year based on a Board pre-approved calendar.
ii) Any of the oversight functions, which include: Financial; Risk Management; Compliance; Internal Audit; and Actuarial (the “Oversight Functions”), may also call a meeting of the Board at any time.

2. Private Meeting of the Members of the Board and Private Meetings With Members of Management

i) At each meeting, the members of the Board will meet privately for an in-camera session without the presence of management.
ii) The members of the Board may meet members of management in private after each meeting or with any other employees of the Company, as deemed appropriate.

3. Quorum

A quorum at any meeting shall be a simple majority of the members of the Board of Directors.

IV. Duties and Responsibilities

The Board of Directors supervises the management of the business and affairs of the Company. In exercising this role, the Board fulfills the following duties and responsibilities:

1. Strategic Planning

i) Approves, at least annually, the strategic plan and the corporate objectives of the Company and oversees their execution. This oversight includes reviewing and approving all major strategy and policy recommendations and monitoring the Company’s performance against the strategic plan using appropriate metrics and milestones.
ii) Reviews the opportunities and risks of the Company’s three-year plan and, if deemed advisable, approves such plan, including the budget for the following year.
iii) The Board performs periodic reviews of the approved strategy and reviews and discusses results at each of its quarterly meetings to ensure attainment of key objectives and prompt realignment, if judged appropriate.

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iv) Reviews and approves material transactions and reorganizations, such as acquisitions, dispositions, mergers, corporate reorganizations, alliances and financing transactions.

2. Risk Management and Capital Management

i) Oversees the identification and monitoring of the principal risks affecting the Company’s business and ensures that the Company’s business strategies and allocations of capital are related to the Company’s Risk Appetite Framework and tolerance.
ii) Ensures that the Company has effective risk management programs and practices that are within the risk tolerance of the Company and that risk management activities have sufficient independence, status and visibility.
iii) Evaluates the Company’s compliance with key risk policies and limits.
iv) At least annually, evaluates and approves the Enterprise Risk Management Policy including the Risk Appetite Framework and the Internal Capital Ratio.
v) Approves the Company’s Investment Policy.
vi) Oversees the company’s policies and strategies with respect to liquidity, funding and capital management and provides advice and guidance to management on the effectiveness of such policies and strategies.

3. Ethics, Compliance and Corporate Governance

i) Sets the tone for the integrity, ethics and compliance culture throughout the Company and ensures that the appropriate structures and programs are in place to meet and maintain the highest rules of ethics, compliance and conduct.
ii) Develops the Company’s approach to corporate governance and its corporate governance principles.
iii) To support the Company’s corporate governance objectives, the Board ensures that the Directors, the CEO, the Oversight Functions and other executives demonstrate suitability and integrity in line with the high ethical values of the Company and foster a culture of integrity throughout the Company.
iv) Reviews management reports regarding important developments in the relationship between the Company and key regulators, including the Office of the Superintendent of Financial Institutions (“OSFI”), the Autorité des Marchés Financiers (“AMF”) and U.S. insurance regulators.
v) Reviews the Company’s compliance programs including the Ombudsman’s Office, the Privacy Office and market conduct initiatives.
vi) Reviews the Company’s procedures to monitor its Related Party Transactions and approves permitted Related Party Transactions.
vii) Ensures that there are appropriate procedures in place for the identification and resolution of conflicts of interest.
viii) Oversees and monitors the Company’s environmental, social and governance (“ESG”) and corporate social responsibility initiatives, including with respect to diversity.
ix) Oversees and approves the Company’s codes of ethics and conduct.

4. Supervision over Senior Management, Oversight Functions and Compensation and Succession Planning

i) Ensures that the Company is supported by an appropriate organizational structure including a CEO, Oversight Functions as defined by law, and other executives who have complementary skills and expertise, to ensure the sound management of the business and affairs of the Company and its long-term profitability.
ii) Oversees the Company’s succession planning and talent development.
iii) Develops the annual corporate goals and objectives of the CEO and is responsible for the CEO’s appointment, assessment, compensation and termination (if applicable).
iv) Conducts an annual assessment of the effectiveness and independence of the Oversight Functions and reviews their objectives. Such assessment may include conducting a benchmarking analysis of such functions and processes with the assistance of internal or external advisors.
v) Periodically reviews and approves the respective mandates of the Oversight Functions.
vi) Appoints, assesses and terminates (if applicable) the head of the Oversight Functions.

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vii) Oversees the Company’s general approach to human resources and compensation philosophy and reviews, discusses and approves the compensation and benefits plans for employees, management, executives, including the Oversight Functions, and Directors.

5. Pension Plans and Funds

i) Monitors the various aspects of the Company’s Pension Plans (benefits, Financial Statements and actuarial valuation) or the management of their funds (review of policies and approval of strategies and investment reports).
ii) Reviews the governance framework in relation to the management of the Company’s pension plans and pension funds.

6. Board of Directors Structure and Composition

i) Ensures that its own structure and composition are in compliance with applicable legislation and best practices, as determined by the Board, and reviews the size, composition and policies of the Board and its committees with a view to the effectiveness, contribution, skills, suitability, integrity and independence of the Board and of all the directors.
ii) Establishes the appropriate policies and procedures to enable the Board, its committees and individual directors to function independently of management.
iii) On an annual basis, the Board undertakes a self-assessment to evaluate the effectiveness of the Board and committee practices, periodically with the assistance of external advisors.
iv) Identifies potential new Board members and implements and reviews the nomination process for new Board members.
v) Provides orientation for new directors and continuing education opportunities to all Board members.

7. Financial Reporting, Public Disclosure and Internal Controls

i) Reviews and approves the Company’s significant disclosure documents including financial statements and related financial information and oversees the Company’s compliance with applicable audit, accounting, actuarial and reporting requirements.
ii) Ensures that the Company adopts appropriate policies and procedures that provide for timely and accurate disclosure to regulators, shareholders, employees, analysts and the public, that meet all applicable legal and regulatory requirements and that facilitate feedback from stakeholders and shareholder engagement.
iii) Oversees and monitors the integrity and effectiveness of the Company’s internal controls and management information systems. The Board also reviews management’s assertions on internal controls and disclosure control procedures.
iv) Appoints, subject to approval by shareholders, and terminates, if applicable, the external auditor.

8. General

i) As part of meeting its responsibilities, the Board is responsible for overseeing the governance and activities of subsidiaries.
ii) The Board is responsible for establishing general Company policies and performing other tasks required by law and regulations.

V. Access to Independent Consultants

i) The Board and each committee may retain and terminate independent consultants, at the Company’s expense. Individual members of the Board are authorized to engage consultants, at the expense of the Company, in appropriate circumstances.
ii) The Board ensures that consultants are retained only when necessary and that such consultants are retained prudently and without duplication.
iii) The Board will ensure that appropriate policies and procedures are in place to provide for the prudent engagement of consultants.

VI. Committees of the Board and Delegation

i) The Board has established the following committees to assist it in its stewardship role: the Audit Committee, the Risk Management Committee, the Compliance Review and Corporate Governance Committee, and the Human Resources and Compensation Committee. Subject to applicable law, the Board may establish other Board committees or merge or dispose of any Board committee.

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ii) The Board has approved mandates for each Board committee. Such mandates will be reviewed annually and approved by the Board.

iii) The Board has delegated for approval or review the matters set out in each Board committee’s mandate to that committee.

iv) The Board may designate a sub-committee or individual(s) to review any matter the Board can delegate by law.

VII. Board Mandate Review

On an annual basis, the Board reviews this mandate and approves such changes as are necessary.

Approved by the Board of Directors of Intact Financial Corporation and its Canadian P&C Insurance Companies on February 4, 2020.

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How to Contact Us

Investors

Intact Financial Corporation Investor Relations Department 700 University Avenue, Suite 1500 Toronto, Ontario M5G 0A1 Email: [email protected] Phone: (416) 941-5336 or 1 (866) 778-0774 (toll-free within North America)

Shareholders Computershare Investor Services Inc. 100 University Avenue, 8th floor For changes in share registration, address Toronto, Ontario M5J 2Y1 changes, dividend information, estate Email: [email protected] transfers and duplicate mailings. Phone: 1 (800) 564-6253 Independent Directors Senior VP, Corporate and Legal Services, and Secretary Intact Financial Corporation For inquiries related to Board of Directors 2020, Robert-Bourassa Blvd., 6th floor structure and composition, Board of Montréal, Québec H3A 2A5 Directors and CEO performance, executive Email: [email protected] compensation, succession planning, Phone: (514) 985-7111 x 83131 or 1 (888) 221-7111 (toll-free within North corporate governance practices and America) disclosure, material strategic decisions and overall corporate performance. Management Intact Financial Corporation Investor Relations Department For inquiries related to the Company’s 700 University Avenue, Suite 1500 general business operations, financial Toronto, Ontario M5G 0A1 results, strategic direction and similar matters. Email: [email protected] Phone: (416) 941-5336 or 1 (866) 778-0774 (toll-free within North America) Media Christina Kanellos Director, External Communications Email: [email protected] Phone: 1 (416) 341-1464 x 42271

Further information relating to Intact Financial Corporation may be obtained from its website at www.intactfc.com and from the SEDAR website at www.sedar.com. Financial information is provided in the Company’s comparative financial statements and management’s discussion and analysis for the fiscal year ended December 31, 2019 and these documents are accessible through SEDAR. To obtain a copy of these documents together with the Company’s annual information form, when available, at no cost, please contact the Investors Relations Department of the Company.

Intact Financial Corporation | Management Proxy Circular 2020

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Intact Financial Corporation 700 University Ave. Toronto, Ontario M5G 0A1

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AI assistant

Intact Financial Corporation — Proxy Solicitation & Information Statement 2020

45522_rns_2020-04-03_fda1cd79-6853-4426-b549-1bec3c1af599.pdf

Intact Financial Corporation

Management Proxy Circular 2020

Building a Resilient Future

Your Vote Matters

Location of Annual and Special Meeting of Shareholders

Virtual-only Meeting

How to attend the virtual Meeting

Dear Shareholders,

Table of Contents

ESG Content Map

Notice of Annual and Special Meeting of Shareholders of Intact Financial Corporation

Business of the Meeting:

Frédéric Cotnoir

April 3, 2020

Our purpose, values and core belief

Our values

Integrity

Respect

Customer-driven

Excellence

Generosity

Our leadership success factors

Our objectives

Our customers are our advocates

Our people are engaged

Our company is one of the most respected

2019 Developments

Our customers are our advocates

Our people are engaged

Our Company is one of the most respected

2019 Financial highlights

Investment portfolio

Financial strength

Summary

Shareholder Voting Matters

Director Nominees at a Glance

Corporate Governance

Top 3 Finalist

Highlights of our Corporate Governance Practices

What We Do

What We Don’t Do

Compensation

What We Do

What We Don’t Do

Combined Ratio for STIP calculation

1. Voting Information

Why is Intact holding a virtual-only Meeting?

Who is Soliciting my Proxy?

How can I attend the virtual Meeting?

Who has the right to vote at the virtual Meeting?

Who can vote?

Registered shareholder

Non-Registered shareholder

How do I vote my Common Shares?

Option 1 – Voting by Proxy

Registered shareholders

Non-Registered shareholders

Option 2 – Voting online at the virtual Meeting

Registered shareholders

Non-Registered shareholders

How will my common shares be voted if I return a proxy form/VIF?

How do I appoint someone else to attend the virtual Meeting and vote my Common Shares online for me?

What if I change my mind?

Is my vote confidential?

2. General Information

Date of Information

Glossary of Terms

Currency

Non-IFRS financial measures

Notice and Access

Share Capital and Principal Holders

Shareholder proposals

3. Business of the Meeting

3.1 Financial Statements

3.2 Appointment of Auditor

Pre-approval of External Auditor Services

Auditor Fees

Intact Financial Corporation Proxy Solicitation & Information Statement 2020