Welcome

2. Welcome

3. YOUR BOARD OF DIRECTORS

4. John H. Bowey • A. Scott Carson • Richard M. Freeborough • David A. MacIntosh • Charles M.W. Ormston • Michael P. Stramaglia • W. David Wilson • Karen L. Gavan

5. 14 YEARS OF SERVICE

6. YOUR SENIOR MANAGEMENT TEAM

7. Jorge Arruda, SVP, Strategic Business Unit • Dean Bulloch, SVP and Chief Human Resources Officer • David Crozier, SVP Operations • Innes Dey, General Counsel and Corporate Secretary • Louis Doiron, SVP Chief Risk Officer • Michael Gagnier, SVP and Chief Information Officer • Linda Goss, SVP and Chief Actuary • Philip Mather, SVP and Chief Financial Officer

8. BUSINESS OF THE MEETING

10. FINANCIAL STATEMENTS APPOINTMENT OF AUDITORSELECTION OF DIRECTORS

11. PRESENTATIONS

12. Gerald Hooper Chairman of the Board of Directors Economical Insurance

13. Mutual policyholder’s equity 2012 ANNUAL GENERAL MEETING

14. 2008 – 2011 combined ratio * 108.5% 106.1% 102.9% 98.1% * Presented on an undiscounted basis * Represents loss ratio and expense ratio 2012 ANNUAL GENERAL MEETING

17. Karen Gavan President and chief executive officer Economical Insurance

18. Transformation Creating value Ownership transformation Business transformation

19. Vision WHAT WE WANT TO ACCOMPLISH To be the leading property and casualty insurance provider through the delivery of high quality insurance products and superior service, built on a foundation of innovation and financial strength. 2012 ANNUAL GENERAL MEETING

20. Mission WHY WE EXIST Damage from the Slave Lake fires To provide security and support for our customers and distribution partners; to be there when our customers need us most. Damage from the Goderich tornado 2012 ANNUAL GENERAL MEETING

21. Values: WHAT WE STAND FOR Integrity Customer focus Guide our Behaviour Achievement Learning Collaboration 2012 ANNUAL GENERAL MEETING

22. Achieving our vision: KEY STRATEGIC INITIATIVES Superior customer experience Preferred business partner Industry leading skills: pricing, U/W, claims,risk management Being a great place to work Maintain stakeholder trust and confidence 2012 ANNUAL GENERAL MEETING

23. Strategic importance of demutualization • Level the playing field; reduce barriers to capital access • Consolidation of the Canadian P&C insurance industry • Size and scale matter 2012 ANNUAL GENERAL MEETING

24. 2011 key accomplishments • Executive leadership • Refreshed brand • Predictive analytics • Energie™ auto • Corporate responsibility 2012 ANNUAL GENERAL MEETING

26. 2011 key accomplishments • Executive leadership • Refreshed brand • Predictive analytics • Energie™ auto • Corporate responsibility 2012 ANNUAL GENERAL MEETING

27. 2012 ANNUAL GENERAL MEETING

28. 2011 results 2012 ANNUAL GENERAL MEETING

29. 2011 results 2012 ANNUAL GENERAL MEETING

30. 2011 combined ratio: Top competitors Best Worst 2012 ANNUAL GENERAL MEETING

31. 2011 Claims ratios: Top competitors Best Worst 2012 ANNUAL GENERAL MEETING

32. Top competitors: relative size 2012 ANNUAL GENERAL MEETING

33. Q1 2012 results 2012 ANNUAL GENERAL MEETING

34. 2012 outlook • Sustained profitable growth • Demutualization readiness • Risk management and disciplined underwriting • Productivity improvement • Top quartile performance 2012 ANNUAL GENERAL MEETING

36. John Bowey Chair of the Special Committee

37. Why is the Board pursuing demutualization? Economical in 1871 Economical Now • National group offering comprehensive personal and commercial insurance coverage • 1.1 million policies in force and over $4.5 billion in assets • Competes directly against large national and global corporations who have easy access to capital • Collection of farmers in Kitchener banding together to help neighbours in times of hardship Optimal Structure: Stock Company Optimal Structure: Mutual

38. Benefits of demutualization to Economical

39. Strategic actions Implementation of Strategic Plan Communication with Mutual Policyholders The Board of Directors their advisors and management have created a comprehensive plan to demutualize and maintain profitable operations Regulatory Allocation of Value Sponsored Demutualization IPO Process

40. Drafting of regulations The Special Committee, Board and Management have each played a role in extensive, ongoing discussions with Government representatives Spring 2012 Winter 2011 / 2012 Spring / Fall 2011 • Meetings with Finance and various government officials • Response to Consultation Paper, extensive meetings and discussions with Finance • Appeared before the House of Commons Finance Committee to further the position of the Company in the required regulations • Continued discussions with all levels of Government • Submitted supplemental commentaries to Government • Continued to pursue framework for fair and equitable regulations through meetings with all levels of Government

41. Regulatory process Choose optimal path: IPO or Sponsored Demutualization

42. Dual track process Sponsored Demutualization Mutual Policyholder Vote on Demutualization and Approval Bids Preferred Transaction Chosen Drafting of Regulations (Department of Finance) Regulations Complete Demutualization Initial Public Offering OSFI Approval Indicative Market Pricing

43. Sponsored Demutualization process Field is Narrowed Formal Due Diligence Formal / Binding Proposals Execute CA and Receive CIM First Round Proposals Strategic In-market Institutional • The Board of Directors, with their advisors Blair Franklin, have created a robust auction • The majority of the parties that signed the Confidentiality Agreement have made proposals - formal due diligence is now being undertaken by select parties

44. IPO process Prepare for Public Company Reporting Requirements Draft Prospectus, Form Syndicate, Complete Roadshow Engage Accounting Firm Engage Accounting Firm Engage Underwriters Convert, Distribute Shares, List on Exchange • Management and the Board have engaged and worked with advisorsto prepare Economical for public company reporting requirements • The Board has engaged BMO Capital Markets and RBC Capital Markets as lead underwriters for the IPO

45. Reference points for valuation of Economical Select North American Comparables

46. Allocation of value The Department of Finance will likely look to the LifeCodemutualizations as a precedent for determining the allocation of value to mutual policyholders

47. Variable allocation Variable allocations will be different from the Lifeco allocations due to the difference in the underlying policies Engage Accounting Firm Lifeco Variable Allocation Factors Recommended Engage Accounting Firm Likely P&C Variable Allocation Factors Recommended • Policy premium • Contribution to Surplus • Policy reserves • Cash values • Amounts of coverage • Duration of the Policy • Policy premium • Amounts and type of coverage • Duration of the policy • Premium Notes • “Duration of the policy” will likely be a key criteria in the case of Economical’s demutualization

48. Strategic actions Implementation of Strategic Plan Communication with Mutual Policyholders Regulatory Allocation of Value Sponsored Demutualization IPO Process

49. Strategic actions Implementation of Strategic Plan Communication with Mutual Policyholders Regulatory Allocation of Value Sponsored Demutualization IPO Process

50. Strategic actions Implementation of Strategic Plan Communication with Mutual Policyholders Regulatory Allocation of Value Sponsored Demutualization IPO Process