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Industrial Alliance Penetrates the Individual Disability and Health Insurance Market by Acquiring L'Excellence Life Insurance Company

Quebec City, December 13, 2007 - Industrial Alliance Insurance and Financial Services Inc. ("Industrial Alliance" or "the Company") is pleased to announce the conclusion of agreements to acquire all the shares of the holding companies controlling L’Excellence Life Insurance Company ("L’Excellence"), a company specializing in individual disability and health insurance, as well as the brokerage companies with which L’Excellence is associated: Michel Rhéaume & Associés and Beaulne & Rhéaume Assurance Ltée. This transaction gives Industrial Alliance an entryway for its development in the individual disability and health insurance sector.

L’Excellence is an insurance company that specializes in the manufacturing and distribution of personal life and health insurance products for individuals, corporations and professional associations. It offers a broad range of disability insurance, medical care and hospitalization benefits insurance, and life and accident insurance products. L’Excellence primarily distributes its products in Quebec through independent brokers and authorized agents working with professional associations. Founded in 1962, L’Excellence is a company with a Quebec charter that in 2006 generated $81 million in premiums income. L’Excellence and the brokerage companies associated with it employ some 170 people. The head office of L’Excellence is located in Montreal.

"We’re pleased to acquire a company with a long and rich expertise in the individual disability and health insurance market," said Normand Pépin, Executive Vice-President at Industrial Alliance. "It’s a complementary market for our life insurance activities. We plan to make L’Excellence our platform for the development of our activities in this new market segment, as much in Quebec as outside of the province. To succeed, we expect to maintain the current status of L’Excellence, which will continue to operate as a separate company. We also plan to retain all of the employees and honour all of the agreements of L’Excellence’s brokers, on whom we count to actively continue to grow the companies."

"We’re pleased to be associated with a large-scale partner like Industrial Alliance, that has the financial resources to allow us to accelerate our growth in Quebec, and also outside of Quebec," said Antoine Ponce, President and General Manager of L’Excellence. "Our association with Industrial Alliance will also allow us to further improve our personalized service practice, which has always been our trademark."

"Over the last 30 years, we carved out a leadership position in the market for products tailored to specific needs distributed through specialized networks," added Daniel Riopel, President and General Manager of Michel Rhéaume & Associés. "This association lets us expand the range of products that we make available to our brokers, who could also have access to different Industrial Alliance wealth management products."

The acquisition of L’Excellence and the brokerage companies associated with it represents an investment for Industrial Alliance that could reach $67.3 million, if certain conditions are respected and if existing debts are taken into account. The transaction will be financed in part by issuing company shares. The issued shares will be bought back as quickly as possible in order to eliminate any dilution for shareholders. The buybacks will be made under the normal course issuer bid currently in effect. The Company estimates that the acquisition should help to increase its earnings per share by $0.04 starting in 2008.

The transaction is subject to the approval of the Autorité des marchés financiers and the Toronto Stock Exchange. It is scheduled to be concluded in the first quarter of 2008.

About Industrial Alliance

Founded in 1892, Industrial Alliance Insurance and Financial Services Inc. is a life and health insurance company that offers a wide range of life and health insurance products, savings and retirement plans, RRSPs, mutual and segregated funds, securities, auto and home insurance, mortgage loans and other financial products and services. The fifth largest life and health insurance company in Canada, Industrial Alliance is at the head of a large financial group, which has operations across Canada as well as in the western United States. Industrial Alliance contributes to the financial well-being of over 3 million Canadians, employs more than 2,900 people and manages and administers over $50 billion in assets. Industrial Alliance stock is listed on the Toronto Stock Exchange under the ticker symbol IAG. Industrial Alliance is among the 100 largest public companies in Canada.
 

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