2006 Annual Financial Results - Excellent Insurance Sales Growth for Desjardins Financial Security in 2006

    Net income of $151.3 million
    Operating income growth of 9.7%, for a total of $202.8 million
    Return on shareholder equity of 20.7%
    Profitability in all business lines
    Net premium growth of 6.0%
    Insurance premiums cross the $2-billion mark for the first time
    Group insurance sales outside Quebec grow by 135.6%
    Individual savings product sales grow by 10.5%

    LEVIS, QC, March 12 /CNW Telbec/ - For the year ended December 31, 2006,
Desjardins Financial Security had operating income of $202.8 million, for a
9.7% increase. The life and health insurer of Desjardins Group posted net
income of over $150.0 million for the second year in a row. At $151.3 million,
the Company's figures were down slightly (2.0%) from the previous year, when
income from continuing operations totalled $154.4 million. In 2005, certain
non-recurring items, including a reversal of provisions from the settlement of
impaired loan losses, had a positive impact on results that year. Had it not
been for these exceptional factors, net income for 2006 would have exceeded
2005 figures. Return on shareholder equity remains one of the best in the
financial services industry at 20.7%.
    In terms of overall business growth, premium income from insurance and
annuities was up 6.0%, for a total of $2.4 billion. Insurance premiums crossed
the $2-billion mark for the first time, to stand at $2.1 billion, for an
increase of 8.4%. Insurance sales were up 81.4%. Assets under management and
administration stood at $19.9 billion, compared to $20.4 billion on
December 31, 2005.
    Desjardins Financial Security therefore continues to contribute to the
profitability of Desjardins Group, the largest cooperative financial group in
Canada. In 2006, the Group reported combined surplus earnings before patronage
dividends to members of $988 million. The share of Desjardins Financial
Security's income attributable to the Desjardins caisses, the ultimate
shareholders, totalled $145.8 million, compared to $151.6 million in 2005.
    Mr. Alban D'Amours, President and Chief Executive Officer of Desjardins
Group and also Chief Executive Officer of Desjardins Financial Security, was
very pleased with these results but stressed the importance of continually
making our products more competitive. "We are confident that the momentum
generated by our accomplishments in 2006 will remain strong in 2007, despite a
fiercely competitive market."
    Mr. Richard Fortier, President and Chief Operating Officer of Desjardins
Financial Security, noted that the results for this first year of the
Company's 2006-2008 Strategic Plan are more than just promising. They confirm
that the Company is on the right track. "The gains made by each one of our
business lines in 2006 are largely due to the strict application of our
business plan." Based on the major group insurance and savings contracts we
signed in 2006 and the strengthening of our distribution capacity through the
acquisition of certain Performa Financial Group assets, Mr. Fortier said he
was convinced that "if we stayed on course, in two years' time, Desjardins
Financial Security would be able to double its market share outside Quebec
without impacting our growth in Quebec".

    Performance by business line

    Group Insurance - This business line has two activity sectors: insurance
plans offered to groups and businesses and insurance plans offered through
financial institutions like the Desjardins caisses. Over the past five years,
despite a fiercely competitive environment, the compound growth rate for our
in-force group insurance business has remained strong. It totals $99.6 billion
versus $67.1 billion in 2001.
    In 2006, net income for the Group Insurance business line exceeded
$100 million for the third year in a row, to stand at $101.1 million compared
to $102.5 million in 2005. In terms of net business growth in this sector,
2006 was a record year for Desjardins Financial Security following the signing
of major group insurance and savings contracts, such as the contract covering
the 36,000 public sector employees and retirees of the Government of
Newfoundland and Labrador. Insurance sales to groups and businesses totalled
$195.6 million, more than double the previous year's sales figures
($95.2 million). Sales outside Quebec alone totalled $154.8 million. The
enrolment of several large groups is responsible for the 9.5% increase in the
premium volume administered by the business line, which totalled
$1,743.3 million compared to $1,593.7 million a year earlier. Credit insurance
premiums were up by 6.7%, allowing the Company to maintain its position among
the top credit insurance providers in Canada.

    Individual Insurance - This business line handles the offer of life and
health insurance, as well as products sold without the assistance of a
representative. In the past year, Desjardins Financial Security intensified
its efforts to recruit and train financial security advisors to serve the
needs of Desjardins caisses members. The Company also strengthened its product
offering with the introduction of Universal Life T-100. To maintain its
leadership position in health insurance development and marketing, the Company
enhanced its Independent Living Long-Term Care insurance and launched a
critical illness insurance for children.
    Net income for this business line crossed the $40.0-million mark once
again, to stand at $42.0 million. In 2005, the Company more than doubled its
figures by posting $43.0 million in net income, compared to $18.8 million a
year earlier. Sales grew by $4.6 million and totalled $38.4 million. This
growth comes largely from outside Quebec, where a substantial increase of
51.7% was recorded. Financial security advisors assigned to the Desjardins
caisses posted 12.3% growth in sales, which stood at $15.5 million. In
operation since 2000, this distribution model crossed the 90,000 mark for
in-force contracts in 2006. The total volume of individual insurance premiums
stood at $374.2 million, up 3.3% due mainly to the 16.9% rise in the number of
in-force contracts sold to Desjardins caisse members. Direct insurance premium
volume was up 8.3% and totalled $52.5 million.

    Savings - This business line offers individuals a wide range of
retirement savings products, including guaranteed return investments, multiple
strategy investments, as well as segregated funds and retirement annuities.
For groups and businesses, Desjardins Financial Security has a comprehensive
product offering of group registered retirement savings plans, defined
contribution plans and simplified pension plans. Eager to differentiate itself
from the competition by the superior quality of its service offer and plan
sponsor and member support and education, in 2006 the Company launched
Destination, a new module of its Setting Sail for the Future education and
retirement planning program designed to support plan members in transition
towards retirement. In 2006, the business line also integrated an offer of
life annuities into the Vision-Retirement program for Desjardins caisse
members who are approaching or have reached retirement age. In individual
savings, the introduction of new portfolios and a new partnership with
Northwest Funds marked the beginning of a segregated funds redesign project. A
new innovative offering of individual plans is now also in effect.
    The Savings business line posted good results in 2006 as it did in 2005.
Net income totalled $8.2 million, compared to $8.9 million in 2005. Sales
totalled $1,062.4 million, an increase of $48.0 million over 2005. This
excellent growth of 4.7% is due mainly to payout annuities, and to mutual fund
sales bolstered by the integration of Performa Financial Group's sales force
in June 2006. Savings has experienced strong growth for the past two years.
Sales have increased by 41.2% in two years' time, which translates into
premium volume growth of more than 20.0%. Efforts deployed by the group
retirement savings team enabled the Company to increase its visibility and
thereby its ability to attract major groups. In individual savings, annuity
product sales were up, totalling $140.3 million more than in 2005. Segregated
fund sales, which have experienced strong growth for the past three years,
were up 15.3% and totalled $114.6 million in 2006.

    About Desjardins Financial Security

    Desjardins Financial Security, a subsidiary of Desjardins Group, the
largest integrated cooperative financial group in Canada, specializes in group
and individual life and health insurance, and savings products and services.
Every day, over 5 million Canadians rely on Desjardins Financial Security to
ensure their financial security. With a staff of over 3,700 employees,
Desjardins Financial Security manages and administers close to $20 billion in
assets from offices in major cities across the country, including Vancouver,
Calgary, Winnipeg, Toronto, Ottawa, Montreal, Quebec, Levis, Halifax and
St. John's.

For further information:

For further information: Shannon Bowness, External Communications
Advisor, Desjardins Financial Security, (416) 926-2700 ext. 2015,
shannon.bowness@dfs.ca, Virtual pressroom:
http://www.desjardinsfinancialsecurity.com/press; Claude Beauchamp, External
Communications Advisor, (418) 838-7800, toll free at 1 800 463-7870, extension
7797, claude.beauchamp@dfs.ca, Virtual pressroom:

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