La Capitale maintains strong growth

    "The excellent financial results seen in 2007 confirm and concretize our
    commitment to our mutualist values. Although experts are predicting a
    less favourable economic context in 2008, our Mutual will continue to
    proudly and consistently maintain a balance between being financially
    efficient and socially responsible in the way it does business."
    - Jean-Yves Dupéré, Chairman of the Board and Chief Executive Officer

    QUEBEC CITY, March 17 /CNW Telbec/ - The consolidated financial
statements for 2007 come as proof that La Capitale is prospering. In 2007, the
company's primary Life and Health Insurance and Property and Casualty
Insurance sectors remained extremely competitive despite the market context.
The first benefits of partnerships sealed in 2006 and 2007, along with the
launch of new innovative products tailored to clients' needs are among the
strategies that have strengthened the growth of the Mutual.
    "Over a five-year period up to the end of 2007, La Capitale Civil Service
Mutual has generated average annual sales growth of 12.2%. We made the right
choices," explains Jean-Yves Dupéré, Chairman of the Board and Chief Executive
Officer. "For instance, the acquisition of our Ontario subsidiary Penncorp at
the end of 2006, despite the integration processes required, is already
bearing fruit."
    In 2007, the total income of La Capitale and its subsidiaries reached
$1.1 billion, an increase of 22.6% over fiscal year 2006. Total assets grew by
18.5% to $2.8 billion, while net profits reached $65.8 million.
    Members' equity grew from $350.2 million in 2006 to almost $445.4 million
in 2007, thanks to the excellent financial results in 2007 and following
application of the new accounting standards for financial instruments
implemented on January 1, 2007.

    Consolidated facts and figures 2007

    - Number of Mutual members: 213,942
    - Assets: $2.8 billion
    - Total income: $1.1 billion
    - Net profit: $65.8 million
    - Number of employees: 2,226

    I- Life and Health Insurance Sector

    The company's Life and Health Insurance sector ended the year with total
premiums of $548 million, up 47%, showing a net profit after tax of
$42 million, 24.7% higher than the previous year.
    Individual life insurance sales by La Capitale Civil Service Insurer and
La Capitale Insurance and Financial Services increased by 21%. As for
Penncorp, its premium volume reached $78.4 million. Our portfolio of
individual savings products reached some $568 million, an 11.9% increase over
2006. Investment income amounted to close to $116 million. In Quebec, more
than 86% of new business in individual life insurance and savings came from
within the public sector. This proportion is 75% for group insurance, an area
in which overall sales increased by 134% this year.
    "We enhanced our individual insurance product line by launching The
Provider, a new life insurance product that's unique on the market. This
innovative new product pays a fixed monthly benefit in the event of death as
opposed to a lump sum. We enhanced our savings product offering with the
launch of our new actively managed index accounts, a highly attractive
investment vehicle. Our investment in AGA Financial Group has proved highly
profitable, generating an excellent rate of return," highlights Robert
St-Denis, President and Chief Operating Officer, "Naturally, such sustained
growth, year after year, does mean we have to make a number of technical and
administrative adjustments. Our objectives remain the same, however: To
maintain the superior quality of service we offer and to meet the various
needs of our clients and Mutual members." A clear example is the 2007
investment of $8 million in the technological infrastructure and IT
development of the company's group insurance operations.

    II- Property and Casualty Insurance Sector

    2007 was a year of profitability, despite an extremely competitive
market. Consolidated net profits in the Property and Casualty Insurance sector
reached $33.3 million, an $11 million increase compared to 2006. This sector
showed marked overall growth of 8.6%, with total sales of $473 million. Assets
were up, growing by 12.8% to reach $591 million. Net operating profit rose to
7.8%, up from 4.2% in 2006.
    Once again this year, our Auto Insurance line posted excellent results,
with premium volume up by $7.2 million. The profitability of this line of
business has allowed us to lower our rates so that our clients can benefit
from these strong results.
    "Automobile theft remains a major problem which we continue to battle.
The financial consequences are significant, representing some 17% of Auto
Insurance claims paid. The frequency of losses due to auto theft did however
fall by 20% in 2007", explains John Strome, President and Chief Operating
Officer of La Capitale General Insurance.
    We also made the finishing touches to RV Solutions Insurance(TM), La
Capitale's recreational vehicle (RV) insurance program. Originally launched
with motorcycle, ATV and snowmobile coverage, we have now added coverage for
watercraft, motorhomes, travel trailers and stationary trailers. This makes La
Capitale the first direct writer to offer stand-alone insurance coverage for
various types of recreational vehicles.
    Our Home Insurance line posted net growth of $11.4 million. The absence
of natural disasters in 2007, combined with the success of our prevention
initiatives, contributed to a 10% decline in claims.
    It was an excellent year for Commercial Insurance, which posted a growth
rate of 30.2%. Premium volume reached $28.7 million. During the year, a new
insurance program created for automobile dealerships and home renovation
centres proved profitable.
    L'Unique, a subsidiary which offers brokerage firms a viable solution to
the consolidation of property and casualty insurance markets, reported 16.7%
growth in sales with a net profit of $5.7 million.

    About La Capitale

    La Capitale Civil Service Mutual, owned by members of Quebec's civil
service, operates ten subsidiaries. It has provided clients and Mutual members
with value-added financial products (insurance, savings, loans, retirement)
for over 68 years. With a strong presence across Quebec, and increasingly
present throughout Canada, La Capitale has $2.8 billion in assets, employs
over 2,226 people and provides financial products and services to the general
public as well as to 600,000 individuals working for over 900 institutions in
the Quebec public and parapublic sectors.

For further information:

For further information: Andrée Plante, Communications and Public
Relations Advisor, La Capitale Financial Group, (418) 644-4276,

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