Committed to All Our Members

2016 ANNUAL REPORT COMMITTED TO ALL OUR MEMBERS Summary 02 2016 Financial Highlights 04 Chairman’s Message 16 CEO’s Message 35 2016 Sustainable Development and Societal Responsibility Report 50 SSQ, Mutual Management Corporation – Consolidated Financial Statements as at December 31, 2016 51 Independent Auditor’s Report 52 Consolidated Statement of Income 53 Consolidated Statement of Financial Position 54 Consolidated Statement of Changes in Equity 55 Consolidated Statement of Cash Flows 56 Notes to the Consolidated Financial Statements 64 SSQ, Life Insurance Company Inc. – Consolidated Financial Statements as at December 31, 2016 65 Management’s Report 66 Independent Auditor’s Report 67 Consolidated Statement of Income 68 Consolidated Statement of Comprehensive Income 69 Consolidated Statement of Financial Position 70 Consolidated Statement of Changes in Equity 71 Consolidated Statement of Cash Flows 72 Notes to the Consolidated Financial Statements 129 Ownership Structure 130 Boards of Directors 131 Management Team and Senior Management 132 Addresses 132 Contact Us Building a Community Our hope is that, by drawing inspiration from our mutualist model, our members and customers will come to form a genuine community of insureds, thus deepening their sense of belonging and ensuring that each point of contact with the Company contributes to this experience. In so doing, we are seeking to become the insurance destination of choice for our members and our customers. 2016 FINANCIAL HIGHLIGHTS SSQ Ω 2016 ANNUAL REPORT Ω 3 CONSOLIDATED DATA (M$) 2016 2015 Variation $ $ % Insurance premiums 2,342.8 2,204.9 6.3 Assets under management and administration 11,373.8 11,222.6 1.3 Equity attributable to shareholders 791.7 727.0 8.9 Net income attributable to shareholders 77.6 64.8 19.8 Fair value of properties 267.1 289.6 -7.8 Number of employees 2,091 2,108 INSURANCE 2012 1,809.0 PREMIUMS 2013 2,008.6 (in millions of dollars) 2014 2,084.4 2015 2,204.9 2016 2,342.8 ASSETS UNDER 2012 10,871.5 MANAGEMENT AND 2013 11,421.8 ADMINISTRATION 2014 10,622.3 (in millions of dollars) 2015 11,222.6 2016 11,373.8 EQUITY 2012 315.5 ATTRIBUTABLE 2013 363.8 TO SHAREHOLDERS 2014 670.7 (in millions of dollars) 2015 727.0 2016 791.7 4 Ω SSQ Ω 2016 ANNUAL REPORT Chairman’s Message Mr. Pierre Genest Embracing transformation Chairman of the Board SSQ, Mutual Management As a general rule, the arrival of a new CEO within an organization indicates that Corporation major changes are on the way, and Jean-François Chalifoux’s appointment was no exception in this regard! Back in early 2016, following the completion of an in-depth analytical process, as well as many meetings with the Corporate Management Committee, individual managers and various employees, Jean- François put together an organizational diagnosis, submitted it to the Board members and laid out his strategic vision for SSQ. Remaining focused on the primary objective of strengthening the role of our members, clients and partners at the heart of SSQ’s mission and better meeting their needs, Jean-François presented an integrated organizational model based on a Group-based identity and power structure. SSQ will need to draw on its strengths and values as it makes “One Customer, One Experience, One Entity” a reality. This slogan underscores the importance of offering consumers a new, unique and straightforward way of doing business with SSQ. SSQ Ω 2016 ANNUAL REPORT Ω 5 Impressed by the boldness of the transformation project submitted in early 2016, the various boards were convinced that, despite its scope, the project would pave the way to the future; indeed, the resulting synergies and advantages justified the approval and implementation of this measure. Needless to say, a transformation project of this magnitude must be divided into several initiatives, including the corporate and organizational restructuring, as well as the 2017-2019 strategic planning process. Integrated governance In order to boost the boards’ synergies and agility, one of the first steps taken was to harmonize their size and composition. Previously, the total number of board members for the three insurance companies was 27; it is now 19. This reduction necessarily led to the departure of several board directors. Initially, the Board of SSQ General Insurance Company Inc. (SSQauto) increased its number of members from 10 to 19, as did the boards of SSQ, Life Insurance Company Inc. (SSQ Life) and SSQ Insurance Company Inc. (SSQ Insurance). By the end of an initiative undertaken together with the shareholders, six SSQauto board directors left their positions on June 1, 2016, and 15 new board directors were appointed. Since these new members were already serving on the boards of SSQ Life and SSQ Insurance, this reorganization made it possible to ensure integrated management of all insurance and financial services operations and provided the board members with a comprehensive understanding of all business sectors. Subsequently, SSQauto’s board members formed their own committees using the same members already serving on SSQ Life’s and SSQ Insurance’s committees. Lastly, two SSQ Life and SSQ Insurance board members left their positions on September 8, 2016. Since then, the boards and committees of the three insurance companies have had the same composition. In addition to standardizing the governance of proceedings, this reorganization facilitates the management of meetings, ensures more consistent accountability and ensures the balanced presence of internal resources on the various boards and committees. Corporate restructuring Acting and thinking like a single entity and an integrated group also meant making changes to the existing corporate structure. The board thus approved the merger of the two insurance subsidiaries, SSQ Insurance and SSQauto. On December 12, 2016, Quebec’s Finance Minister approved the proposed transaction. As a result, since January 1, 2017, SSQ Insurance and SSQauto pursue their general and life and health insurance business under the auspices of the new entity, SSQ Insurance Company Inc. In addition, the streamlining of SSQ’s corporate structure led to the merger of the five distribution companies, which was also completed in late 2016. Since January 1, 2017, SSQ Distribution Inc. has comprised SSQ Financial Services Firm Inc., assurancevoyages.ca/Travel Insurance Compare, 6801188 Canada Inc., SSQ Evolution and Garantie supplémentaire 100 Limite Inc. 6 Ω SSQ Ω 2016 ANNUAL REPORT Simplified and effective organizational model As part of efforts to encourage all SSQ entities and business sectors to think and act as a single group and to develop and share a common vision, the board approved a new organizational model put forward by Jean-François in early 2016. All operations associated with product and service development were brought together under the new Strategy and Product Management corporate division, headed by Éric Trudel. In addition, Carl Laflamme now serves as Senior Vice- President―Distribution and is responsible for the distribution of all insurance and savings products (individual as well as group). In order to develop a consistent and integrated approach to our customers and partners, operational management was entrusted to Gilles Mourette, now Senior Vice-President―Customer Experience and Operational Management. These three new corporate divisions are supported by three existing corporate divisions that retain the same leaders despite changes to their responsibilities. Patrick Cyr, Denis Légaré and Michel Loranger thus continue to serve as Senior Vice-President―Finance, Senior Vice-President―Human Resources and Corpo- rate Affairs and Senior Vice-President―Information Technology, respectively. The Corporate Management Committee also comprises Geneviève Hamel― Transformation Bureau Lead, Marie Lamontagne―Strategic Advisor, and France LeBlanc―Risk Management Lead. Executive and Human Resources Committee Throughout 2016, the committee closely monitored progress in negotiations with the office employees union (SEB) and work on the organizational transformation program. SSQ Ω 2016 ANNUAL REPORT Ω 7 Audit and Risk Management Committee In November 2016, the first internal assessment report on risks and solvency was produced. Over and above the regulatory requirements set out in the AMF’s Capital Management Guideline, best practices in a number of countries include the filing of an annual Own Risk Solvency Assessment (ORSA), which gives management and board members an appreciation of a company’s results based on its risk profile, including factors that could jeopardize its capital and solvency. The new annual process marks a major step forward in the area of risk governance. The committee also approved management’s recommendations to appoint Thierry Brochu as the designated actuary of SSQ Life and Josée Grondines as internal auditor. Investment Committee The highlights of the Investment Committee’s efforts over the past year included working on asset allocation, reviewing the common share investment strategy, introducing new investment strategies and educating committee members on the impacts of new regulatory and accounting standards, in particular IFRS 9 and IFRS 17. Ethics Committee In addition to its statutory meeting, the committee convened to examine a proposed transaction between SSQ Life and its real estate subsidiary regarding the property at 3000 Laurier Blvd in Quebec City. Important work in addition to statutory meetings In addition to its regular statutory meetings, the board took part in two training sessions run by qualified experts. One of these sessions focused on the prescrip- tion drug market and cost control mechanisms, while the other presented the outlook for Canada’s property and casualty insurance industry. The board was also very actively involved with the Corporate Management Committee’s preparatory work for the 2017-2019 strategic plan, which included two additional meetings. Meanwhile, the Executive and Human Resources Committee called a special meeting of its members for a work session with the Corporate Management Committee in connection with the 2017-2019 strategic plan.

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