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Policyholders People Pro t 2020 ANNUAL CONVENTION Web Meeting April 29 2020 OMIA s 138th Annual General Meeting and Convention did not happen at the expected place or time With the declaration of a global pandemic and a looming lockdown the OMIA Board made the decision to cancel the 2020 AGM in the interest of public safety Chair Bob Burley 2019 2020 Like several of OMIA s own member companies it was necessary to determine how best the business portion of the AGM could be conducted After studying our by laws our governing legislation and our calendars OMIA elected to move ahead with a virtual AGM on April 29th Chair Bob Burley convened the meeting from Cobourg while participants joined the meeting from across the province A number of out of province delegates were also able to participate Voting delegates registered ahead of the meeting and with the assistance of scrutineers and parliamentarians the virtual voting process was used and the Association completed its business for another year Bob Burley thanked everyone for their support during his year as Chair and reflected on the many positive aspects of meeting mutuals on their home turf and working with so many great individuals at the mutuals Bob also thanked HTM Insurance for their support in his year as Chair and during his time on the Board John Taylor provided a report on OMIA s activities and provided an update on the mutuals positive response in working through the COVID 19 pandemic He reflected on Bob Burley s theme of Policyholders People and Profit with particular emphasis on the mutuals strong support of policyholders and people in challenging times Treasurer Sharon Dittmer provided the financial report and the 2019 financial statements 6 The following motions were brought forward 1 APPROVAL OF THE MINUTES OF THE 2019 ANNUAL GENERAL MEETING THAT the Minutes of the Annual General Meeting of the Ontario Mutual Insurance Association as held March 21 2019 be approved Moved by Frank Rider Seconded by Scott Roung South Easthope Mutual Dumfries Mutual 2 APPROVAL OF THE 2019 FINANCIAL STATEMENT AUDITORS REPORT THAT the Financial Report and Auditors Report for the Ontario Mutual Insurance Association for the year ended December 31 2019 be adopted as presented Moved by Cameron Ross Algoma Mutual Seconded by Mike Salmon L A Mutual 3 APPOINTMENT OF AUDITORS THAT Clarke Starke and Diegel be appointed auditors for the Ontario Mutual Insurance Association for the year 2020 Moved by Jeff Whiting Seconded by John Scriver Ayr Farmers Mutual Dufferin Mutual 4 ELECTION OF DIRECTORS Chair Bob Burley reviewed the OMIA Bylaw provision on nomination and election of directors at large He reviewed the work of the nomination committee and confirmed the sole candidate meeting the qualification position was John Stirk of Dufferin Mutual THAT John Stirk be elected by acclamation Moved by Jacquie Bishop Seconded by Jodi Rich Howick Mutual Howard Mutual John Stirk thanked members for their support and looked forward to a further term on the OMIA Board 2020 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT

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POLICYHOLDERS PEOPLE PROFIT 5 BYLAW AMENDMENT Bob Burley provided a review of the reason for this membership category change with the primary focus on encouraging mutual enterprise by welcoming subsidiaries to the Association THAT an amendment to OMIA s General By laws deleting Article IV section 2 b and replaces it with the following be ratified Membership in the Association as a Subsidiary Associate Member may be granted by the board upon receipt of a written application to any company at least 50 of the voting shares of which are owned by i Voting or Associate Members ii a company at least 50 of the voting shares of which are owned by one or more or any combination of A Voting or Associate Members or B Companies that would otherwise be qualified for membership in the Association as a Subsidiary Associate Member Incoming Chair Terry Knight thanked Bob Burley for his tireless service to the OMIA Board and his resilience and positive outlook in dealing with the challenges arising from the pandemic The Incoming Chair then provided delegates with his background and his theme for the year 2020 Vision Setting Our Sights on Future Success Terry explained the choice of a compass as a symbol of his year acknowledging the north point of the compass aligning with North Blenheim Mutual the compass as a symbol of the COMPASS Strategic Planning to take place in 2020 and the compass as a guide on our journey With the completion of the Annual General Meeting delegates were reminded that awards presentations and other important convention activities would be rescheduled when there would be a better opportunity to get together At the direction of the board Subsidiary Associate Members may attend the meetings of the members and may participate in the discussion but shall not have any voting rights Moved by Jeff Howell Bay of Quinte Mutual Seconded by Ross Lincoln Grenville Mutual 2020 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT 7

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2020 PRESIDENTS MANAGERS Web Meeting October 27 2020 In a year of firsts the first ever virtual Presidents Managers meeting took place on the morning of Tuesday October 27th The meeting had been scheduled for the London Convention Centre however the pandemic events of 2020 moved the meeting into a virtual format Three hundred attendees signed on from office buildings home offices and in one instance the cab of a combine to receive updates from OMIA Farm Mutual Re the Fire Mutuals Guarantee Fund and the Farm Mutual Foundation In addition an insurance leaders panel took a deeper look at insurance in a most unusual year Chair Terry Knight 2020 2021 Chair Terry Knight led off with thoughts on his 2020 theme 2020 Vision Setting Our Sights on Future Success Terry noted that his theme focused on vision but could easily have been 2020 What a Blur Terry reflected on the mutuals response to the pandemic and the ongoing commitment to policyholders and communities through charitable support Terry also recognized Farm Mutual Re s generosity in providing additional funds for each mutual to support important local causes John Taylor provided an update from OMIA including detailing how OMIA and the mutuals dealt with the March lockdown The creation of a daily mutual issues call was an example of pulling together in uncertain times John provided an update on the important work done by each OMIA committee Despite the challenges posed by the 2020 pandemic many strategically important projects continued on schedule 8 Neil Petreny provided a report from the Fire Mutuals Guarantee Fund Neil officially reported to the membership that no mutual posed a solvency threat to the fund Catherine MacLellan provided an update on 2020 mutual results She also reported on ongoing solvency and governance projects and work with FSRA as the mutuals prudential regulator Farm Mutual Re Chair Ross Gowan and CEO JP Gagnon provided reports including important reflections on the path to profitability and provided an opportunity for the Innovation Lab Working Group to update the work that began with the COMPASS planning meetings in July 2020 Jill Taylor provided a report from the Farm Mutual Foundation announcing that 243 scholarships were granted The essay topic for 2020 was What has the emergence of fake news done to society How do we create a global culture that values and promotes truth Following the business meeting presentations a mutual leadership panel was convened including Chuck Chamness CEO of the National Association of Mutual Insurance Companies Don Forgeron the CEO of the Insurance Bureau of Canada and Colin Simpson CEO of the Insurance Brokers Association of Ontario Each panelist had an opportunity to provide their perspective on working through a pandemic lockdown including the insurance industry s key responses to issues arising around business interruption claims and the more rapid adaption of technology to do insurance business The panelists also had an opportunity to comment on long standing issues such as the provision of flood insurance and potential public private partnerships and the importance of responding to insurance availability and affordability issues in the wake of the pandemic 2020 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT

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Accounting Advisory Committee Report Mandate to assist member companies in meeting requirements for audit and financial reporting Chair Andrea Schaefer Hay Mutual 2020 Committee Members Christine Van Daele Westminster Dave Paterson Ayr Traci Radford West Wawanosh Kevin Konecny K E Catherine MacLellan FRC Bob Brown Farm Mutual Re Amy Butler Farm Mutual Re Sharon Dittmer OMIA Susan Baker OMIA Committee Focus The Accounting Advisory Committee monitors and contributes to dialogue on many issues including International Financial Reporting Standards IFRS changes to the statutory financial reporting forms required by the regulators requirements of the General Insurance Statistical Agency GISA tax both federal and provincial essentially any topic where the information required must be delivered to or extracted from the member company accounting and financial systems The committee forms a link between the Regulatory Review Committee where many of these requirements first come to light the Financial Review Committee and the Accountants Roundtable The Roundtable is composed of member company staff and management who are responsible for financial reporting and compliance The committee also works closely with the Financial Review Committee in reviewing changes to solvency rules such as revised MCT calculations This collaborative approach helps ensure that the implications of changes are understood and implemented consistently In 2020 much of the committee focus has been in developing an implementation process for IFRS 17 IFRS 17 Getting Ready In April 2018 the Accounting Advisory Committee launched a Gap Analysis Project with Ernst Young E Y The committee elected to undertake this gap analysis as a precursor to developing more detailed implementation plans Partnering with E Y on the gap analysis process also provided some insight into the mandatory actuarial work that will be required under IFRS 17 in addition to the changes in accounting policies processes and reporting IFRS 17 has introduced new terminology and definitions 10 around items such as level of policy aggregation onerous contracts liability for incurred claims and liability for remaining coverage Many of our old familiar ledger and balance sheet accounts such as unearned premium will disappear from our financial reports IFRS 17 will completely change financial reporting and the Accounting Advisory Committee have identified an opportunity to recommend standardization of accounting treatments and approaches to financial reporting among the mutuals In 2019 one key project was formalizing a model for accessing group actuarial services This was a priority project given the increased scrutiny and requirements under IFRS 17 for actuarial input and sign off for financial statements The Accounting Advisory Committee working with mutual auditors and other service providers such as E Y will continue to develop recommended wording and approaches such as Accounting treatments and policies Chart of accounts Accounting for reinsurance premium and proceeds Guideline on level of aggregation by a coverage line Guidelines on identifying onerous contracts pportunities for aggregated approaches to financial data O for actuarial discounting ecommendations on accounting for policy acquisition R costs hared resources for management and board training on S IFRS 17 Shared resources for actuarial services 2020 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT

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In 2020 it was announced that IFRS 17 would be delayed by one year and currently has a target effective date of January 1 2023 Implementation will be required earlier in order to create comparative statements for the 2023 fiscal year During 2020 the committee continued to work on IFRS 17 readiness by developing position papers to be shared with mutuals participating in the group actuarial services project In work to date the Accounting Advisory Committee has included representatives from policy management system programmers in order to provide some indication on what system changes may be required for financial reporting The committee will also be working closely with mutual auditors to ensure decisions are acceptable to our audit partners The committee is in the final stage of work with three mutuals as test companies to ensure that the actuary will be able to access the data they require to provide the required actuarial services under IFRS 17 Looking ahead into 2021 the committee will be finalizing position papers and working with mutuals to provide the data required to be submitted for IFRS 17 The Financial Review Committee also plays a critical role in IFRS 17 readiness and their contributions to the committee and the Accountants Roundtable provide valuable insight to the potential impact on regulatory reporting and solvency examination IFRS 17 will completely change financial reporting and the Accounting Advisory Committee have identified an opportunity to recommend standardization of accounting treatments and approaches to financial reporting among the mutuals Auto Rate Filing Committee Report Mandate To lead member companies in working together to create a sustainable and profitable auto product offered at competitive rates to meet the unique needs of mutual policyholders Chair Henry Miller North Kent Mutual 2020 Committee Members Warren Ting HTM Shelley Deyo North Blenheim Steve Quinn Cayuga Tracy MacDonald Trillium Jodi Meiering Ayr Sharon Turnbull Farm Mutual Re Jiayi Zheng Farm Mutual Re Jeff Ferguson OMIA Christine Senior OMIA Committee Focus 2 Product Offering The Auto Rate Filing Committee represents the group of OMIA companies that underwrite automobile insurance in Ontario and have elected to do a common filing with the Financial Services Regulatory Authority FSRA This approach is a successful example of mutuals working together to pool expertise and leadership create economies of scale and make decisions in the best interest of member companies and policyholders Differentiated product within the regulated environment The Committee identified six Critical Success Factors to achieve the mission 5 Claims Discipline 1 Underwriting Appetite and Marketing Responsive and flexible underwriting criteria and supporting marketing to attract quality customers 3 Agile Pricing Actuarially sound sophisticated pricing methodology 4 Portfolio Management Customer level underwriting practices combined with member company monitoring of performance Consistent claims reserving and settlement practices 6 Operational Efficiencies Forward thinking and efficient processes continued on next page 2020 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT 11

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Auto Rate Filing Committee Strategic Directions 1 Committee responsibility and awareness education and communication Enhance connection between committee members and stakeholders i e constituency model Skills and experience based matrix to balance committee Researching and recommending product enhancement and differentiation 2 Advanced targeted GLM create profitable and competitive auto pricing for our mutuals Re examine segmentation strategy the committee a number of rate filings have been completed and several others are planned Each filing is focused on the strategic priorities of Underwriting Appetite Marketing and Agile Pricing to implement required rate reductions while enhancing the product offered by member companies The automobile portfolio is diligently monitored Date Actions May 2021 Private Passenger 0 0 Underwriting Manual Refresh May 2021 Private Passenger 0 0 CLEAR Rate Group Upcoming Dates Actions Q3 2021 Private Passenger Manage dislocation Q4 2021 Commercial Orientation and training on GLM Q4 2021 Miscellaneous Communication strategy COVID 19 Response Data collection enhancement strategy 3 Grass Roots Inputs Increased two way communication Effectively capture member input Ensure committee s strategies are aligned with member mutual Use Manager s Conference Tell the membership the types of decisions the committee has to make 4 Customer centric Develop deeper understanding of policyholder needs E nsure that pricing rating data strategy does not preclude implementing self serve model for policyholders at a future point Projects and Rate Filings In the spring of 2020 we met several times to discuss the mutual response to the situation Ultimately we decided to follow IBC s proposed relief measures which involved Allowing flexibility in payment options for those experiencing hardships Waiving NSF or Administrative fees Updating driving characteristics for those working at home and or not driving as far and Not adjusting premiums for policyholders volunteering including deliveries The topic of premium relief was also seriously considered with strong and varying opinions among the mutuals The decision was made not to provide premium relief This has allowed companies to decide whether or not to provide auto refunds to policyholders based on 2020 year end results and several mutuals have opted for a policyholder return of premium We have been engaged in providing direction on projects in development at Farm Mutual Re and OMIA At the direction of 12 2020 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT

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Automobile Committee Report Mandate To develop OMIA s position on auto insurance issues and communicate with the industry regulators and legislative ministries Chair Terry Knight North Blenheim Mutual 2020 Committee Members Frank Montgomery North Kent Kelly Jackson Westminster Linda Pereira Lambton Lisa Fazzari Farm Mutual Re Jon Hodson Farm Mutual Re John Taylor OMIA Susan Baker OMIA Background The Automobile Insurance Committee provides formal input to government consultations on potential changes to Ontario s automobile insurance product In reforms dating back over 25 years virtually every part of the Ontario automobile insurance environment has been affected often radically by changes to either statute or regulation Each of these changes has required detailed study and comment from the insurance industry including OMIA Many of the initial reforms in the 1990s focused on enrichment of statutory accident schedule benefits and creating more stringent claims handling regulations The Ontario auto insurance system has often been described as evolving toward a social safety net Over time this has created a very generous insurance product with benefits that exceed those of any other jurisdiction in Canada In addition the complexity of the rules governing the product have created an extremely complex environment for both insurers and policyholders This in turn has led to more involvement of legal counsel on behalf of policyholders and an adversarial environment for auto claims While 2019 was a year focused on potential changes to the Statutory Accident Benefit schedule and benefits delivery consultations in 2020 have been focused on other issues typically pertaining to civil litigation processes and towing Consultations on the Civil Trial Process Following the onset of COVID 19 in March access to the courts was suspended while the court system determined how best to provide litigation services in a virtual environment As can be appreciated given that the court system touches almost every single facet of life in Ontario getting the system going again was of paramount importance The Attorney General s office brought forward three items for consultation in the first lockdown break These items had come forward previously but COVID 19 and the need to potentially streamline the litigation process brought them back to the forefront The Automobile Committee was canvassed to provide input on OMIA s response to the Attorney General and in doing so also accessed other partners with significant insight into litigation issues For several years the plaintiff bar has lobbied to eliminate access to juries for cases arising from automobile tort Some categories of litigation in Ontario don t allow access to juries but access to juries has always been a fundamental right for auto tort defendants Ostensibly the plaintiff case to eliminate juries is made on the basis that automobile accident claims and the damages arising from them are very complex and beyond a jury s ability to decide properly From a defense standpoint OMIA took the position that juries provide a leavening effect bringing common sense to bear We firmly believe that juries properly instructed are more than capable of dealing with all of the issues arising from automobile tort cases In fact our position was that the juries bring a superior ability to arrive at reasonable and balanced decisions In early summer the Attorney General s office introduced consultation on introducing mandatory mediation in all civil proceedings as well as implementing a single judge case management model These systems were in place on a trial basis in Toronto Ottawa and Essex Windsor for a number of years continued on next page 2020 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT 13

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The purpose of mandatory mediation was to bring plaintiff and defendants together in an environment for early resolution of claims The rationale for a single judge model was to eliminate the inefficiencies of various judges providing decisions throughout the management of a case before pretrial In early 2021 the Ministry reported some progress by launching a pilot program to restrict towing to single vendor pre approved models on parts of the 400 series highways to eliminate accident chasing and accident scene coercion of drivers OMIA recommended that mediation be highly recommended but not mandatory We also suggested ways to improve the mediation roster to ensure that skilled mediators with the required technical expertise were available at the appropriate stage of each case when the facts were known and where parties would be most likely to reach settlement A core theme for OMIA was the importance of the early disclosure of evidence and reports Delay in disclosure is considered the greatest barrier to early resolution of cases Another issue arising in 2020 is the Tomec versus Economical case which removed one of the limitations from the Statutory Accident Benefit Schedule There was a concern that this could have a retroactively adverse effect on claims reserves A joint working group of OMIA Farm Mutual Re and the Financial Review Committee created a simplified questionnaire for members so that we could track the potential impact over 2021 and if necessary make a report to FSRA We also wrote in support of a single judge model on the understanding that a single judge would take the case from the outset through the pretrial process but would not preside at trial There has been no further information from the Attorney General s office by year end and no mention in the fall economic update as related to these proposals and it would appear unlikely that any will take place OMIA has also been involved in two very early consultations with the Ministry of Transportation The first of these relates to the Ministry providing more direct access to motor vehicle records and other material that may be critical to underwriting and claims processes This discussion is in early stages The Ministry of Transportation is also looking at how towing should be regulated in Ontario The cost of towing has been problematic as has been the behaviour of certain towing companies creating the potential for inflated claims costs and inefficiencies in the automobile repair and salvage process 14 Another unique element in 2020 was the anticipation that some mutuals might provide refunds to automobile policyholders in recognition of better than expected results in 2020 due to decreased risk profiles Risk reduction was not uniform across the province however this unique development in providing auto refunds has required some research and work on providing undertakings and explanations to FSRA in the context of their safe harbour program for consumer relief for auto policyholders Looking Ahead There are multiple consultations underway with FSRA and the Ministry of Finance on relatively specific proposals including creating a regulatory sandbox on auto insurance to allow more leeway for innovation by auto insurers making direct compensation property damage an optional coverage and liberalizing policyholder notice requirements by allowing electronic notice OMIA will provide input on each of these areas We also anticipate that sometime in 2021 FSRA will provide some further guidance on what they ve seen in the marketplace as related to take all comers complaints from brokers arising from hard market conditions in auto 2020 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT

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Benefits Committee Report Mandate To provide guidance on issues related to employee benefit programs and company benefit programs that are available to the membership through OMIA Chair Steve Quinn Cayuga Mutual 2020 Committee Members Jeff Howell Bay of Quinte Teresa Martin North Blenheim Tracy Wintermute Westminster Terrye Calnan HTM Jennifer Allan Farm Mutual Re Sharon Dittmer OMIA John Taylor OMIA The following chart summarizes the participation level in OMIA programs as at January 1st 2021 Individuals Companies 1 156 42 Short Term Disability 111 4 Critical Illness 870 27 Directors Life 173 25 Dependant Life Employees 969 42 Dependant Life Directors 167 25 Directors AD D 268 36 Health Spending Account HSA 499 14 Plan A Basic 98 4 Plan B Basic Major 173 9 Plan C Basic Major and Child Ortho 968 28 TOTAL Health Dental 1 239 41 Defined Benefit 447 31 Defined Contribution 718 34 Directors Officers with ICPP 0 42 Directors Officers without ICPP 0 1 Bond 1 744 40 E O P C Agents 285 42 Cyber Liability 0 31 Employees Life package Life LTD AD D Health Dental Pension Pension Plan Asset Liability Modelling and Plan Design Changes The Plan has undergone an asset liability modeling ALM study to assess the sustainability and expected trends in Plan funding requirements over the longer term This study projects varied economic scenarios forward on a ten year basis The initial scope of this study was to determine how efficiently the assets in the Plan were matched against the anticipated liabilities of the Plan The second phase of the study looked at the design of the Plan from the standpoint of how pensions are earned by beneficiaries and funded A report on the work to date along with suggested changes to Plan design was provided to member companies in the fall of 2018 continued on next page 2020 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT 15

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Information sessions were held in December 2018 and OMIA requested input from members on the potential changes early in 2019 Overall the purpose of the study has been to investigate ways to reduce the volatility of the contribution requirement from employers and find ways to best manage or ideally reduce contribution risk in the future In 2019 the OMIA board elected to make the following changes to the OMIA Defined Benefit Pension Plan effective January 1st 2022 1 T he DB pension formula will change to 1 5 x credited service x final average earnings for future service only 2 T he monthly employee and employer contributions will increase to 9 of Directors elected to file an early valuation due to the significant improvement to the funded position of the Plan based on the guidance and interest rate environment the Plan membership information as of January 1 2020 and various other actuarial assumptions and rates in the Plan s position and legislative changes with respect to funding of pension plans Results of that valuation revealed a small surplus on a solvency basis therefore no special payments were required The next mandated valuation is required for the period ending January 1 2023 The January 1 2020 valuation also indicated a required decrease to the employer contribution rate effective January 1 2020 3 The indexing cap will decrease to 3 In June 2019 all companies participating in the Defined Benefit Pension Plan received a report on the OMIA Board s decision with respect to the changes listed above In September of 2019 an employee announcement detailing the plan changes was sent to all participating members of the Defined Benefit Pension Plan In November of 2019 a legal notice of upcoming pension plan changes was distributed to all participating active members of the Defined Benefit Pension Plan OMIA will return to the ALM early 2021 Pension Plan Text In 2020 one amendment was filed with FSRA concerning upcoming changes to the plan effective January 1st 2022 Annual Plan Review Defined Benefit Plan This review is completed by OMIA as Plan Administrator and Morneau Shepell as Plan Actuary The annual plan review ensures that the OMIA Plan is compliant with both statute and regulations relating to pension plans in Ontario It also provides a formal review of governance practices to measure the Plan s policies and processes against best practices in the pension field Member companies were provided with written confirmation of the OMIA Plan s compliance in September 2020 Stewardship Review Defined Contribution Plan OMIA as Plan Administrator and Canada Life as Plan Manager reviewed the Defined Contribution Plan for stewardship and compliance The OMIA Board approved the Stewardship Report late in 2020 This report provided feedback to OMIA on the design of the Plan and the services available to employees in the Defined Contribution Plan as compared to pension industry trends and best practices Pension Valuation January 1 2020 marked the end of the most recent annual valuation period for the OMIA Pension Plan The OMIA Board 16 Transfer Status of Defined Benefit Pension Plan At the onset of the COVID 19 pandemic financial markets reacted with a significant decline in equity markets Defined benefit pension plans have significant exposure to equity markets and the decrease in underlying asset values affects the funded status of pension plans In March and April the Financial Services Regulatory Authority of Ontario FSRA introduced regulations that restricted the ability of any plan to transfer lump sum pension entitlements to terminating members The purpose of the regulation is to ensure plans have sufficient capacity to protect all members following significant declines in funded status One of the regulations states that if the transfer ratio of a pension plan at the end of a quarter has deteriorated by more than 10 since the last valuation filed with the regulator the plan cannot process the payment of lump sum pension entitlements for terminating members without first obtaining an approval from FSRA 2020 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT

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Following the market volatility that started in March 2020 a majority of the Defined Benefit pension plans experienced significant deterioration in asset values and funded status at the end of Q1 2020 Our own plan s transfer ratio as at March 31st 2020 was 77 3 This represented a decrease of more than 10 from the last reported transfer ratio of the plan 92 3 as reported in the January 1 2018 funding valuation report This decrease triggered the new regulation and as a result OMIA as Plan Administrator was required to request FSRA s approval to allow lump sum commuted value transfer payments to continue from the plan for terminating members At that time FSRA only approved commuted value transfer payments capped at the most recent transfer ratio of 77 3 The remaining 22 7 of commuted value owing to terminating members can only be made subject to a sponsor top up payment or may also be paid within 5 years if the transfer ratio improves to the most recently filed transfer ratio of 92 3 For those terminating members who have elected a lumpsum payment we proceeded with transfers at 77 3 of the lump sum owing Each terminating member who is affected will receive notice of the regulatory change and future considerations on the remaining lump sum owing Late in 2020 the OMIA Board elected to make a funding call to allow for the release of funds being held back in 2020 This funding call will be applied against the overall funded position of the plan Defined Benefit Pension Plan Rate of Return The 2020 annual return on assets as at December 31 2020 was 6 32 Total Assets under management was 218 598 172 Employee Benefits Health and Dental Coverage The OMIA Health and Dental Plan operates under an ASO Administrative Services Only model In an ASO model participating companies essentially selfinsure and fund claims through direct premium assessment to member companies Services to administer claims under the plan are purchased from a life and health insurer This model provides the most cost effective basis for the benefit plan while also ensuring claims are adjudicated at arm s length on a confidential basis The Plan Actuary will continue to monitor the transfer value quarterly Should the transfer ratio increase above the 92 3 threshold from the January 1 2018 valuation OMIA will apply to FSRA to have any of the remaining 22 7 of the payment plus accumulated interest based on the prescribed interest rate set out by Canadian Institute of Actuaries paid and then future payments from that point forward would be paid at 100 As the transfer ratio did not increase above the 92 3 threshold OMIA investigated the option for top up payments late in 2020 to enable the remaining 22 7 to be paid out Note that this approval is only applicable to members who elect the lump sum transfer upon termination or retirement It has no impact on processing retirement calculations or terminating members who elect deferred annuity options it will also have no effect on any DC members Our plan is not alone in experiencing this new development on lump sum transfers and we understand that FSRA has applied the same methodology to other plans as well This is a new regulation and there was no previous guidance as to how FSRA would respond to the request to continue full lump sum transfers For OMIA as the Plan Administrator and for plan sponsors the security of pension benefits for plan members is a priority FSRA has also set security of benefits as a priority and we recognize that these regulatory actions are taken with that in mind The committee monitors the ASO claims experience history changes in participation levels and claims utilization data The committee also provides input on benefits issues that are brought forward by member companies and monitors the ASO target reserve The committee reviewed the target reserve set in 2019 and recommended increasing the current target level over the next five years Some of the items and trends of interest this year have been T he Employee Family Assistance Program EFAP continues to be well utilized by members The program provides employees and their families with support in times of need The program is completely confidential O verall Health and Dental claims costs continue to rise This is consistent with industry trends and the Benefits continued on next page 2020 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT 17

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Committee closely monitors this trend and potential methods to reduce claims costs while still providing a competitive benefits package OMIA continues to use the ASO reserve to offset increased claims costs H ealth and Wellness education continues to be a major focus through wellness newsletters and by providing information on lifestyle choices that promote long term health Increased Coverage for Mental Health Professionals Effective January 1 2021 the coverage for mental health professionals under the OMIA Health plan was increased to 1 200 per person per year was previously 500 per person per year This is an aggregate limit shared between five mental health professionals Psychologist Psychiatrist Psychotherapist Social Worker Clinical Counsellor The OMIA Benefits Committee and Board of Directors chose to increase this coverage to bolster support for employees agents directors and their family members The COVID 19 pandemic has caused increased levels of stress and anxiety for many and has highlighted the need for mental health support and resources The intent of increasing the coverage for mental health professionals is to help individuals and families cope during this time and forward into the future Company Benefits Agents Errors and Omissions The Agents Errors and Omissions program renewed with no increase in premium rates in 2020 In 2020 the insurer included Breach of Personal Data Third Party Coverage with limits of 1 million at no additional cost Please refer to the E O renewal mailout in July 2020 for complete details Directors and Officers Insurance The Directors and Officers Insurance continues to be well utilized with 42 companies participating in 2020 Cyber Liability Insurance Cyber Liability Insurance was introduced late in 2015 Currently 35 companies have added this coverage with 31 insuring under the Chubb Cyber Program and four members having coverage with other insurers In 2019 a new Cyber ERM policy was introduced The Cyber ERM policy is designed to address the evolving regulatory legal and cyber security standards In addition a new short form application was introduced for those companies renewing their coverage OMIA will continue to share policies and templates on cyber protection and security measures as they are developed Implementing and documenting these measures is a key factor in being eligible for the more comprehensive levels of coverage available through Chubb Compensation and Benefits Survey Effective January 1 2021 companies were given the option to enroll in a Health Spending Account HSA through Sun Life and the OMIA Benefits Department Advantages of the HSA offered through the OMIA Benefits Plan include increased confidentiality ease of administration for the company ease of claims submissions for employees and coverage information being available on the Sun Life member s website and mobile app OMIA saw many companies enroll in this new offering effective January 1 2021 The rollout went very smoothly for employees and companies alike The bi annual Compensation and Benefits Survey will be run again in 2021 The survey will be sent to member companies in May or June and results will be shared only among participating companies prior to September 30 2021 In 2019 a total of 45 companies participated The survey asks for information on all aspects of compensation benefits and related employment terms for employees agents and directors It provides excellent benchmarking at minimal cost to those taking part For any company that participated in 2019 the survey will be pre filled with the answers you provided in the 2019 survey This will make the 2021 survey easier for companies to complete OMIA has been working with the survey programmers to correct bugs that came up during the 2019 survey Member Company Visits HR Roundtable OMIA is available to provide virtual presentations on employee benefit and or pension at no cost to your company Companies wishing to have a presentation should contact the Benefits Department at OMIA We will assess resuming in person presentations late in 2021 The Association provides members with the opportunity to participate in an HR Roundtable that is held twice a year in Cambridge The HR Roundtable provides education and discussions on HR trends and challenges Over the last couple of years topics covered at the HR Roundtable included mandatory health and safety training mental health in the workplace corporate wellness programs the Employee Family Assistance Program EFAP employment terminations Health Spending Account HSA 18 2020 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT

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employee orientation onboarding and completing pay equity assessments Given the COVID 19 pandemic the HR Roundtable scheduled for May 2021 will be held virtually using the WebEx platform The November 2021 roundtable has been tentatively scheduled for in person however it can be held virtually depending on the situation in the fall OMIA Website Some key features of the OMIA Member s website include the ability to send a secure message directly to the OMIA Benefits Department without going over the worldwide web a library of application forms HR document samples HR manual samples company administration manuals for benefits and pension HR Leadership Forum newsletters prior mailouts and links to various government and benefit carrier websites The Company Administration Manuals for Benefits and Pension are also available on the website Both manuals are updated annually and can be found on the OMIA Member s website under Member Resources Information for HR Administrators Pandemic Response Beginning in March 2020 daily WebEx meetings were held with members to discuss key issues impacting their business operations arising from the Covid 19 pandemic and restrictions Key topics included business continuity initiatives communication strategies legal and HR issues impacting employees Health and Safety and emergency measures regulatory announcements Various experts were featured to keep members abreast of new developments on these topics as the pandemic progressed The OMIA member website was updated to include resource links to Ontario Public Health the Federal Government and the World Health Organization A Self Assessment Covid 19 Questionnaire Tool was created by Farm Mutual Re and deployed to interested members for prescreening purposes Looking Ahead The benefits committee monitors and provides guidance on issues relating to programs that are currently offered In late 2014 the committee held a strategic planning session that established priorities to address member needs over the coming years Three primary strategies were identified Evaluating and enhancing plan user knowledge of the benefits program Providing cost effective labour market competitive benefit plans for member mutuals Upgrading OMIA s current benefit software to improve efficiency adopt best practices and meet data reporting requirements These strategies have been incorporated into the OMIA Strategic plan 2020 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT 19

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Data Strategy Committee Report Vision Better Data Better Decisions Knowledge Beyond Intuition Mission To facilitate data driven decision making Chair Neil Shay CTM Insurance 2020 Committee Members Christine Van Daele Westminster Shelagh Cleary Usborne Hibbert Tracy Campbell Germania Garth Driedger My Mutual Jeff Ferguson OMIA Shawn Zhang OMIA Sharon Turnbull Farm Mutual Re The Data Strategy Committee is comprised of representatives from member companies using each of the different computer systems in place in the mutual system This ensures the committee is aware of the potential scope and effect of its decisions on statistical reporting requirements Strategic Priorities In 2021 and beyond Farm Mutual Re will continue to pursue The committee engages in strategic planning and oversight on data related issues Currently our strategic priorities are listed below and form part of OMIA s overall strategic plan 1 Determine feasibility of a Property Rate Working Group model Several companies have identified an interest in using our collective data to advance property rating 2 Increase maintain and govern the OMIA centralized database for the benefit of regulators and Farm Mutual Re Enhanced data collection Use of 3rd party data Working to provide predictive analytic capabilities across all lines of business 3 Improve data utilization and analysis for business intelligence needs Improvements to OMIA suite of statistical software and hardware Improvements to business intelligence solutions 4 Enable member company efficiencies on data collection and reporting Work to eliminate any manual reporting Look for alternate methods of capturing data to bring efficiencies to member company reporting 20 analytic capabilities Integrating Peril Scores The objective is to provide an integrated solution that works in conjunction with the members current rating philosophy to bring about more sophisticated rating methodologies This will evolve to include multi variate rating capability incorporating credit scoring Advancing Property Rating The objective is to provide a benchmark rating algorithm using the full breadth of data available in OMIA s centralized data warehouse This will also include reviewing the potential for the creation of a property rating sub committee to aid in moving member property rating forward Improving Rating for Agricultural Risks The objective is to gain an appreciation of the agriculture data that is available glean insights and improve rating methodology In future years this could evolve in other lines of business In 2021 and beyond OMIA will continue to pursue improvements to data quality and regulatory data requirements Additional Data Collection During 2021 more data will be collected through XML 4 5 in the area of commercial automobile Improving Data Quality Ongoing enhancements to OMIA s editcheck software Working closely with system vendors to identify front end data quality issues and improvements Regulatory Data Requirements Supporting FMGF group based approach to financial reporting under IFRS 17 2020 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT

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Legislative Affairs Committee Report Mandate To communicate the association s position on legislative issues to our elected representatives Chair Brad Vanstone West Wawanosh Mutual 2020 Committee Members Allan Hedley Cayuga Doug Crockett Westminster Ross Lamont Trillium Barbara Bethune Nova Ed Forbes Dufferin Farm Mutual Re John Taylor OMIA Legislative Affairs at OMIA Roundtable Summaries The Ontario Mutuals have a unique place in the insurance landscape in Ontario This is evidenced by our mutuals commitment to the economic health of rural Ontario local community causes and direct policyholder participation in their mutual The mutual commitment and value system are well recognized by the Ontario Legislature MPPs see mutuals as an important part of a healthy and sustainable insurance system Spring 2020 The Legislative Affairs delegate at your mutual plays an important role in maintaining our profile with MPPs and MPs These delegates act as ambassadors to the legislature and communicate effectively on the potential impact of proposed legislation In many cases our delegates provide an informal sounding board for MPPs and are able to provide feedback on how government policies relating to insurance will affect policyholders This is especially important during difficult markets or when the availability and affordability of insurance coverage becomes an issue Legislative Affairs delegates also provide information back to OMIA and fellow mutuals on important issues in their ridings that will have an impact either locally or provincially In many cases these early discussions on local issues result in broader discussions as issues migrate to other areas of the province Issues concerning trespass and activism on family farms were a good example of this type of scenario Delegates are asked to participate in two roundtables during the year The spring event takes place in early March with a visit to Queen s Park Roundtable topics focus on areas of developing interest In addition to roundtables individual delegates are also expected to be active in attending local political events within their communities An effective Legislative Affairs delegate has a keen interest in the democratic process a down to earth approach in communicating with MPPs and a sincere interest in promoting mutual insurance 22 On Tuesday March 3rd 2020 67 mutual delegates attended the 6th annual Queen s Park Day Our host sponsor for the day was the Hon Ernie Hardeman Minister of Agriculture Food and Rural Affairs and MPP for Oxford Brad Vanstone welcomed delegates and in reflecting on the continued growth of our event recognized Allan Hedley for his work as Chair of the committee when OMIA s Queens Park Day was introduced The day s first roundtable speaker was MPP Norm Miller Parry Sound Muskoka MPP Miller was first elected in 2011 and spoke to us in his role as Parliamentary Assistant to the Ministry of Intergovernmental Affairs In 2019 MPP Miller introduced Bill 118 an Act to amend the Occupiers Liability Act He did so after speaking to several business enterprises in his riding who were engaged as fulltime or part time snow removal contractors Increasingly they had seen the cost of their liability insurance escalating along with the cost of the administration and record keeping The upward pressure on insurance costs and administration was due to the propensity of individuals to slip or fall in parking lot and sidewalk areas and subsequently sue property owners This increasing trend particularly towards commercial property owners has resulted in onerous contracts and an attempt to transfer liability from landowners to contractors MPP Miller s Bill proposed a straightforward amendment to the Occupier s Liability Act that would require any individual wishing to make a claim against the occupier or an independent contractor to provide written notice of their intention to do so within 10 days after the occurrence of the incident This requirement would allow defendants to investigate circumstances of a loss in a timely fashion and ensure prompt evaluation and accurate inspection of loss exposures 2020 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT

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Our second speaker was MPP Stan Cho Willowdale MPP Cho is the Parliamentary Assistant to the Minister of Finance and sits on several important Queen s Park committees Over the months preceding our Queen s Park day he d had 102 face to face meetings on automobile insurance with various stakeholders MPP Cho shared his perspective on the complexity of automobile insurance and his particular concern over the cost of legal conflict within the current regime 2020 A New Reality The OMIA legislative affairs program traditionally incorporates a fall roundtable in Cambridge Little did we know at our Queens Park day in March that we were barely slipping under the wire in our ability to have in person events in 2020 The declaration of the pandemic and the ensuing lockdown in mid March put many of our normal legislative affairs activities on hold including MPP visits The legislature itself was in flux as the government battled heroically to provide pandemic management and economic support necessary to see the province through the COVID 19 crisis Corporations Act Many of the government s activities in the months following COVID 19 concerned revising statutes and regulations on an emergency basis to allow businesses to continue under altered pandemic emergency rules Several governance requirements for mutual insurers are set out in statute including the need for in person annual general meetings and the need to hold these meetings by March 31 each year The Ministry of Government and Consumer Services needed to amend legislation to provide extensions on this timeline and to allow mutuals to meet virtually OMIA working with legal counsel took preliminary steps to handle the transition with the Ministry and as a result all mutuals were able to comply with the annual general meeting requirements forward by the Attorney General s Office suggested access to jury trials be removed from certain types of civil actions including automobile accident litigation OMIA spoke strongly against this and to date access to jury trials remains in place OMIA also provided detailed comments to the Attorney General s Office relating to implementing mandatory mediation and single judge case management models Although these questions are not strictly pandemic focused the potential for reform occurred due to the need to rethink court proceedings and access to justice By the end of 2020 nothing further had been heard about these potential changes and it appears they are unlikely to proceed Ministry of Transportation OMIA was also asked to participate in a consultation with the Ministry of Transportation on effective regulation of towing services in Ontario Towing rates charges and practices has long been an escalating concern for automobile insurers and public safety as related to accidents in major urban areas OMIA provided preliminary input to the Ministry While former consultation results have not been released the Ministry has initiated a number of pilot projects to regulate towing and this includes restricted tow zones on sections of some 400 series highways to eliminate accident chasing and accident scene coercion by towing operators Ministry of Agriculture In June 2020 Bill 156 the Security from Trespass and Protecting Food Safety Act was proclaimed into law This much needed law stewarded by the Hon Ernie Hardeman was the result of a broad based initiative by farmers and food producers to protect farm families and others from trespass by animal activists OMIA was a very strong supporter of this Bill having been quoted as a supporter in Hansard three times during the Bill s debate cycle As the year progressed and a second lockdown was declared the Ministry launched a more formal proposal for amendments to the Corporations Act to allow for more flexible approaches to virtual meetings of the members and boards of directors OMIA provided input to this and included requested changes to the Corporations Act as to the number of directors required on mutual boards The OMIA request is to have the Act require a range of 6 15 directors but to eliminate the requirement that the board complement be divisible by 3 We await the Ministry s response Ministry of the Attorney General Civil Court Proceedings At mid year 2020 several ministries began consultations on civil court proceedings in Ontario courts These proceedings had been severely restricted due to COVID 19 A proposal put continued on next page 2020 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT 23

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Tort Reform MPP Norm Miller s Private Members Bill 118 an act to amend the Occupiers Liability Act moved rapidly forward in 2020 Some amendments were made at Committee to lengthen the allowable notice time but the Bill was enacted and is a good small step forward in terms of ensuring fairness to both plaintiffs and defendants and putting reasonable expectations around slip and fall litigation The government also enacted Bill 218 Supporting Ontario s Recovery Act to protect individuals corporations and public entities from litigation arising from an individual being infected or exposed to COVID 19 on a premises if the premises owner had acted reasonably to comply with public health guidance Fall 2020 Economic Statement There were two items of particular interest to mutual insurers in the government s fall economic statement The first of these was the indication from the government that they would be allowing Credit Unions to sell property casualty policies within their branches This was a very brief reference in the economic statement and OMIA will be following up with the Ministry of Finance to determine what rules will be put in place to ensure any branch sales will be on a level playing field and will not involve tied selling to credit based or investment products This has been controversial with many different groups and OMIA will be taking a position with the Ministry of Natural Resources asking that they move very carefully on this OMIA generally supports the excellent work of Conservation Authorities over many decades in reducing flood plain development and managing watersheds to the benefit of all residents Looking Ahead Although the Fall roundtable program was interrupted we were able to successfully hold our first virtual Queens Park Day on March 2nd 2021 Our featured speaker was Steven Del Duca Leader of the Ontario Liberal Party In the unique circumstances of 2020 when one might have expected many parts of the legislature to grind to a halt with a focus on the pandemic OMIA was involved as evidenced by this long report in consultations with a wide variety of ministries on the widest number of issues ever and we expect this to continue throughout 2021 OMIA also updated support material for Legislative Affairs delegates including a virtual brochure on the Ontario Mutuals Giving Back highlighting the work mutuals completed in supporting communities and charitable organizations during the 2020 pandemic The government also made changes to the Conservation Authorities Act reducing a Conservation Authorities ability to veto certain developments in the sensitive watershed areas and allowing a broader application of ministerial zoning orders ities g Commun Protectin tario Across On ONTARIO MUTUALS WE RE IN THIS TOGETHER AM UT We re 39 mutual insurers across Ontario and together we make a big impact COVID 19 challenged us all in new and unprecedented ways but the mutual spirit of neighbour helping neighbour held strong In 2020 heim Mutual North Blen Mutual Bright Germania t Mutual ual Ayton North Ken Algoma Mut Mutual Dresden Thessalon Grenville d ual ptville Islan Mut a Kem erst Nov Amh Jarvis rance Simcoe Mutual HTM Insu Stella Cobourg Peel Mutual Mutual ual Brampton Ayr Farmers Halwell Mut ual thope Mut lph Eas Ayr th Gue Sou te Mutual Tavistock Bay of Quin Hay Mutual Mutual Country Picton Zurich ual Town rance Farm Mut Strathroy BCM Insu Pelham Heartland ual o Mut erlo Welland ition Wat Trad ual Thamesford Sebringville Brant Mut ual ual Brantford Howard Mut Trillium Mut n nsend Ridgetow Listowel Caradoc Tow Hibbert Blenheim Mutual Usborne Mount ick Mutual Waterford How Mutual Brydges ter Wingham ual Exe ual Mut Mut ex Mutual Cayuga Kent Ess Westminster ont Cayuga Chatham Belm well n Mutual The Common L A Mutual West Elgi Perth Lindsay Napanee Dutton ria and ual Alex Mut anosh Lambton West Waw ual Dufferin Mut Watford Mutual ual Shelburne Goderich McKillop Mut Mutual Mutual Dumfries Seaforth Yarmouth d ual ffiel as Mut She St Thom Middlesex ual Edge Mut Ilderton Drayton Erie Mutual le Dunnvil UAL Our FRIE re ND Supp insurer F o more rt fund arm Mu w in hich tual Re the s given cre allo u p exam 40 000 port of wed eac ated a g ou h e to ple o f mu donate r local co of us to nerous Ag Mutu partic tuality mmu rea al ip nit in ac ORGANIZATIONS tion t contrib ies We ate even ution w and ere each anoth er 500 WHY M U TUA received donations from Mutu LS M al ins our mutual ATT ls ca shacompanies uran riomutua re ER www onta who holders ce exists here form for th com pany our board just a vib e benefi ra to decis s ions of direc nt comm f all Th We v e tors e and unity of re are no for th been o p vote pera on im olicyhold at M ting integ ers utua porta fo ra ls r nt l p rt ove an was donated omore Flip afor 7 f the d the m r 160 ye P O Box 318 and counting u a With information fabri sh Road N3H 4S6 c of tual insu rs and th 350 Pinebu Ontario our p ranc com our polic e Cambridge e mo re s a re mun yhold rovin 2 9220 62 519 ities del a ce Phone FOOD BANKS we ers wit com are a son www omia re tr h HOSPITALS n uly in our fell HOSPICE CARE ow this SHELTERS toge mutuals th and er CHILDREN S PROGRAMS with FIRE HALLS our CANCER CENTRES OVER 2M Rooted in Co mmun Ontario ity M indepen utuals is the overar dent 10 ching insuran 0 Ca brand ce com nadian for 39 A Stro pa proper nie ng So s acro Comm ty an ss the unity ba phistic Ontario provinc d casualty sed m operat s ated Fi e utual co ed for particip purely mutua nancia the be mpanie no shar ate in l insur l Model nefit of s eholder what ance co ar Fu e policyh owned nd Fo s Each electe mpa olders rmed in is called the and d from m m ut Fire Mu nies Th ember 1976 ual s bo among ere are the Fu tuals Gu compa ard of Premium its polic nd nie directo arante places yholder s behin s toge In the rs is e surplus are us d s ve th an er ry y with inc one of ed of the mem unlikely ev om the mem all as well to pay losse ent of bers all s susta e from inves bers the ins as the 100 other m tments ine olvency expens excess of curre ember es of ru d by the po of one surplus nt insur would mutua licyhold nning of either ge an no ls ne ce t lose an would ers the co rated on remain mpa cover y unea claims and s in th a year The M the be policyh rned pr e com utuals to year ny Any nefit of pany s olders emium also ow the po basis Farm M time be surplus s paid licyh n their ut refund acco own re ed to po olders or m reinsur ual Re was insuran ay from unt for the first ance co licyhold ce com A Rich time to Ca m of er pa na s only tw Histor o Cana ny when form dian owned pany y The fa today dian ow ed in 19 rm ned re remain mutuals sta insurer 59 and is on rted ed stron e s in ex istence g stable in the midyears Quick 1800s Althou and re an gh their Fa offer a d lia ct have ble th s roots ar full rang Numbe e agric roughout the e of ho insuran r of Farm ult me au ce Formed M ut to busin ural today th ua 1856 ls 39 They ar ey ess an to 1910 Ontario e d farm Owners provinc part of the fa Emplo hip 10 br e and yees 0 have be ic of commun over Policyh en for ities ac older Di 1 100 Worki genera ross th rectors Policyh ng Toge tions e over olders ther Fo The On 300 more th ta r the G an 450 Financ trade as rio Mutuals ood of 000 ial Stab brand so All is m ility Associa ciation OM 1 IA Ont anaged thro 2 Billio tion wh ugh its ario M and co o deve among n policyhold utual In nsumer lops m ers su highest suranc arketin so The As rplus Fo e in g com sociatio lutions for its Ca rmed nada munica n was by the tion two 10 in 1959 Farm formed member com na 0 Ca panies in and lat me Purely M Th nadian Mutual Re er utual Un 1882 and or e Fire is one reinsur iginally Canadia Mutual Fire derwrit Mutua of only er 19 s we 76 pr ls Gu Underw er n nt riters As s Associatio or CAM Association all farm otecting po arantee Fu n of Mut sociatio nd IC ne lic mutua ual Insu tworks n The ls and yholders thro was formed mutua 2019 Pr Farm M in ug ls natio rance Compa emium utual Re h surplus of nally nies Total 9 s 37 Millio n 11th Proper largest ty in Ontar 497 M Auto io includ illion 6 ing th large 360 M st in On illion 1 tario 2th lar gest in Ontario 1920s Co Delegate nvention the Mu s of tua Underw l Fire riters Associa tion COMMUNITY CENTRES MEDICAL CLINICS were just some of the recipients Contact marketing omia com if you would like promotional materials to share with your MPPs www ontariomutuals ca 24 2020 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT

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Market Issues Committee Report Mandate To gather and analyze industry market information that affects Mutuals ability to sell their product and serve policyholders to disseminate this information to the mutuals and to connect with industry groups Chair Marg Torrance Halwell Mutual 2020 Committee Members Ed Forbes Dufferin Rob Moorehead McKillop Christine Owens HTM Chris Hibbs Nova Jeff Consitt Farm Mutual Re Sharon Turnbull Farm Mutual Re JP Gagnon Farm Mutual Re Susan Baker OMIA John Taylor OMIA The Market Issues Committee focuses on proactively identifying and researching issues that affect how where and when insurance products are sold to policyholders The committee s discussions and work are published to membership through the MarketWatch bulletin The committee also provides important input as OMIA plans subject matter and topics of interest for meetings roundtables and conferences Perhaps the most important part of the committee s process is to answer this question about any emerging issue What will this mean to my mutual In 2020 the year of COVID 19 answering that question has been easier said than done This year several strong themes have come to the forefront in the marketplace Profitability and Availability At this time last year a dominant theme was the hard market in property casualty insurance A traditional hard market exists when insurers become risk averse restrict risk selection and charge higher premiums for lines of business that show a loss or declining profitability In late 2019 and early 2020 this hard market was well underway with particular concerns around automobile results and certain types of commercial risk exposures With automobile rating in Ontario regulated and subject to rate approval any changes in automobile pricing take some time to work their way through the system In addition Ontario has a take all comers rule that prevents auto insurers from declining new business This creates a more regimented approach to pricing and access to auto markets and limits an insurer s ability to adapt to market conditions Conversely with commercial and residential rates being unregulated insurers have a greater opportunity to apply significant rate increases withdraw from some lines of business and decline or nonrenew risks at their discretion Today s hard market is the result of years of declining profitability volatile loss patterns and low investment returns In this perfect storm there was simply insufficient income from investments to support marginal underwriting These results were evident across the industry including mutuals In 2019 Farm Mutual Re introduced the Path to Profitability initiative as a step towards ensuring adequate pricing and sustainable profitability at the reinsurance level which in turn enables sustainability at the mutual primary level The onset of the pandemic in mid March exacerbated concerns over profitability and availability although the final outcome remains to be seen The equity market crash in March did much to heighten profitability challenges Surprisingly however the ensuing economic shutdown appears to have significantly reduced risk and loss exposures across almost all lines supporting improved underwriting results In addition the equity markets responded strongly to government stimulus and at the end of Q3 2020 were providing a tail wind in a reasonably profitable although volatile year By the fourth quarter of 2020 hard market conditions in commercial business persisted and were especially notable in the hospitality and restaurant sector Several insurers had significantly reduced their risk appetite for these exposures and this was exacerbated by the pandemic lockdown as restaurants hotels and other hospitality venues were exposed to increased liability and business risk Many of these risks reported premium increases many times greater than their previous year premium This caught the attention of the provincial government and there was significant speculation that the insurers were not fairly treating the hospitality industry continued on next page 2020 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT 25

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IBC were extremely proactive in launching a Business Insurance Action Team program The program had two important features the first of which was an agreement by participating insurers to renew as many of these types of risks as possible on reasonably favorable terms This was known as the non renewal embargo In addition IBC canvassed several leading insurers to provide a pool for risks that could no longer insure in the traditional market The mutual exposure to the hospitality sector was very small and there was no practical opportunity to participate in the insurance pool A number of mutuals did however sign on to the embargo in support of availability Mutuals that did not sign on to the embargo in many instances still did their utmost to ensure continuity with any of their hospitality risks at a reasonable price and terms By the end of the year it appeared that this approach by the overall industry had been successful in navigating the worst of this crisis High Value Homes This category of risk has its own unique profitability and availability story for the mutuals While not complete newcomers to this market the mutual footprint here has typically been small for several reasons A key reason was well established competitors with strong balance sheets technical expertise brand recognition and a hearty risk appetite Another reason was that our geographic market didn t align with a lot of these risks The past 20 years however has seen a flight to the country and a boom in high end large square footage homes At the same time the traditional market seems to have shrunk away from some of these risks leaving mutuals as a good option for brokers and policyholders Our current challenge is the growing pains associated with fully seasoning a category of business and getting pricing and risk selection in line with our capacity Farm Mutual Re has sponsored a member working group to tackle the unique challenges of this category of business as it s expected to be a significant long term opportunity if properly managed Consumer Expectations The consumer experience for purchasing goods and services changed radically as a result of COVID 19 Traditional retail in store shopping virtually disappeared for a while Online shopping boomed as did in store retailers who were able to accommodate social distancing As almost all consumers had to become adept with online transactions the expectations of consumers to be able to purchase insurance in a paperless virtual environment will also presumably increase Creating a seamless virtual experience for insurance policyholders is a complex process Insurance is a highly regulated product and is distributed by a unique network 26 of intermediaries This creates a barrier to direct digital transactions In 2020 the Insurance Brokers Association of Ontario having observed many insurers looking to increase their virtual direct contact to policyholders created a working group to determine how best to move to a paperless environment Key outcomes include ease of business but also ensuring access to appropriate expert advice from brokers This working group s final report remains to be produced but we believe consumers will increasingly expect to be able to purchase policies request changes on policies and pay for policies in a fully virtual environment Another significant consumer expectation arising following the onset of COVID 19 was for immediate rate relief on auto insurance With the economy locked down overnight the cost of automobile insurance went squarely into the spotlight as cars were parked and driven less frequently The insurance industry responded by looking at ways to allow re rating of policies temporary coverage suspensions and flexibility on payment terms and nonpayment penalties due to financial hardship One of the challenges for the entire industry in April and May was dealing with the government s musings on the need for insurers to provide immediate auto rebates without having thought through the actual impact on an often unprofitable line of business Automobile as a longtail product did not lend itself well to immediate consumer relief in the eyes of the mutuals from a rebate standpoint however as 2020 wound down some mutuals provided consumer relief measures on the traditional mutual year end refund model Regulatory Trends Ontario s automobile market is highly regulated including market conduct as to how and where auto policies may be sold Market conduct oversight and regulation is considerably less present in the residential and commercial property market As noted in the section above rising consumer expectations and a volatile economy have placed some pressure on the regulator to consider how market conduct should be judged in a crisis environment FSRA has been moving to the national guidelines for Fair 2020 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT

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Treatment of Consumers and we can probably expect more regulatory oversight on market conduct and insurance sales over the coming years From a practical standpoint this means more focus on promotional materials and content how advice is given and point of sale practices An example of the public impact of a proactive regulator could be seen this year as FSRA at their discretion conducted two surveys asking automobile insurers to specify how they were providing consumer relief on COVID 19 and the dollar value of those measures FSRA then published those benchmarks with the government industry and general public potentially re igniting a controversial issue Business Interruption The Great Unknown The ability of an insurance wording to respond to a business interruption claim arising following a pandemic has been a closely followed topic since the onset of COVID 19 Government mandated shutdowns created national and global pressures on the insurance community to provide business interruption for a peril which was never anticipated Some specific cancellation or business interruption indemnity wordings had been issued in some jurisdictions These wordings however were rare birds and the overwhelming majority of commercial policies do not underwrite nor collect premium for perils arising from a pandemic shutdown Nonetheless elements of the legal community and some interest groups immediately attempted to litigate the issue and force fit the coverage issue There is ongoing litigation around the world including the UK United States and Canada In the United States legislatures had been particularly proactive in entering into the coverage fray The potential indemnity impact of business interruption would create significant solvency issues and potential market chill associated with this litigation will hang over the commercial insurance marketplace for several years Looking Ahead These issues arising from COVID 19 will continue to be a focus of the committee Since the outset of the pandemic OMIA has convened daily and now twice a week issues calls for companies to call in and respond to questions including many of the market issues topics noted here Some of these challenges have created a once in a lifetime opportunity to reexamine and fortify the mutual way of serving policyholders More to come in 21 Marketing Committee Report Mandate To raise the profile of mutual insurance Chair Kevin Inglis Howick Mutual 2020 Committee Members Deb Van Eyk Lambton Morna Foan Grenville Jeff Holmes Ayr Farmers Tim Wade Westminster John Taylor OMIA Lisa Hunter OMIA This committee continues to pursue a variety of marketing projects that communicate the advantages of mutuality to internal and external audiences alike We remain guided by OMIA s Strategic Priorities and the needs of the membership Promotional Materials The OMIA Marketing department was pleased to collaborate with members on multiple individual product and advertisement projects this year and continues to be available for requests We encourage you to contact marketing omia com to support your promotional strategy This service is part of your membership fee and you only pay the cost of applicable printing and shipping continued on next page 2020 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT 27

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Priority Exhibitions OMIA Marketing facilitated the Ontario Mutuals presence at the London Farm Show in early March the last of our in person events in 2020 Unfortunately the circumstances around COVID 19 led to the cancellation of the Ottawa Valley Farm Show that same month We look forward to maintaining a strong brand presence in eastern Ontario when it s safe to do so As it stands the 2021 show has been cancelled but the date has been set for March 15 17 2022 The London Show pivoted to a virtual Speakers Series in 2021 and we re happy to report that Ontario Mutuals secured the Presenting Sponsorship No additional consumer research projects are on the horizon for 2021 but we remain open to follow up projects in the near future as the need arises Digital Marketing Campaign OMIA Marketing launched an online brand awareness campaign from August to November using Google Ads Facebook Youtube and partner sites The campaign featured shortened versions of The Mutual Difference video which was shared with the membership in summer 2020 Canada s Outdoor Farm Show which typically takes place in mid September in Woodstock was able to adapt their programming to a virtual platform from September 15 18 We promoted the Ontario Mutuals brand via the show s web platform We also provided a giveaway item to their swag boxes All proceeds from the sale of the boxes went to 4 H Ontario one of our primary sponsorship recipients The 2021 Outdoor Farm Show has yet to be scheduled and will likely be guided by the circumstances around the pandemic The International Plowing Match IPM of which we are Presenting Partner was postponed until 2021 and is set to take place in Lindsay from October 13 16 As with all in person events now we will watch and wait to see if this highly anticipated event will be made possible Broker Convention The IBAO ran a short virtual event on October 21 and 22 2020 We were a sponsor and promoted the Ontario Mutuals brand via a web platform similar to the Outdoor Farm Show The full 2021 schedule remains to be released but dates have been set for October 19 21 2021 Consumer Research The committee was presented with an opportunity to become involved in a consumer research project undertaken by PMG Intelligence a company dedicated to offering solutions to organizations in the financial sector The study delivered strategic insights that gave a deeper understanding of the consumer purchasing process how a household connects insurance to other facets of their budget the triggers to switching beyond price and value proposition markers that will inform product technology distribution and marketing strategies PMG also provided a detailed illustration of three P C insurance customer personas Rob Grein of PMG Intelligence presented the findings to the Managers Conference in early June and to an additional member company group during an online education session in late July The feedback from the sessions was positive and we arranged to have PMG back for another education session in January 2021 28 The key data point for an awareness campaign is the view rate which indicates how often the video is viewed and if you re familiar with Youtube it means the viewer did not click the skip ad button A typical view rate for this type of ad is 8 10 but the Ontario Mutuals videos had a view rate of over 34 The videos had over 300 000 views Across Google Video Ads and Youtube which is a promising result We re certainly encouraged by this and hope to continue down the digital marketing path to increase general awareness of the Ontario Mutuals brand and messaging A fresh campaign is scheduled to begin in early Q2 2021 featuring testimonial and educational style videos Key Sponsorships We continue to maintain relationships with key partners in the agricultural sector as part of our initiative to remain top of mind in this community The public facing brand Ontario Mutuals supports t he Ontario Plowmen s Association and the Ontario Queen of the Furrow Competition The IPM 4 H Ontario t he Rural Ontario Institute ROI and the Advanced Agricultural Leadership Program AALP Farm and Food Care Ontario the Ontario Soil and Crop Improvement Association the Advancing Women in Agriculture Conference the FarmSmart and Southwest Ag Conferences 2020 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT

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Composition of the Committee The composition of the product strategy committee is structured to provide an appreciation of member company perspectives from Eastern and Western Canada as well as Ontario from companies whose distribution system is broker driven and those that are agent driven and insurance professionals who look at insurance issues through a mix of underwriting sales and claims lenses We were pleased to welcome Jamie Ellis from PEI Mutual Insurance Company A Pivotal Piece of the Development and Updating Process guidelines or information pieces continue to be well attended by member company staff During the upcoming year we will be experimenting with recording short audio files that will contain an explanation of some new coverage documents Based on some member feedback that indicated a need for access to just in time reviews of new insurance wordings the plan is to post these sound files with the print version We will be interested to hear our members feedback on the initial clips Projects The committee is an important cog in the wheel of activity that surrounds the updating of existing coverage and supporting reference documents and the development of new coverage and supporting reference documents for member companies to use This committee has met monthly on the Zoom platform during the pandemic We look forward to returning to being able to include our twice yearly in person meetings Each meeting includes a discussion of market issues involving both current and future looking topics a review of the action items a review of projects that OMIA staff believe are ready to roll out and a discussion of requests and suggestions about coverage documents that have come from member companies Since our report to the 2020 Annual Convention the Product Strategy Committee has overseen a variety of projects to completion A few examples of the updates are R isk Selection Reference document for Water Coverage Endorsements t he Pollution Liability coverage for Land Exterminators Application and the accompanying Reference Document t he Certificates of Liability Insurance for both Farm Liability and Commercial Liability R ebuilding Cost Inflation Factors Personal Commercial Lines New forms and or coverage reference documents include Poultry Housing Reference Document C ommunicable Disease Exclusion Endorsements for both Commercial Property Liability Template for Notification of Policy Changes S tated Amount Waiver of Co insurance Endorsement Reference Document and Statement of Values Form P rimary Non Contributory Liability Endorsement supporting Reference Document Certificate of Personal Liability Insurance We continue to evolve our oversight function so that we are tracking progress on the projects that member companies have identified as having significant importance to their business We also work on updating existing coverage and reference documents all while providing a member company s eye view of insurance market issues around coverage forms and observation of the activities of policyholders which may require an insurance response Forms Releases The Forms Release webinars which follow the release of new and updated coverage documents underwriting risk selection 30 Support was provided for various Farm Mutual Re Product Services Reinsurance initiatives including Updated CGL Rate Pages 2021 U pdating of the Equipment Breakdown Resource Treaty Manual C hecklists and Underwriting Guides for underwriting Garage Fleet during the pandemic N ot For Profit Directors Officers Liability Claims Reporting Form The Committee continues to focus on improving the speedto market of products The challenge of course is to move quickly with development and at the same time get consensus 2020 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT

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on specific points from over 40 independent insurance companies We have had some challenges but remain committed to investing in the resources required to meet the demands As always in response to member company needs the Product Strategy Committee works with staff to respond to immediate market pressures as they arise What is underway now Our oversight role on a variety of on going projects includes Develop a Waiver of Subrogation Liability Endorsement and Reference Document Introduction of a partnership program for Personal Cyber Insurance Coverage Update to Commercial Cyber Insurance Coverage Options Releasing the ability to expand the scope of Farmers Accident Replacement Labour coverage Exploring the possibility of a partnership program for Legal Expense Coverage Develop a Non Stacking of Liability Limits endorsement Update Commercial Property and Liability Coverage Documents to clarify the exclusion of a silent cyber exposure Develop a Contingent Milk Pick up Endorsement Update Builders Risk Coverage Regulatory Review Committee Report Mandate To review regulatory issues that affect member companies Chair John Stirk Dufferin Mutual 2020 Committee Members Shawn Durnin Hay Jeff Whiting Ayr Bryan Hicks Trillium John Taylor OMIA Jackie Roy OMIA The Regulatory Review Committee is the key liaison with insurance regulators including the Financial Services Regulatory Authority of Ontario FSRA Regulatory oversight is an active area for insurers provincially nationally and globally In fact many insurers identify the threat of regulatory intervention as an enterprise risk The committee s areas of focus include regulatory requirements on solvency market conduct and governance These requirements continue to evolve in complexity and increasingly reflect international trends on financial regulation continued on next page 2020 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT 31

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FSRA continues to take steps to refine its regulatory structure and its relationship with stakeholders FSRA s organizational structure and mandate is considerably more complex than its predecessor the Financial Services Commission of Ontario that the Corporations Act be amended to allow any mutual s complement of directors to fall between 6 and 15 as set out in a bylaw without the necessity to have the number divisible by three In 2020 OMIA had several meetings with the prudential solvency branch of FSRA Much of the focus of this branch was on the credit union sector which had been brought within FSRA when the new regulator was created As related to market conduct FSRA has been actively engaged in market conduct review since the onset of COVID 19 In the second half of 2020 FSRA added additional managers with responsibility for P C solvency for provincially chartered companies such as the mutuals and we are working with them on orienting to the mutuals solvency examination regime As 2020 drew to a close OMIA and the Financial Review Committee worked closely with FSRA to clarify some of their reporting requirements and wherever possible streamline and add efficiencies to questions that were arising from FSRA s Solvency Group such as the impact of Tomec versus Economical The hard market in Ontario auto dating from 2019 had raised concerns about the application of the take all comers rule and FSRA announced a consultation on this in early 2020 This is related to distribution of auto insurance and we await the outcome of that ongoing review More recently FSRA created an auto data usage working group to look at the more sophisticated use of data and potentially liberalizing the data use in rating automobile insurance We anticipate that OMIA will be involved with that working group The Regulatory Review Committee has been closely watching developments with the Corporations Act particularly as it refers to some of the changes made on an emergency basis following the COVID 19 lockdown This Act falls under the auspices of the Ministry of Consumer and Government Services MCGS Much of the focus has been on market conduct in automobile insurers and the potential for automobile insurers to provide relief to consumers based on reduced risk profiles In March April and May FSRA held town halls to provide clarification on the interpretation of legislation including the Unfair or Deceptive Acts or Practices Regulation in the Insurance Act These clarifications were provided to expedite insurers in providing some temporary relief on a timely basis to consumers In early 2021 FSRA launched a consultation on the potential to make changes to the Unfair and Deceptive Acts and Practices Regulation to allow greater rule making ability and more will follow on this We believe that FSRA will continue to look at this in more detail as it has significant impact on how automobile insurance can be underwritten and sold in the province FSRA also announced an intention in the third quarter of 2020 to adopt the CCIR guideline on the Fair Treatment of Consumers FSRA s predecessor FSCO had opted to go with a similar guideline but included some different language to create a made in Ontario guideline Although the guidelines were very similar in many ways and came to the same conclusions we are reviewing this again for any potential problem areas Market conduct will continue to be a significant focus for FSRA in 2021 As property casualty insurers we must bear in mind that FSRA also has market conduct responsibilities for a wide range of financial services some of whom have unique consumer challenges The provincial government s announcement that Credit Unions will be allowed to sell property casualty insurance in their branches will also require the Ministry of Finance to develop some market conduct rules for that arrangement We will participate in providing input to ensure that a level playing field is created and that there will not be any opportunity for tied selling The primary practical concern was the requirement under the Corporations Act for mutuals to hold in person AGM s before March 31st each year The province wide lockdown banning these types of gatherings made it necessary for MCGS to create an emergency amendment extending both the date for AGMs and allowing them to take place virtually This was done just before the mutuals introduced a court motion to provide for relief Looking Ahead We anticipate that the Corporations Act will have some permanent amendments introduced in the first half of 2021 to allow more flexibility for virtual meetings of both members and directors OMIA has provided input specific to the mutual insurance environment OMIA has also requested FSRA will continue to have a significant impact on how property casualty insurers respond to COVID 19 in 2021 At the same time they are looking at longer term consultations and continuing to organize their efforts as an integrated regulator of a broad range of financial 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Group E Meeting Thursday November 19th 2020 Allan Sheppard Chair of HTM Insurance welcomed over 40 participants to Group E s annual meeting Group E persevered and held this meeting in a virtual format having postponed an earlier June meeting due to the pandemic lockdown There were participants from each of the Group E companies including Amherst Island Mutual Bay of Quinte Mutual The Commonwell Mutual Insurance Group Grenville Mutual HTM Insurance and L A Mutual The group appointed Dave Rutherford a long standing board member of HTM as the Group E representative to the OMIA Board Dave will begin a three year term starting in March 2021 Outgoing Group E Director and OMIA Past Chair Bob Burley was thanked for his years of service to the OMIA Board The group also confirmed the reappointment of Farm Mutual Re board member Gord Lodwick a Commonwell director for a second term to begin March 2021 and the focus on continuing to adapt to the realities of the pandemic The CEO of each member company provided a report on results to date in 2020 as well as commentary on three lessons they had learned during the pandemic This engaging discussion covered several common themes including the ability of mutuals to adapt quickly work remotely and innovate rapidly under pressure and the general durability of the business portfolio Companies also reflected on strategies to support employee resilience and considered how some of the operational changes compelled by necessity will be incorporated into longerterm operating policies Chair Allan Sheppard thanked everyone for participating and also wished Ross Lincoln well in his retirement from Grenville Mutual Allan noted Ross contribution over the years including his long service to the Farm Mutual Re Board Pam Marson the new CEO of Grenville Mutual was welcomed to her first group meeting Updates were provided by John Taylor from OMIA and from Ross Gowan and JP Gagnon of Farm Mutual Re Each organization spoke on the adjustments made in 2020 The Commonwell Mutual Insurance Group invited all Group E companies to attend the 2021 meeting to be hosted by The Commonwell at a date place time and method to be determined Group A Group B Group C Group D Howard Mutual Ayr Farmers Mutual Hay Mutual Algoma Mutual Kent Essex Mutual BCM Insurance McKillop Mutual Dufferin Mutual Lambton Mutual Brant Mutual Middlesex Mutual Edge Mutual North Kent Mutual CTM Insurance North Blenheim Mutual Germania Mutual Town Country Mutual Cayuga Mutual South Easthope Mutual Halwell Mutual West Elgin Mutual Dumfries Mutual Tradition Mutual Howick Mutual Westminster Mutual Erie Mutual Usborne Hibbert Mutual Heartland Farm Mutual Yarmouth Mutual Nova Mutual West Wawanosh Mutual Peel Mutual Trillium Mutual 2020 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT 35

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At this point Rob was already a seasoned leader in the insurance field however he continued to build his leadership skills as he guided Town Country and also became well known for his contributions to the larger mutual insurance community In addition to his chairmanship of OMIA Rob also played a key role in the formation of Collectivfide a consortium of mutual insurers investing in brokerages Rob was one of the inaugural directors of Collectivfide In 2016 Rob was also recognized nationally as an Established Leader by the Insurance Institute of Canada This prestigious award was an acknowledgment of the contributions Rob has made over the course of his career at many different levels In summing up and recognizing Rob s contribution to the mutuals we will use his own words from his Chair s address at the 2017 Annual Convention It s not just about insurance for us it s about a way of life that we ve grown up with believe in and strongly support Our communities depend on us and have every reason to do so you can t find more stable or secure insurance providers anywhere We are all in and proud of it We stand for something greater than insurance In 2009 Rob joined the board of the Ontario Mutual Insurance Association where he was elected as a Director at Large During his time on the board Rob provided unstinting service to his fellow mutuals and played a key role in a number of OMIA committees including the Market Issues Committee the Education Committee and the Auto Rate Filing Committee Rob truly thrived in his passion for insurance professionalism and education For the past 25 years Rob has been an instructor in Fanshawe College s insurance program In his role as teacher and mentor Rob has started many individuals off on the right foot from a technical knowledge standpoint but also in terms of understanding the importance of insurance as an industry and the importance of professionalism within that industry As we congratulate Rob Pearson on his long and enviable career and his many contributions we again refer to his Chair s theme together we are stronger Rob Pearson has been a big part of that strength New adventures lie ahead and we wish Rob Mary and the entire Pearson family all of our best wishes in those adventures and congratulations as we present you with the 2020 Presidential Merit Award on behalf of the Ontario Mutual Insurance Association and its member companies Many individuals who have become hard working productive employees of the mutuals found their way to the mutuals as a result Rob s example at Fanshawe As an aside Rob s passion for education may only be surpassed by his passion for golf and OMIA benefited from that passion with two visits to St Thomas Country Club at Union for our annual tournament In 2016 and 2017 Rob served as Chair of the OMIA Board Each year the OMIA Board Chair selects a theme Rob s theme for his term was together we are stronger In choosing a visual symbol for his chairmanship Rob chose three intertwined rings representing three core pillars of the Ontario Mutuals the Ontario Mutual Insurance Association Farm Mutual Re and the Fire Mutuals Guarantee Fund 2020 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT 37

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2020 OMIA OUTSTANDING CONTRIBUTOR AWARD Dumfries Mutual Insurance Company The Outstanding Contributor Award is presented each year to a member company that has demonstrated leadership in supporting the mutual system It is with great pleasure this year that we recognize Dumfries Mutual as our Outstanding Contributor Award recipient In recognizing Dumfries Mutual we are putting the spotlight on our earliest mutual On May 10th 1856 a group of community minded residents of North Dumfries and South Waterloo Townships formed their mutual in the village of Roseville Ontario Two well known Dumfries leaders served as Chair of the Ontario Mutual Insurance Association Gordon Welsh was OMIA Director and served as Chair in 1977 His theme was Enthusiasm which captured the possibility and promise of mutuals growing while working together Shelley Sutton was Chair of OMIA in 2009 Shelley s theme was Back to Basics a timely theme as the global financial crisis of 2008 2009 wiped out trillions of dollars in wealth and plunged the global banking and insurance markets into panic During her tenure she served on several important OMIA committees and the Farm Mutual Pooled Fund Investment Committee Following her OMIA Board tenure she became a NAMIC P C Conference Director and NAMIC s Canadian board member Currently Dumfries Director Neil Petreny serves as Chair of the Fire Mutuals Guarantee Fund Operations Manager Megan Rooney sits on OMIA s Product Strategy Committee Recently retired Director Gordon Taylor sat on the Farm Mutual Financial Services Board and was a dedicated member of the Legislative Affairs Roundtable and a strong local mutual voice with MPP s The 1800s was a prolific time for creation of farm mutuals and over the ensuing century it was not uncommon for smaller township mutuals to merge or be assumed into neighbouring mutuals Among the legacy mutuals that are part of Dumfries heritage include the Guelph Township Mutual and Hopewell Creek Mutual A consistent theme throughout the history of Dumfries Mutual has been its contribution to the mutual community 38 To fully understand the positive influence that Dumfries Mutual has had on the Ontario farm mutual system special mention should be made of Walter Cross For many decades Walter Cross was the SecretaryTreasurer known today as the CEO of the North Dumfries and South Waterloo Farmers Mutual Fire Insurance Company He also served 31 years from 1938 to 1969 as the Secretary Treasurer of the Mutual Fire Underwriters Association which became OMIA in the 1970s 2020 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT

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During his tenure with the Association Walter Cross helped establish the supplemental reinsurance pool the forerunner of the Farm Mutual Reinsurance Plan and was also part of the committee that successfully gained a federal tax exemption for farm mutuals in 1945 that existed up until two years ago Much like today among the duties Walter Cross assumed was the development of the OMIA Annual Convention to include educational sessions and important networking opportunities It was during this time that spouses and family members were also encouraged to attend convention Over the past decade Dumfries has put a focus on giving back to the community with fundraising and charitable donations taking place in both good times and bad Among the many good causes supported by Dumfries include agricultural societies and fair boards local farm associations 4 H Ontario and local 4 H clubs local youth programs the Ontario Holstein Dairy Youth Trust Fund community arenas and food banks Dumfries have also for many years had a high school scholarship program to assist applicants from both within and outside their own policyholder base Now located in Sheffield Ontario in a new state of the art employee friendly building Dumfries is a shining example of a mutual that combines a singular focus on policyholders with the commitment to mutual values and to neighbor helping neighbor It s our distinct pleasure to recognize Dumfries Mutual as the 2020 Outstanding Contributor Past Recipients of the Presidential Merit Award 2019 Catherine MacLellan 2009 Bill Jellous 1999 Dave Bailey 1989 Mel McIntyre 2018 Steve Smith 2008 Kathryn Adie 1998 John Harper 1988 Fred Legg 2017 Shelley Sutton 2007 Brian Fisher 1997 Carrol Lambert 1987 David Wilson 2016 Sue Baker 2006 Bob Brenner 1996 Stuart Howlett 1986 Ed Pellow 2015 Tim Shauf 2005 Rick Walters 1995 Ron Perry 1985 Bruce McBlain 2014 Neil Shay 2004 Rob Forsythe 1994 Bert Abbott 1984 Gerald Snyder 2013 Frank Rider 2003 Glen Johnson 1993 Lorne Wolgemuth 1983 Emory Knill 2012 Don Davidson 2002 Ernie Koehler 1992 Don Mylrea 1982 Bill Weir 2011 Alec Harmer 2001 Randy Hutchinson 1991 Vern Inglis 1981 Bruce Caughey Jr 2010 Joe Dietrich 2000 Aleck Stickle 1990 Dave MacKay 1980 Max Forsythe Past Recipients of the Outstanding Contributor Award 2019 Germania 2013 Westminster 2007 West Elgin 2001 Peel 2018 Amherst Island 2012 Lanark 2006 Glengarry 2000 Brant 2017 Hay 2011 Kent Essex 2005 Ayr Farmers 1999 Farmers Lindsay 2016 Bay of Quinte 2010 Cayuga 2004 Oxford 1998 Hamilton Township 2015 PEI 2009 Lambton 2003 Dufferin 2014 Grenville 2008 North Kent 2002 Formosa 2020 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT 39

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2020 APPOINTMENTS Transforming the Mutuals SASKATCHEWAN MUTUAL Senior Vice President Rob Jones was appointed as Senior Vice President effective February 26th to succeed Shelley Willick who was appointed as President CEO in July 2019 Prior to joining SMI Rob was the Chief Information Officer CIO at Prairie Centre Credit Union PCCU He had been with PCCU since 2016 previously holding the role of Chief Operating Officer Rob has a Bachelor of Arts in Psychology along with a Bachelor of Commerce with a major in Accounting He has also taken the leadership development program from the UofS and strategic planning and organizational effectiveness training through other educational institutions He also has his Professional Director designation Pro DirTM COGNITION President CEO Matthew Scott was appointed as President and Chief Executive Officer effective March 25th Matthew brings with him more than 20 years experience in senior roles in the software development and technology industries most recently serving as Vice President and General Manager with ZTR Control Systems Transportation Division Matthew led this organization to winning the 2005 Ontario Chamber of Commerce Business of the Year Award Additionally he helped ZTR become recipient of the 2016 2017 2018 Deloitte Canada s Best Managed Companies award He holds an Executive MBA from Queen s University and Software Engineering and Computer Science degrees from Western University Matthew is also a Professional Engineer P Eng in Ontario and a Chartered Professional Accountant CPA CMA He is a project advisor to Queen s University Smith School of Business on new ventures international business and management consulting projects for the Queens Executive MBA program and the Queens Cornell Executive MBA program Matthew is a past member of Tech Alliance s Experts team a technology incubator organization that represents and accelerates the growth of high tech companies in southwestern Ontario Matthew has supported Western University through previous training and co operative education programs 40 2020 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT

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2020 APPOINTMENTS Transforming the Mutuals BRANT MUTUAL President CEO Jeff Barnard was appointed as President CEO effective November 21st Jeff has over 29 years of experience in the insurance industry including one and a half years with Brant Mutual Jeff started his Insurance career with Farm Mutual Re as an Accountant and transitioned to the role of AVP Reinsurance He spent 25 years with Farm Mutual Re and has worked with many mutuals across Canada and the U S as well as Reinsurers around the world but he is happy to call Brant Mutual home Since taking the business program at Sheridan College Jeff has done the leadership training at Western University TransRe s Executive training program ICMIF Executive training CIAA advanced course and was working towards his CGA GRENVILLE MUTUAL President CEO Pam Marson was confirmed in the role of President and Chief Executive Officer on October 5th Pam succeeds Ross Lincoln who will retire in December 2020 Hired in June as President Pam now oversees all strategic and operational aspects of the company With more than 30 years experience in personal lines commercial property and casualty insurance and strategic planning and execution Pam s experience will prove central in her role In the time that Pam has been with us she has demonstrated tremendous value with her insights and her skills as a change leader With Pam s strong leadership combined with her knowledge and understanding of the emerging trends and pressures facing the insurance industry from the distribution and customer facing view she will be a strong asset to Grenville in the years to come 2020 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT 41

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Ontario Mutual Insurance Association Financial Statements Year ended December 31 2020 7 Union Street East Waterloo Ontario N2J 1B5 Telephone 519 579 5520 Fax 519 570 3611 www csdca com INDEPENDENT AUDITOR S REPORT To the Directors of Ontario Mutual Insurance Association Opinion We have audited the financial statements of Ontario Mutual Insurance Association the Association which comprise the statement of financial position as at December 31 2020 and the changes of members surplus operations and cash flows for the year then ended and notes to the financial statements including a summary of significant accounting policies In our opinion the accompanying financial statements present fairly in all material respects the financial position of the Association as at December 31 2020 and the results of its operations and its cash flows for the year then ended in accordance with Canadian accounting standards for not for profit organizations Basis for Opinion We conducted our audit in accordance with Canadian generally accepted auditing standards Our responsibilities under those standards are further described in the Auditor s Responsibilities for the Audit of the Financial Statements section of our report We are independent of the Association in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada and we have fulfilled our other ethical responsibilities in accordance with those requirements We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion Responsibilities of Management and Those Charged with Governance for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with Canadian accounting standards for not for profit organizations and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement whether due to fraud or error In preparing the financial statements management is responsible for assessing the Association s ability to continue as a going concern disclosing as applicable matters relating to going concern and using the going concern basis of accounting unless management either intends to liquidate the Association or to cease operations or has no realistic alternative but to do so Those charged with governance are responsible for overseeing the Association s financial reporting process Continues Proudly serving the business community since 1972 42 1 2020 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT

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Independent Auditor s Report to the Directors of Ontario Mutual Insurance Association Continued Auditor s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement whether due to fraud or error and to issue an auditor s report that includes our opinion Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists Misstatements can arise from fraud or error and are considered material if individually or in the aggregate they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements As part of an audit in accordance with Canadian generally accepted auditing standards we exercise professional judgment and maintain professional skepticism throughout the audit We also Identify and assess the risks of material misstatement of the financial statements whether due to fraud or error design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error as fraud may involve collusion forgery intentional omissions misrepresentations or the override of internal control Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the Association s internal control Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management Conclude on the appropriateness of management s use of the going concern basis of accounting and based on the audit evidence obtained whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Association s ability to continue as a going concern If we conclude that a material uncertainty exists we are required to draw attention in our auditor s report to the related disclosures in the financial statements or if such disclosures are inadequate to modify our opinion Our conclusions are based on the audit evidence obtained up to the date of our auditor s report However future events or conditions may cause the Association to cease to continue as a going concern Evaluate the overall presentation structure and content of the financial statements including the disclosures and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation We communicate with those charged with governance regarding among other matters the planned scope and timing of the audit and significant audit findings including any significant deficiencies in internal control that we identify during our audit Waterloo Ontario February 10 2021 CHARTERED PROFESSIONAL ACCOUNTANTS LICENSED PUBLIC ACCOUNTANTS 2020 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT 43

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OntarioMUTUAL MutualINSURANCE Insurance ASSOCIATION Association ONTARIO Statement Operations Statement of of Operations December 31 2020 2020 December 31 2020 2019 REVENUES Association Fees Interest Sundry Group Benefits Employee Benefit Receipts Employee Benefit Fees Direct Expenses Employee Benefit Premiums Company Benefit Receipts Company Benefit Premiums 2 012 955 26 104 2 102 7 535 544 5 566 6 922 717 607 261 1 953 572 39 939 1 700 7 055 970 18 265 6 483 370 554 335 2 001 979 1 928 713 73 266 1 864 288 1 793 826 70 462 14 531 527 14 531 527 680 527 13 451 527 13 451 527 624 797 Conventions Revenue Direct Expenses 13 350 5 493 7 857 522 007 417 861 104 146 Education Revenue Direct Expenses 343 115 96 909 246 206 520 917 165 331 355 586 154 253 135 082 19 171 217 602 188 432 29 170 Trusteed Pension Receipts Trusteed Pension Remittances Forms Marketing Sales Cost of Sales Statistics Revenue Direct Expenses 1 811 199 590 729 1 220 470 4 215 392 1 829 175 553 525 1 275 650 4 384 560 EXPENDITURES Salaries Benefits and Pension Costs Occupancy Costs Promotional Activities Industry Subscriber Fees Committees Programming Software Professional Fees Office Insurance Amortization General Office Non Recoverable G S T H S T Board Per Diems Communication Costs Workshops and Training Travel Mileage Board Travel Loss on Disposal of Capital Assets Conference Attendance Note 8 2 704 216 192 948 168 203 102 859 90 431 86 339 73 123 62 541 56 113 50 738 44 472 43 420 23 754 22 641 19 140 13 722 259 3 754 919 Note 7 EXCESS OF REVENUES OVER EXPENDITURES 460 473 2 601 169 190 515 426 350 86 695 122 021 95 869 21 907 55 941 85 698 80 469 62 262 48 955 26 287 50 347 53 601 53 988 169 35 698 4 097 941 The accompanying notes form an integral part of these financial statements 2020 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT 286 619 4 45

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Ontario InsuranceAssociation Association OntarioMutual Mutual Insurance Notes Statements Notesto toFinancial Financial Statements December 31 2020 2020 December 31 1 BASIS OF PRESENTATION The financial statements were prepared in accordance with Canadian accounting standards for not forprofit organizations ASNPO 2 DESCRIPTION OF OPERATIONS Ontario Mutual Insurance Association is a not for profit trade association that provides support services to its membership of farm mutual insurers across Canada The Association is incorporated without share capital under the laws of the Province of Ontario As a not for profit organization the Association is exempt from income taxes under Section 149 of the Income Tax Act The continued operation of the Association is dependent upon the continued support of its membership 3 SIGNIFICANT ACCOUNTING POLICIES Revenue recognition The Association follows the deferral method of accounting for its contributions Accordingly externally restricted contributions are recognized as revenue in the year in which the related expenses are incurred Unrestricted contributions are recognized as revenue when received or receivable if the amount to be received can be reasonably estimated and collection is reasonably assured Restricted funds are deferred and recognized as revenue in the year in which the related expenses are incurred Revenue is recognized on the accrual basis service is provided Membership revenue is recognized in the period the Inventory Inventory of forms and promotional material is valued at the lower of cost and net realizable value with the cost being determined on an average cost basis Employee future benefits The Association has a defined benefit plan for its employees which is accounted for using the immediate recognition approach Under this method the accrued benefit obligation is based on an actuarial valuation completed in accordance with paragraph 3463 07 at least every three years for purposes of funding the plan The accrued benefit obligation is reported net of fair value of plan assets Actuarial gains and losses and all costs of the plan are expensed in the year incurred 6 2020 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT 47

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Ontario Mutual Insurance Association Ontario Mutual Insurance Association Notes to Financial Statements Notes to Financial Statements December 31 2020 December 31 2020 3 SIGNIFICANT ACCOUNTING POLICIES Continued Capital assets Capital assets are stated at cost less accumulated amortization Capital assets are amortized over their estimated useful lives at the following rates and methods Furniture and equipment Computer equipment 20 declining balance method 33 straightline method Cash and cash equivalents The Association considers cash and cash equivalents to be cash deposited in financial institutions and guaranteed investment certificates which have a maturity date of less than 12 months Financial Instruments Financial instruments are recorded at fair value when acquired or issued In subsequent periods financial assets with actively traded markets are reported at fair value with any unrealized gains and losses reported in income All other financial instruments are reported at amortized cost and tested for impairment at each reporting date Transaction costs on the acquisition sale or issue of financial instruments are expensed when incurred Measurement uncertainty Certain amounts in the financial statements are subject to measurement uncertainty and are based on the Association s best information and judgment Actual results could differ from these estimates Examples of significant estimates include providing for amortization of capital assets the estimated useful lives of assets the allowance for doubtful accounts the allowance for inventory obsolescence certain actuarial and economic assumptions used in determining the defined benefit pension costs accrued pension obligations and pension plan assets 4 CAPITAL Cost Furniture and equipment Computer 440 427 809 166 1 249 593 Accumulated amortization 382 642 768 842 1 151 484 2020 Net book value 57 785 40 324 98 109 2019 Net book value 71 475 65 618 137 093 7 48 2020 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT

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Ontario Mutual Insurance Association Ontario Mutual Insurance Association Notes to Financial Statements Notes to Financial Statements December 31 2020 December 31 2020 8 PENSION PLAN COSTS The Association is a member of a multi employer defined benefit group pension plan which it sponsors on behalf of its members The plan covers a majority of Association employees and pension benefits are based on length of service and final average earnings As of January 1 2017 all new hires are enrolled in the defined contribution pension plan provision which the Association also sponsors on behalf of its members An Actuarial Valuation of the plan as of January 1 2020 revealed the plan was in a Going Concern surplus position The Solvency Position was above the required 85 at that time therefore no special payments were required as a result of the valuation During 2020 the OMIA transfer ratio fell more than 10 triggering the Financial Services Regulatory Authority FSRA to limit members lumpsum transfer value from the plan resulting in holdbacks Late in 2020 the OMIA Board of Directors elected to make a funding call on members of the plan to pay the amount held back from the 2020 lumpsum transfers That resulted in a funding call amount of 35 257 In addition the Association contributed an additional 233 329 to the Plan during 2020 for normal pension benefit contributions The next valuation is scheduled to take place January 1 2023 however the Association s Board of Directors will continue to monitor the position of the plan and may elect to call a valuation prior to that date 9 FINANCIAL INSTRUMENTS The Association s financial instruments consist of cash and cash equivalents accounts receivable from members and others accounts payable and accrued liabilities ASO claim reserve and pension contributions payable Unless otherwise noted it is management s opinion that the Association is not exposed to significant currency or credit risks arising from these financial instruments Interest rate risk is the risk that the value of a financial instrument might be adversely affected by a change in the interest rates The Association is not exposed to any significant interest rate risk from its financial instruments The extent of the Association s exposure to the above risks did not change significantly during the year 10 UNCERTAINTY REGARDING COVID 19 In March 2020 the World Health Organization declared a global pandemic due to the novel coronavirus COVID 19 The situation is constantly evolving and the measures put in place are having multiple impacts on local provincial national and global economies During the fiscal period the Organization has experienced the following financial implications Uncertainty regarding future revenues including conventions education and forms and marketing A decrease in committees general office board travel promotional activities and travel mileage related expenses due to decrease in use Management is uncertain of the effects of these changes on its financial statements and believes that any disturbance may be temporary however there is uncertainty about the length and potential impact of the disturbance 9 50 2020 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT

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