Mission StatementThe Co-operators: financial security for Canadians and their communities.

Our VisionWe will be…• the Canadian champion.• where Canadians are, with the financial security products and services they need, when they need them, however they wish to buy them.• a member of, and contributor to, a strong co-operative community.

Statement of ValuesThe Co-operators believes…• in holding the highest level of integrity as our standard of conduct.• that our success depends on meeting and anticipating our clients’ needs.• in enhancing the excellence of our products and services through innovation.• in fostering open communication, teamwork and team spirit throughout the organization.• good business depends on responsible corporate citizenship.• in the co-operative principles, which complement our values.

Seven Co-operative Principles

1. Voluntary and open membership

2. Democratic member control

3. Member economic participation

4. Autonomy and independence

5. Education, training, and information

6. Co-operation among co-operatives

7. Concern for community

Cover photo: Valerie Hall, age 4, daughter of staff member Alan Hall, Co-operators General.

REPORT PROFILE

In this, The Co-operators third corporate responsibility report, activities reflected

were undertaken during the fiscal year – January 1 to December 31, 2006.

This report discloses our activities in compliance with the Public Accountability

Statement (PAS) requirements under the Insurance Companies Act.

Every other year, we will publish a substantive report to detail our progress and

accomplishments during the two-year period. In alternate years, such as 2006,

we will carry through the two-year theme and publish a smaller report focusing on

our progress in each of the areas below, and our targets.

This report is produced for our major stakeholders – clients, staff,

member-owners, agents and broker partners, co-operative organizations,

government and non-government organizations, and community. It offers

information in the following eight areas: economic, governance, co-operative

relations, agent and broker relations, client relations, human resources,

community investment and environment.

The report includes information on our activities from the following companies

owned by The Co-operators Group Limited. There are instances in the report

when brand names for different subsidiaries of The Co-operators are used.

References to these companies include: Co-operators General Insurance Company

(Co-operators General); The Sovereign General Insurance Company

(The Sovereign General); L’UNION CANADIENNE, COMPAGNIE D’ASSURANCES

(L’UNION CANADIENNE); Co-operators Life Insurance Company

(Co-operators Life); HB Group Insurance Management Ltd. (HB Group);

Co-operators Investment Counselling Limited (CICL); Co-operators Development

Corporation Limited (CDCL); TIC Travel Insurance Coordinators Ltd. (TIC)

There are a number of subsidiaries not specifically mentioned in this report –

Harlock Murray Underwriting Ltd., The Equitable General Insurance Company,

Trent Health Insurance Company, UNIFED Insurance Brokers Limited,

Federated Agencies Limited (Federated); COSECO Insurance Company.

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contents

mission, vision, values and principles 1

report profile 2

message to stakeholders 3

our group of companies 5

organizational chart and business profile 6

economic 7

governance 9

co-operative relations 12

agent and broker relations 16

client relations 19

human resources 22

community investment 25

environment 29

2006 target report card 32

member-owner listing 33

information gathering process 34and verification

As an insurer, investor, employer, co-operative, and community partner, we believe sustainability is about thinking for tomorrow today – transforming our business decisions into actions; contributing to solutions rather than adding to the problems. Since 2005 we have taken additional steps in a long journey to become a sustainable organization. We know that along our journey we must positively influence the lives of Canadians, specifically our clients, staff and member-owners, as well as the social economy and the natural environment. Balancing these commitments requires us to see beyond the bottom line, incorporate innovation in our business activities, and provide solutions for a sustainable future.

Today, more than 61 years since our founding, we remain committed to our co-operative heritage. We value good corporate citizenship – it’s been a focus since the beginning. As the journey continues, our co-operative roots continue to be part of our decision-making and the reason we are so committed to embedding sustainability into the organization’s strategic goals.

In 2006, we carefully considered how best to integrate economic, social and environmental commitments into the day-to-day work lives of staff across the organization. We started with plans to engage stakeholders in the development of our sustainability vision and strategy – the biggest stride so far in our sustainability journey. A Sustainability Steering Committee was formed to develop and guide the delivery of this strategy and vision.

Also cemented into our four-year sustainability strategic plan is a corporate responsibility governance and policy framework that will become the foundation on which we manage the way we do business.

message to stakeholders

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Continuing Our Journey

We will create a sustainability vision and integrated strategy that incorporates a balanced approach to our economic, social and environmental commitments across all our companies.

In 2006, we promoted safer living by building a storm-resilient home and identified ways we can help the voluntary sector find adequate insurance coverage so they can continue to provide for the betterment of our communities. In addition, we will continue to measure the public’s level of trust related to our business and our reputation, and enhance how we measure the economic, social and environmental elements of our business. Educating all our stakeholders on the role of insurance, its issues and our approach to corporate responsibility will continue.

We are committed to leading a responsible, sustainable organization that invests in the social economy; and, we are well positioned to strengthen our commitment to a greener, healthier, natural environment.

The journey continues in the pages of our third corporate responsibility report. Your feedback is integral to our success. Please be in touch. Contact the Manager of Corporate Citizenship at cr_report@cooperators.ca.

Sincerely,

Peter Podovinikoff,Chairperson, Board of Directors

Kathy Bardswick, President and Chief Executive Officer

Co-operators Financial Services Limited is a Canadian insurance holding company with $7.0 billion in assets. The two principal subsidiaries of the company are Co-operators General and Co-operators Life.

Co-operators General Insurance Company provides home, auto, farm and commercial insurance through an exclusive agency network across Canada. This agency network also distributes life and travel insurance and wealth management products for Co-operators Life.

The Sovereign General Insurance Company writes commercial, marine and special risk insurance through independent brokers across Canada, and also offers personal insurance products in select geographic areas of the country.

L’UNION CANADIENNE, COMPAGNIE D’ASSURANCES writes personal and commercial insurance in Quebec through independent brokers, and provides auto and property insurance products through one broker in Newfoundland.

Co-operators Life Insurance Company provides life and travel insurance, as well as wealth management products to individuals, and group insurance and pensions to a wide variety of employee and association groups.

Federated Agencies Limited offers specialty personal, commercial and wealth management products that complement the offerings of our strategic business partners. Federated Agencies is also the vehicle for our insurance broker investments.

HB Group Insurance Management Ltd. offers automobile and property insurance products through three contact centres, under two brands, to employer groups, affinity groups, associations and credit union members. Business developed by HB Group is primarily insured by COSECO. HB Group also manages the Agency Contact Centre, which supports our agency distribution network, assisting home and auto clients through extended hours of operation.

Co-operators Investment Counselling Limited provides discretionary investment advisory services to pension plans, insurance companies, endowments, foundations, governments, corporations and mutual funds.

Co-operators Development Corporation Limited provides comprehensive real estate development, asset management and investment services to The Co-operators group of companies and to a broad spectrum of clients from the business and investment communities at large.

our group of companies

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• The Co-operators is the leading Canadian-owned, multi-product insurance company

• Assets of $7.0 billion

• 4,315 staff and 455 exclusive agents with 632 retail outlets, 1,077 independent broker offices, four contact centres and one call centre for our travel insurance business

• Protects 855,000 homes, 1.1 million vehicles and 590,000 lives

• Insures 292,000 employees through group benefit plans

• Provides coverage to 44,000 farms and 129,000 businesses

• Provides travel insurance to more than one million Canadians and visitors to Canada

• Offers a wide range of wealth management products including mutual funds

• Provides investment, real estate development and asset management services

The Co-operators Group Limited

Co-operators Financial Services Limited

• Co-operators General Insurance Company

- The Sovereign General Insurance Company - L’UNION CANADIENNE, COMPAGNIE D’ASSURANCES - COSECO Insurance Company

• Co-operators Life Insurance Company

• Federated Agencies Limited

- HB Group Insurance Management Ltd.

Co-operators Investment

Counselling Limited

Co-operators Development

Corporation Limited

organizational chart

business profile

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economicLong-term targets and strong returns are the foundation to sustainable thinking at The Co-operators. First and foremost, we must maintain solid financial strength and stability to deliver on our promise – to be there for our clients following a claim. And so, growth is essential to remaining strong and viable, enabling us to remain committed to our member-owners, support the social economy, the environment, and a growing co-operative movement.

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Co-operators General (47.1%) $3,408

Co-operators Life (34.0%) $2,462

The Sovereign General (7.2%) $519

L’UNION CANADIENNE (5.9%) $428

COSECO (5.8%) $420

(in millions)

Co-operators General (49.5%) $1,411

Co-operators Life (28.3%) $806

L’UNION CANADIENNE (8.7%) $249

The Sovereign General (7.2%) $205

COSECO (6.3%) $180

(in millions)

Assets of Insurance Companies Revenue by Company

BC (7.5%) $207

Alberta (20.0%) $556

Man/Sask (6.9%) $193

Ontario (44.6%) $1,241

Quebec (11.6%) $324

Atlantic (9.4%) $262

(in millions)

Bonds (61.5%) $3,418,974

Stocks (16.8%) $930,815

Mortgages (13.3%) $741,660

Other (4.2%) $232,555

Cash (4.2%) $233,098

(in thousands)

Premium Across Canada Invested Assets Mix

To view our six-year financial review, visit www.cooperators.ca, About Us, Corporate Responsibility; under Related Links go to 06 additional information.

For detailed 2006 financial results, visit our annual reports at www.cooperators.ca, About Us, Media Resource Centre, Annual Reports.

2007 Targets

• Return on Shareholders’ Equity

(ROE) of 11.2 per cent.

• Revenue of $3.0 billion.

The following represents the federal and provincial income, capital, premium and other taxes payable for 2006.Taxes in their various forms make up a significant portion of our operating expenses.

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2006 Highlights

• Return on Shareholders’ Equity

(ROE) of 12.9 per cent.

• Revenue of $2.9 billion.

2006 CONSOLIDATED TAX EXPENSES (in $000 dollars)1

Income Tax Capital Tax Premium Tax Other Taxes2

Federal $69,962 $0 $0 $34,210Provincial

British Columbia 2,595 10 6,701 412

Alberta 5,820 0 15,968 657

Saskatchewan 1,846 0 4,428 1,529

Manitoba 903 38 1,949 41

Ontario 18,320 195 32,981 20,282

Quebec 1,514 24 10,654 1,181

New Brunswick 1,547 70 2,438 0

Prince Edward Island 403 0 813 4

Nova Scotia 1,360 75 3,112 46

Newfoundland 1,070 0 2,806 6,897

Territories 265 0 481 11Total Provincial 35,643 412 82,331 31,060

Total $105,605 $412 $82,331 $65,270

TOTAL OF ALL TAXES PAID $253,618

1 Income tax amounts are estimates for 2006 as at February 28, 2007.

2 Other taxes include commodity (provincial sales and goods and services taxes), health levies, property and business, payroll and other miscellaneous taxes.

To view the 2005 consolidated tax expenses table, visit www.cooperators.ca, About Us, Corporate Responsibility; under Related Links go to 06 additional information.

governance

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Our commitment to integrity, high standards and balanced perspectives on governance start with the values rooted in our co-operative heritage and diverse Canadian membership.

Who Governs Our Path to Success?The Co-operators Group Limited is a 100 per cent democratically controlled co-operative owned by its 34 member-owners across seven regions of Canada. Our membership consists of co-operatives, credit unions and like-minded organizations in six sectors – agriculture, financial, service, retail/consumer, health and labour.

Our member-owner organizations appoint delegates from their region who, in turn, elect the Board of Directors. Each director serves a three-year term. In 2006 we increased the number of directors by 1 to 21, as a result of the new Quebec region established in 2005. This addition to our board enhances the diversity and representation of our governance structure. The board’s independent structure contributes directly to its effectiveness, as it oversees the strategic direction and significant operating decisions, but is independent from the day-to-day management of the business. We also benefit from gender diversity on our board with six female and 15 male directors.

Director DevelopmentIn 2006, we introduced an extra board education day where directors enhance their knowledge of our business, the insurance industry, our sector, and governance trends. Topics covered at these sessions are based on the board’s needs and interests. In addition to these education days, we offer individual director development opportunities. In addition to several industry and governance courses, two directors have graduated from formal director education accreditation

programs offered by McMaster University, Hamilton, ON, and McGill University, Montreal, QC.

Expanding Our Presence Across CanadaEfforts to increase our membership provided us with two new member-owners in 2006. They include:

Fédération des coopératives d’alimentation

du Québec (FCAQ) was formed in 1994 and is headquartered in Québec, QC. FCAQ offers management, marketing development, human resources, co-op education and commercial services to its 62 food co-op members.

Keystone Agricultural Producers is headquartered in Winnipeg, MB, and represents and promotes the interests of agricultural producers in Manitoba. Established in 1984, Keystone’s primary client base is farmers and its 5,000 memberships represent 7,000 farm families.

For a list of our member-owners and their website addresses, refer to page 33 of the report.

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Measuring Membership EngagementEvery two years we measure member-owner engagement. In 2007, external human resources firm Hewitt Associates will conduct a third formal member-owner engagement survey with each organization to help us better understand their needs. The results of previous surveys, and individual reviews with each member-owner, show that we are improving, but still need to focus on innovation and value-added insurance products and services for our membership.

Further to engaging our member-owners, delegates and directors from each region along with senior management meet face-to-face each spring and fall at region committee meetings. The purpose of the meetings is to facilitate two-way dialogue and maintain open lines of communication. Issues are discussed, applications for membership are reviewed, the director election process is initiated, and ideas for new products or services to enhance our co-op business are generated. It is also an opportunity to educate delegates on the insurance industry and our business initiatives in addition to reporting on our financial progress and strategic plans.

In 2006, The Co-operators held its first bilingual Annual General Meeting

in Montreal, QC.

Agriculture (38.2%)

Financial (29.4%)

Service (17.6%)

Retail/Consumer (8.8%)

Health (2.9%)

Labour (2.9%)

Our Membership

The Co-operators Group LimitedDemocratic Structure

34 member-ownersappoint

88 delegates to

7 region committeeswho elect

the 21-memberBoard of Directors of

The Co-operators Group Limited

Our member-owners represent various sectors in seven regions across Canada,

with more than 19,000 employees and total assets exceeding $22 billion.

Building a Culture of ComplianceOur company-wide compliance committee meets three times a year to share ideas, discuss common problems, solutions and practices, and give feedback to the Chief Compliance Officer, our Vice-President, General Counsel and Secretary.

An example of our dedication to transparency can be found in Alberta. Insurance rates in the province changed in 2005, but unfortunately computer system errors were found in 2006, and as a result, auto insurance premium reductions were not applied for the first six months of the year. We notified the Superintendent of Insurance in Alberta immediately and conducted a comprehensive internal audit. We provided a full assessment of the problem, notified policyholders, implemented new safeguards and reimbursed clients. Our openness, transparency and willingness to work proactively with the Superintendent demonstrated our corporately responsible way of doing business.

The Ontario Securities Commission (OSC) has established new regulations, for companies listed on the Toronto Stock Exchange, to encourageinvestor confidence. Our Chief Executive Officer and Chief Financial Officer are required to make certain certifications regarding Co-operators General’s controls over public disclosure and financial reporting. This certification process fits well with our corporate culture since it has roots in accountability and enhanced communication. Our disclosure and reporting controls are already strong, and in 2006 our internal audit services department led a cross-company initiative to create business processes

and key control documentation that will be used by management to assess compliance with the OSC rules on an ongoing basis.

2007 Targets

• Increase member-owners by three to 37.

• Develop and implement “green” meeting practices for the 2007 Annual General Meeting.

• Conduct third member-owner engagement survey.

• Launch an integrated Member/Board of Directors website to enhance communication.

2006 Highlights

• Increased our membership by two

to 34.

• Increased Board education from one

to two days annually.

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Insurer of Choice for Co-opsEach year, we take strides to be the preferred insurance provider for Canadian co-operatives. We develop and provide products and services to meet the unique insurance needs of co-operatives of all sizes.

• 32 of our 34 member-owners do business with us.

• 59 per cent of our member-owners are multi-product clients.

• We provide insurance to 46 of Canada’s 50 largest non-financial co-operatives.

Co-operators General continues to provide additional value for our member-owner co-operatives by creating programs that benefit their organizations. In 2006, it introduced an annual two-day travel policy within Canada and internationally for farmers. L’UNION CANADIENNE also launched a profit distribution program as a new advantage for its AssurToit housing co-op insurance program. Based on profitability of the program, yearly dividends are paid to the co-ops, their regional federations and to the Confédération québécoise des coopératives d’habitation (CQCH).

Value-Added PoliciesOur efforts go beyond selling the policy and paying the claims. Open lines of communication between The Co-operators and the Co-operative Housing Federation (CHF) of Canada have helped facilitate our emergence as the number one provider of insurance for co-op housing. At no additional cost to the co-op housing groups, Co-operators General provides a policy enhancement – $1 million personal liability coverage – to every person living in a participating co-op housing unit, in addition to assistance with risk management and onsite inspections every three years.

Member LoyaltyMember-owners share in our success through the Member Loyalty Program. It recognizes and rewards member-owners based on a formula that acknowledges the significance of each member-owner’s business relationship with us. In 2006, $10.3 million was returned to Canadian co-operatives and credit unions.

Member Loyalty Payments

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co-operative relationsThe co-operative movement provides an efficient and durable business model; as an insurer we support the sector as it plays a positive role in empowering communities to make decisions that will help to meet their present and future needs.

Premium and other revenue from the Canadian co-operative and credit union sector reached

$246 million, compared to $228 million in 2005.*

* In our 2005 report we reported $390 million of premium and other revenue. This amount was incorrect due to an error in calculation. The number should have been $228 million. In 2007, processes will be developed to verify the accuracy of the data collected.

2004 2005 2006

$10.5 $10.5 $10.3

In millions of dollars

Securing Our Co-operative FutureManagement, member-owners and co-operative partners worked collaboratively in 2005 to encourage the passage of Bill C-57, an Act to amend certain Acts in relation to financial institutions. It was proclaimed into law in April 2006, at which point we applied for, and received, an exemption to the public holding requirement in the Insurance Companies Act.All companies with more than $1 billion in equity are required to make a significant portion of this equity available for public trading. Because this requirement would have shifted a significant portion of The Co-operators ownership and control away from our member-owners in the co-operative community, the survival of our co-operative would have been threatened, leaving us less responsive to our member-owner organizations. Having received approval for an exemption, The Co-operators has recently passed the $1 billion equity threshold, assured of its future as a co-operative.

Making a Difference, the Co-operative Way• We continue to work closely with the Ontario

Co-operative Association to raise the profile of the co-op sector in Ontario. Starting in 2005, we assisted grassroots lobbying efforts to encourage the Ontario government to create a Co-operatives Secretariat that assists, promotes and works with the co-op sector to deliver important public policy goals.

• We worked in tandem with co-operative sector partners to raise issues of shared interest to the federal finance committee, having been invited to

address this body in pre-federal 2006 budget consultations. We discussed strengthening government partnerships with the co-operative sector, establishing a co-operative investment plan, and we addressed the role of the social economy. We encour-aged members of parliament to consider re-introducing the Social Economy Initiative, as we believe the social economy has an important role to play in the alleviation of poverty.

• In 2006, we brought together health-care co-ops from across the country to discuss challenges and opportunities for improving the health of Canadians in the future. Our Board of Directors approved a statement of direction on health care that emphasizes wellness, prevention and support for the growing co-operative, health-care sector. We believe this will serve as our guide to address evolving issues in health care as an organization, an employer, a health and multi-product insurer, and a co-operative. We looked for opportunities to support innovative health services through the Co-operative Development Program. For example, our grant of $15,000, towards The University of Sherbrooke Co-operative Institute’s Knowledge Base Project will help facilitate an international survey on the status of health and social care co-operatives around the world.

Co-operative Education PartnershipsWe believe in the viability and future of co-operatives and have taken action to institutionalize the study of co-operatives at the highest levels. We support different chairs in co-operative and related studies at leading Canadian universities, and sponsor several university and college scholarships designed to promote insurance-related study. This demonstrates our support

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for insurance and co-op education. For more information on co-op educational programs, visit the following websites:

• Saint Mary’s University - www.smu.ca/mmccu/(Master of Management –Co-operatives and Credit Unions)

• University of Victoria - http://web.uvic.ca/bcics/(BC Institute for Co-operative Studies)

• University of Saskatchewan - www.usaskstudies.coop/ (Centre for the Study of Co-operatives)

• Association of Co-operative Educators (ACE) - www.uwcc.wisc.edu/ace/ace.html

Dedicated to Developing Co-operativesWe continue our dedication to the emergence and expansion of co-operatives and like-minded organizations. The Co-operative Development Program (CDP) has provided more than $1 million in grants and investments. In 2006, $102,500 was granted to eight organizations. The following co-operative benefited from our support in 2006:

• Incorporated as a co-operative in February 2006, Tisdale Home Support Co-operative Ltd. provideshousekeeping and maintenance services to local seniors and those who experience difficulty with independent living in rural Saskatchewan. These services are intended to bridge the gap between public sector services and the full range of services required by our aging population. Our grant will enable Tisdale to reach out to even more seniors and mobility-impaired citizens.

For a complete profile of 2006 CDP recipients, guidelines, or an application form, visit www.cooperators.ca, About Us, Corporate Responsibility, In The Community, Co-op Dev Program.

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In 2006, we invested $105,000 in university-level programs.

Tisdale Home Support Co-operative provides staff with the resources to help seniors live independently.

Global RankingThe International Co-operative Alliance (ICA) published the Global 300 listing of major co-operatives and mutuals around the world. The Co-operators ranked 102nd in 2006. Full details are available at www.global300.coop.

Our Presence Around the GlobeWe continue to support the global co-operative community through our involvement in various international associations. Our President and CEO continues as chair of the International Co-operative and Mutual Insurance Federation (ICMIF) of which we are one of 300 worldwide members that share mutual concerns and present a common voice. In addition to senior management involvement in ICMIF’s networks and committees, we host study visits, participate in management seminars and other development opportunities.

Working Together to Make a DifferenceIn 2006, we played a key role in bringing leading members of the Canadian co-operative and credit union sectors together to address important issues related to the social economy and corporate responsibility. The Canadian Community Investment Network Co-op and members of the steering committee for the Corporate Social Responsibility Forum, developed and delivered its inaugural conference, “Working Together to Make a Difference.” More than 145 Canadian leaders in social development and CR were brought together for the event, which featured workshops on the conference’s main theme of social responsibility.

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2007 Targets

• Increase co-operative business premium by $10 million.

• Engage three member-owners with theInsurance 101 series.

• Participate in the second CSR Forum for Canadian co-operatives and credit unions.

2006 Highlights

• Increased co-operative business premium

by $9.6 million or 10 per cent.

• Provided insurance, loss prevention, and

safety education through member-owners

to their members.

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agent and broker relationsThe insurance industry continues to experience changes in the marketplace, at government levels, and the ever-changing needs of consumers. Our agents and broker partners are committed to our mission – to provide financial security for Canadians and their communities. At the same time, they go above and beyond the mission to actively make a difference in their communities.

Our multi-level distribution network allows us to be where Canadians are, with the financial security products and services they need, when they need them, however they wish to buy them. Clients can access our products and services by meeting face-to-face with agents, through contact centres, or in association with our broker partners. We have:

• 455 exclusive agents in communities across Canada; 79 are licensed to sell mutual fund products. This network is supported by 496 associate agents; 41 are licensed to sell mutual fund products. Agent locations can be found by visiting www.cooperators.ca, Client Services, Find an agent.

• L’UNION CANADIENNE’s brokerage network has 322 points of contact across Quebec that market personal and commercial insurance products, and provides auto and property insurance through one of these brokers in Newfoundland.

• The Sovereign General is one of the major commercial insurers in Canada, also selling personal lines products in selected regions. It distributes exclusively through its 755 independent brokers.

• HB Group’s four contact centres are staffed with licensed insurance representatives. Three Sales and Service Contact Centres assist clients with their individual and group insurance needs; one Agency Contact Centre supports the agency distribution network by assisting home and auto clients through extended hours of operation.

• Co-operators Life manages the TIC call centre located in Toronto, ON.

Clients have access to ourmulti-level distribution network

21

13 4

281 246 42 53 431495*

35

1050 61

4

* 159 brokers represent both The Sovereign General and L’UNION CANADIENNE

Co-operators agent retail outlets and broker partners of The Sovereign General and L’UNION CANADIENNE 1,711

Contact centres

TIC Travel Insurance Coordinators Ltd. Call Centre 1

1

It employs Licensed Insurance Advisors who service diverse clientsseeking travel insurance.

Making a Difference in Our Communities Our agents go beyond meeting the financial security needs of their clients; they also contribute in the communities in which they live and work.

Agent Philippe Ryan, Embrun, ON, purchased a generator that allowed the Russell Fire Department to run its fire prevention model home at fairs and schools. This initiative impacted 5,000 children and adults who experienced, first-hand, fire safety drills inside the model home.

Agent Tammy Truman, Calgary, AB, was the gold sponsor for the Crohn’s and Colitis Foundation of Alberta for the seventh year in a row. In addition to her $7,000 donation, Tammy has committed to a five-year sponsorship ($5,000 each year) of a University of Alberta student studying in the field of gastroenterology.

Agent Rex Hunter, Conception Bay South, NL, donated four automated external defibrillators to the Conception Bay South, Eastport Peninsula and St. Joseph’s fire departments. This donation makes it possible for emergency crew to respond quickly to a heart problem as hospitals in these areas are between 20 to 90 minutes away.

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Russell Fire Department unveiling ceremony of the Fire Safety Trailer.

Dr. Remo Panaccione, Clinical Professor, and World renowned researcher for Crohn’s and Colitis and the University of Calgary presents agent Tammy Truman with a recognition award.

Agent Rex Hunter and wife Dorothy of Conception Bay South present two Automated External Defibrillators to Fire Chief Richard Murphy of the Conception Bay South Fire Department.

As a Canadian-owned insurance company, Co-operators General has the third

largest share of the Canadian property and casualty insurance market.

2007 Targets

• Increase our Co-operators General agency

distribution network to 460 across Canada.

• Increase our broker distribution network

(The Sovereign General) from 392 to 422.

Our national sponsorship of the Block Parent Program continues to encourage our agents to open their doors and provide safe havens by becoming Business Block Parents. We currently have 201 agents – 44 per cent of our entire agency force – participating in the program.

Associate Agent Wendi Chase, Amherst, NS, and her staff teamed up with Constable Francis Smith and the local Canadian Tire to promote the Wiserider Bike Rodeo at local elementary schools. Wiserider is Canada’s largest bicycle safety program educating children and adults on the aspects of safe cycling.

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Launch of The Co-operators first Business Block Parent office in Brantford, ON.

Constable Smith, agent Wendi Chase, and a recipient of a new bike.

client relationsOur clients lead increasingly busy lives. Easy access to resources and information, and simple approaches to buying the necessary insurance products – from a company they can trust – is becoming more and more important to them. Balancing the conditions of the industry with the expectations of our clients is a challenge we’re in business to face.

Clients Helping ClientsUnique to the industry, The Co-operators four regional Service Review Panels, established in 1989, meet four to six times per year and consist of clients who volunteer their time to help resolve clients’ claims and service concerns. A company representative is always in attendance to act as an information resource and ensure that the terms of the policy in question are honoured, but it is up to the panellists to make a decision. Our clients always have the option to seek alternative recourse if the decision is not in their favour. In 2006, the option to appeal to the panel was made available to HB Group clients. Results of the panels’ work are listed above.

Client EngagementWe aim to effectively create and maintain mutually profitable and long-term relationships with our clients by gathering and assessing their needs, expectations and perceptions. In the past, we have conducted a number of separate client satisfaction surveys with differing methodologies, questionnaires and business requirements. In 2005, we agreed to use a common client engagement survey, across Co-operators General,

Co-operators Life and HB Group, which will measure client satisfaction based on various transactions, such as new business, amendment, renewals and claims of our home, auto and life clients. Over the next year, we will implement this common measurement tool for tracking client engagement.

Our Connection to ClientsUnderstanding our clients’ current needs and preferences, and identifying future ones, is the core of our client relationship management strategy. In 2006, we focused on communicating, training and rolling out new business practices and tools so our staff and agents will be better equipped to meet our clients’ needs.

We launched our pilot Agency Contact Centre in July 2006. Located in Mississauga and Brampton, ON, the contact centre is staffed with licensed insurance representatives. It was established to meet our clients’ desire for extended hours of operation and better access to telephone service. Using state of the art technology, the contact centre supports Co-operators agents and provides service to clients who have auto and home insurance if their agent is unable to answer

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Decisions by Service Review Panels 2004 2005 2006

Total appeals 53 54 50Agreed with client 13 cases 7 cases 8 casesAgreed with The Co-operators 35 cases 44 cases 38 casesReached a compromise 5 cases 3 cases 4 cases

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their call during regular business hours. Clients benefit from four extra hours of service during the week and eight hours on Saturdays.

In 2006, we developed and launched a new, fully bilingual website – www.cooperators.ca. Our goal was to deliver a more client friendly tool that provides helpful consumer information. Some of the benefits include: less insurance jargon, easy navigation, links to a wider range of resource sites, life-stage-specific information, and a tool to help make insurance and retirement decisions.

Preparing For a Crisis Our Business Continuity Planning program is a significant focus for us as it is necessary to ensuring our ability to carry on our business in the wake of difficult situations, such as natural disasters and pandemics. In the event of a pandemic, the business community will play a key role in protecting employees’ health and safety, as well as limiting the negative economic impact. In 2006, we started preparing for such a scenario by expanding our business continuity plans to ensure critical processes continue. We are also working towards implementing staff protection initiatives to safeguard them and help with prevention, as well as working with the community to ensure collaboration, share plans and provide leadership.

Protecting Our ClientsIn 2006, we received 10 privacy concerns from clients; all were addressed in a timely and discrete manner. Our privacy policy is posted on our website at www.cooperators.ca, Life Events, Privacy, Legal. A copy is also available from any of our agents.

Questions, comments, or requests can be directed to the Chief Privacy Officer at 1-888-887-7773, or e-mail privacy@cooperators.ca.

Measuring Our Trust and ReputationIn 2006, we developed and implemented clear measurement tools to track our Trust and Reputation scores. This tool enables us to identify areas of strength and adapt to changes that best serve our clients and the broader community.

Insurance 101Our Insurance 101 series is aimed at helping clients better understand the basics of insurance so they are better equipped to purchase the coverage they need. Topics communicated in 2006 included: Why do we need insurance? How are rates calculated? How are claims settled? Managing insurance costs. Visit our Insurance 101 series material at www.cooperators.ca, About Us, Media Resource Centre, Insurance 101.

More than 1,260 claims staff in 79 locations across our group of companies.

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Product Advantages for HB Group Clients• A revised home business endorsement provides

clients who run businesses from their homes with added protection that isn’t covered under their property insurance policy.

• “The Accident Protector” was introduced to our clients in Quebec to ensure that when licensed and accident-free for six years, and involved in their first at-fault collision, they are protected against rate increases.

Life Insurance in QuebecBased on an in-depth study conducted in Quebec in 2005, it was clear the marketplace was ready to receive a new life insurance company and new products. “Co-operators” was launched on May 1, 2006 signing on three managing general agencies and 54 contracted advisors who offer Co-operators Life products. We are also looking to incorporate wealth management products into our range during 2007. Our objective over the next five years is to capture three per cent of Quebec’s new life insurance premium.

Listening To Our CommunitiesOur Community Advisory Panel (CAP) program continued to generate positive results as we held productive meetings with 50 members in five groups across Canada – Halifax, Moncton, Ottawa, Guelph and Calgary. Panel members were instrumental in helping refine our Insurance 101 series and provided us with new topics for the 2007 series. All CAPs challenged us to think more creatively when responding to the youth and senior markets.

2007 Targets

• Introduce four new educational themes into the Insurance 101 series.

• Develop newsletter for L’UNION CANADIENNE policyholders.

• Capture $1.5 million (0.75%) of Quebec’s newlife insurance premium.

• Launch a new Community Advisory Panel in St. John’s, NL.

2006 Highlights

• Launched a newly designed,

bilingual website.

• Developed a measurement tool to

track our Trust and Reputation scores.

• Educated clients quarterly through

the Insurance 101 series.

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The Canadian Home Builders’ Association of Kelowna, BC awarded CDCL with the

2006 Silver Tommie Award in four categories for its Osoyoos, BC development,

Casa del Lago.

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human resourcesOur talented and dedicated staff members are the backbone of the organization, and their continued professional commitment to the company is our greatest assurance of a bright future. That’s why, every year, we make it a priority to engage staff by involving them in our strategic plans, investing in their professional development and providing health and wellness initiatives to help them achieve a realistic approach to work-life balance.

BC AB SK MB ON QC NB NS PEI NL TotalFull Time 62 534 625 14 2,016 426 231 55 15 59 4,137Part Time 1 20 29 1 95 30 1 0 0 1 178

Total Staff Count for All Companies

Engaged Staff Say, Stay and StriveOur focus is to recruit, develop, motivate and retain our staff. Their level of engagement and desire to speak positively about the organization, stay with the organization, and strive for the organization’s success is measured each year through the confidential staff engagement survey conducted externally by international human resources firm, Hewitt Associates.

Engagement Scores Across Our Companies 2004 2005 2006

Aggregate na* 75% 76%

The Co-operators Group na* 88% 94%

Co-operators General 79% 76% 79%

The Sovereign General 66% 69% 66%

L’UNION CANADIENNE 88% 77% 73%

Co-operators Life 80% 76% 69%

HB Group 67% 75% 79%

CICL 43% 61% 58%

CDCL 53% 47% 53%

The average engagement score for North American organizations is 55 per cent; the best companies are coming in at 77 per cent. * score was not gathered in 2004.

Four of eight companies showed an increase in engagement levels. Human resources departments at each company review the results and staff and management work together to create action plans to address areas of

concern. To maintain and improve engagement scores, various companies will be conducting focus groups, administering follow-up surveys, putting more emphasis on internal communication, and learning from feedback and discussion.

Among The Best Employers In CanadaWithin The Co-operators group of companies, Co-operators General, HB Group and CGL were grouped together as “The Co-operators” and ranked 20th among the “50 Best Employers In Canada” as published each year by the Globe and Mail’s “ Report On Business” magazine. In 2005, Co-operators General and CGL ranked 25th and HB Group ranked 41st.Rankings are determined by staff feedback given in the engagement surveys, human resources practices, policies and procedures, and alignment of responses between our senior executive.

In addition, L’UNION CANADIENNE ranked 16th

among the “20 Best Small and Medium Employers in Canada,” a study for 2007 published in the “Careers” section of the Globe and Mail.

For a detailed breakdown by company, province and full or part time staff, refer to the 2006 staff count chart at www.cooperators.ca, About Us, Corporate Responsibility; under Related Links go to 06 additional information.

Average Years of Service2004 2005 2006

The Co-operators Group 10.72 10.57 11.01 Co-operators General 12.45 12.98 12.18 The Sovereign General 5.84 6.37 8 L’UNION CANADIENNE 9.05 9.14 9.73 Co-operators Life 11.0 10.7 10.9 HB Group 6.6 6.22 6 CICL 10.63 10.76 11.6 CDCL 6.75 9.8 7.65

Women In Management for 2006 Executive Manager Supervisor

The Co-operators Group 17% 61% 100% Co-operators General 21% 54% 72% The Sovereign General 0% 40% 61% L’UNION CANADIENNE 11% 54% 56% Co-operators Life 30% 41% 92% HB Group 0% 62% 74% CICL 30% 67% 100% CDCL 0% 0% 0%

Women In Management for 2005 can be found at www.cooperators.ca, About Us, Corporate Responsibility; under Related Links go to 06 additional information.

Recruit, Retain and Motivate – Staff BenefitsThe success of our organization depends on its people. We provide benefits to help recruit, motivate and retain our staff members. Some of these include: helping them reach a realistic balance between personal and work life by offering options for working flexible hours; personal

days; competitive salaries and profit sharing or employee incentive programs.

For a detailed list of staff benefits (may vary between companies), visit www.cooperators.ca, About Us, Corporate Responsibility; under Related Links go to 06 additional information.

Staff RetentionOur rate of retention in 2006 was 91 per cent, across our group of companies, up from 88 per cent in 2005.

For a breakdown of our rate of retention by company over three years,visit www.cooperators.ca, About Us, Corporate Responsibility; under Related Links go to 06 additional information.

Health and WellnessWe make the health and wellness of our staff a high priority across our companies with a wellness co-ordinator on staff at Co-operators General and Co-operators Life. A variety of initiatives are also available.

For a detailed list of these initiatives, visit www.cooperators.ca, About Us, Corporate Responsibility; under Related Links go to 06 additional information.

Professional Development and TrainingOur companies offer and support a variety of education and career development programs and courses in every geographic region. We also have the benefit of internal Learning Departments with trained learning specialists. In addition, we reward staff for their achievement of professional designations.

For a detailed list of the programs and courses we offer to our staff, visit www.cooperators.ca, About Us, Corporate Responsibility; under Related Links go to 06 additional information.

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Across our group of companies, more than $3.5 million was invested in training and

professional development in 2006.

The number of Certified Insurance Professionals within our organization continues to grow. Staff members who received their Chartered Insurance Professional (CIP) and Fellowship, Chartered Insurance Professional (FCIP) designations include:

CIP FCIP CIP and FCIP designations 2005 2006 2005 2006

Co-operators General 675 698 107 99 The Sovereign General 50 49 15 12 L’UNION CANADIENNE 51 55 20 19HB Group 57 55 10 10

*a decline in numbers is attributed to staff retiring.

Encouraging Learning: Scholarship ProgramsThe Co-operators scholarship program, intended to promote continuous learning, is available to dependent children of full- and part-time staff members of Co-operators General, The Co-operators Group, Co-operators Life, CDCL, CICL, HB Group and agents and their staff who are pursuing a post-secondary education. The amount increased from $18,150 in 2005 to $24,400 in 2006 for 19 students.

Paid Day To VolunteerAs a socially responsible organization, we encourage volunteerism among our staff members. Six of our seven companies offer one paid day to volunteer annually. The Sovereign General offers two paid days to volunteer, specifically with the Children’s Wish Foundation.

2007 Targets

• Achieve an aggregate staff engagement score of 80 per cent. • Increase staff participation in the “Paid Day To Volunteer” program by 25 per cent.

2006 Highlights

• Achieved an aggregate staff

engagement score of 76 per cent.

• Involved 550 staff in the “Paid Day

To Volunteer” program.

community investmentWith a total corporate contribution of $3.5 million, we strive to make a real difference in the quality of life of Canadians and the sustainability of our communities. From volunteerism to community partnerships to philanthropy, our balanced approach to investing in communities helps Canadians of all ages enhance their well-being.

Corporate Giving ProgramIn 2006, our Corporate Giving Program donated $864,267 through the United Way, Directed Donations and Corporate Donations to national, charitable organizations in the areas of health, business, education, environment, safety and social well-being.

United Way

Annually, our group of companies supports United Way chapters across Canada. The 2006 campaign totalled a corporate and staff donation of $446,514.Corporately, we donated $44 per staff member, up from $37 in 2005.

Directed Donations

Developed in 1988, the Directed Donations Program allows each staff member to direct $50, and each director and delegate to direct $100, of corporate funds to a charity of their choice. In 2006, a total of $152,900 was directed to 184 charitable organizations across Canada.

Corporate Donations

We donated $564,011 to organizations that support Canadian communities. For example:

• Big Brothers, Big Sisters of Canada (BBBSC) expanded its volunteer base and risk management training. We provided training for senior staff and volunteers so they can identify, prevent and manage risks that impact their programs.

The development of a bilingual risk management workshop and handbook will help prevent risks and protect children.

• In support of building the social economy in our communities, we provided a contribution to the Community Foundation of Canada, a national membership organization for over 150 community foundations across Canada.

• We believe in investing in research to make our communities safer. In 2006, we supported research into injury prevention and innovation. For example, we supported the Water Incident Research Alliance, which provides timely, accurate water-related injury, fatality and rescue information to support research, advocacy and prevention.

• Our support of the Traffic Injury Research Foundation (TIRF) helps achieve its mission of reducing the tragic consequences of traffic collisions by enabling TIRF to continue to design, implement and promote effective solutions to traffic safety issues.

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Company-wide GivingOur Corporate Giving Program is just one way we support the lives of Canadians. In addition, we support various organizations in their local communities.

• Co-operators Life donated $330,000 to various charitable organizations, such as the Regina FoodBank and the Children’s Health and Hospital Foundation of Saskatchewan. Sponsorships for various events totalled $250,000, some of these events include Wiserider, Canada’s largest bike safety program helping more than 16,000 children, and the Saskatchewan Science Centre.

• For the seventh year, HB Group was title sponsor of the Credit Valley Hospital Golf Classic raising $62,000 for the hospital’s foundation. A donation of $90,000 was also directed to the Toronto Police Association’s Tovee Awards for 150-200 eligible students (children of parents who are members of the association).

• The Sovereign General named the Children’s Wish Foundation of Canada its charity of choicein 2005 for three years and has committed $600,000 in corporate funding.

Community Economic DevelopmentEstablished in 1995 to recognize our 50th anniversary and broaden support for the social economy sector in Canadian communities, our Community Economic Development (CED) Funds have disbursed over $1.5 million to organizations supporting marginalized individuals in our society. Close to $5 million has been allocated to these funds since 1995. We are dedicated to extending opportunities to struggling individuals and families. In 2006, we donated $233,000 to 12 organizations. On the following page is one such organization that received assistance through the CED Funds.

2005 $809,290

Corporate Donations (68%) $549,705

Directed Donations (17%) $141,000

United Way (15%) $118,585

2004 $785,791

Corporate Donations (69%) $536,805

Directed Donations (18%) $143,650

United Way (13%) $105,336

2006 $864,267

Corporate Donations (65%) $564,011

Directed Donations (18%) $152,900

United Way (17%) $147,356

Corporate Giving Program Allocations

For more details on our Corporate Giving Program, visit www.cooperators.ca, About Us, Corporate Responsibility, In The Community, Corporate Giving.

87 per cent of staff members believe their organization within The Co-operators group of

companies adds value to our communities. Source: Hewitt Associates

• Stella Burry Community Services bridges the gap between social marginalization and full inclusion. It believes in developing supportive housing for people with complex mental health issues and employment programs that teach real skills and offer meaningful work experience. Stella Burry is working in solidarity with its clients to improve the quality of life for affected individuals, and laying to rest the stigmas surrounding poverty and mental illness.

For 2006 profiles of CED recipients, guidelines, or an application form, visit www.cooperators.ca, About Us, Corporate Responsibility, In The Community, CED Fund.

Community PartnershipsThe voluntary, non-profit sector touches everyone at some point in their lives. With more than 160,000 organizations, the sector delivers much needed social programming to Canadians every day, whether it’s sports programs for children, health and lifestyle programs for seniors, reaching out to the most disadvantaged, or protecting our environment.

As an insurer and socially responsible organization that encourages volunteerism, we are uniquely positioned to help the sector with its insurance needs. It faces the challenge of affordability, availability and stability of insurance – even modest rate increases can be disastrous to programming.

The Co-operators Community Advisory Panel in Moncton, NB, raised this issue. In response to the panel’s concerns, we established a cross-company committee to examine the issues and develop solutions. We are also working with representatives in the sector that provide advice and direction on the issues, and they tell us our action plan will certainly offer relief. In 2006, we began to identify and change business practices to make ourselves more voluntary, non-profit client friendly.For example, we clarified the availability of insurance coverage for our home and auto clients who volunteer their time. In addition, we are working towards some long-term solutions that will meet the sector’s needs.

Partners in Safety

In 2006, we highlighted fire safety in collaboration with our partner – Staying Alive Inc. We produced 15- and 30 -second bilingual Public Service Announcements (PSAs) to teach children not to hide in the event of a fire. The PSAs were distributed to all broadcast outletsacross Canada and made their public debut in four cities – Halifax, Fredericton, Edmonton and Winnipeg – during fire safety week in October. As Staying Alive’s exclusive partner, we are proud that the program was able to distribute 55,000 fire safety CDs.

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Woodworking is one of the employable skills training programs offered at Stella Burry Community Services’ New Beginnings program in St. John’s, NL.

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We endeavoured to satisfy the demand for car seat inspections in 2006. Staff, agents and community partners inspected 947 seats at 69 clinics in Ontario, Nova Scotia, Prince Edward Island and Newfoundland/Labrador.

In partnership with Bringing Awareness of Senior Safety Issues to the Community (B.A.S.S.I.C.), we created and distributed 175,000 copies of our Safe Seniors calendar in 2006. Research and development on the aging driver continued through our sponsorship of CANDrive – an interdisciplinary health-related research program dedicated to improving the safety of older drivers. As an insurer of more than one million vehicles, we are dedicated to helping fund research that helps identify and examine issues related to safe driving.

Started by a group of Calgary, AB staff members in 2002, and adopted by Guelph, ON staff in 2005, the CHAMP (Co-operators Heroes Assisting Many People) program promotes our grassroots approach to volunteerism. The staff-led volunteer programs at Co-operators General (Guelph and Calgary), and HB Group

(Mississauga, ON) support community groups that assist the less fortunate. Calgary’s 2006 CHAMP golf tournament raised $18,000 on behalf of the Kerby Centre.

For a list of CHAMP volunteer activities, visit www.cooperators.ca, About Us, Corporate Responsibility; under Related Links go to 06 additional information.

2007 Targets • Contribute a minimum of 1 per cent of our

pre-tax profit to Canadian communities. • Increase participation in the Directed

Donation program to 94 per cent. • Develop an instructional DVD on basic

car-seat installation.

As a member of Imagine Canada – a program to promote public and

corporate giving, volunteering and support for the community – we directed over

$2.3 million across Canada representing 1.41 per cent of our pre-tax profit.

2006 Highlights

• Contributed 1.41 per cent of our pre-tax profit to

Canadian communities.

• Expanded our CHAMP (Co-operators Heroes

Assisting Many People) staff-led volunteer

programs from two to three.

• Increased participation in the Directed Donation

program from 91 per cent to 93 per cent.

Carol Soodurine, HR Manager, Calgary, flips pancakes at the Mustard Seed, an organization that responds to the inner-city’s less fortunate.

environmentEnvironmental sustainability has increasing relevance in our daily lives, and climate change is one of our biggest challenges. As an insurer we are impacted by the results of climate change and are concerned for the welfare of our communities.

Our Natural EnvironmentWith the exception of our development company CDCL, the nature of our operations does not directly impact the environment. We emit no threatening effluence or dangerous spills into the environment and therefore we do not comprehensively track the effects that our companies’ operations have on bio-diversity and the natural habitats of animals.

Here is an example of how we support the natural environment:

• CDCL is building on its Gloucester Industrial Estates bio-filtration pond project started in 2005. In 2006, it built a new storm water bio-filtration pond to service 19 new acres of industrial land, which minimizes the impact on the surrounding areas by removing contaminants in the water before it goes to other water systems.

Climate change causes increases in the frequency and severity of storm damage in Canada and around the world. To enhance protection of our clients and further science-based home safety research, we support the Institute for Catastrophic Loss Reduction’s Designed…for safer living program.

• In partnership with the Institute for Catastrophic Loss Reduction, we financed and built Canada’s first safer living home in 2006 after one of the homes we insured was totally destroyed by fire. Located in PEI, this weather-resilient home was designed and constructed to withstand the most hazardous

climate conditions in the area – wind storms andextreme winter weather. From the foundation tothe roof, the construction involved special materials and methods to fortify the house. This prototype and the safer living homes we will build in years to come will further our understanding of safer home construction and may encourage other stakeholders to embrace safer standards. Our hope is that this will prove to be the first step in our journey to building more resilient homes and communities across the country.

Our Environmental FootprintIt’s our responsibility to dispose of materials and measure how lightly we tread on our environment. We have the greatest potential – and need – for growth in good resource and waste management. Though staff members at all levels are careful to conduct their business in a conscientious manner, there’s no doubt that more work has to be done to put measurements in place so we can accurately measure our environmental footprint, and identify areas for improvement. Some of the steps we took across our companies include (the following measures may vary between companies):

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Canada’s first safer living home in PEI.

• Donated office supplies, accessories, equipment and furniture to local schools and charities.

• Replaced all light fixtures with more energy efficient fixtures.

• Enhanced the incentives we provide for carpooling, using teleconferences in lieu of physical meetings (and measuring the subsequent reduction in air pollution from plane travel) and integrating new technologies to offset emissions in our daily operations.

• Donated 512 pounds of food to the Guelph Food Bank by recycling ink cartridges in support of THINK FOOD.

• Recycled copier, fax and printer cartridges inpartnership with Greentec International.

Our Environmental InvestmentIt’s clear that sustainable energy is a high priority for Canadians.

Through the Co-operative Development Program,we have focused on increasing the profile of renewable energy as a positive vehicle for moving forward with environmental sustainability. By supporting a number of organizations dedicated to reducing Canada’s dependence on environmentally dangerous sources of fuel, we are working to develop the capacity and infrastructure of the renewable energy sector. For example:

• We support the Ontario Sustainable Energy Association (OSEA), which plays a crucial role in pushing Ontario’s renewable power agenda forward in a concerted and professional way (17 of its 21 members are recognized renewable energy co-operatives).

• Our renewed financial support will help Toronto Renewable Energy Co-operative (TREC) continueinto the future as a model wind turbine co-operative.

• Our investment in Countryside Energy Co-operative (CEC), in south western Ontario, enables them to receive matched funding from the Ontario Ministry of Agriculture, Food and Rural Affairs to further develop the first community-owned, wind co-operative in North America.

We also partnered with the Youth Environmental Network (YEN), which strives to connect with Canadian youth environmental groups that empowereach other for more successful local, regional and national environmental, action-based projects and campaigns.

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Youth Environment Network staff and Board of Directors.

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Co-operators Life’s support of Cosmopolitan Industries,a workshop in Saskatoon, SK for adults with intellectual disabilities, will help with the expansion of its waste reduction and recycling facility.

Over the past 10 years, our partnership with Harmony Foundations of Canada has provided opportunities for educators and community leaders to build their skills and knowledge for a positive change in environmental protection.

On behalf of respondents to our 2005 corporate responsibility report survey, we supported Tree Canada Foundation, a not-for-profit organization that plants and nurtures trees to reduce the harmful effects of carbon dioxide emissions. The funding helped tree planting efforts in Madawaska Valley’s town of Combermere after a F2 tornado caused extensive damage to the area’s natural environment.

L’UNION CANADIENNE has committed $30,000 over three years to support a project initiated by one of co-op housing federation’s members in Quebec – Confédération Québécoise des cooperatives d’habitation. The project aims to offer the co-operatives and their members an information service, support and assistance on the implementation of energy-saving measures and reduction of greenhouse gases.

2007 Targets

• Build four safer living homes (one in the Atlantic, one in the West and two in Ontario).

• Track usage of recycle programs, such as paper, glass bottles and cans.

Canada representative; and Co-operators agent Debbie Marshall plant the first tree after Combermere’s tornado.

2006 Highlights

• Built Canada’s first safer living home

in PEI resilient to severe weather.

• Donated more than $153,000 to

Canadian environmental initiatives.

(Left to right:) Representative of the Township of Madawaska Valley; a Tree

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2006 Target Result Notes

EconomicReturn on Shareholders’ Equity (ROE) of 11.4%.Revenue of $2.8 billion.

GovernanceIncrease our member-owners by three to 35.

Three applications for membership were

received; two were approved and one is pending.

Increase Board education from one to two days annually.Co-operative RelationsIncrease co-operative business premium by $5 million.

Provide insurance, loss prevention, and safety education

through our member-owners to their members.Client RelationsLaunch “Co-operators” life insurance initiative in Quebec.

Develop a comprehensive client satisfaction measurement program.

Launch newly designed bilingual website.Develop and track measurement related to Trust and Reputation.Create material and provide insurance education for clients.

Human ResourcesStaff engagement aggregate score of 80%.

Our aggregate score improved from 75% to 76% but

we missed our target by 4%.

Track the number of staff who participated

Approximately 550 staff across our group of companies

in the “Paid Day to Volunteer” program.

used their paid day(s) to volunteer their time across Canada.

We will improve our tracking systems in order to provide

a more accurate number for 2007.

Community InvestmentContribute a minimum of 1% of our pre-tax profit to

Canadian communities.Expand CHAMP (Co-operators Heroes Assisting Many People) Expanded our CHAMP staff-led volunteer program

staff volunteer programs by two within our group companies. by one due to timing constraints and resourcing issues.

Increase participation in the Directed Donations program to 93%EnvironmentEstablish environmental sustainability guidelines for our

A comprehensive sustainability vision, including

group of companies.

environmental guidelines, will be created in 2007.

Track usage of recycle programs, such as paper,

Some recycling programs were implemented, although

glass bottles and cans.

tracking systems are yet to be developed. In 2007,

we will begin tracking our recycling efforts.

Achieved

Partially Achieved

Not Yet Achieved

Our 2006 Target Report Card

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member-ownersOur 34 member-owners represent six sectors in seven regions across Canada — Agricultural, Financial, Service, Retail/Consumer, Health and Labour.

British ColumbiaCredit Union Central of British Columbiawww.cucbc.com

Mountain Equipment Co-opwww.mec.ca

PBC Health Benefits Societywww.pac.bluecross.ca

AlbertaAgrifoods International Cooperative Limitedwww.agrifoods.ca

Credit Union Central Alberta Limitedwww.albertacentral.com

Lilydale Inc. www.lilydale.com

UFA Co-operative Limitedwww.ufa.net

Wild Rose Agricultural Producerswww.wrap.ab.ca

SaskatchewanAccess Communications Co-operative Limitedwww.accesscomm.ca

Credit Union Central of Saskatchewanwww.saskcentral.com

Federated Co-operatives Limited www.fcl.ca

Saskatchewan Wheat Poolwww.swp.com

ManitobaAgricore United www.agricoreunited.com

Arctic Co-operatives Limitedwww.ArcticCo-op.com

Credit Union Central of Manitobawww.creditunion.mb.ca

Keystone Agricultural Producerswww.kap.mb.ca

La Fédération des caisses populaires du Manitoba Inc.www.caisse.biz

OntarioCo-operative Housing Federation of Canada www.chfc.ca

Credit Union Central of Ontariowww.cuco.on.ca

Gay Lea Foods Co-operative Limitedwww.gaylea.com

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Information gathering process and verification Under the leadership of the Manager, Corporate Citizenship, who serves as project manager, a Corporate Responsibility (CR) Report Committee is formed and tasked with co-ordinating, writing, designing and distributing the report. Key contacts within The Co-operators group of companies are identified and asked to provide relevant information. English and French editorial teams are created to review the material. This process involves over 100 people from across our organization. It is the responsibility of the project manager to ensure that the information is accurate and current.

GROWMARK, Inc.www.growmark.com

Ontario Federation of Agriculturewww.ofa.on.ca

United Steelworkers of America, District 6www.uswa.ca

QuebecFédération des coopératives d’alimentation du Québecwww.fcaq.coop

La Coop fédéréewww.lacoop.coop

La Fédération des coopératives du Nouveau-Québechttp://inuit.pail.ca/fcnq.htm

AtlanticCo-op Atlanticwww.coopatlantic.ca

Credit Union Central of New Brunswickwww.creditunion.nb.ca

Credit Union Central of Nova Scotiawww.nscreditunions.ca

Credit Union Central of Prince Edward Islandwww.peicreditunions.com

La Fédération des caisses populaires acadiennes limitéewww.acadie.com

Newfoundland-Labrador Federation of Co-operativeswww.nlfc.nf.ca

Northumberland Co-operative Limitedwww.northumberlanddairy.ca

Scotsburn Co-operative Services Ltd.www.scotsburn.com

Our 2006 corporate responsibility report is produced in English and French, and is available to view on our website at www.cooperators.ca. To contact us, provide feedback, or obtain an additional print version of the report, call 1-800-265-2612, e-mail the Manager, Corporate Citizenship at cr_report@cooperators.ca, or visit your local Co-operators agent for a copy.

We are affiliated with the following organizations in relation to corporate responsibility.

Caring CompanyUne ent repr isegénéreuse

Released April 2007 CCR 04/07

Did you know . . . by printing this report on Rolland Enviro100 paper we : • saved 38 mature trees• reduced solid wastes by 1,084 kg.• reduced water and wastewater flow by 102,554 litres• reduced atmospheric emissions by 2,381 kg.• reduced use of natural gas by 155m3