Northbridge Financial Corporation: Third Quarter Financial Results, Dividend Declaration and Normal Course Issuer Bid

Market Wire, November, 2007

(Note: All dollar amounts in this news release are expressed in Canadian dollars)

Northbridge Financial Corporation (TSX: NB) today announced net earnings of $53.9 million ($1.06 per share) for the third quarter of 2007, which compares to net earnings of $30.9 million ($0.61 per share) for the third quarter of 2006. Underwriting profit was $32.7 million for the third quarter of 2007, improved from $18.6 million for the third quarter of 2006, and produced a combined ratio of 88.4% for the third quarter of 2007 compared to 93.6% for the same period one year earlier. Underwriting results and the combined ratio for the third quarter of 2007 were affected by favourable foreign exchange movement on translation of claims denominated in U.S. dollars, reducing claims expense and combined ratio by $20.4 million and 7.2 percentage points, respectively. Net investment income was $47.6 million for the third quarter of 2007 compared to $34.9 million for the third quarter of 2006, and included net gains on portfolio investments of $16.4 million compared to $3.8 million for the third quarter of 2006.

Net earnings for the first nine months of 2007 were $215.6 million ($4.24 per share), which compares to net earnings of $130.0 million ($2.56 per share) for the first nine months of 2006. Underwriting profit for the first nine months of 2007 was $86.3 million, which compares to $6.6 million for the same period in 2006, and resulted in a combined ratio of 89.6% for the first nine months of 2007 compared to 99.2% for the same period in 2006. The effect of the previously described foreign exchange movement on the first nine months of 2007 resulted in a $50.5 million reduction in claims expense and a 6.1 percentage point reduction on the combined ratio. Net investment income was $199.6 million for first nine months of 2007 compared to $202.5 million for the first nine months of 2006, and included net realized gains on sales of portfolio investments of $104.7 million compared to $121.3 million for the first nine months of 2006.

Northbridge also announced that its Board of Directors has declared a dividend of $0.165 per share on its outstanding common shares, payable on December 31, 2007 to shareholders of record on November 30, 2007.

Northbridge also intends to make a normal course issuer bid, subject to regulatory approval, for up to 2,480,000 of its outstanding common shares through the facilities of the TSX at the prevailing market price at the time of purchase. Northbridge believes that in appropriate circumstances its common shares represent an attractive investment opportunity and that, consequently, purchases under the bid will enhance the value of the shares held by the remaining shareholders.

The normal course issuer bid will begin on November 6, 2007 and will end on the earlier of the date on which purchases under the bid have been completed and November 5, 2008. Up to 200,000 of the common shares available for repurchase under the bid may be purchased and held by an affiliate of Northbridge in respect of outstanding and future stock option grants. All common shares purchased by Northbridge under the bid, other than those purchased and held by such affiliate, will be cancelled. All purchases under the bid will be made through the facilities, and in accordance with the requirements, of the TSX.

As of November 1, 2007, Northbridge had 50,009,359 common shares outstanding. The 2,480,000 common shares available for repurchase under the normal course issuer bid represent approximately 5% of Northbridge's issued and outstanding shares. The average daily trading volume of Northbridge's common shares on the TSX for the six months ended October 31, 2007, calculated in accordance with the rules of the TSX for the purposes of the bid, is 53,534 shares.

Northbridge has purchased 841,947 of its common shares for cancellation at an average price per share of $34.84 under its normal course issuer bid which commenced November 6, 2006 and will terminate on November 5, 2007.

The following table presents a summary of the third quarter and year to
date financial results:

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For the Periods Ended September 30     Third Quarter           Nine Months
(in $ millions except per share
 amounts and percentages)           2007        2006     2007         2006
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Total revenue(1)                   328.4       326.4  1,026.0      1,070.7
Underwriting profit                 32.7        18.6     86.3          6.6
Combined ratio(2)                   88.4%       93.6%    89.6%        99.2%
Net earnings                        53.9        30.9    215.6        130.0
Net earnings per share             $1.06       $0.61    $4.24        $2.56
Net earnings per diluted share     $1.06       $0.61    $4.23        $2.55
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(1)Total revenue consists of net premiums earned, interest and dividend
income and net gains on portfolio investments.
(2)The combined ratio is the sum of two components: the loss ratio, which
represents claims and loss adjustment expenses incurred, net of
reinsurance, expressed as a percentage of net premiums earned, and the
expense ratio, which represents expenses including commissions, premium
taxes and all general and administrative expenses incurred in operating
the business during a period, expressed as a percentage of net premiums
earned during that period. A combined ratio below 100% indicates
profitable underwriting, while a combined ratio over 100% indicates
unprofitable underwriting. The combined ratio does not include
consideration of investment income. The underwriting ratios
(the loss, expense and combined ratios) are all non-GAAP measures and do
not have standard meanings prescribed by GAAP. They may not be comparable
to similar measures used by other companies.