Northbridge Announces Second Quarter Financial Results and Dividend Declaration

TORONTO, ONTARIO, Jul 31 (MARKET WIRE) --
(Note: All dollar amounts in this news release are expressed in Canadian
dollars)

Northbridge Financial Corporation (TSX: NB) today announced a net loss of
$82.4 million ($1.67 per share) for the second quarter of 2008, which
compares to net earnings of $116.7 million ($2.29 per share) for the
second quarter of 2007. Underwriting profit was $1.2 million for the
second quarter of 2008, compared to $35.5 million for the second quarter
of 2007, producing a combined ratio of 99.6% compared to 86.7% for the
same period one year earlier. Total net investment loss was $123.1
million for the second quarter of 2008 compared to total net investment
income of $101.0 million for the second quarter of 2007. Investment
results for the second quarter of 2008 included a net loss on portfolio
investments of $153.5 million compared to net gains of $69.8 million for
the second quarter of 2007. Net losses on portfolio investments for the
second quarter of 2008 were impacted by $113.1 million of impairment
writedowns in our common stock portfolio.

Net earnings for the first six months of 2008 were $23.1 million ($0.47
per share), which compares to net earnings of $161.7 million ($3.18 per
share) for the first six months of 2007. Underwriting profit for the
first six months of 2008 was $4.4 million, which compares to $53.7
million for the same period in 2007, producing a combined ratio of 99.2%
for the first six months of 2008 compared to 90.2% for the same period in
2007. Total net investment income was $36.6 million for first six months
of 2008 compared to $152.0 million for the first six months of 2007, and
included a net loss on portfolio investments of $23.7 million compared to
net gains of $88.3 million for the first six months of 2007.

Northbridge also announced that its Board of Directors has declared a
dividend of $0.165 per share on its outstanding common shares, payable on
September 30, 2008 to shareholders of record on August 29, 2008.

The following table presents a summary of the second quarter financial
results:

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For the Periods Ended June 30 Second Quarter Six Months
(in $ millions except per share
amounts and percentages) 2008 2007 2008 2007
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Total revenue(1) 157.5 368.3 597.7 697.6
Underwriting profit 1.2 35.5 4.4 53.7
Combined ratio(2) 99.6% 86.7% 99.2% 90.2%
Net earnings (loss) (82.4) 116.7 23.1 161.7
Net earnings (loss) per share ($1.67) $2.29 $0.47 $3.18
Net earnings (loss) per diluted share ($1.67) $2.29 $0.47 $3.17
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(1) Total revenue consists of net premiums earned, interest and dividend
income and net gains (losses) on investments.
(2) 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. 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.

As previously announced, Northbridge will hold a conference call and
webcast at 9:30 am (Toronto time) on Friday, August 1, 2008 to discuss
its second quarter results, available on the Company's website at
www.norfin.com under "Financial Information". The call, consisting of a
presentation by management followed by a question period, will be
broadcast live on the internet through the Company's website or may be
accessed by telephone at (416) 641-2140 or (800) 952-4972. Presentation
materials will be posted on the Company's website under "Financial
Information" prior to the call. A replay will be available following the
call on the same website or via telephone at (416) 695-5800 or (800)
408-3053 (passcode 3266484) until Friday, August 15, 2008.

Northbridge is the leading commercial property and casualty insurance
group in Canada, providing property, automobile, general liability and a
wide range of other commercial insurance products to businesses primarily
in Canada. Northbridge common shares are listed and traded under the
symbol NB on the Toronto Stock Exchange. Visit Northbridge's website at
www.norfin.com for more information.

This release includes registered and unregistered product names, trade
names, trademarks and service marks of Northbridge, Lombard, Markel,
Commonwealth, Federated and other companies, each of which is the
property of its respective owner.

As used in this release, references to "Northbridge", "we", "us", and
"our" refer to Northbridge Financial Corporation, references to "Lombard"
refer to Lombard Canada Ltd., references to "Markel" refer to Markel
Insurance Company of Canada, references to "Commonwealth" refer to
Commonwealth Insurance Company and references to "Federated" refer to
Federated Insurance Company of Canada and, in each case, unless the
context otherwise requires or as otherwise expressly stated, their
respective subsidiaries.

Forward-Looking Information

Statements in this release about future plans, intentions, results,
levels of activity, performance, goals, achievements or other future
events constitute forward-looking statements. In some cases
forward-looking statements may be identified by the use of words such as
"may", "will", "should", "would", "could", "expects", "plans", "intends",
"anticipates", "believes", "estimates", "predicts" or "potential" or the
negative or other variations of these words, or other comparable words or
phrases. Although Northbridge believes that the expectations reflected in
its forward-looking statements are reasonable, it cannot guarantee future
results, levels of activity, performance or achievements or other future
events. Readers should not place undue reliance on forward-looking
statements as they involve known and unknown risks, uncertainties and
other factors about Northbridge, the business environment in which it
operates, the economy and the insurance industry generally that may cause
actual results or events to differ materially from those expressed,
implied or anticipated in such forward-looking statements. These risks,
uncertainties and other factors include, but are not limited to, the
following factors which are more fully described in Northbridge's Annual
Information Form and other filings with Canadian securities regulators
(accessible on SEDAR - System for Electronic Document Analysis and
Retrieval - at www.sedar.com: the adequacy of claims reserves;
unpredictable catastrophic events; the cyclical nature of the property
and casualty insurance industry; competitive market environment; ability
to alleviate risk through reinsurance coverage; credit risks associated
with reinsurers and certain insureds; ability to achieve investment
returns; subsidiaries' ability to maintain their financial strength
ratings; changes in the business, economic and political environment;
changes in government regulation; negative publicity regarding the
insurance industry; litigation and regulatory actions; reliance on
independent brokers and third parties to sell certain products; reliance
on information technology and telecommunications systems; adequacy and
effectiveness of risk management framework; dependence on operating
management and key personnel; dependence on the financial performance of
subsidiaries; uncertainties associated with critical accounting
estimates; and foreign currency fluctuations. Northbridge is under no
obligation and has no intention to update or alter any of its
forward-looking statements as a result of new information, future events
or otherwise, except as required by law.

In addition, the preparation of Northbridge's financial statements in
accordance with Canadian generally accepted accounting principles
requires it to make estimates and assumptions about future events which
affect certain amounts reported in the financial statements and amounts
derived therefrom, including amounts presented in this release. Those
critical accounting estimates and assumptions principally relate to the
establishment of provisions for claims and expenses, other than temporary
impairments of investments, amounts receivable and recoverable from
reinsurers and income taxes. As more information becomes known, these
estimates and assumptions could change and impact future results. For a
more complete discussion of critical accounting estimates and
assumptions, please refer to the Company's filings with Canadian
securities regulators (accessible on SEDAR at www.sedar.com).

Contacts:
Northbridge Financial Corporation
Craig Pinnock
Chief Financial Officer
(416) 350-4300
(416) 350-4307 (FAX)
Website: www.norfin.com

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