company presentation...company presentation. 2 2 2009 financial aggregate figures p. 14. agenda. 1...

UNIPOL GRUPPO FINANZIARIO

UNIPOL GRUPPO FINANZIARIO

Company Presentation

2

2 2009 financial aggregate figures p. 14

Agenda

1 Company profile p. 3

4 1Q10 results p. 16

5 Investment management p. 26

6 Solvency p. 31

7 Dividends and operations on capital p. 34

5 2010-2012 Business Plan – Highlights p. 38

3

Mission

To guarantee sustainable and long-term growth along with adequate profitability through a fair relationship with all our stakeholders: shareholders, customers, agents, employees and providers.

Mission

4

About us

It is a leader in the insurance field, ranking 4th in Italy with a 11.6% market share in

Non-Life business and 6.5% in Life business.

From the end of the ‘90s it has been implementing a development strategy focused on:

growth by acquisition (Meie, Aurora, Navale, BNLVita, Winterthur, MMI);

specialising by line of business (start of Unisalute, operating in the health care sector) or by distribution channel (start of Linear, a Motor company selling products via the phone and the Internet)

diversification in banking sector (start up of Unipol Banca*)

* Now UGF Banca

Unipol Gruppo Finanziario is a Financial Group operating in the Insurance, Banking and Asset Management sectors.

These actions allowed UGF to move from the 9° to the 4° position amongthe insurance players in Italy and to become one of the few integrated

Financial groups providing its 6 million customers withcomprehensive financial services

5

Corporate History

1999 Unipol is the 8th largest insurer in Italy. Diversification in the banking business: start-up of the Unipol Banca* project.

Specialisation strategy by product and by sales channel. Unipol becomes a Group. The new subsidiaries: Unisalute - health care; Linear - teleselling of motor-vehicle products and Quadrifoglio Vita and Noricum Vita - bancassurance.

1991-94

Listing on the Italian Stock Exchange: preference shares (1986) and ordinary shares (1990).1986-90

Acquisition strategy (2000: Aurora, Meie Danni, Meie Vita, Navale and BNL Vita – 2003: Winterthur Italia). Fast growth of Unipol Banca*.

2000-04

Corporate reorganization: set up of the new holding Unipol Gruppo Finanziario S.p.A. UGF ranks 4th among the insurance players in the Italian market.Merger between Unipol Assicurazioni and Aurora Assicurazioni to form UGF Assicurazioni S.p.A.

2007-09

The Sixties

2005-06 Strategic agreement with BNP PARIBAS.

Appointment of Mr. Carlo Salvatori as CEO of Unipol Assicurazioni.Definition of the 2006-2009 Industrial Plan.

Incorporation (1961) and subsequent acquisition by Italian Cooperatives (1962). * Now UGF Banca

2010 Appointment of Carlo Cimbri as CEONew 2010-2012 Business PlanAcquisition of control of the Arca GroupStrategic and industrial partnership with the Banca Popolare dell’Emilia-Romagna and Banca Popolare di Sondrio Groups.

6

Insurance business evolution

Non-LifeLife

Acquired company

Acquiredstake Vendor

51.4% TELECOM

100% GENERALI

98.2% GENERALI

50% GENERALI

(OPA) su 23.1% Mercato

Total premiums: 2,234 €mTotal invested: 812 €m

ACQUISITIONS - 200090% Credit

Suisse

ACQUISITIONS - 2003

Total premiums: 1,931 €mTotal invested: 1,319 €m

MERGER - 2004

+

Total premiums: ~ 3,300 €m

ACQUISITIONS - 2004• 100% of MMI Group acquired from Mutuelles

du Mans Assurances Group (premiums 140 €m), merged with Navale Ass.ni in 2005

CORPORATE EVENTS - 2005• bid to acquire BNL

CORPORATE EVENTS - 2005• bid to acquire BNL

CORPORATE EVENTS - 2006• Carlo Salvatori appointed as CEO• company reorganization plan

CORPORATE EVENTS - 2006• Carlo Salvatori appointed as CEO• company reorganization plan

CORPORATE EVENTS - 2007• acquisition of Aurora Ass.ni minorities

(29.2% of capital – consideration 657 €m) • Start of UGF SpA, holding of Unipol Ass.ni

and Aurora Ass.ni • Acquisition of 1% of BNL Vita (for 6 €m)

CORPORATE EVENTS - 2007• acquisition of Aurora Ass.ni minorities

(29.2% of capital – consideration 657 €m)• Start of UGF SpA, holding of Unipol Ass.ni

and Aurora Ass.ni• Acquisition of 1% of BNL Vita (for 6 €m)

CORPORATE EVENTS - 2008• Sale of the Quadrifoglio Vita stake

CORPORATE EVENTS - 2008• Sale of the Quadrifoglio Vita stake

CORPORATE EVENTS – 2009• merger of Aurora Ass.ni into Unipol

Ass.ni, renamed UGF Ass.ni • acquisition of UGF Banca (ex Unipol

Banca) minorities (15.5% of capital – consideration 213 €m)

CORPORATE EVENTS – 2009• merger of Aurora Ass.ni into Unipol

Ass.ni, renamed UGF Ass.ni• acquisition of UGF Banca (ex Unipol

Banca) minorities (15.5% of capital – consideration 213 €m)

6 ,7

4 ,63 ,5

5,2

4 ,1

4 ,3

4 ,4

4 ,3

6 ,85,75,1

3 ,72 ,8

1,20 ,8

3,9

3,93,8

2,3

2,1

2,0

1,1

Insurance business Issued premiums €bn

1999

1.9

CAGR 1999-200917.5%17.5%

2000 2001 2002 2003 2004 2005 2006 2007 2008

3.2

4.9

6.0

8.99.6

10.7 10.8

8.97.9

4° Group in Italy (8.1% stake)

8° Group in italy(2.9% stake)

9.5

2009

CORPORATE EVENTS – 2010• appointment of Carlo Cimbri as CEO• new 2010-2012 Business Plan• acquisition of control of the Arca

Group

CORPORATE EVENTS – 2010• appointment of Carlo Cimbri as CEO• new 2010-2012 Business Plan• acquisition of control of the Arca

Group Total premiums: 650 €mTotal invested: 270 €m

7

2001Acquisition of 51 branches from Banca

Intesa

Start-up

2001Acquisition of 51 branches from Banca

Intesa

Start-up

1999Projectstart-up

1999Projectstart-up

Banking business evolution

Tot. amount invested: 205 €m

2002Acquisition of 60 branches

from Capitalia

2002Acquisition of 60 branches

from Capitalia

Tot. amount invested: 165 €m

2003Unipol Merchant

becomes

A bank intended for undertakings

2003Unipol Merchant

becomes

A bank intended for undertakings

2004Acquisition of 22 branches from Banca Antonveneta

2004Acquisition of 22 branches from Banca Antonveneta

2009Unipol Banca is

renamed UGF Banca:

Appointment of Mr. Luciano Colombini as

GM of UGF Banca

2009Unipol Banca is

renamed UGF Banca:

Appointment of Mr. Luciano Colombini as

GM of UGF Banca

2007Acquisition of Cooperleasing

2007Acquisition of Cooperleasing

Tot. amount invested:

15 €mTot. amount

invested: 70 €m

26,322,4

20,121,7

7,9

9,1

8,79,5

23,6

15,9

11,57,06,3

3,42,2

6,9

4,3

2,6

2,21,1

0,50,4

Baking businessCustomer deposits and funds €bn

1999

2.6

CAGR 1999-200928.2%28.2%

customer depositscustomer funds

2000 2001 2002 2003 2004 2005* 2007* 2008*

3.9

7.49.2

14.1

20.2

30.6

34.331.5

28.8

* IAS/IFRS data

Branches: 24Advisers: 132Shops: -

Branches: 36Advisers: 270Shops: 17










2006* 2009*

31.2

http://www.unipolbanca.it/Default.aspx

8

Unipol Gruppo Finanziario – Shareholding structure

** holding own shares for 8.11% of the capital

FINSOE**

50.75% ordinary shares

100% preference shares

49,25% ordinary shares

‘MARKET’* HOLMO is a financial company made up of the leading national cooperatives.

2,114,122,551 ordinary shares1,302,200,446 preference shares3,416,322,997 total shares

UGF SHARE CAPITAL

P&V Group(BE)HOLMO* BNP

PARIBASJP MORGAN

(USA)

4.35% 4.26% 1.35%

OTHERCOOPERATIVES

5.44%76.5%

9

BANKING, ASSET MANAGEMENTAND MERCHANT BANKING

BANCASSURANCE BUSINESS

TOTAL BANCASSURANCE INCOMETOTAL INSURANCE INCOME

BANKING BUSINESSBANCASSURANCE BUSINESS

COMPANY

FY 2009PREMIUMS 1

(€m)

3,051 +98.7%Non-Life Life 2,188 +10.7%TOTAL 6,448 +1.8%

1,978 1,5356,335

268Non-exclus. Agent/ brokers

155Health / agreements, internet

5,865P&C+ Life /agencies

160Telephone,Internet

BUSINESS/ CHANNEL COMPANY

FY 2009PREMIUMS 1

(€m)BUSINESS/ CHANNEL

FY 2009FY 2008

3,051Life / BNL branches

COMPANY

FY 2009FIGURES

(€m)BUSINESS/ CHANNEL

Customer Deposits 9,539Lending 9,218

Bank / branches, Fin. counters, Fin. advisers

296Mutual funds/UGF Banca

Loans granted 3 622Shareholdings 76

Merchant banking and mid-term loans

Asset management

Leasing

FY 2009FY 2008 2

UGF Group present structure

Notes:1 local GAAP2 excl. Quadrifoglio Vita (a company sold to MPS on 28 March

2008) 3 including sureties given4 consolidated in the P&L accounts as from 2H10, excluded from

total

INSURANCE BUSINESS

3,192

2,673

+2.2%4,2604,357Life

122

Life / BPERBPSO and other banks’ branches

650 4

10

Leader in the Italian insurance market

Italian insurance market

Figures as at 31/12/2009

market share

Generali

Allianz

UGF

FonSai

Mediolanum Vita

Group Gross direct written premiums€bn

21.1%21.1%

10.2%10.2%

9.1%9.1%

8.1%8.1%

7.3%7.3%

6.3%6.3%Intesa S.Paolo

24.9

12.0

10.7

8.7

7.4

9.5

Life

Generali

Mediolanum Vita

Poste Vita

Allianz

Intesa S.Paolo

Group

21.3%21.3%

10.7%10.7%

9.3%9.3%

8.9%8.9%

8.7%8.7%

Gross direct written premiums€bn

6.5%6.5%UGF 5.2

17.3

8.7

7.5

7.3

7.1

Non-Life

Generali

FonSai

Reale Mutua

Allianz

UGF

Group

20.8%20.8%

19.2%19.2%

12.1%12.1%

11.6%11.6%

5.2%5.2%

Gross direct written premiums€bn

4.4%4.4%Zurich 1.6

7.6

7.1

4.4

4.3

1.9

11

Insurance agencies

538 agencies

1.491 sub-agencies

261 brokers

Sales network as at 30 June 2010

1.608 agencies o/w 579 Unipol Division and

1,029 Aurora Division

3.562 secondary sales points

52

13

46

45

95

150

2724285 132

124196

101

45

4

2738

788

52%

24%

24%

118 20

4

15

15

25

63

9777 48

4867

29

12

1215

243

50%

29%

21%

45

*

* integration with UGF Assicurazioni is underway; figures as at 31/3/10

155 agencieso/w 11 agencies specialized in bond

2

3

1

3

23

3

30 226

10

10

11

26

4

50%

30%

20%

14

23

Bank branches

300 branches,

o/w 182 co-located with insurance agencies

28 financial shops

358 financial advisors

46%

32%

22%

10

1

9

35213

3

64

33 11840 4

13 111

31

11

12

2.156 outlets 36 banks

Bancassurance

748 outlets

Sales network – Bancassurance

70

35

7

41

170

216

88273 129

69429

155

229

3103

318

46%

23%

31%

100

42%

34%

24%

54

28

105 55

51

57 2914

139 18

46 443

35

25

2

22

1281

13


Agenda




6 Solvency p. 31



14

2009 financial aggregate figures - Highlights

€9,539m€21.7bn€9,218m

Consolidated profit -€769mo/w Group -€772mo/w minority interests €3m

Shareholders’ equity €3,826mo/w Group €3,585mo/w minority interests €241m

Total insurance investments €23.4bn

Agencies 2,168o/w Unipol UGF Assicurazioni 582

1,043

UGF Banca branches 299

Staff 7,157o/w Insurance Companies 4,807

Premium income €9,501mo/w Non-Life €4,260mo/w Life €5,240m

Bank customer deposits

LendingBank customer funds

Life In Force Value €301m

o/w Aurora UGF Assicurazionio/w Navale Assicurazioni 543

o/w Banking Group 2,350

Life Embedded Value €1,063m

15


Agenda




6 Solvency p. 31



16

1Q10 consolidated results Comprehensive result

€m

-135

218

621

-769

41

1Q09 FY09 1Q10

consolidated result comprehensive result

17

AVAILABLE FOR SALE RESERVE ROLL-FORWARD*

* break-up based on in-house estimate

Total -1,524

€m

-393 -323

** after dividend distribution

1Q10 consolidated results AFS reserve as at 31 March 2010

-645

-330 -273-51-64

-879

1Q09 FY09 1Q10

equities bondsSolvency I ratio

estimate as at 31/3/10**1.4 x

18

1Q10 consolidated results Summary of consolidated income statement by business sector

€m

31/03/10 31/03/09 var.% 31/03/10 31/03/09 var.

% 31/03/10 31/03/09 var.% 31/03/10 31/03/09 31/03/10 31/03/09 var.

%

Insurance income (dir. business) 984 1,022 -3.7 1,193 1,661 -28.2 2,177 2,683 -18.9

Net earned premiums 996 1,034 -3.6 1,185 1,654 -28.3 0 0 0.0 0 0 2,182 2,687 -18.8

Net income from commissions and fees 0 0 -122.9 0 0 -19.2 29 18 63.1 -4 -1 24 17 44.8

Financial income/charges (excl.assets/liabilities at fair value) 53 61 -13.6 232 156 49.3 40 52 -24.1 -5 -3 320 266 20.5

Impairment on AFS equities -23 -2 997.2 -9 -4 112.9 -1 0.0 0 0 -33 -7 401.2

Net claims charges -841 -808 4.1 -1,302 -1,744 -25.4 0 0 0.0 0 0 -2,143 -2,552 -16.0

Operating expenses -217 -232 -6.8 -31 -24 27.0 -63 -61 3.5 -6 -8 -317 -326 -2.8

Other income/charges -6 -4 62.0 -8 -10 -21.7 1 0 -765.3 3 1 -10 -14 -25.8

Profit (loss) before taxation -38 48 -179.6 69 27 152.9 5 8 -38.1 -12 -12 24 72 -67.1

Taxation -23 -31 -27.5

Consolidated profit (loss) 1 41 -97.5

TOTALCONSOLIDATED

NON-LIFE BUSINESS LIFE BUSINESS BANKING BUSINESS

Holding, Services and intersectorial

eliminations

19

1Q10 consolidated results NON-LIFE direct premium income

Accident/healthFire/other damageto property

Income by channel

86.2%

9.6%

4.2%

% on total

Income by type of company

-5.3%

+10.4%

-0.3%

-5.7%

+7.7%

Motor

General TPL

Other

60%

18%

9%

9%

5%

984

-2.6%

-3.7%1,022

-5.5%

€m

610 594

412 390

1Q09 1Q10Motor Non-Motor

163

821

specialistcompanies

compositecompanies

42

95

848

Direct channel

Head office/Brokers

Agencies

20

99.6% 105.0%108.0%

1Q10 consolidated results NON-LIFE combined ratio (direct business)

76.9% 86.0%

22.0%

83.0%

22.7%22.0%

1Q09 FY09 1Q10

Loss Ratio Expense Ratio

21

1Q10 consolidated results LIFE direct premium income

o/w closed-end guaranteed

pension funds(class VI) =

€106m (+4.3%)

-28.2%

728

465

BNL Vita

UGFAss.ni

Income by channelIncome by company

-36.6%

-6.9%-8.6%

-36.8%

Pension Funds119 (+4.7%)

Index/Unit linked111 (+90.6%)

Capitalization84 (+41.2%)

Traditional879 (-38.5%)

€m

1,6611,193

1Q09 1Q10

754

439

Third-partychannels

Groupchannels

22

1Q10 consolidated results Life income and APE *

(*) Annual Premium Equivalent. Pro-quota figures

-4.2%

-33.1%

(100%)

1Q09 1Q10

-19.9%

€m

50

116

109

8778

48

UGFAssicurazioni

BNL Vita UGF Group(pro-quota)

1Q09 1Q10 1Q09 1Q10

23

1Q10 consolidated results UGF BANKING Group – Financial highlights

Doubtful debts

Net doubtful debts/loans 2.0%

FY09

2.2%

1Q10

Customer deposits(excl. securitization) Customer funds

21.78.7

Lending*(excl. securitization)

8.4

€bn

21.4-2.8%

-1.6%

-6.9%

-1.5%

€bn

6.66.5

2.01.9

FY09 1Q10

deposits – third parties deposits – UGF Group

6.9 7.2

FY09 1Q10

+4.3%

* Securitized loans of €2.9bn on 31/12/2009 and €2.7bn on 31/3/2010

€bn €m

19.9 19.6

1.8 1.8

FY09 1Q10

funds under custody AUM

24

Gross operating income Cost/Income Ratio

Consolidated net profit

€m

1Q10 consolidated results UGF BANKING Group – Economic highlights

73.1% 74.8%

1Q09 1Q10

non-interest income net interest income

2.41.1

1Q09 1Q10

83.4 83.5 +0.1%

+49.2%

-16.3%

21 31

63 52

1Q09 1Q10

25


Agenda




6 Solvency p. 31



26

BREAKDOWN BY ASSET

* fixed and floating rates and structured products.

equities 1.8 (7.3%)

cash 1.5 (6.2%)

bonds* 21.1 (86.5%)available for sale 15.8 (64.8%)

fair value0,5 (2.0%)

held tomaturity2.2 (9.0%)

loans & receivables4.4 (18.0%) cash 1.5 (6,2%)

BREAKDOWN BY ACCOUNTING CATEGORY

Insurance investments managed by UGF (excluding Class D)

TOTAL €24.4bn

€bn

market value

1Q10 consolidated results Investment breakdown as at 31 March 2010

27

Insurance investments managed by UGF. Fixed and floating rate and structured products, excl. Class D Total €21.1bn, market value

Life 74%Non-Life 24%

Breakdown by rating Breakdown by rate indexing

above or equal to A+: 70%

equal to or below BBB+: 13%from A to A-: 17%

fixed rate 67%

floating rate 33%

government 54%financials 42%

corporate 4%

2.77

UGF 2%

4.06

2.51

* including monetary investments and cash

Breakdown by issuer Breakdown by duration*

total portfolio duration = 3.67

1Q10 consolidated results Bond portfolio as at 31 March 2010

28

Equity portfolio as at 31 March 2010

Equity portofolio(market value)

BREAKDOWN BY COUNTRY BREAKDOWN BY SECTOR

TOTAL €1.78bn

Italy 27%

Germany 12%

Netherlands 8%UK 8%

USA 7%

France 24%

Other 7%

Switzerland 7%

Financials 23%

Energy 15%

Utilities 13%Health 12%

Funds 11%

Other 7%

Telecom. 13%

Industrials 5%

29

coupons anddividends

monetary gains fair value throughP&L

total income

coupons &dividends

monetary gains fair value throughP&L

total income

As at31/03/09

As at31/03/10

179.1 15.0 42.3 211.2

206.7 97.3

(36.2)

269.7

3.87%% yield 3.28% (0.46%) 0.77%

3.47% 1.63% (0.60%) 4.53%% yield

(25.2)

0.28%

1.9

0.03%

o/w -€32m due to impairment

Ordinary income from financial investments – 1Q09 vs 1Q10 (Insurance business, excl. Class D – management figures)

€m

30


Agenda




6 Solvency p. 31



31

Estimate of Group excess capital as at 31 March 2010 (after dividend distribution)

FY 2008 FY 2009 Q 1 2010

2.6

2.0

1.3x1.3x

1.0

in-house estimate

Solvency margin coverage

AVAILABLE CAPITAL

SOLVENCY I REQUIREMENTS

3.1

2.20.2

€bn

(0.2)(0.8)

1.4x1.4x

2.3

(0.1)3.1

0.5

0.1

1.4x1.4x

0.1

FY08 AFS DELTAGROUP AND

THIRD PARTIES

ACQUISITION

MINORITIESUGF BANCA

HIGHERELIGIBLE

SUB. DEBTS/OTHER ADJ.

2009NET

PROFIT

FY09 AFS DELTAGROUP AND

THIRD PARTIES

DIVIDENDS 1Q10POST

DIVIDENDS

32

€m

1.48x 1,2461.44x 880

Coverage ratio Excess capital

FY 2008 FY 2009

Group capital according to Solvency II

33


Agenda




6 Solvency p. 31



34

PayoutTotal Dividends

Preference shares – Dividend per Share (€)

Dividend 0.0452

No. of shares 911,540,314 1,479,885,786No. of shares

4.5%

0.0400

Ordinary shares – Dividend per Share (€)

€m

Share price 0.591 0.900

Dividend

Share price

Dividend Yield 7.6% Dividend Yield

Dividend yield calculated on the official price of 24 March 2010

UGF S.p.A. – Proposed dividend distribution

pref.ord.

59.20

41.20

UGF S.p.A. net profit

Dividend to pay

Payout

128.82

100.40

77.9%

€m

100.40

35

Capital increase – Key terms

no. 3 new shares per no. 7 shares owned

ORDINARY shares

no. 3 new shares per no. 7 shares owned

PREFERENCE shares

option ratio

634,236,765 390,660,132no. new shares

0.445 0.300subscriptionprice (€)

282,235,360 117,198,040subscription amount (€)

CAPITAL INCREASE

2010

634,236,765 390,660,132no. free warrants

no. 2 conversion shares per no.13 warrants

no. 2 conversion shares per no.13 warrantsconversion ratio

0.720 0.480subscriptionprice (€)

70,253,918 28,848,748subscription amount (€)

CAPITAL INCREASE FOR THE PURPOSE

OF EXERCISING

THE 2013 WARRANTS

97,574,886 60,101,558no. new conversion shares

ORD. + PREF.

399,433,400

99,102,666

36

Capital increase – Main stages and outcome of the operation

option offer to owners of the shares derivedfrom the capital increase

STAGE

subscribed 98.64% of the ord. shares offered subscribed 98.45% of the pref. shares offered

OUTCOME

from 21 Juneto 9 July

16, 19, 20, 21 and 22 July

unexercised option rightsoffered on the Stock Exchange

all the unexercised option rights sold during the first day they were offered

on the Stock Exchange

beginning of trading ofUnipol 2010-2013 ordinary share warrants and Unipol 2010-2013 preference share warrants

avg. daily volumes of 25 million for the 2010- 2013 ord. shares warrants and of 39 million for

the 2010-2013 pref. share warrants *16 July

* average daily volumes in the period 16 July – 27 July.

2010 capital increase completed with full subscription of the new ordinary and preference shareswithout intervention of the underwriting syndicate

SHARE CAPITAL AFTER 2010 INCREASE

no. ordinary shares 2,114,122,551

no. preference shares 1,302,200,446

no. total shares 3,416,322,997

SHARE CAPITAL BEFORE 2010 INCREASE

no. ordinary shares 1,479,885,786

no. preference shares 911,540,314

no. total shares 2,391,426,100

Finsoe 50.75% stake of ord.shares remains unchanged

37


Agenda




6 Solvency p. 31



38

Key assumptions underlying the Plan

• The Group Business Plan was drawn up during the first months of 2010, based on scenarios which exclude shocks or events disruptive to the financial markets over the next three-year period.

• In the last weeks we have witnessed tensions and turmoils in the Eurozone, which could make the course of the economy and markets post the 2007-2009 crisis more uncertain, with possible effects on the current and expected market scenarios and economic results.

Introductory remarks

39

Market scenarios

+1.5% ‘09-’12 cagrMotor premiums

+1.7% ’09-’12 cagrNon-Motor premiums

+1.6% ’09-’12 cagrNon-Life premiums

+2.0% ’09’-12 cagrLife premiums

+1.9% ’09-’12 cagrTotal premiums

+4.4% ’09-’12 cagrCustomer deposits

+5.3% ’09-’12 cagrLending

Interest rates

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

2010 2011 2012

Euribor 3 M CMS 10 Y Eur

Source: in-house calculation Note: avg. interest rates

Key assumptions underlying the Plan – Market scenarios

40

Key assumptions underlying the Plan – The Group basis of consolidation

2009

2012


COMPANY

Non exclusiveagents/brokers

Health care

Non-Life+ Life

Motor

BUSINESS

Life

COMPANY

Banking

Merchantbanking & mid-term loans

INSURANCE BUSINESS

… other companies

CHANNEL

Agents / UGF Banca branches

Internet / Telephone

Agreements/Internet

Non-Life

BNL branches

COMPANY BUSINESS CHANNEL BUSINESS CHANNEL

Branches, fin. shops, advisors

Head office,local premises


COMPANY

Health care

Non-Life+ Life

Motor

BUSINESS

Life + Non-Life

COMPANY

Banking

Merchantbanking & mid-term loans

INSURANCE BUSINESS

… other companies

CHANNEL

Agents//UGFBanca branches

Internet / Telephone

Agreements/Internet

BPER, BPSO branchesand otherbanks

COMPANY BUSINESS CHANNEL BUSINESS CHANNEL

Branches, fin. shops, advisors

Head Office,local premises

Key assumptions

consolidation in the UGF Group is expected from the second half 2010Arca Group

planned integration in UGF AssicurazioniNavale

expected sale within the Plan period. The Business Plan figures therefore exclude BNL Vita consolidation. The 2009 figures included in this presentation are pro-forma, i.e. calculated excluding BNL VitaBNL Vita

a capital increase to be carried out in the current year for a total amount of up to €400m and a warrant issue (to be converted into shares in 2013 for a maximum amount of €100m)

UGF S.p.A.

41

Group Mission

Our targets

distinguishing ourselves in the offer of products and servicesto retail customers and SMEs

enhancing our traditional presence in the territory and our relationship with labour organizations

maintaining our capital strength

producing long-term profitability by creating value for shareholders

becoming Leader in welfare services(pension schemes, assistance, health care)

42

Business Plan guidelines

PROFITABILITY

TARGET MARKETS

OPERATING EFFICIENCY

CAPITAL STRENGTH

•focus on retail and SME segments, especially in ‘traditional markets’, i.e. trade unions, self-employment organizations and cooperatives

•recovery of ‘structural’ profitability in Non-Life business•increase in Life business margin•consolidation in Banking sector results

•organization set-up restructuring•evolution of IT platform focusing on distribution and

efficiency in customer service•razionalization and control of running costs

•capital strength to support business development and meet the necessary capital requirements

•decision-making based on capital absorption profitability•risk/return optimization

SUSTAINABILITY – Strategic approach to Sustainability aimed at enhancing the Company’s identity and features as key drivers of its competitive position

43

TRADITIONAL MARKETS

• Increasing the present agreements penetration at national, regional and local level

• Development of new agreements with additional sectors of Associations

• Review of the offer system shifting from the ‘leverage-on-price’ to the ‘targeted-offer’ rationale (focus on service)

1,000,000 customers in traditional markets in 2012

Presence on the market Focus on traditional markets

PriorityChannel

UGF Assicurazioni Agencies

Group traditional markets

Target segment

Retail

SMEs

UGF Banca

Internet/telephone

Alternative channels

Retail Mass Market

Bancassurance Retail Affluent

Head Office(broker)

Selected industrial sectors

Head Office(account) Large Enterprises

SMEs

Corporate

Retail

SMEs

44

Business Plan 2012 key targets

PROFITABILITY

TARGET MARKETS

OPERATING EFFICIENCY

CAPITALSTRENGTH

97.5%

25%

€50m

2012 target

Non-Life combined ratio (direct business)

Life newbusiness margin

Banking net profit

€250mconsolidatednet profit

- 10.5 pp

+ 5.6 pp

+ €74m

2009-2012 delta*

n.m.

€4.6bn (Non-Life)

€3.1bn (Life)direct premiums + 2.9% cagr

+ 12.4 % cagr

1.4 x (Solvency I)1.5 x ** (Solvency II)

solvency ratio stable

* pro-forma

** Solvency II calculation made on assumptions based on the last regulatory indications. The results shown could change if the Solvency II final rules differ from the proposed ones adopted so far

SUST

AIN

AB

ILIT

Y

45

PRODUCT DEVELOPMENT UNDERWRITING

• strict control on claims costs and related expenses

• fraud prevention

• service quality

PORTFOLIO MANAGEMENT

CLAIMSSETTLEMENT

• tariff customization (Motor and Non- Motor)

• innovation and enlargement of offer range

• stringent selection and reduction of fleet and public entities portfolio

• review of current underwriting processes to focus on strict risk control

+ €130m

+ €440m in 2009-2012 Group technical margin

+ €165m + €110m

AGENCY NETWORK

• defining competitive models

• network restructuring

• CRM (customer relationship management)

+ €35m

NON-LIFE business Technical margin recovery

46

2009 2012e

3,945 4,075

160185155210180

UGF Assicurazioni * LinearUniSalute Arca Group

Premiums by company

1,735 1,930

2,525 2,540

180

2009 2012eNon-Motor Motor Arca Group

+1.6%

+2.9%

4,260

+3.6%

4,470

CAGR

+0.2%

4,650

direct business

86.0% 75.5%

22.0%22.0%

2009 2012eLoss Ratio Expense Ratio

108.0%97.5%

Δ 09/12

-10.5 p.p.

-10.5 p.p.

- 115

325

Technical margin

2009 2012e

* UGF Assicurazioni including Navale

NON-LIFE Business Target highlights

Non-Life premiums Combined Ratio€m

€m €m

+€440m

47

€85m Group NBV in 2012 (+€43m)€340m Group APE in 2012 (+€126m)

LIFE Business Value generation recovery

PRODUCT DEVELOPMENT INCOME PORTFOLIO

MANAGEMENT

• Offer enlargement in a customer life-cycle perspective

• Review of tariff and guarantee structures

• Reinforcing position in pension funds

• Increase in service level for customer/agent through a single operating platform

• Enlargement of IT platform and management structure efficiency

• Encourage reinvestment of maturing policies in new profitable products

• Guidance and incentive for the agency network

• Strengthening commercial support to high-potential agencies

48

Onset of a strategic partnership with two of the leading national banking groups, with which UGF shares values and market approach.

UGF consolidates its presence in Non-Life and Life bancassurance (BNL Vita to be sold) through the Arca Group, which has experience and know-how in this sector (2009 premium income was €477m in Life business and €173m in Non-Life and consolidated profit amounted to €16m).

Arca will be a bancassurance platform with a widely known market brand and open to other banking groups which share a similar culture

Increasing UGF Group presence on the national territory: Arca sells its products in over 18 regions, with around 2,000 bank outlets of over 30 contracted banks and about 150 agencies, o/w 49% located in Nothern Italy, 28% in Central Italy and 23% in the South and Islands.

Targets: (i) matching the Arca market expertise with UGF industrial, commercial and management know-how in Life and Non-Life business and (ii) sharing both groups’ operational excellence and best practices.

Opportunity to increase Arca’s market penetration, which is currently below market benchmarks

€180m 2012 Non-Life direct

premiums

€645m 2012 Life direct premiums

LIFE business The Arca Group – Strategic rationale behind the acquisition

Strategic partnerhsip with BPER and BPS

Consolidating presence inbancassurance

Creation of anopen platform

Widening territorial presence

Maximize know-how and best practice synergies

Exploitingmarket potential

49

LIFE business Target highlights

* pro-quota figures

20

90

214

340

2009 2012e

recurr./annual premiums APE

2,190 2,465

645

2009 2012e

Arca Group – Life business

3,110

CAGR

+12.4%

+4.0%

Pro-forma

New business volumes *CAGR

+16.5%

+64.3%

Pro-forma

19%

25%

NBM **

2009 2012ePro-forma

Δ 09/12

+5.6pp

4275

10

2009 2012e

Arca Group – Life business pro-quota

-Pro-forma

85CAGR

+25.9%

+21.3%

Life premiums NBV€m €m

€m

(**) Assumptions underlying the calculation:- discount rate 6.50%- yield rate 4.00%- tax-rate 32.32%

50

BANKING business Strategic targets

+8.0% gross operating income‘09-’12 CAGR+10.4% deposits from third

parties ’09-’12 CAGR over 10 pp ‘09-’12 cost/income reduction

Business model

Profitability

Operating model

Sales network

• Development of Banking-Insurance integrated business model- product factory with targeted and distinctive offer

• Focus on the Group’s preferential markets, SMEs and affluent with specific offers and structures

• Increase in network’s productivity and efficiency standards i.r.o. market benchmarks

• Improvement in operating cost management: structured expense process

• Review of credit granting and management process (in-house credit rating, credit recovery outsourcing, new integrated procedures for head office/branches)

• Strategic review of branch geographic location

51

Indicators

Gross operating income and net profit

Lending (excl. securitization) *

€bn

CAGR

+6.1%

+10.4%

8.710.4

CAGR

+9.7%

CAGR

+8.0%

n.m.

€m

€bn

2.0

6.7

1.5

8.9

6.99.1

* securitized loans for €2.9bn in 2009 and €2.3bn in 2012.

Customer deposits (excl. securitization)

2009 2012e

deposits - third parties deposits - UGF Group

440348

50

-24 2009 2012e

gross operating income net profit

2009 2012e

BANKING business Key targets (figures relating to UGF Banca Group)

Cost / income 76.6%

2009

66.0%

2012e

No. of branches 299 308

Tier 1 ratio 7.3% 6.3%

Total capital ratio 14.5% 12.2%

52

Investment management Investment strategies

Asset allocation guidelines

• portfolio profitability targets

• capital absorption targets according to Solvency II (equity reduction already implemented in 2010)

• diversification per issuer (corporate/government)

Investment activity targets

• cash flow matching: investments in liquidity consistent with the maturity of liabilities

• preference for equities with high dividend yield, adequate income growth profile and financial strength

• investments consistent with the maturity of liabilities

• diversification by issuer, industry sector and rating

• selective investments in subordinated bonds

2010-2012 investment strategies

Equities

Liquidity

Corporate bonds

• preference for Italian government bonds

• diversification between sovereign and supranational issuers

• maturities consistent with ‘cash flow matching’ approach

Government bonds

• optmization risk/reward profile of the portfolio

• low volatility of income in a multi-year horizon

• residual investment in alternative financial instruments

53

2009 pro-forma 2012 *Insurance business asset allocation

expected yield of insurance assets in the Plan period: 4% – 4.3%

fixed rate49%

floating rate24%

structuredproducts

7%

equities 10%

monetary instruments10%

fixed rate57%

floating rate 22%

structuredproducts

6%

equities 7%

monetary instruments8%

* excluding Arca Group

Investment management Asset allocation

54

Consolidated economic results Targets highlights

Net consolidated result by business area*€m

Non-Life business

Life business

Banking business

Holding Consolidationadjustments

* net of taxes, gross of minority interests

Net consolidatedresult

-15-639 -56 -24 -51 -785

2009 pro-forma

100175 80 50 -155 250

2012e

o/w €631m impairments

55

Note: Solvency II calculation carried out according to assumptions based on the last regulatory indications. The results shown could change if the Solvency II final rules differ from the proposed ones adopted so far

Pro-forma Pro-forma

Group Solvency Target highlights

Solvency ratio

1.5 x1.4 x

Solvency II

2009 2012e

1.4 x1.4 x

Solvency I

2009 2012e

56

Disclaimer

This presentation contains information relating to forecasts of figures,

results and events which reflect the current management outlook but

these could differ from what actually happens owing to events, risks and

market factors that it is presently impossible either to know or to predict.

Maurizio Castellina, the Senior Executive Responsible for drawing up

the corporate accounts, declares – in accordance with Article 154-bis (2)

of the ‘Single Financial Services Act’ – that the accounting information

included in this presentation corresponds to the documentary results,

the books and accounting records.

57

Contacts

[email protected]

Adriano Donati Tel +39 051 507 [email protected]

Devis Menegatti Tel +39 051 507 [email protected]

Eleonora Roncuzzi Tel +39 051 507 [email protected]

Silvia Tonioli Tel +39 051 507 [email protected]

Investor RelationsUnipol Gruppo Finanziario - Via Stalingrado 45, Bologna

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