1Cattolica Group
Cattolica Group:
Growth and Value Mix
Italian Investment Seminar
Dresdner Kleinwort Wassersteinand Borsa Italiana
Frankfurt, 28 September 2005
Giorgio Zampieri – Group CFO and IR Manager
2Cattolica Group
Agenda
� Cattolica Group at a glance
� Market scenario and Cattolica strategy
� Focus on value creation
� 1H 2005 Results
� IAS/IFRS adoption
� Attachments
3Cattolica Group
Agenda
� Cattolica Group at a glance
� Market scenario and Cattolica strategy
� Focus on value creation
� 1H 2005 Results
� IAS/IFRS adoption
� Attachments
4Cattolica Group
� The Parent Company is a co-operative legal-entity structure, operating in lifeand non-life businesses
� Today the Group is made by 22 companies, among which there are 14insurance companies
� Insurance companies, other than the Parent Company, are:
• 8 operating in life business (Duomo Previdenza, Risparmio & Previdenza,BPV Vita, Lombarda Vita, Eurosav, Axa-Cattolica Previdenza in Azienda,San Miniato Previdenza, UniOne Vita)
• 5 operating in non-life business (Il Duomo Assicurazioni, VeronaAssicurazioni, Cattolica Aziende, Tua Assicurazioni, UniOne Assicurazioni)
� Other Group companies are two real-estate companies, four servicecompanies, one asset management company and one retail-brokerage
(Fas) company
Cattolica Group
5Cattolica Group
1896 1976
BIRTH CONS. GROUP DEVELOPMENT
1994 20042000 2002 2003‘98‘95 ‘97
Cattolica Group history’s key pointsHISTORICAL PHASES
2001
Cattolica Group Evolution
2005
Listing
November
6Cattolica Group
525 7561,053 1,267 1,392
917
2,012
2,298
2,464
2,820
1999 2000 2001 2002 2003
Development of consolidated premiums
1,442
2,768
3,351
3,731
4,212
2004
1,420
3,197
4,617
Gross Consolidated PremiumsDirect and indirect business
(1999 - 2003; Euro mn)
2004 Result
73%64% 69% 66% 67%
Non-life
Life
Breakdown
27%36% 31% 34% 33%
Life
Non-life(*)
69%
31%
CAGR
99/04
26%26%
(*) With the inclusion of indirect business (**) Only direct business
2007E
2,010
3,499
5,510
64%
36%
2007 Target
28%28%
22%22%
CAGR
04/07
6%6%
3%3%
12%12%
+9.6%+9.6%
+13.4%+13.4%
+2.5%**+2.5%**
Change % 2004/ 2003
MKT 10%
MKT 13%
MKT 6%
7Cattolica Group
Group Market Share trend
Group Market Share
(2002 - 2004; Italian direct business)
Sources: Estimates on Cattolica Group reports and ANIA data
3.8%4.0% 4.0%
4.5% 4.5%
4.9%
4.2%4.3%
4.5%
2002 2003 2004
Non-life Life Total market share
2004
• FonSAI• Generali• Allianz• Unipol• Toro• R. Mutua• Cattolica• Zurich• Axa Italia• Sara
• Generali• Allianz• AIP• Unipol• Poste V.• Cattolica• Aviva• FonSAI• MPS• Mediolan.
• Generali• Allianz• Unipol• FonSAI• AIP• Cattolica• Poste V.• Aviva• Toro• MPS
Non-life Life Total
7
6 6
5 thtraditionalinsurance
Italian Group
8Cattolica Group
Business mix: Cattolica Group and the Market
MARKET 31.12.2004 CATTOLICA GROUP 31.12.2004
Non-Life
35%
Non-Life
30.4%
Life
65%
Life
69.6%
Total Total
Non-Life
Life
Non-Life
Life
Motor
59.9%
Others
40.1%
Motor
60.1%
Others
39.9%
Index e Unit
37.7%
Traditional
62.3%
Traditional
43.3%
Index e Unit
56.7%
9Cattolica Group
Technical profitability
Non-life combined ratio trend
(1999 - 2003; %)
2004 Result 2007 Target
94.5%
2007E
97.5%
20041999 2000 2001 2002 2003
104.2%
98.9%
101.3%
98.5%
100.6%
10Cattolica Group
Development of consolidated technical results
Non-life business
12
(Euro mn)
30
Life business
2003
58
(Euro mn)
59
Change % 2003-2004
Total technical result
(Euro mn)
2003 2004
71
892003 2004 2007E
93
170
2003 2004 2007E
77
+24%+24%
+46%+46%
+9%+9%
CAGR 04/07
2007E
+148%
+148%
+1%+1%
+26%+26%
11Cattolica Group
Development of consolidated net profit
Consolidated net profit 1999-2003
( Euro mn)
26
4753
63
125
1999 2000 2001 2002 2003
Group net
profit (*) 25 44 46 57 116
2004
150
136
2004 Result
CAGR
99/04
2007 Target
CAGR
04/07
2007E
176
162
42%42%
5,5%5,5%
+19.6%+19.6%
40%40% 6%6%+17.1%+17.1%
12Cattolica Group
Agenda
� Cattolica Group at a glance
� Market scenario and Cattolica strategy
� Focus on value creation
� 1H 2005 Results
� IAS/IFRS adoption
� Attachments
13Cattolica Group
Market scenario
� Integration (M&A) processes and rationalization and concentration in holding structures
� Financial market recovery expectations, and the resulting impact on the companies’ asset andfinancial management
� Progressive improvement of technical management, through cost reduction and portfolioselection policies
� Strengthening existing channels and consolidating new distribution models
� Customer need for simplicity and transparency, and an increasing demand for consultancy
General overview and trends
� Increase in the Life market growth rate
� Finalisation of Italian pension reform
� Pressure for greater transparency of life product costs
� P&C is set to remain a low growth but highly profitable business
� Motor business: flat or slightly increasing tariffs and stable claim frequency.
� Non- motor segments will sustain the overall growth of the P&C sector
Non-life business
Life business
14Cattolica Group
Mission and strategic objectives continued
Architettura industriale focalizzata,
integrata e aperta
Crescita
organica
Crescita
per linee
esterne
sul core business assicurativo,
proseguendo nel consolidamento dei business
attuali ed avviando nuovi percorsi di crescita
Focus integrated, open
Industrial architecture
Crescita
organica
Organic
growth
Crescita
per linee
esterne
External
growth
STRATEGIC PATHS
MISSION
Consolidate the
insurance
business model
Integrated
development of
financial services
Service
centralisation and
cost optimization
Strengthencontrollership
Develop current
business
Develop new
markets, products,
channels
Accelerate
development
Strategic objectives
… focus on insurance core business, consolidating
current businesses and implementing new growth
strategies through flexible development methods
15Cattolica Group
Organic growth: multi-channel developmentBUSINESS/SERVICELINES
Tied agents Banks Brokers Other channels
CHANNELS
Non-Life
Life
Financial
services and
asset
management
• Agencynetworkdevelop-ment
• Productandchannelinnova-tion(TUA)
• Retailsegment
• Selectivecorporateexpansion
• Focus onprofitability
• Penetrationon preferredsegments
• Socialsecurity
• Expansion of parentcompany units fordirect assumption ofcorporate risks
• Private retail segment• Standard products• JV with BPVN and other
business/ partnershipsagreements (OnLineDivision)
• “Flexible” confirmation ofthe JV model
• Protection/developmentof strategic commercialcontracts
• Product and segmentinnovation
• Re-launch ofCattolicaAziende
• Focusandselectionof middlesize,high-contribu-tionbrokers
• Axa-Cattolica
• Middlecompanysegment(B2B2E)
• Direct channel forcorporate contracts
• Development of“preferred multi-mandatory” distribution
• FAs working insideagencies: CattolicaInvestimenti SIM
• Cross-selling at salesoutlets
• Banking partnershipsto increase multi-bankfinancial products withspecific proprietarybrands
• Development of Cattolica Investimenti SIM model• Institutional Asset management: Verona Gestioni
SGR
16Cattolica Group
Agenda
� Cattolica at a glance
� Market scenario and Cattolica strategy
� Focus on value creation
� 1H 2005 Results
� IAS/IFRS adoption
� Attachments
17Cattolica Group
Development of dividend per share
Fonti: Cattolica – Bilancio d’esercizio 2003 – Analisi interne(*) Dividend yield: Dividend per share/Official price of last day of the year(**) With the inclusion of extraordinary dividend
(***) Calculated on a price per share of € 36
2000 2001 2002 2003
Pay-out (Euro mln)
Other indicators
30 43 48
0.70
1.00 1.001.02
Dividend per share
(1999-2003; Euro)
0.78
0.22
Dividend yield(*) 2.28% 3.60% 4.59% 3.50%
43(**)
Extraordinarydividend
1 free share forevery 10
1999
0.62
17
n.a.
Dividend 2004
2004
1.35
64.,0
3.75%(***)
Cattolica dividend policy is consistent with the 3-year plan value creation program
+32,4%+32,4%
CAGR
99/04
17%17%
30%30%
18Cattolica Group
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Growth and Value Performance
Focus on
Growth
Focus on
Growth
Focus on
Value
Focus on
Value
Index value = 1
BUSINESS
PLAN 2005|2007
Business Plan 2005-2007 estimates abalanced mix of growthand value for the next3 years
Index focused on growth and value performance
Index=Consolidated premiums/Group net profit (1995-2007E)
Listing
More focus on VALUE
in combination with
positive growth
19Cattolica Group
Cattolica stock performance in 2005
Source: Bloomberg
PERFORMANCE 2005as at 20 September 2005
Cattolica +22.6%
MIB INS.
Mibtel
S&P/MIB
+12.6%
+11.5%
+7.5%
Change % 01/01/2005-20/09/200501/01/2005
Cattolica S&P/MIBMIB INS. MIBTEL
20/09/2005
Stock performance in comparison
with the main indexes
20Cattolica Group
Agenda
� Cattolica at a glance
� Market scenario and Cattolica strategy
� Focus on value creation
� 1H2005 Results
� IAS/IFRS adoption
� Attachments
21Cattolica Group
1H 2005 Results at a glance
All figures compare 1H 2005 with 1H 2004
The validity of Cattolica 3-year-plan strategy is confirmed
by 1st half 2005 results:
� Increase of consolidated net profit up 11.9% to € 66 millionand of Group net profit up 3.7% to € 56 million
� Premiums growth up 14.7% to € 2,768 million; significantdevelopment in life premiums: + 21% to € 2.015 million
� Continued core business profitability: technicalperformance + 30.8% to € 51 million; non-life technical resultup 240% to € 17 million; consolidation of life technical result
� Group combined ratio down from 99.28% in 1H 2004 to97.41%
22Cattolica Group
1H 2005 Key numbers
(1) Net of taxes and minority interests
Legend:
Technical ResultTechnical Result
5
1734
34
1H 2004 1H 2005
39
30.8%30.8% 51
Non-life Life
Figures in € mlnChange 1H04-1H 05
5456
1H 2004 1H 2005
3.7%3.7%
Net profit (1)Net profit (1)
14,432
17,157
1H 2004 1H 2005
18.9%18.9%
Technical ReservesTechnical Reserves
Gross PremiumsGross Premiums
1.666
753748
2,015
1H 2004 1H 2005
2,414
2,76814.7%14.7%
Non-life Life
99.28%97.41%
1H 2004 1H 2005
Non-life combined ratioNon-life combined ratio
Net ordinary resultNet ordinary result
64
94
1H 2004 1H 2005
46,9%46,9%
23Cattolica Group
Development of Group’s multichannel network
Agencies n.
546
918 974 1,024 1,049 1,092
1999 2000 2001 2002 2003 2004 30/06/05
1,270
FAs n.
337511
613
895
1,212 1,138
1999 2000 2001 2002 2003 2004 30/06/05
1,069
With the inclusion of 138
Eurosav multi-mandatory
agencies
Other 164 FAs of
Cattolica Investimenti
SIM network
Bank branches n.
2,066
2,653 2,717 2,748
3,053
2,702
1999 2000 2001 2002 2003 2004 30/06/05
2,955
The additional 198
branches are Eurosav
partner banks
24Cattolica Group
Non-life business
Premiums
726
(Direct business - Euro mn)
735
2003
1H 2004 1H 2005 2004
1,398
+1.2%+1.2%
Agents
90.3%
Other
6.8%
Broker
1.5%Banks
1.4%
� Growth in agency networK
− 1,132 proprietary agencies− 138 Eurosav multi-mandatory agencies
� New structures for selecting and
supporting new agents
� Special projects
− Agency segmentation based on performance− Service Partners and Club Best agencies− Regional and local projects
Premiums breakdown by channel Premiums growth by channel
(Direct business - Euro mn)
1H2004 1H2005
Agencies - 1.8%
Broker + 22.2%
Banks + 100%
Other + 38.9%
676664
95
36
111050
25Cattolica Group
Agencies network development
Proprietary agency network(number of agencies)
Eurosav network
1H 2005 premiums collection: €275 million (through banks andagencies)
TARGET
Improve the multi-mandatoryagency network and set up ourPole for “preferred multi-mandatory” distribution
UniOne network
1H 2005 premiums collection: €123 million
They will be included in CattolicaGroup agency network in 2H2005:an integration plan with Duomohas been approved
1,0701,092
705709
359364
1H2004 FY2004
6
1H2005
1,132
719
374
31.8. 2005
1,325
Multi-mandatory agency network(number of agencies)
138 Eurosav multi-mandatory agencies as at1H2005, which sell life products from thebeginning of this year.
19 39
188
45
372
720
26Cattolica Group
Life business
Premiums
1,666
(Direct business - Euro mn)
2,015
1H 2004 1H 2005 2004
3,197
+21%+21%
Banks
85.6%
Agencies
6 %
Other
6.1%
FAs
1.1%
Broker
1.2%
Premiums growth by channel
(Direct business - Euro mn)
1H2004 1H2005
� Index- and unit-linked products grew by12% from € 905 million to € 1,014 million.
� Capitalization operations rose from €
181 million to € 362 million� Cometa pension fund collected € 90
million premiums. In the first 4 monthsCometa registered a 4.5% (annualized)performance
Banks + 13.2%
FAs + 100%
Agencies + 8.1%
Other + 609.5%
1.523
1.72411
111
2122120149
27Cattolica Group
Life new business premiums
Premiums
1,580
(Euro mn) 1,835
1H 2004 1H 2005 2004
2,981
+16.1%+16.1%
Premiums mix by type of product(Euro mn)
1H 2004 1H 2005
44.1%
12.8%
43.1%
Index
Unit
Traditional
39%
15.9%
12.8%45.1%
Breakdown by channel(Euro mn)
+17.2%+17.2%
+13.3%+13.3%
75
1,683
64
1.485
7544
4444
Agents
1,485
Banks
FAs/other
77
31
+148.4+148.4
1H 2004
1H 2004
1H 2004
1H 2005
1H 2005
1H 2005
28Cattolica Group
Life technical reserves and segregated funds
Group Average yield
Segregated funds
Technical reserves breakdown
by financial guarantee
2003A 2004A 2005E 2007E
3.57%
3.65%
3.62%
3.44%
3.55%
2006E<= 2.5% > 2.5% e < 4% >= 4%
Financial guarantee
6,058
5,202
(Euro mn)
1H
200572.2%
56.6%
11.1%
14.2%
16.7%
29.2%1H
2004
+ 48.2%+ 48.2% - 8.7%- 8.7% - 33.5%- 33.5%
29Cattolica Group
Core business: technical performance
Non-life business
� Premiums stable; focus on profitability with arecord increase of 240%
� Expense ratio down to 20.67% from 20.83%in 1H2004 and claims ratio decreases from75.79% in 1H 2004 to 74.12% in 1H 2005
Life Business:
� Strong premiums increase (+21%); technicalresult stable; expense ratio down to 4.31%from 4.49% in 1H2004
5
Non-Life technical result(Euro mn)
17
1H 2004 1H 2005 2004
30
+240%+240%
Combined ratio
99.28%97.41%
1H2004 1H2005 2004
97.5%34
Life technical result(Euro mn)
1H 2004 1H 2005 2004
59
34
30Cattolica Group
Non-technical account
128
Net Investment income(Euro mn)
149
1H 2004 1H 2005 2004
260
+16.4%+16.4%
� Financial performance increase despitelow interest rates environment
� Lower incidence of extraordinary incomederiving from real estate reorganization,even if property assets transfer is stillongoing
� Capital gains on property disposalsamounted to 19 million
64
Net ordinary result(Euro mn)
94
1H 2004 1H 2005 2004
140
+46.9%+46.9%49
Net extraordinary result(Euro mn)
14
1H 2004 1H 2005 2004
80
-71.4%-71.4%
31Cattolica Group
Consolidated net profit
OtherNet
income
1H04
Change in
technical result
Change in
financial
management
12
59
(35)
Change in
income taxes
Change in net
extra ordinary
result
21
12
Net
income
1H05
(3)
66
32Cattolica Group
Agenda
� Cattolica at a glance
� Market scenario and Cattolica strategy
� Focus on value creation
� 1H2005 Results
� IAS/IFRS adoption
� Attachments
33Cattolica Group
Transition to IAS IFRS and impacts of first time adoption
IAS IFRS application
� Cattolica Group edited the consolidatedsix-months report to 30 June 2005 inaccordance with Italian gaap principlesand the required prospects attachment incompliance with CONSOB art. 81-bis n.14990
� It’s important to point out that the Grouphas decided to apply IAS 39 and IFRS 4as from 1st January 2005, in order tobetter understand the impacts onconsolidated shareholders’ equity and onconsolidated net profit
� All other IAS/IFRS principles were adoptedas from 1st January 2004
� The prospects resulted to be a completeIAS/IFRS application as far as it regards1H2005 consolidated net profit andconsolidated net shareholders’ equity
The impact on Group shareholders’
equity will be positive
�� � = � ��
Analysis areas
Consolidation area �
Technical reserves and DAC �
Financial investments �
Business combinations �
Land and buildings �
Intangible assets �
Group shareholders’ equity �
Impacts
Impacts of first time adoption
IAS/IFRS application on net profit gives rise
to non-significant impacts
34Cattolica Group
IAS/IFRS impact on shareholders’ equity
Net shareholder’s equity
(Euro mn)
IT gaap as at 1stJanuary 2005
1,166 +3.7%+3.7%
1,209
IAS/IFRS as at 1st
January 2005IT gaap as at 30th
June 2005IAS/IFRS as at 30th
June 2005
1,163
1,215
+4.5%+4.5%
35Cattolica Group
IAS/IFRS impact on shareholders’ equity
IT gaap as at30th June 2005
IAS/IFRS as at30th June 2005
1,1631,215
- 22
Tangible andintangible
assets
243
Financial assetsand liabilities
- 146
Insurancecontracts
3
Other
- 26
Fiscaleffect
Net shareholder’s equity
(Euro mn)
+4.5%+4.5%
36Cattolica Group
IAS/IFRS impact on consolidated net profit and life premiums
150
Consolidated net profit
66
IAS/IFRS as at
31st December 2004
66
163
IT gaap as at
31st December 2004
IT gaap as at
30th June 2005
IAS/IFRS as at
30 June 2005
(Euro mn)
+8.7%+8.7%
Consolidated life premiums
1,7772,015
IT gaap as at
30th June 2005
IAS/IFRS as at
30 June 2005
(Euro mn)
-11.8%-11.8%
Investment
contracts: €
238 million
37Cattolica Group
Agenda
� Cattolica Group at a glance
� Market scenario and Cattolica strategy
� Focus on value creation
� 1H 2005 Results
� IAS/IFRS adoption
� Attachments
38Cattolica Group
Why UniOne?
� Relative young company, born in1984, from 2000 in Generali Group
� Agency network focused on P&C
business, based most of them inmiddle and south Italy
� Motor Transportation business is86.3% of total premiums
� Liquidators network
complementary to Cattolica
network
� High potential in life business whichis a recent start-up
Before acquisition
100%
100%
UniOne: the key pionts
39Cattolica Group
Economic/Financial information
(*) Before dividens and reserves pay back
PREMIUMS(Euro millions)
NET PROFIT(Euro millions)
Capital(Euro miilions)
ASSET(Euro millions)
1H 2005 2004
120.7 236.3+16%
1.6 14.1
51.9 85.3
~ 401 ~ 410
P&C
LIFE 2.5 5.4
TOTAL 123.2 241.7
(*)
2003
204.4+19%
9.3
71.2
~ 350
P&C
LIFE 3.2
TOTAL 207.6
40Cattolica Group
Agency network at the end of June 2005
14
74
19
1574
171
68
66
23
29164
8
65
1165
33
38
69
UniOne
189189
Number of agencies
N: 29C: 70S: 903
14 8
1
3
11 9
2311
2
14
27
521
22
15
14
74
19
1574
171
68
66
23
29164
8
65
1165
33
38
69
Cattolica Group
1.1321.132
Number of proprietary agencies
N: 665C: 328S: 13989
235 131
20
132
7821
39
11343
7
27
31
949
18
32
3
37
18
37%
48%
15%
29%
12%
59%
42Cattolica Group
Embedded Value as at 31 December 2004
1,228
1,034
1,067
(33)
194
Sources: Internal Analyses
Group Embedded Value 2004 (Euro mn)
Shareholders’
equity
Adjustments N.A.V. Embedded
Value
1,177984979 5 193
1,2281,0341,067 (33) 194
+ 51+ 50+ 88 (38) + 1
2003
2004
Delta
EV/Share (€)
24.8
25.9
+ 1.1
Variazione 2004/ 2003
Note: 2004 figure is pre distribution of dividends. 50%Eurosav. All components are net of : taxes, reinsurance, policyholders’ interests and minorities
Value of life
in force
business
43Cattolica Group
Embedded Value Assumptions
7.25%
4.5%
Variables
100% ISVAP Minimum
38.25%
Discount Rate
Life Products Investment Return
Solvency Margin
Taxation on Profit
AssumptionVariable
44Cattolica Group
Definitions
Ratio Calculation method
Claims incurred/Earned premiums, net of reinsuranceClaims Ratio
Operating expenses/ Earned premiums, net of reinsuranceExpense Ratio (non-life)
1 – (Non-life technical result/Net earned premiums)Combined Ratio
Other administrative expenses/ Average Life Technical ReservesExpense Ratio (Life)
Other operating expenses (life) / Earned premiumsLife G&A ratio
Acquisition expenses and commissions /Earned premiums ,net of reinsuranceCommision ratio (non-life)
Commision ratio (life) Acquisition expenses /Earned premiums , net of reinsurance
45Cattolica Group
This document has been prepared by Cattolica Assicurazioni – based on data from internal sources (year-endfinancial statements, consolidated group financial statements, internal reporting and other companydocumentation, etc.) – for the sole purpose of providing information on the group’s results and futureoperating strategies. Given this, it can in no way be used as a basis for possible investment decisions. It is nota solicitation to buy or sell shares. No part of the document can be taken to be the cause of or reason foragreements or commitments of any type or kind whatsoever, nor can it be relied upon for agreements andcommitments.Information contained in the document concerning forecasts has been prepared according tovarious assumptions and/or elements that might ultimately materialise differently to present expectations.Results might therefore change. Cattolica therefore in no way provides any guarantee, either explicit or tacit,as regards the integrity or accuracy of the information or opinions contained in the document, nor can anydegree of reliability be attributed to the same, inasmuch as it has not been subjected to independentverification. Responsibility for use of the information and opinions contained in the document lies solely withthe user. In any case Cattolica, within legally admissible limits, will not consider itself liable for any damages,direct or indirect, that third parties might claim due to utilisation of incomplete or inaccurate information. Forany further information concerning Cattolica Assicurazioni and its related group, reference must be madeexclusively to the information given in the annual, quarterly, and interim reports and financial statements. Thefull versions of these documents, which constitute the factual basis and proof for all legal purposes, arelodged at the company’s registered offices and are available to anyone requesting them. Reproduction or fullor partial publication and distribution of the information contained herein to third parties is prohibited.Acceptance of the present document automatically signifies recognition of the aforesaid constraints.
DISCLAIMER
46Cattolica Group
Cattolica Group:
Growth and Value Mix
Frankfurt, 28 September 2005
Giorgio Zampieri – Group CFO and IR Manager