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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




� 1H 2005 Results


� 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




� 1H 2005 Results


� 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



� 1H 2005 Results


� 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




� 1H2005 Results


� 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


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


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


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




� 1H2005 Results


� 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




� 1H 2005 Results


� 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

cattolicagroup: growthandvaluemix...cattolica group 1 cattolicagroup: growthandvaluemix...

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