Interim Management Report as of March 31st, 2016

Transcription

1 Interim Management Report as of March 31st, 2016 Approved by the Board of Directors May 13th, 2016

2 Please note that the original Report is in Italian. In case of doubt the Italian version prevails.

3 Contents INTERIM MANAGEMENT REPORT Corporate Bodies 5 Group Structure and bank shareholdings 9 Foreword and consolidation area 13 Consolidated financial statements 19 Management report 27 Certification of the Appointed Executive 47 TABLES Table 1 - Key economic indicators 31 Table 2 - Key equity indicators 31 Table 3 - Sales network and headcount 32 Table 4 - Reclassified consolidated statement of financial position 33 Table 5 - Reclassified consolidated income statement 34 Table 6 - Reclassified consolidated income statement by segment of activities 35 Table 7 - Key indicators 36 Table 8 - Total premiums written 37 Table 9 - Life premiums written 38 Table 10 - Investments 39 3

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5 Corporate Bodies

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7 Corporate Bodies BOARD OF DIRECTORS Chairman Paolo Bedoni (*) Vice Deputy Chairman Aldo Poli (*) Deputy Chairman Manfredo Turchetti (*) Secretary Alessandro Lai (*) Managing Director Giovan Battista Mazzucchelli (*) Directors Luigi Baraggia Barbara Blasevich (*) Bettina Campedelli Lisa Ferrarini Paola Ferroli Paola Grossi Giovanni Maccagnani Luigi Mion Carlo Napoleoni Angelo Nardi Pilade Riello (*) Anna Tosolini Eugenio Vanda BOARD OF STATUTORY AUDITORS Chairman Giovanni Glisenti Statutory Auditors Luigi de Anna Federica Bonato Cesare Brena Andrea Rossi Substitute Auditors Massimo Babbi Carlo Alberto Murari GENERAL MANAGEMENT General Managers Marco Cardinaletti Flavio Piva Deputy General Managers Carlo Barbera Carlo Ferraresi (*) The Directors whose names are marked with an asterisk are members of the Executive Committee 7

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9 Group Structure and bank shareholdings

10 As of March 31st, 2016 NON-LIFE LIFE OTHER 60% ABC Assicura 51% BCC Vita Cattolica Immobiliare 100% 51% 100% FATA Assicurazioni Danni 99.99% BCC Assicurazioni TUA Assicurazioni (*) 60% 60% 60% Berica Vita Cattolica Life Lombarda Vita Cattolica Beni Immobili Cattolica Agricola Cattolica Services (**) 100% 100% 100% 99.96% Cattolica Services Sinistri C. P. Servizi Consulenziali 100% Cassa di Risparmio di San Miniato 25.12% All Risks Solutions 20% Non-life insurance Life insurance Agricultural-real estate property sector Operating services Banks Property services (*) TUA Assicurazioni wholly owns TUA Retail. (**) 0.005% of the share capital is held individually by ABC Assicura, BCC Assicurazioni, BCC Vita, Berica Vita, FATA Assicurazioni Danni, Lombarda Vita and C.P. Servizi Consulenziali, and 0.01% is held by TUA Assicurazioni.

11 As of March 31st, 2016 BANKING EQUITY INVESTMENTS 0.57% UBI Banca Veneto Banca 0.22% 0.01% (*) Banca Popolare di Vicenza Emil Banca 0.08% (*) Holding post share capital increase in May 2016.

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13 Foreword and consolidation area

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15 Foreword The interim management report relating to the first quarter of 2016 is drawn up on a voluntary basis. Italian Legislative Decree No. 25 dated February 15th, 2016, which assimilated the European Transparency II directive within Italian legislation, eliminated the obligation to publish the interim management report, envisaged by Article 154 ter, section 5 of the Consolidated Finance Law (T.U.F.) and granted CONSOB the faculty to envisage - by means of regulation - possible additional disclosure obligations, only after impact analysis which also takes into account the approaches of the other countries in the European Union, in the majority of which the obligation has been abolished for all the issuers. For the purpose of continuity with the past and transparency vis-à-vis the financial market, the Cattolica Group deems to proceed, on a voluntary basis, with the publication of the interim management report pending the definition of the reference legislative framework. In the report: the income statement figures relating to the first quarter of 2016 are presented on a comparative basis with those for the first quarter of the statement of financial position figures at the close of the first quarter of 2016 are compared with the corresponding figures as of December 31st, The report is accompanied by the following statements: statement of financial position income statement and statement of comprehensive income management report. The interim management report closed as of March 31st, a date which coincides with that of the corresponding reports of the companies included within the consolidation area. For the purpose of ensuring prompt quarterly disclosure to the market, recourse was also made to estimation processes for certain items of minor importance. 15

16 Consolidation area The consolidation area includes the financial statements of the Parent Company and those of the subsidiary companies, in accordance with IFRS 10. During the first three months, the scope of consolidation changed from that as of December 31st, 2015, due to the final liquidation of Prisma. As at March 31st, the scope of consolidation comprised nine insurance companies, two companies which carry out agricultural-real estate activities, four service companies and three real estate property mutual funds. In addition to the companies in the consolidation area, the Group includes a banking company and two service companies. 16

17 As of March 31st, 2016 Consolidated line-by-line 51% BCC Vita Cattolica Services (*) 99.96% FATA Assicurazioni Danni 100% 60% Berica Vita 100% Cattolica Services Sinistri 100% Cattolica Agricola BCC Assicurazioni 51% 60% 60% Lombarda Vita Cattolica Life C.P. Servizi Consulenziali 100% 100% Cattolica Beni Immobili ABC Assicura TUA Assicurazioni 60% 99.99% Cattolica Immobiliare 100% 45.95% Fondo Euripide (**) 72.02% Fondo Macquarie Office Italy (***) 52.87% Fondo Perseide (****) Equity method 25.12% Cassa di Risparmio di San Miniato All Risks Solutions 20% Carried at cost 100% TUA Retail Non-life insurance Life insurance Agricultural-real estate property Operating services sector Real estate property funds Banks (*) 0.005% of the share capital of Cattolica Services is held individually by ABC Assicura, BCC Assicurazioni, BCC Vita, Berica Vita, FATA Assicurazioni Danni, Lombarda Vita and C.P. Servizi Consulenziali. TUA Assicurazioni holds 0.01% of the share capital of Cattolica Services. (**) The remaining 54.05% is held as follows: 43.63% by Lombarda Vita, 9.77% by Berica Vita and 0.65% by TUA Assicurazioni. (***) The remaining 27.98% is held as follows: 17.66% by Lombarda Vita and 10.32% by BCC Vita. (****) The remaining 47.13% is held as follows: 20.46% by Lombarda Vita,13.38% by Berica Vita, 6.41% by BCC Vita, 3.59% by FATA Assicurazioni Danni and 3.29% by TUA Assicurazioni. 17

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19 Consolidated financial statements

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21 INTERIM MANAGEMENT REPORT AS OF MARCH 31st, 2016 Company: CATTOLICA ASSICURAZIONI GROUP STATEMENT OF FINANCIAL POSITION - ASSETS ( millions) March 31st, 2016 December 31st, INTANGIBLE ASSETS Goodwill Other intangible assets TANGIBLE ASSETS Property Other tangible assets TECHNICAL PROVISIONS - REINSURANCE AMOUNT INVESTMENTS 21,063 20, Investment property Investments in subsidiaries, associated companies and joint ventures Held to maturity investments Loans and receivables Available for sale financial assets 16,265 15, Financial assets at fair value through profit and loss 3,291 3,365 5 SUNDRY RECEIVABLES Receivables deriving from direct insurance transactions Receivables deriving from reinsurance transactions Other receivables OTHER ASSET ITEMS 1,148 1, Non-current assets or disposal group held for sale Deferred acquisition costs Deferred tax assets Current tax assets Other assets CASH AND CASH EQUIVALENTS TOTAL ASSETS 24,167 24,043 21

22 Company: CATTOLICA ASSICURAZIONI GROUP STATEMENT OF FINANCIAL POSITION - SHAREHOLDERS EQUITY AND LIABILITIES ( millions) March 31st, 2016 December 31st, SHAREHOLDERS' EQUITY 2,164 2, pertaining to the Group 1,916 1, Share capital Other equity instruments Capital reserves Revenue reserves and other equity reserves (Own shares) Reserve for net exchange differences Gains or losses on available for sale financial assets Other gains or losses recognised directly in equity Profit (loss) for the period pertaining to the Group pertaining to minority interests Capital and reserves pertaining to minority interests Gains or losses recognised directly in equity Profit (loss) for the period pertaining to minority interests PROVISIONS AND ALLOWANCES TECHNICAL PROVISIONS 19,081 18,899 4 FINANCIAL LIABILITIES 1,756 1, Financial liabilities at fair value through profit or loss 1,475 1, Other financial liabilities PAYABLES Payables deriving from direct insurance transactions Payables deriving from reinsurance transactions Other payables OTHER LIABILITY ITEMS Liabilities of disposal group held for sale Deferred tax liabilities Current tax liabilities Other liabilities TOTAL SHAREHOLDERS EQUITY AND LIABILITIES 24,167 24,043 22

23 INTERIM MANAGEMENT REPORT AS OF MARCH 31st, 2016 Company: CATTOLICA ASSICURAZIONI GROUP INCOME STATEMENT ( millions) March 31st, 2016 March 31st, Net premiums 1,152 1, Gross premiums written 1,214 1, Ceded premiums Commission income Income and charges from financial instruments at fair value through profit and loss Income from investments in subsidiaries, associated companies and joint ventures Income from other financial instruments and investment property Interest income Other income Realised gains Valuation gains Other revenues TOTAL REVENUES AND INCOME 1,325 1, Net charges relating to claims -1,047-1, Amounts paid and change in technical provisions -1,088-1, Reinsurance amount Commission expense Charges from investments in subsidiaries, associated companies and joint ventures Charges from other financial instruments and investment properties Interest expense Other charges Realised losses Valuation losses Operating expenses Commission and other acquisition costs Operating expenses relating to investments Other administrative expenses Other costs TOTAL COSTS AND CHARGES -1,281-1,710 PROFIT (LOSS) FOR THE PERIOD BEFORE TAXATION Taxation PROFIT (LOSS) FOR THE PERIOD NET OF TAXATION PROFIT (LOSS) FROM DISCONTINUED OPERATIONS 0 0 CONSOLIDATED PROFIT (LOSS) pertaining to the Group pertaining to minority interests

24 INTERIM MANAGEMENT REPORT AS OF MARCH 31st, 2016 Company: CATTOLICA ASSICURAZIONI GROUP STATEMENT OF COMPREHENSIVE INCOME - Net amounts ( millions) March 31st, 2016 March 31st, 2015 CONSOLIDATED PROFIT (LOSS) Other income components net of taxation without reclassification in the income statement 0 0 Change in the equity of investee companies 0 0 Change in intangible assets revaluation reserve 0 0 Change in tangible assets revaluation reserve 0 0 Income and charges relating to non-current assets or disposal group held for sale 0 0 Actuarial gains and losses and adjustments related to defined-benefit plans 0 0 Other items 0 0 Other income components net of taxation with reclassification in the income statement Change in reserve for net exchange differences 0 0 Gains or losses on available for sale financial assets Profits or losses on cash flow hedging instruments 0 0 Profits or losses on instruments hedging a net investment in foreign operations 0 0 Change in the equity of investee companies 2-1 Income and charges relating to non-current assets or disposal group held for sale 0 0 Other items 0 0 TOTAL OF THE OTHER COMPONENTS OF THE STATEMENT OF COMPREHENSIVE INCOME TOTAL OF THE CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 9 90 pertaining to the Group 8 85 pertaining to minority interests

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27 Management report

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29 Management report The Cattolica Group The Cattolica Group closed the first quarter of 2016 with consolidated profit of 25 million, compared to 33 million in the first quarter of 2015, (-24.2%) The Group s net result came to 24 million, compared with 30 million as of March 31st, 2015 (-20%). The consolidated profit was penalised by non-recurrent expense for 7 million mainly attributable to the alignment of the value of the equity investment in Banca Popolare di Vicenza to the subscription price of the shares within the sphere of the share capital increase transaction of the bank by the Atlante Fund on May 4th, Gross of these effects, the consolidated profit amounted to 32 million, with Group profit of 31 million. The Group closed the management of non-life classes with a combined ratio of retained business of 92%, compared to 93% as of March 31st, Total premiums written for direct and indirect business - life and non-life - came to 1,276.9 million, down 25% compared with 1,701.7 million as of March 31st, Premiums written for direct non-life business dropped from million to 469 million as of March 31st, 2016 (-3.8%). The motor segment posted premiums of million, down 5% compared with March 31st, Premiums written for non-motor classes amounted to million compared with million as of March 31st, 2015 (-2.1%), increasingly focused on products intended for retail customers. In the life segment, direct premiums written came to million, down 33.5% with respect to March 31st, 2015, essentially due to the minor premiums from the bank-assurance channel (-34.6%) and brokers (-83.6%) also as a result of the weakness of the distribution channels linked to Banca Popolare di Vicenza. Financial operations 1 closed with a result, gross of tax effects, amounting to 108 million as against 150 million as of March 31st, With reference to net income from other financial instruments and investment property, this aggregate was mainly characterised by net income from interest and other proceeds, which fell from 117 to 108 million, by the decrease in net profits realised which dropped from 32 million to 17 million and net losses from valuation on financial assets for 11 million (compared with net profit of 2 million as of March 31st, 2015). As of March 31st, investments - including properties classified in the item tangible assets and cash and cash equivalents - amounted to 21,528 million ( 21,391 million as of December 31st, 2015). Gross technical provisions for non-life business amounted to 3,568 million ( 3,589 million as of December 31st, 2015). Provisions for life business, inclusive of financial liabilities, amounted to 16,702 million ( 16,607 million as of December 31st, 2015). Consolidated shareholders equity amounted to 2,164 million ( 2,159 million as of December 31st, 2015). 1 With the exclusion of investments whose risk is borne by the policyholders and the change in other financial liabilities. 29

30 The Solvency II margin came to 1.90 times the regulatory minimum 2. The ratio was calculated according to the Solvency II principles, applying the Standard Formula. The Group is preparing the application to the Supervisory Authority (IVASS) to use Undertaking Specific Parameters (USP) for the quantification of the solvency capital requirement for the non-life technical-insurance risks. The use of the USPs will permit the Group to represent its risk profile in a more precise manner and further confirm its equity soundness. ***** As of March 31st, there were a total of 1,497 agencies, of which 797 non-exclusive, distributed as follows: 52.1% in Northern Italy, 27.1% in Central Italy and 20.8% in Southern Italy and the islands. The number of branches distributing Pension Planning products increased from 5,744 at the end of last year to 5,912. The bank branches of the UBI Group numbered 585, unchanged with respect to December 31st, The alliance with ICREEA HOLDING launched in the second half of 2009 makes it possible to distribute products via 4,037 branches (3,857 as of December 31st, 2015) of the co-operative lending banks, while that with Banca Popolare di Vicenza, underway since 2007, permits the Cattolica Group to access a network of 574 branches (more or less unchanged with respect to of December 31st, 2015). The leading banks operating as Cattolica s partner, in addition to those already indicated, include Banca Carim, Banca Popolare Pugliese, Banca Popolare di Torre del Greco, Barclays Bank, Cassa di Risparmio di Ferrara and Cassa di Risparmio di San Miniato. The Group s financial advisors rose to 1,056, compared to 1,039 at the end of the previous year. Welfare and pension product advisors, C.P. Servizi Consulenziali sub-agents, numbered 347 (362 as of December 31st, 2015). 7,000 6,000 5,744 5,912 Sales channels number 5,000 4,000 3,000 2,000 1,516 1,497 1,000 1,039 1, Agencies Bank branches Financial advisors Pension advisors Already net of the dividend which will be distributed as from May 25th,

31 KEY INDICATORS OF CATTOLICA GROUP BUSINESS PERFORMANCE The tables which follow show the most significant performance indicators, the figures concerning the sales network and the headcount, the reclassified consolidated statement of financial position and income statement, the consolidated income statement reclassified by segment of activities and the key indicators as compared to those for the same periods in the previous year, respectively, in accordance with the international accounting standards. In this report, the term premiums written means the sum total of the insurance premiums (as defined by IFRS 4) and the amounts of the investment contracts (as defined by IFRS 4 which refers the related discipline to IAS 39). Table 1 - Key economic indicators Change ( millions) March 31st, 2016 March 31st, 2015 Abs. amount % Total premiums written 1, , of which Gross premiums written 1, , Direct business - non-life Direct business life , Indirect business - non-life Indirect business life n.a. of which Investment contracts Consolidated net profit for the period Group net profit for the period n.a. = not applicable Table 2 - Key equity indicators ( millions) March 31st, 2016 December 31st, 2015 Change Abs. amount % Investments 21,528 21, Technical provisions net of reinsurance amount 18,354 18, Financial liabilities relating to investment contracts 1,475 1, Consolidated shareholders' equity 2,164 2,

32 Table 3 - Sales network and headcount (number) March 31st, 2016 December 31st, 2015 Change Abs. amount % Total headcount 1,581 1, FTE headcount 1,523 1, Direct network: Agencies 1,497 1, including non-exclusive agencies Partner networks: Bank branches 5,912 5, Financial advisors 1,056 1, Welfare and pension product advisors

33 Table 4 - Reclassified consolidated statement of financial position ( millions) March 31st, 2016 December 31st, 2015 Change Abs. amount % Items from obligatory statements (*) Assets Investment property Property Investments in subsidiaries, associated companies and joint ventures Loans and receivables Held to maturity investments Available for sale financial assets 16,265 15, Financial assets at fair value through profit and loss 3,291 3, Cash and cash equivalents Total investments 21,528 21, Intangible assets Technical provisions - reinsurance amount Sundry receivables, other tangible assets and other asset items 1,595 1, (**) TOTAL ASSETS 24,167 24, Shareholders equity and liabilities Group capital and reserves 1,892 1, Group profit (loss) for the period Shareholders' equity pertaining to the Group 1,916 1, Capital and reserves pertaining to minority interests Profit (loss) for the period pertaining to minority interests Shareholders' equity pertaining to minority interests Total capital and reserves 2,164 2, Premium provision Provision for outstanding claims 2,808 2, Gross technical provisions - non-life 3,568 3, Gross technical provisions life 15,227 14, Other gross non-life technical provisions Other gross life technical provisions Financial liabilities 1,756 1, of which deposits from policyholders 1,475 1, Allowances, payables and other liability items 1,166 1, (***) TOTAL SHAREHOLDERS EQUITY AND LIABILITIES 24,167 24, (*) Indicates the items of the statements in the consolidated financial statements as per ISVAP Regulation No. 7 dated July 13th, (**) Sundry receivables, other asset items, and other tangible assets (statement of financial position items under assets = ). (***) Allowances, payables and other liability items (statement of financial position items under liabilities = ). 33

34 Table 5 - Reclassified consolidated income statement ( millions) March 31st, 2016 March 31st, 2015 Change Abs. amount % Items from obligatory statements (*) Net premiums 1,152 1, Net charges relating to claims -1,047-1, Operating expenses of which commission and other acquisition costs of which other administrative expenses Other revenues net of other costs (other technical income and charges) Net income from financial instruments at fair value through profit or loss n.s. 1.3 Of which result from class D financial operations (**) n.s. Net income from investments in subsidiaries, associated companies and joint ventures n.s Net income from other financial instruments and investment property of which net interest of which other income net of other charges of which net profits realised of which net valuation profits on financial assets n.s of which changes in other financial liabilities n.a Commission income net of commission expense Operating expenses relating to investments RESULT OF INSURANCE BUSINESS AND FINANCIAL OPERATIONS Other revenues net of other costs (excluding other technical income and charges included under insurance operations) PRE-TAX PROFIT (LOSS) FOR THE PERIOD Taxation NET PROFIT (LOSS) FOR THE PERIOD PROFIT (LOSS) FROM DISCONTINUED OPERATIONS n.a. 4 CONSOLIDATED PROFIT (LOSS) FOR THE PERIOD Profit (loss) for the period pertaining to minority interests PROFIT (LOSS) FOR THE PERIOD PERTAINING TO THE GROUP (*) Indicates the items of the statements in the consolidated financial statements as per ISVAP Regulation No. 7 dated July 13th, (**) Includes the Class D profits recognised in the revenues for commission amounting to 1 million. n.s. = not significant n.a. = not applicable 34

35 Table 6 - Reclassified consolidated income statement by segment of activities NON-LIFE LIFE OTHER TOTAL ( millions) March 31st, 2016 March 31st, 2015 March 31st, 2016 March 31st, 2015 March 31st, 2016 March 31st, 2015 March 31st, 2016 March 31st, 2015 Net premiums , ,152 1,482 Net charges relating to claims , ,047-1,485 Operating expenses of which commission and other acquisition costs of which other administrative expenses Other revenues net of other costs (other technical income and charges) Net income from financial instruments at fair value through profit or loss Result from class D financial operations (*) Net income from investments in subsidiaries, associated companies and joint ventures Net income from other financial instruments and investment property Commission income net of commission expense Operating expenses relating to investments RESULT OF INSURANCE BUSINESS AND FINANCIAL OPERATIONS Other revenues net of other costs (excluding other technical income and charges included under insurance operations) PRE-TAX PROFIT (LOSS) FOR THE PERIOD Taxation NET PROFIT (LOSS) FOR THE PERIOD PROFIT (LOSS) FROM DISCONTINUED OPERATIONS CONSOLIDATED PROFIT (LOSS) FOR THE PERIOD (*) Includes the Class D profits recognised in the revenues for commission amounting to 1 million. 35

36 Table 7 - Key indicators March 31st, 2016 March 31st, 2015 December 31st, 2015 Non-life ratios for retained business Claims ratio (Net charges relating to claims / Net premiums) 65.4% 66.8% 64.4% G&A ratio (Other administrative expenses / Net premiums) 6.7% 6.4% 6.8% Commission ratio (Acquisition costs / Net premiums) 19.0% 19.0% 18.7% Total Expense ratio (Operating expenses / Net premiums) 25.7% 25.4% 25.5% Combined ratio (1 - (Technical balance / Net premiums)) 92.0% 93.0% 91.5% Non-life ratios for direct business Claims ratio (Net charges relating to claims / Premiums for the period) 65.3% 66.5% 64.3% G&A ratio (Other administrative expenses / Premiums for the period) 6.0% 5.8% 5.9% Commission ratio (Acquisition costs / Premiums for the period) 19.8% 19.9% 19.8% Total Expense ratio (Operating expenses / Premiums for the period) 25.8% 25.7% 25.7% Combined ratio (1 - (Technical balance / Premiums for the period)) 91.9% 92.9% 91.6% Life ratios G&A ratio (Other administrative expenses / Premiums written) 1.2% 0.7% 0.9% Commission ratio (Acquisition costs / Premiums written) 2.3% 1.6% 2.2% Total Expense ratio (Operating expenses/ Premiums written) 3.5% 2.3% 3.1% Total ratios G&A ratio (Other administrative expenses / Premiums written) 2.9% 2.1% 2.7% Note: "premiums written" in the life business refer to the amount of gross insurance premiums and of the investment contracts. 36

37 Table 8 - Total premiums written A BRIEF OUTLINE OF THE BUSINESS PERFORMANCE Insurance premiums are shown in the table below, with indication of the percentage in relation to total direct business and percentage changes as compared with the same period last year, together with investment contracts. Classes ( millions) March 31st, 2016 % of total March 31st, 2015 Change % of total Abs. amount % Accident and injury Health Land vehicle hulls Goods in transit Fire & natural forces Other damage to assets TPL - Land motor vehicles TPL - General Credit 0.2 n.s. 0.2 n.s. 0 0 Suretyship Sundry financial losses Legal protection Assistance Other classes (1) 0.9 n.s. 0.6 n.s Total non-life classes Insurance on the duration of human life - class I Insurance on the duration of human life linked to investment funds - class III Health insurance - class IV 0.2 n.s. 0.1 n.s Capitalisation transactions - class V Pension funds - class VI Total life classes , Total direct business 1, , Indirect business Total insurance premiums 1, , Insurance on the duration of human life linked to investment funds - class III Pension funds - class VI Total investment contracts TOTAL PREMIUMS WRITTEN 1, , (1) includes railway rolling stock, aircraft, sea and inland water vessels/hulls and TPL aircraft and sea and inland water vessels. n.s. = not significant 37

38 In particular, life premiums written are divided by insurance class (taking account of both insurance premiums and investment contracts) as follows: Table 9 - Life premiums written Life business ( millions) March 31st, 2016 % of total March 31st, 2015 Change % of total Abs. amount % Insurance on the duration of human life - class I Insurance on the duration of human life linked to investment funds - class III Health insurance - class IV 0.2 n.s. 0.1 n.s Capitalisation transactions - class V Pension funds - class VI Total life premiums - direct business , n.s. = not significant Direct non-life premiums written decreased from million to 469 million, or 3.8%. As already indicated, in the motor segment there were premiums for million (-5%) and in the non-motor segment the premiums amounted to million (-2.1%): in particular, with reference to the main non-life classes, premiums relating to land vehicle hulls rose to 33.6 million (+3.4%), along with TPL - General which amounted to 41.2 million (+2.5%) and those relating to the assistance class which amounted to 9.4 million (+3.3%). Decreases were posted for premiums for accident and injury, to 50 million (-0.6%), for the health class which amounted to 14.7 million (-5.8%), fire and natural forces equal to 25.7 million (-2.7%), other damages to assets amounting to 35.4 million (-8.1%), and TPL motor equal to million (-6.1%). Direct non-life premiums written were generated as follows: the agency channel with million (-4.7%), the banking channel with 17.6 million (-2.2%), brokers with 13.3 million (+49.4%) and other channels with 6.8 million (-10.5%). Direct business non-life premiums are attributable to the Parent Company for million, ABC Assicura for 8.7 million, BCC Assicurazioni for 6.3 million, FATA Assicurazioni Danni for 86 million and TUA Assicurazioni for 60.6 million. Insurance premiums in the life business totalled million (-30.5%). Premiums written relating to investment contracts amounted to 68.1 million (-54.9%). Total life premiums written, amounting to million, were down by 33.5% when compared with 1,211.6 million as of March 31st, Direct life premiums written were generated as follows: the agency channel with million (-0.1%), the banking channel with million (-34.6%), brokers with 15.9 million (-83.6%), financial advisors with 6.8 million compared to 2.1 million as of March 31st, 2015, and other channels with 67.8 million (-14.6%), which include part of the 38

39 premiums of the pension funds for around 40 million. Life premiums attributable to the Parent Company totalled million, BCC Vita 97.6 million, Berica Vita 37.6 million, Cattolica Life 11 million and Lombarda Vita million. STATEMENT OF FINANCIAL POSITION Goodwill Investments The item, which comprises the goodwill acquired in the business combinations as established by IFRS 3, amounts to 203 million, unchanged with respect to December 31st, Investments (which include investment property, investments in subsidiaries, associates and joint ventures, loans and receivables, held to maturity investments, available for sale financial assets, financial assets at fair value, cash & cash equivalents and property used for operating purposes) at the end of the period amounted to 21,528 million, compared with 21,391 million as of December 31st, 2015 (+0.6%). The result of financial operations, with the exclusion of investments whose risk is borne by the policyholders and gross of the tax effects and the change in other financial liabilities, came to 108 million, compared with 150 million as of March 31st, 2015 (-28%). Table 10 - Investments ( millions) March 31st, 2016 % of total December 31st, 2015 Change % of total Abs. amount % Investment property Property Investments in subsidiaries, associated companies and joint ventures Loans and receivables Held to maturity investments Available for sale financial assets 16, , Financial assets at fair value through profit and loss 3, , Cash and cash equivalents TOTAL 21, ,

40 Property investments The first few months of the year confirm growth in investment property volumes at market level, while a decrease in returns continued, encouraged by the albeit discrete improvement in the economy and the rising competition between investors. During the first quarter, the investment transaction of Cattolica and FATA in the Agris Real Estate Property Fund was finalised for a total amount of around 14 million. Securities investments The investment activities took place in a market context characterised by a period of high volatility and scarce liquidity, essentially influenced by the deterioration of the growth forecasts for emerging markets and the United States. The macro-economic scenario saw a modest pick up in activities in Europe and in the United States, and a further slowdown in emerging markets, which led to a maintenance of the rates of inflation at all-time minimum levels, mainly fuelled by a further heavy drop in raw material prices, which decreased only at the end of the quarter. This permitted the central banks to maintain the accommodating monetary policy for the purpose of supporting the economy, with the real returns at all time lows, even if in a context of aversion to risk and high volatility. Operations were characterised by the maintenance of adequate liquidity levels; there were no significant movements between the various investment sectors, while rotations within the same sector took place on a consistent basis with the financial duration objectives of the portfolios expressed by asset & liability management. During the period, exposure to Italian government issues with maturities within 12 months was increased slightly, while the component with a duration of more than 12 months was mainly increased on the fixed rate portion, the prices of which were supported for the majority of the period by the heavy demand from the domestic market, partly by the foreign market, and the European Central Bank. As regards bonds, the company took advantage of interesting opportunities offered by the subscription, especially on the primary market, of both bank securities and securities linked to industrial issuers. Capital gains were also generated, exploiting the volatility of the related financial markets. The exposure to the share-based component was gradually increased, on achievement of certain interesting technical thresholds. The positions maintained in the portfolio were mostly attributable to issuers capable of paying the shareholders stable and sustainable dividends over the mid-term, as well as characterised by solid performance from an economic-equity standpoint. The portfolio is denominated principally in Euro, with marginal exposures in US dollars and GBP. Issuers place products primarily in Europe, and to a lesser extent in the United States. However, many issuers presented an elevated geographic diversification within the sphere of operations, for the purpose of reducing recession risks as far as possible. 40

41 Investments in subsidiaries, associated companies and joint ventures The item includes investments in subsidiary companies excluded from the consolidation area and in associated companies over which the Group exercises significant influence, which are accounted for using the equity method. The item amounted to 35 million, unchanged with respect to December 31st, Loans and receivables Assets with a pre-established maturity and payments which are fixed or can be determined, not listed on active markets, which are not recorded in any of the other categories, are included in this item. Specifically, all the loans and receivables, the deposits from re-insurers with transferring companies and bonds not listed on active markets are recognised herein. At the end of the period, loans and receivables amounted to 859 million (-1.9% with respect to the end of 2015) and represent 4% of investments. Held to maturity investments All financial assets, excluding derivatives, with a pre-established maturity and payments which are fixed or can be determined, which the Group intends to or has the ability to hold until maturity, are classified in this category. As of March 31st, held to maturity investments amounted to 245 million, compared with 247 million as of December 31st, 2015 (-0.8%) and represent 1.1% of investments. Available for sale financial assets This category includes all the financial assets, valued at fair value, other than derivative instruments, both debt instruments and equities, which are not classified in the other categories and are disciplined by IAS 39. Specifically, the equity investments deemed to be strategic in companies which are not subsidiary or associated companies, whose fair value derives from prices taken from active markets, or, in the case of securities not listed on active markets, from commonly applied valuation methods, which have been chosen taking into account the sector they belong to, have been recognised in this category. At the end of the first quarter, available for sale financial assets amounted to 16,265 million (+2.7%) and represented 75.6% of investments. Financial assets at fair value through profit and loss This item comprises financial assets, including derivatives, held for trading and those designated by the Group as valued at fair value through profit or loss. Specifically, besides assets held for trading purposes, the item also includes the financial assets designated at fair value through profit or loss related to: insurance or investment contracts issued by the Group whose investment risk is borne by the policyholders; the management of pension funds. At the end of the first quarter, financial assets at fair value through profit or loss amounted to 3,291 million (-2.2%) and represented 15.3% of total investments. 41

42 Technical provisions Gross non-life technical provisions (premiums and claims) amounted to 3,568 million, compared with 3,589 million as of December 31st, 2015 (-0.6%). Gross life technical provisions (mathematical provisions inclusive of shadow accounting) totalled 15,227 million, compared with 14,984 million at the end of the previous year (+1.6%). Also taking into account financial liabilities relating to investment contracts, the technical provisions and deposits relating to life business amounted to 16,702 million ( 16,607 million as of December 31st, 2015, +0.6%). Shareholders' Equity Consolidated shareholders equity at the end of the first quarter came to 2,164 million, compared with 2,159 million at the end of the previous year, of which 1,916 million for the Group and 248 million pertaining to minority interests. The Group s shareholders equity includes gains on available for sale financial assets amounting to 104 million, compared with 122 million at the end of the previous year. The shareholders equity pertaining to minority interests includes gains on available for sale financial assets amounting to 11 million, unchanged with respect to December 31st, SIGNIFICANT TRANSACTIONS CARRIED OUT DURING THE FIRST QUARTER The significant events that occurred during the period as part of managing the investments in Group companies are set out below, in addition to other significant events during the period. You are hereby reminded that the Parent Company s Board of Directors resolved to comply, with effect as from December 13th, 2012, with the opt-out regime as per Articles 70.8 and 71.1 bis of the Issuers Regulations, therefore availing itself of the faculty to depart from the obligations to publish the disclosure documents laid down at the time of significant merger, spin-off, share capital increase via conferral of assets in kind transactions, acquisitions and transfers. Cattolica and the Group On January 7th, the Parent Company informed Veneto Banca S.p.A. of the exercise of the right to withdraw, made further to the decision to transform the bank into an Italian joint-stock company, with regard to the entire investment held in the bank (277,777 shares). This investment, held since 2014, was acquired within the sphere of the transaction for the early exercise of the option agreed in 2014 relating to Cassa di Risparmio di Fabriano e Cupramontana shares, which subsequently become Veneto Banca shares, after the absorption of the former in the latter. On March 18th, the Parent Company received the settlement of 3,567 shares subject to withdrawal for a total of 26,039.1 ( 7.3 per share). Cattolica s holding remains unchanged at 0.22%. On February 17th, a consultation agreement was established between some of UBI Banca S.p.A. s shareholders. The shareholders represented conferred, at the time of establishment of the Agreement, 107,765,134 ordinary shares equal to 11.95% of UBI Banca s share capital. On its part, the Parent Company complied conferring 4,850,000 ordinary shares of the bank from among the 5,100,000 shares held by the same in total. Among the terms of the agreement it is contemplated that the participants in said Agreement will meet also to discuss the choice of the 42

43 most suitable candidates to cover the role of members of the Supervisory Board presenting their own list for the shareholders meeting which will be called to renew the offices with the consequent commitment to vote for the same. On March 5th, Banca Popolare di Vicenza (BPVi), with which well-known and important commercial and investment partnerships exist, resolved its transformation into an Italian jointstock company. In the 15 days after the recording of the resolution, the shareholders, including Cattolica, who did not participate in the afore-mentioned resolution may exercise the right to withdraw, which what is more was limited by the bank with regard to all and without time limits. Furthermore, as a consequence of said resolution, Cattolica has the right to withdraw from the outline agreement which disciplines the partnership in the 180 days after the event and with effectiveness 180 days after the exercise of this right and, consequently, BPVi is obliged to repurchase the entire ownership of the three product companies Berica Vita S.p.A., ABC Assicura S.p.A. and Cattolica Life Ltd, in which BPVi and Cattolica respectively hold 40% and 60% of the related share capital, according to the terms and conditions disciplined in said outline agreement; accordingly, BPVi will obviously be free to proceed with the negotiation of new bank-assurance agreements with third party partners. OTHER INFORMATION Human resources As of March 31st, the Group headcount included 1,581 staff, compared with 1,580 as of December 31st, 2015 (having taken into account the exit as of December 31st, 2015 of 46 employees of which 35 complying with the Intersectorial Solidarity Fund. The headcount comprised 45 executives, 296 officials and 1,240 office workers. The number of full time equivalent employees came to 1,523, compared with 1,522 as of December 31st, 2015 (having taken into account the exit as of December 31st, 2015 of 45 employees of which 34 complying with the Intersectorial Solidarity Fund). Performance of Cattolica stock During the first three months of 2016, Cattolica shares recorded a minimum price of and a maximum price of The capitalization of the stock on the market as of March 31st, came to 1,046 million. As of March 31st, the quarterly stock performance showed a decrease of 18.3%, with respect to a decrease of 15.4% in the FTSE Mib index and a decrease of 19.5% in the FTSE Italia All- Share Insurance Index. Average volumes traded in the first quarter of 2016 were 544,431 transactions. 43

44 SIGNIFICANT EVENTS AFTER THE END OF THE FIRST QUARTER On April 5th, the Parent Company s Board of Directors resolved the project for merger via incorporation of FATA Assicurazioni within the Parent Company, as a further initiative to support the achievement of the Business Plan which considers the growth in the agricultural and foodstuffs sectors to be one of its strong points. The merger transaction will be submitted to the competent authorities to obtain legal authorisation. This choice represents the last stage in a process for the rapid and efficient integration of FATA within the Group which made a more far-reaching definition of the development policies in the segment to be implemented possible, also with the finalisation of important agreements. In fact, on April 5th, 2016 a memorandum of understanding was entered into with Coldiretti and a number of Agricultural Consortiums, to be imbued in a subsequent final document for the establishment of an Italian Agency with mixed capital mainly held by Cattolica. The merger will, what is more, make it possible to achieve further cost synergies as well as a streamlining in the management of the capital. The shareholders meeting of the Parent Company was held on April 16th. The shareholders meeting approved the 2015 annual financial statements and the distribution of a single dividend for a total of 0.35 per share. The shareholders meeting appointed the following members of the Board of Directors for the three-year period : Paolo Bedoni, Giovanni Battista Mazzucchelli, Aldo Poli, Barbara Blasevich, Pilade Riello, Manfredo Turchetti, Anna Tosolini, Bettina Campedelli, Paola Ferroli, Giovanni Maccagnani, Luigi Mion, Luigi Baraggia, Lisa Ferrarini, Paola Grossi, Alessandro Lai, Carlo Napoleoni, Angelo Nardi from the list presented by the Board of Directors. Eugenio Vanda was also appointed, a minority member. The shareholders meeting also resolved with regard to the determination of the related remuneration, appointed the members of the Ethics and Disciplinary Board for the three-year period and, pursuant to the matters envisaged by ISVAP Regulation No. 39 dated June 9th, 2011, approved the remuneration policies relating to the directors and officers, the personnel and other parties contemplated as beneficiaries of general principles by said Regulation. The shareholders meeting, upon the proposal of the Board of Directors, approved the plan for the purchase and sale of own shares pursuant to the law; the plan concerns a maximum number of shares equal to 5% of the share capital, for a maximum total equivalent book value of the own shares of 60,000,000 for a period of 18 months from the date of the shareholders meeting resolution. On April 20th, the Parent Company s Board of Directors assigned additional corporate offices to the directors elected by the Shareholders Meeting held on April 16th, Paolo Bedoni was appointed Chairman, Giovan Battista Mazzucchelli was appointed as Managing Director, Aldo Poli as Vice Deputy Chairman, Manfredo Turchetti as Deputy Chairman and Alessandro Lai as Board Secretary. Barbara Blasevich and Pilade Riello were appointed as members of the Executive Committee; Giovanni Maccagnani, in the capacity as Chairman, Bettina Campedelli and Paola Ferroli were appointed as members of the Related Parties Committee. Furthermore, as of the same date the Board of Directors resolved the binding commitment to subscribe units of the alternative investment fund Atlante, set up and managed by Quaestio 44

45 Capital Management SGR S.p.A., for a total amount of 40 million. The Board positively assessed the initiative of the Atlante Fund, aimed at furthering the deconsolidation of the non-performing receivables of the Italian banks and ensuring a satisfactory outcome of the recapitalisation transaction requested by the Supervisory Authorities with regard to certain Banks. On April 29th, the global offering for subscription of the shares of Banca Popolare di Vicenza concluded within the sphere of which applications were presented for 7.66% of the total equivalent value of the offering of 1.5 billion. On May 2nd, 2016 Borsa Italiana, having duly noted the results of the global offering and the insufficient diffusion of the subscribed shares between the general public, did not authorise the launch of trading for the Bank s shares. Therefore, the subscriptions to the global offering ceased and the Atlante Fund, by virtue of the agreements entered into between Banca Popolare di Vicenza and Unicredit and between the latter and Quaestio Capital Management SGR, subscribed the entire share capital increase so that it now holds 99.33% of the Bank s share capital. On conclusion of the matters described, the Parent Company s holding in Banca Popolare di Vicenza was diluted from 0.89% to 0.006% of the share capital. On May 5th, Quaestio Capital Management SGR, in its capacity as management company of the Atlante Fund and further to the acquisition of control of Banca Popolare di Vicenza by the latter, informed Cattolica, as per Article 120 of Italian Legislative Decree No. 58/1998, of the acquisition of an indirect investment of 15.07% of the share capital of said company. In the latter weeks, the Group defined the framework of the operational appointments in the companies TUA Assicurazioni and FATA Assicurazioni for the purpose of an improved implementation of the Business Plan. Having duly noted the resignations tendered by the Director and Managing Director of TUA Assicurazioni, presented with effect as of April 30th, by Mr. Andrea Sabia, Mr. Marco Cardinaletti, General Manager of the Insurance Division and Technical-Administrative Co-ordination of the Group, took over the related functions. Mr. Flavio Piva, General Manager of the Markets and Operations Division, was entrusted the appointment to achieve the project for merger via incorporation of FATA Assicurazioni within Cattolica Assicurazioni and to launch the Italian distribution company mainly invested in by Cattolica envisaged in the agreement with Coldiretti and with the Agricultural Consortiums. OUTLOOK FOR BUSINESS ACTIVITIES The Group continues its action for achieving the objectives of the Business Plan despite an insurance market characterised by strong competition and the continuation of a period of high volatility and low rates of return on the financial markets. With a view to the Plan, activities will continue aimed at finalising the merger of FATA Assicurazioni within the Parent Company Cattolica whose strong point is the growth of the agricultural and foodstuffs sectors and the achievement of further cost synergies as well as a streamlining in the management of the capital. Verona, Italy, May 13th, 2016 THE BOARD OF DIRECTORS 45

46

47 The undersigned Giuseppe Milone, in his capacity as Executive appointed to draw up the corporate accounting documents of Società Cattolica di Assicurazione Soc. Coop., with registered offices in Lungadige Cangrande, 16, Verona, Italy, with reference to the Interim management report as of March 31st, 2016, approved by the Board of Directors during the meeting held on May 13th, 2016, hereby DECLARES in pursuance of Article 154 bis, paragraph 2 of the Consolidated Finance Law, that the accounting disclosure contained in the Interim Management Report as of March 31th, 2016 and in the press release, complies with the documental results, the books and ledgers and the accounting entries. Giuseppe Milone Verona, May 13th, 2016