Consolidated interim financial report at 31 March 2012

Transcription

1 SOCIETÀ PER AZIONI REGISTERED OFFICES: VIA IGNAZIO GARDELLA, MILAN - ITALY SHARE CAPITAL: EURO 67,378,924 FULLY PAID-UP FISCAL CODE AND MILAN COMPANIES REGISTER NO REA NO COMPANY REGISTERED TO REGISTER OF INSURANCE AND REINSURANCE COMPANIES SECTION I NO PARENT COMPANY OF VITTORIA ASSICURAZIONI GROUP REGISTERED TO REGISTER OF INSURANCE GROUPS NO st year of business Consolidated interim financial report at 31 March 2012 Board of Directors meeting of 11 May 2012 (Translation from the Italian original which remains the definitive version)

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3 Table of contents Page Company bodies and officers 4 Report format and content 6 Accounting policies 6 Interim management report 7 Summary of key performance indicators 8 The Vittoria Assicurazioni Group and scope of consolidation 9 Directors Report 11 Performance of Vittoria Assicurazioni Group 11 Review of operations 14 Premiums 14 Life business 16 Premiums 16 Claims, accrued capital sums and annuities, and surrenders 16 Reinsurance 16 Non-Life business 17 Premiums and technical performance 17 Claims 17 Reinsurance 19 Commercial organisation 19 Products 20 Technical reserves 21 Overhead costs 22 Operating costs 23 Employees 23 Investments cash & cash equivalents - property 24 Investments for which Group bears risk 24 Investments benefiting Life policyholders who bear risk and those connected with pension fund management 25 Change in securities 26 Property investments 26 Financial liabilities 27 Gains and losses on investments 28 Other revenues 29 Equity 29 Events after quarter-end 30 Consolidated interim financial statements 31 Consolidated income statement 32 Consolidated income statement by business segment 33 Breakdown of insurance technical captions 34 Declaration of Corporate Financial Reporting Manager 35 3

4 BOARD OF DIRECTORS Luigi GUATRI Giorgio Roberto COSTA Andrea ACUTIS Carlo ACUTIS Roberto GUARENA Adriana ACUTIS BISCARETTI di RUFFIA Massimo ANTONARELLI Francesco BAGGI SISINI Marco BRIGNONE Luciano GOBBI Arnaud HELLOUIN de MENIBUS Pietro Carlo MARSANI Giorgio MARSIAJ Lodovico PASSERIN d ENTREVES Luca PAVERI FONTANA Giuseppe SPADAFORA Mario RAVASIO Honorary President Chairman Executive Deputy Chairman Executive Deputy Chairman Managing Director Director Independent director Independent director Independent director Independent director Director Independent director Independent director Independent director Director Independent director Secretary BOARD OF STATUTORY AUDITORS Alberto GIUSSANI Giovanni MARITANO Corrado VERSINO Michele CASO Marina MOTTURA President Standing statutory auditor Standing statutory auditor Substitute statutory auditor Substitute statutory auditor GENERAL MANAGEMENT Cesare CALDARELLI Mario RAVASIO Enrico CORAZZA Antonio MASSOCCO Piero Angelo PARAZZINI Enzo VIGHI General Manager Joint General Manager Central Manager Central Manager Central Manager Central Manager INDEPENDENT AUDITOR Deloitte & Touche S.p.A. 4

5 APPOINTMENTS AND REMUNERATION COMMITTEE Luca PAVERI FONTANA Francesco BAGGI SISINI Lodovico PASSERIN d ENTREVES Non-executive president Independent non-executive member Independent non-executive member INTERNAL CONTROL COMMITTEE Pietro Carlo MARSANI Luciano GOBBI Giuseppe SPADAFORA Independent non-executive president Independent non-executive member Independent non-executive member FINANCE COMMITTEE Andrea ACUTIS Adriana ACUTIS BISCARETTI di RUFFIA Carlo ACUTIS Giorgio Roberto COSTA Luciano GOBBI Roberto GUARENA Luca PAVERI FONTANA Executive president Non-executive member Executive member Non-executive member Independent non-executive member Executive member Non-executive member REAL ESTATE COMMITTEE Andrea ACUTIS Adriana ACUTIS BISCARETTI di RUFFIA Carlo ACUTIS Francesco BAGGI SISINI Giorgio Roberto COSTA Roberto GUARENA Arnaud HELLOUIN de MENIBUS Luca PAVERI FONTANA Executive president Non-executive member Executive member Independent non-executive member Non-executive member Executive member Non-executive member Non-executive member 5

6 Form and contents of report The Italian Consolidated Finance Act, with the new articles 154/2 and 154/3, endorsed the European directive 2004/109/EC (the so-called Transparency Directive) as regards financial reporting. Based on Article 154/3, paragraph 5, Italian issuers with shares listed in Italian regulated markets are allowed to prepare an interim management statement mainly reporting qualitative and management information, restricting the accounting data (results, investments, etc.). However, considering the particular situation of uncertainty and turbulence of financial markets, it has been deemed advisable continuing to present the consolidated quarterly interim report as at 31 March 2012 in compliance with Article 82 of CONSOB (Italian securities & exchange commission) resolution no of 14 May 1999 as subsequently amended. The report, prepared in accordance with Annex 3D of the aforesaid resolution, consists of a directors report, which comments on the group s performance and the main events in the period, the interim financial statements and related notes. All insurance technical data, shown in the various tables in the report on operating performance, refer to Vittoria Assicurazioni S.p.A., which is the Group s only insurance company. Accounting policies The rules for preparation and the accounting policies applied for the consolidated for this interim management report are the same as those used for annual consolidated financial statements. Readers should therefore refer to the Accounting Policies section of the Consolidated Annual Report for the year ended on 31 December Given, however, the faster preparation required than in the case of annual financial statements and the fact that this is an interim report, use has been made consistently with the period s operating data of appropriate estimation methods. 6

7 Interim management report 7

8 Summary of key performance indicators SPECIFIC SEGMENT RESULTS 31/03/ /03/ /12/2011 Δ % 31/03/11 /million Δ % 31/12/11 Non Life business Gross Premiums written - direct Non Life business Earned Premiums (retained) Loss Ratio (retained) 68.2% 71.5% 71.3% (3.3) Combined Ratio (retained) 93.9% 98.8% 97.3% (4.8) Expense Ratio (retained) 25.2% 25.5% 24.5% (0.4) Non Life business pre-tax result Life business Gross Premiums written - direct Life business Annual Premium Equivalent (APE) Segregated fund performance: Rendimento Mensile 4.2% 4.2% 4.1% (0.0) Segregated fund performance: Valore Crescente 4.7% 5.1% 4.9% (0.4) Segregated funds portfolios Index/Unit - linked and Pension funds portfolios Life business pre-tax result (69.3) Total Agencies Average of employees Real Estate business Sales (70.4) - Trading and development margin (80.0) - Real Estate business pre-tax result CONSOLIDATED RESULTS 31/03/ /03/ /12/2011 Δ % 31/03/11 Δ % 31/12/11 Net gains on investments * (14.2) Pre-tax result Consolidated profit (loss) Group profit (loss) Equity attributable to the shareholders of the parent Equity attributable to the shareholders of the parent net of unrealised capital gains * net of gains on investments where policyholders bear the risk Legend Loss Ratio retained business: is the ratio of current year claims to current year earned premiums; Combined Ratio retained business: is the ratio of (current year claims + operating costs + intangible assets amortization + technical charges) to current year earned premiums; Expense Ratio retained business: is the ratio of (operating costs + intangible assets amortization + net technical charges) to current year gross premiums written; APE: Annual Premium Equivalent, is a measure of the new business volume which includes 100% of sales of regular recurring premium business and 10% of sales of single premium business. Technical data are determined in accordance with Italian accounting principles. 8

9 Vittoria Assicurazioni Group and consolidation scope Consolidated investments As at 31 March 2012 the following companies have been consolidated on a line-by-line basis: Registered Offices % Ownership Share Capital Euro Direct Indirect Via Vittoria Assicurazioni S.p.A. Milan 67,378,924 Vittoria Immobiliare S.p.A. Milan 22,000, % Immobiliare Bilancia S.r.l. Milan 5,150, % Immobiliare Bilancia Prima S.r.l. Milan 3,000, % Immobiliare Bilancia Seconda S.r.l. Milan 1,000, % Immobiliare Bilancia Terza S.r.l. Milan 100, % Forum Mondadori Residenze S.r.l. Milan 1,000, % Vittoria Properties S.r.l. Milan 6,000, % 1.00% Interbilancia S.r.l Milan 80, % 20.00% Vittoria Service S.r.l. Milan 100, % 30.00% Gestimmobili S.r.l. Milan 104, % Acacia 2000 S.r.l. Milan 100, % Interimmobili S.r.l. Rome 104, % Cadorna Real Estate S.r.l. Milan 10, % V.R.G. Domus S.r.l Turin 473, % Vaimm Sviluppo S.r.l. Milan 2,000, % Valsalaria S.r.l. Rome 60, % Aspevi Milano S.r.l. Milan 100, % Aspevi Roma S.r.l. Milan 50, % Plurico S.r.l. Milan 10, % Vittoria Immobiliare S.p.A. Vittoria Immobiliare S.p.A. Interbilancia S.r.l. Changes in shareholdings or other changes during the period No changes occurred during the period. 9

10 Unconsolidated investments valued with the net equity method At 31 March 2012 the following companies were carried at equity: Registered Offices Amsterdam Netherlands Yam Invest N.V. (joint venture) 63,083, % % Ownership Share Capital Euro Direct Indirect Via SINT S.p.A. Turin 5,000, % Yarpa S.p.A. Genoa 38,201, % White (S.a.r.l.) Sicar Luxembourg 26,060, % Laumor Partners (S.a.r.l.) Sicar Luxembourg 25,962, % Gima (S.A.) Sicar Luxembourg 66,257, % Consorzio Movincom S.c.r.l. Turin 104, % 38.46% Aspevi Roma S.r.l. Spefin Finanziaria S.p.A. Rome 2,000, % Vittoria Service S.r.l. Sivim S.r.l. Milan 60, % Rovimmobiliare S.r.l Rome 20, % Mosaico S.p.A. Turin 500, % Pama & Partners S.r.l. Genoa 1,200, % Fiori di S. Bovio S.r.l. Milan 30, % Vittoria Immobiliare S.p.A. Valsalaria A.11 S.r.l. Rome 33, % VP Sviluppo 2015 S.r.l. Milan 1,000, % VZ Real Estate S.r.l. Turin 100, % Le Api S.r.l. Milan 10, % Interbilancia S.r.l. Changes in shareholdings or other changes during the period Yarpa SpA During 1Q12 Vittoria Assicurazioni SpA, following to the partial execution of the capital increase (7%) resolved by the Shareholders Meeting on 7 August 2008, paid to Yarpa SpA 521 thousand. Gima (SA) Sicar The direct operating parent company paid to Gima (S.A.) Sicar thousand. Mosaico SpA During the 1Q12 Vittoria Immobiliare increased to 45% its ownership percentage in Mosaico SpA. 10

11 Directors Report Performance of the Vittoria Assicurazioni Group Results as of 31 March 2012 (1Q12) show profit attributable to parent company shareholders amounting to 12,148 thousand vs. 9,807 thousand in the same period in 2011 (1Q11) (+23.9%). The following table shows the contributions of the Group's various businesses to net profit. Reclassified Profit and Loss by business segment Δ 03/12 31/03/12 31/03/11 31/12/11 on 03/11 Non life business - Gross Insurance Result (excluding investments result) 11,451 2,026 18, % Non life business - Gross Investments Result (excluding Yam and Private Equity) 7,677 7,726 30, % Life business - Gross Insurance Result (including Investments Result) 2,079 6,779 9, % Gross Insurance business Result 21,207 16,531 58, % Consolidation adjustments: dividends and interests from Real estate business (16) (21) (2,193) -23.8% Real estate business: taxes (7,699) (5,633) (20,461) +36.7% Insurance business net contribution to Profit attributable to parent company shareholders 13,492 10,877 35, % Gains on property trading , % Real estate service revenues , % Real estate business net costs (3,315) (2,866) (12,372) +15.7% Gross Real estate business Result (2,878) (2,054) (4,391) +40.1% Taxes and minority interests 1, % Net Real estate business Result (1,759) (1,159) (3,593) +51.8% Net profit attributable to Life business Policyholders , % Tax on profit attributable to Life business Policyholders (188) (133) (633) +41.4% Real estate business net contribution to Profit attributable to parent company shareholders (1,189) (754) (2,055) +57.7% Yam Invest net contribution to Profit attributable to parent company shareholders (98) (344) % Private equity net contribution to Profit attributable to parent company shareholders (138) (8) 2,978 +1,625.0% Service business net contribution to Profit attributable to parent company shareholders % Net Profit attributable to parent company shareholders 12,148 9,807 37, % The Group s comprehensive income statement as at 31 March 2012 shows an income of 51,185 thousand vs. 5,207 thousand recorded as at 31 March Equity attributable to parent company shareholders amounted to 384,810 thousand, increasing by 15.3% compared to 31 December 2011, thanks to the recovery recorded in Fair value reserve item. Profit for the insurance business, before taxes and intersegment eliminations, amounted to 21,207 thousand (+28.3% vs. 16,531 thousand as at 31 March 2011) The analysis of the result, and of the Non-Life Business one in particular, must take into account the short reporting period and the consequent uncertainty about the repeatability of the business trends, for example the decrease of both frequency and severity of Motor TPL claims, partially balanced by an increase in Other Non-Marine claims, due to weather events occurred in the quarter. Development plan scheduled by the parent company led the agency network to work with 347 general agencies and 596 professional sub-agencies; thanks to them in 1Q12 written premiums increased by 14.2%. The real estate segment totalled a pre-tax loss of -2,878 thousand, vs. a pre-tax loss of -2,054 thousand in 1Q11. Margins on sales at 31 March 2012 amounted to 139 thousand, vs. 480 thousand in 1Q11. 11

12 Private equity investments made by associate companies led to a loss of 138 thousand (vs. a loss of -8 thousand in 1Q11). 1Q12 result was also affected by the negative result ( -98 thousand) of the joint venture in Yam Invest N.V. ( -344 thousand in 1Q11), due to the start up costs of many investment initiatives that are expected to generate profits in the coming years. Of investments totalling 2,337,851 thousand (+6.9% vs. the situation as at 31 December 2011), 67,165 thousand (+4.5%) referred to investments with risk borne by policyholders and 2,270,686 thousand (+7.0%) to investments with risk borne by the Group. Net investment income, relating to investments with risk borne by the Group, amounted to 15,102 thousand vs. 17,609 thousand at 1Q11 (-14.2%). Decrease is mainly due to gains on government bonds realised in 1Q11. As up to 31 March 2012 the direct operating parent company, Vittoria Assicurazioni SpA, showed a net profit based on Italian GAAPs of 14,715 thousand (vs. 11,961 thousand in 1Q11) increasing by 23.0%. 12

13 Insurance business Income statement by business and business line reports for the insurance business, before taxes and intersegment eliminations, a result equal to 20,971 thousand, increasing by+29.6% vs. the result of 16,179 thousand in 1Q11. The key operating items contributing to the period s result are described below. Total insurance premiums in 1Q12 amounted to 243,447 thousand (+14.3% vs. premiums of 213,066 thousand in 1Q11), of which 243,003 thousand for insurance premiums written and 444 thousand for index - and unit-linked investment contracts and for the Vittoria Formula Lavoro open-ended pension fund. Direct Life insurance premiums which do not include contracts considered to be financial instruments featured a decrease of -9.3% vs. premiums in 1Q11. Direct Non-Life (i.e. property & casualty) insurance premiums increased by 15.0%, specifically: - Motor premiums progressed by 15.5%; - Premiums for other non-marine insurance increased by 16.8%; - Premiums for specialty categories [i.e. marine & transport, aviation, and credit & suretyship] decreased by 19.1%. Overhead costs as a percentage of total direct insurance premiums were 8.2% (vs. 8.6% in 1Q11). The Non-Life combined ratio and loss ratio on the retained business (based on Italian GAAPs), as at 31 March 2012, were respectively 93.9% and 68.2%. (98.8% and 71.5% as at 31 March 2011). Real estate business The loss made by the real estate business, before taxes and intersegment eliminations, amounted to 2,878 thousand ( -2,054 thousand in 1Q11) and featured contributors to the income statement that, before intersegment eliminations, included: - Income earned on properties from trading and development totalling 139 thousand ( 480 thousand in 1Q11); - Revenues from real estate brokerage and management services of 240 thousand and rental income of 175 thousand ( 268 thousand and 83 thousand respectively in 1Q11); - Financial expenses of 1,192 thousand ( 1,203 thousand in 1Q11). The Group s real estate business includes trading and development, brokerage, and management of own and third-party property. Service business This segment showed a profit in the period, before tax and minority interest, of 152 thousand ( 61 thousand in 1Q11). Revenues for services rendered in 1Q12 by Group companies, before elimination of infra-group services, amounted to 1,741 thousand ( 1,454 thousand in 1Q11). These revenues included 1,733 thousand for commissions and services rendered to the direct operating parent company ( 1,359 thousand in 1Q11). 13

14 Review of operations Premiums as up to 31 March 2012 amounted to 243,003 thousand. Portfolio breakdown and the changes occurring by business segment and branch are shown in the following table: COMPARISON BETWEEN GROSS PREMIUMS WRITTEN IN IQ12 AND IQ11 DIRECT AND INDIRECT BUSINESS (in thousand of euros) YoY % of 31/03/ /03/2011 change total book % Domestic direct business Life business I Whole- and term life 26,417 22, IV Health (long-term care) n.v V Capitalisation 5,774 6, Total Life business 32,312 29, Non-Life business Total non-marine lines (exc. specialty and motor) 45,532 38, Total specialty lines 3,591 4, Total motor lines 161, , Total Non-Life business 210, , Total direct business 242, , Domestic indirect business Life business - - n.v Non-Life business 44 - n.v Total indirect business 44 - n.v Grand Total 243, , Revenues not qualified as premiums as defined by IFRS 4 (Unit Linked contracts and those relating to the Vittoria Formula Lavoro open-ended pension fund) amounted to 444 thousand ( 275 thousand in 1Q11). 14

15 The table below shows the geographical spread of agencies and geographical breakdown of premiums for Italian direct business: Regions Non-Life Business Life Business Agencies Premiums % Premiums % NORTH Emilia Romagna 30 15,063 1,466 Friuli Venezia Giulia 4 2, Liguria 14 8, Lombardy 85 46,071 11,693 Piedmont 42 19,269 2,852 Trentino Alto Adige 7 2, Valle d'aosta Veneto 29 12,351 1,808 Total , , CENTRE Abruzzo 12 11,245 1,256 Lazio 25 21,460 3,288 Marche 16 6, Tuscany 35 20,868 2,537 Umbria 14 10,646 2,301 Total , , SOUTH AND ISLANDS Basilicata 2 1, Calabria 2 1,360 0 Campania 8 7, Molise Puglia 5 5,618 1,059 Sardinia 6 7, Sicily 9 9, Total 33 33, , Total ITALY , , France OVERALL TOTAL ,647 32,312 The direct operating parent company operates in France on the basis of the freedom-to-provideservice provisions. 15

16 Life business Premiums Direct insurance business premiums recognised for the period totalled 32,312 thousand, split as follows: YoY % of 31/03/ /03/2011 change total book % Recurrent Premiums 9,425 9, Annual Premiums 22,887 20, Totale Rami Vita 32,312 29, Claims, accrued capital sums & annuities, and surrenders The comparison relating to settlements in the quarter is shown in the following table: 31/03/ /03/2011 Claims 4,450 3,323 Accrued capital sums & annuities 14,851 13,281 Surrenders 11,695 8,319 Total 30,996 24,923 Reinsurance Outward reinsurance In the Life business, the main treaties in place, which relate to Class 1 (whole/term life), are as follows: - Excess of risk premium; - Pure office premiums -- treaties set up in 1996 and In the first quarter ceded premiums amounted to 615 thousand ( 439 at 31 March 2011). Inward reinsurance With respect to the life business, there is a traditional pure-premium treaty no longer fed with new business, which merely records changes occurring in the related portfolio and a commercial premium treaty that refers to a portfolio of policies that have revaluable annual premiums. 16

17 Non-Life business Premiums and technical performance Direct premiums written in 1Q12 amounted to 210,647 thousand ( 183,221 thousand in 1Q11) and featured an increase of 15.% YoY. The technical performance of the individual Businesses prompts the following observations: Non-Life - non-marine (exc. specialty and motor) Non-life non-marine policy premiums experienced an increase of 16.8% (16.1% in the same period a year earlier) while the technical result posted a decrease, largely due to the claims pursuant to the unusual weather events (snow and freezing rain) taking place in the first quarter, especially in the Emilia Romagna, Marche, Abruzzo and Lazio regions. Non-Life - specialty Premiums in the Specialty Business category decreased by 19.1% in the period. The technical result was negative. Non-Life - motor Premiums in Motor Insurance business rose by 15.5% on the whole (27.2% in the same period last year). The lower growth percentage was forecast and it considers the special attention paid to maintaining the technical results, which is experiencing additional improvements, especially as regards the RC Auto business, thanks to the unwavering attention paid to selection of the portfolio, the severity of reform actions, and in part, to the frequency of claims decreasing. Claims Reported claims The following table of claims was prepared by counting the claims filed during the examined period. The data are compared with those of the same period of the previous year: 31/03/12 31/03/11 Change % number total cost number total cost number total cost Total non-motor businesses 11,887 31,727 13,468 22, Total Special businesses 295 1, , Total motor businesses 38,868 96,865 35,503 90, Total non-life businesses 51, ,424 49, , Furthermore, no. 26,859 claims referring to CARD claims were received. Their total cost, net of applicable deductibles, was 7,963 thousand. 17

18 Claims paid The following table shows claims paid for direct business and the amount charged to reinsurers, with the data broken down by the period to which claims refer: Claims paid Claims Claims paid Change 31/03/12 recovered 31/03/11 gross Current year Previous years Total from reinsurers Current year Previous years Total claims % Total non-motor businesses 2,313 16,978 19,291 1,398 2,036 16,931 18, Total Special businesses 424 3,288 3,712 1, ,940 2, Total motor businesses 20,237 85, ,187 2,271 18,248 68,243 86, Total non-life businesses 22, , ,190 5,355 20,525 87, , The cost includes the amount incurred in the period for the contribution to the guarantee fund for road-accident victims. This totalled 3,206 thousand vs. 2,768 thousand in 1Q11. Claims settlement speed The following table illustrates how quickly reported claims (by number) were paid net of claims eliminated without consequences, broken down by current generation and previous generation in reference to the principal Businesses: (percentages) current generation previous generations 31/03/ /03/ /03/ /03/2011 Accident insurance Health insurance Motor vehicle hulls Fire and natural events Miscellaneous damages - theft Third-party motor liability Third-party general liability

19 Reinsurance Outward reinsurance As far as outward reinsurance is concerned, the corporate policy is based on selective underwriting of risks and on book development and entity in relation to the risks covered. It aims to balance net retention. Transactions are undertaken internationally with players in the reinsurance markets featuring high ratings. The main treaties in place are the following: Non-life business Accident Motor vehicle Hulls Marine Hulls Cargo (goods in transit) Fire and natural events Miscellaneous damage Motor TPL General TPL Suretyship Legal protection Assistance Type of treaty Excess claims Excess claims Excess claims Excess claims Excess claims Pure premium for hail, single-multi-risk Pure premium for engineering risks Pure premium for ten year guarantees Excess claims Excess claims Pure premium Pure premium Pure premium Ceded premiums in 1Q12 totalled 5,680 thousand ( 6,037 thousand as at 31 March 2011). Inward reinsurance Acceptance of risks relating to the indirect business mainly arises from participation in syndicates and from acceptance of shares in Italian businesses, which are entered into voluntarily. Commercial organisation As part of the planned expansion of the agency network, 5 new agencies were opened, other 8 were reorganised and 2 were closed in 1Q12. As a result, the parent company was domestically represented by 347 general agencies (324 at 1Q11) and 596 professional sub-agencies (561 at 1Q11). 19

20 Products Work continued on new-product development and on revamping of existing products. The actions taken during the first quarter 2012 are outlined below: New Products Life business: A new product was introduced as part of the Linea Risparmio (Savings Line): o Vittoria Alto Rendimento (Vittoria High Yield ), a whole-life, single-premium individual policy. Two new tariffs were introduced as part of the Linea Protezione (Protection Line): o collective policies related to 20% salary and pension assignment loans ; o collective policies related to 20% pension assignment loans. Non-Life business: In the Non-life business, two new products were introduced relating to reimbursement of healthcare costs, one of which is dedicated to Affinity Groups. Revamped Products Life business: First quarter 2012 activities focused on updating numerous Life products and adapting to the current rules and new regulations enacted by Isvap, Covip and Consob. Non-Life business: Three tariffs were revamped in the Linea Strada (Road Line) product in the Motor Business. Specifically: o the tariff that includes increases in 27 provinces for automobiles of customers that do not belong to Affinity Groups (tariff edition 1 February 2012) o the tariffs that included an increase in the entry premium for the trucks (excluding camper vans) of customers that do not belong to Affinity Groups (tariff edition 1 February 2012); o the tariff that includes raising the minimum insurable value for all vehicles excluding motorcycles and three-wheelers (tariff edition 1 February 2012). The following new products in the Non-life, Non-marine business have been subject to overhaul: o 2011 Environmental Liability Policy for Installations; o 2011 Environmental Liability Policy for loading and unloading operations at thirdparty premises; o 2011 Environmental Liability Policy for activities at third-party premises. 20

21 Technical reserves Technical reserves, gross of reinsurers share, were as shown in the following table: Direct business Indirect business Total carrying amount 31/03/ /12/ /03/ /12/ /03/ /12/2011 Non-life reserves 1,031,166 1,017, ,031,957 1,018,203 Premium reserve 324, , , ,694 Claims reserve 705, , , ,100 Other reserves Life reserves 772, , , ,808 Reserve for payable amounts 21,050 23, ,063 23,368 Mathematical reserves 736, , , ,724 Other reserves 14,439-13, ,443-13,284 Total technical reserves 1,803,381 1,760,963 1,029 1,048 1,804,410 1,762,011 The Life Other reserves item mainly refers to: - 2,361 thousand for the reserve for deferred liabilities to policyholders (of which 1,506 thousand stemming from measurement at fair value of available-for-sale securities and 855 thousand by provisioning made against subsidiaries profit allocated to segregated accounts); - 11,890 thousand for the operating expenses reserve. Reinsurers share of technical reserves is detailed in the following table: Direct business Indirect business Total carrying amount 31/03/ /12/ /03/ /12/ /03/ /12/2011 Non-life reserves 55,436 56, ,714 56,445 Premium reserve 13,195 13, ,195 13,372 Claims reserve 42,241 42, ,519 43,073 Other reserves Life reserves 15,618 16, ,618 16,770 Reserve for payable amounts Mathematical reserves 15,597 16, ,597 16,753 Other reserves Total reinsurers' share of technical reserves 71,054 72, ,332 73,215 21

22 Overhead costs Insurance Business Overhead costs direct business In 1Q12 the total amount of insurance overhead costs -- consisting of personnel costs, various general expenses, plus depreciation of tangible assets and amortisation of intangible assets -- rose to 20,004 thousand vs. 18,342 thousand in 1Q11, increasing by 9.1%. Besides current operating expenses, these costs also include depreciation & amortisation costs for investments made in IT facilities and processes. These investments are intended to limit, in future years, the operating costs burdening corporate departments and the agency network, whilst at the same time improving services to policyholders as regards insurance coverage and claims settlement. Their breakdown is shown in the following table, where Other costs consist mainly of office running costs, IT costs, legal and legal-entity expenses, mandatory contributions, and association membership dues. ANALYSIS OF COSTS 31/03/ /03/2011 Change Personnel expenses 10,415 9, % Other costs 6,616 6, % Amortisation/Depreciation 2,973 2, % Total cost by nature 20,004 18, % Real-estate business Service Business The overhead costs of the Real Estate and Service businesses, before intersegment eliminations, are shown in the following tables: REAL ESTATE BUSINESS ANALYSIS OF COSTS 31/03/ /03/2011 Change Personnel expenses 1, % Other costs 1,141 1, % Amortisation/Depreciation % Total cost by nature 2,461 2, % SERVICE BUSINESS ANALYSIS OF COSTS 31/03/ /03/2011 Change Personnel expenses % Other costs % Amortisation/Depreciation % Total cost by nature % Personnel costs and general expenses are allocated to operating expenses (and specifically to Other administrative costs ). Depreciation and amortisation costs are allocated to the Other costs item in the income statement. 22

23 Operating costs The following table shows the total amount of insurance operating costs (Non-Life and Life) as reported in the income statement by business segment: 31/03/ /03/2011 Change Gross commissions and other acquisition costs 46,078 41, % Profit participation and other commissions received from reinsurers -1,430-1, % Investment management costs % Other administrative costs 5,465 5, % Total 50,421 45, % Operating costs as a percentage of total direct retained insurance premiums were 21.3% (vs. 22.0% in 1Q11). Employees As at 31 March 2012 Vittoria Assicurazioni and fully consolidated companies had 557 employees vs. 539 as at 31 December 2011 and 532 as at 31 March The average number of employees on the payroll, split by contractual category and calculated on an active in-force basis, was as follows: 31/03/ /03/ /12/2011 Managers Officers Administrative staff Total

24 Investments Cash & cash equivalents - Property Investments, cash & cash equivalents, and property reached a value of 2,337,851 thousand with an increase of +6.9% vs. 31/12/2011. The detailed breakdown is shown in the following table: INVESTMENTS - CASH AND CASH EQUIVALENTS - PROPERTY 31/03/ /12/2011 Change A Investments in subsidiaries and associates and interests in joint ventures 108, , % B Held to maturity investments 101,675 98, % Loans and receivables 38,273 37, % - Reinsurance deposits Other loans and receivables 38,048 37,762 C Financial assets available for sale 1,396,240 1,273, % - Equity investments 37,937 34,106 - OEIC units 6,090 6,142 - Bonds and other fixed-interest securities 1,352,213 1,233,374 Financial assets at fair value through profit or loss 70,001 67, % D Financial assets held for trading 2,836 2, % - Bonds and other fixed-interest securities held for trading 2,836 2,787 E Financial assets at fair value through profit or loss 67,165 64, % - Investments where policyholders bear the risk 67,165 64,249 Cash and cash equivalents 94,427 87, % F Property 529, , % Property under construction 312, ,145 Property held for trading 92,746 91,136 Owner-occupied property 123, ,468 TOTAL INVESTMENTS 2,337,851 2,186, % of which investments where the Group bears the risk 2,270,686 2,121, % investments where policyholders bear the risk 67,165 64, % Investments with risk borne by Group Investments with risks borne by the Group totalled 2,270,686 thousand ( 2,121,788 thousand as at 31 December 2011). The following transactions took place during the first 3 months of 2012: B) Investments held to maturity: - purchase of certificates of deposit for 2,993 thousand. - redemption of bonds for 13 thousand. C) Financial assets available for sale: - redemption of bonds for 66,900 thousand; - purchases of Italian government securities for 184,998 thousand; - sales of fixed rate Italian government securities for 15,091 thousand, realising a capital loss of -33 thousand and a capital gain of 123 thousand; - sales of fixed rate German government securities for 57,657 thousand, realising a capital gain of 1,159 thousand. D) Financial assets held for trading: Changes in this item are referred to alignment to fair value. 24

25 Investments where policyholders bear the risk E) Investments benefiting Life policyholders who bear related risk and those arising from pension fund management As at 31 March 2012 these investments amounted to 67,165 thousand, increasing by 4.5% YoY. Of this amount, 55,771 thousand related to unit - and index - linked policies and 11,394 thousand to the open-ended pension fund Vittoria Formula Lavoro. Total net income amounted to 5,253 thousand. The value of investments in securities amounted to 64,040 thousand ( 57,809 thousand as at 31 December 2011). Their breakdown was as shown in the following table: 31/03/12 31/12/11 Change % Equity investments 5,822 5, Unit trusts and OEICs 34,307 31, Bonds and other fixed-interest securities 17,078 14, Index-linked derivative notes 6,833 6, Total Investments in securities 64,040 57, Cash and other assets 3,125 6, Investments benefiting policyholders who bear relating risk and those aring from pension fund management 67,165 64, As at 31 March 2012 the status of the three segments of Vittoria Assicurazioni open-ended pension fund was as follows: Members Assets 31/03/ /12/ /03/ /12/2011 Previdenza Garantita ,873 2,657 Previdenza Equilibrata ,867 3,565 Previdenza Capitalizzata ,584 4,122 25

26 Changes in financial assets The following table illustrates the changes recorded up through 31 March 2012 in financial assets with the risk borne by Group Companies for equity investments, bonds and other fixedincome securities, and OEIC units, and changes in the assets where the risk is borne by policyholders and related to pension funds: Held to maturity investments Equity investments Financial assets available for sale OEIC units Bonds and other fixedinterest securities Total Financial assets at fair value through profit or loss Assets where the risk is borne by policyholders and related to pension funds Financial assets held for trading Bonds and other fixedinterest securities Total Carrying amount at 31/12/ ,047 34,106 6,142 1,233,374 1,273,622 64,249 2,787 1,438,705 Acquisitions and subscriptions 2, , , ,733 Sales and repayments , , ,191 Other changes: - effective interest adjustments ,787 1, ,314 - fair value adjustments - 3, ,371 80,150 1, ,401 - impairment loss rate changes ,669-4, ,548 - other changes ,502-1,502 Carrying amount at 31/03/ ,675 37,937 6,090 1,352,213 1,396,240 67,165 2,836 1,567,916 F) Investments in property As at 31 March 2012, real estate assets totalled 529,050 thousand (+2.2% vs. 31 December 2011). The following table shows the breakdown and changes of these real estate assets: Property under construction Property held for trading Owneroccupied property Total Balance as at 31/12/ ,145 91, , ,749 Purchase and capitalised interests paid - MILAN - Portello Area (via Acacia 2000 S.r.l.) 6, ,067 - MILAN - Portello Area (via Vittoria Assicurazioni S.p.A.) 3, ,797 - PARMA (via Immobiliare Bilancia Prima S.r.l.) SAN DONATO MILANESE (MI) - (via Immobiliare Bilancia S.r.l.) 1, ,452 - SAN DONATO MILANESE (MI) - (via Vittoria Immobiliare S.p.A.) ROME (via Valsalaria S.r.l.) TURIN - Villar Focchiardo Street - (via Vittoria Immobiliare S.p.A.) TURIN - Barbaroux Str. - (via Vittoria Immobiliare S.p.A.) GENOA - De Ferrari Sq., Conservatori del Mare Str., Orefici Str. (via Vaimm Sviluppo S.r.l.) MILAN - Adamello Str. (via Forum Mondadori Residenze S.r.l.) GENOA - Venezia Street (via Immobiliare Bilancia S.r.l.) FLORENCE - Viale Michelangelo (via Immobiliare Bilancia S.r.l.) TURIN - Maria Vittoria Str. - (via Vittoria Properties S.r.l.) Miscellaneous Total purchase and capitalised interests paid 11,328 1, ,989 Sales: - MILAN - San Donato Milanese (via Vittoria Immobiliare S.p.A.) (750) - - (750) - Miscellaneous 0 (6) - (6) Total sales (750) (6) - (756) Depreciations - - (1,071) (1,071) Recognised gains Balance as at 31/03/ ,861 92, , ,050 26

27 Financial liabilities The following table shows the breakdown of financial liabilities relating to contracts for which policyholders bear investment risk and of other financial liabilities, highlighting subordinated liabilities: FINANCIAL LIABILITIES 31/03/ /12/2011 Change Financial liabilities where the investment risk is borne by policyholders and arising from pension fund management 67,165 64, % - Financial liabilities where the investment risk is borne by policyholders relating to index- and unit-linked policies 55,771 53,847 - Financial liabilities where the investment risk is borne by policyholders relating to pension funds 11,394 10,402 Othe financial liabilities 299, , % - Reinsurance deposits 24,418 24,418 - Payables to banks 261, ,791 - Other financial payables 7,757 7,808 - Other financial liabilities 5,415 5,415 - Subordinated liabilities - - TOTAL FINANCIAL LIABILITIES 366, , % The following table shows the cumulative change as up to 31 March 2012 of financial liabilities relating to investments for which policyholders bear investment risk and to liabilities concerning pension fund management: Benefits relating to unitlinked and index-linked policies Benefits relating to pension fund management Total Carrying amount at 31/12/ ,847 10,402 64,249 Investment of net fund assets Profits attributable to policyholders 4, ,253 Amounts paid -2, ,734 Carrying amount at 31/03/ ,771 11,394 67,165 27

28 Gains and losses on investments The following table shows the breakdown as at 31 March 2012 of net gains on investments, with separate disclosure of investments where the risk is borne by life policyholders: Gains and losses on investments Realised gains/ (losses) Unrealised gains/ (losses) 31/03/2012 total net gains/(losses) 31/03/2011 total net gains/(losses) Investments 16,487 4,465 20,952 20,044 From: b investments in subsidiaries and associates and interests in joint ventures c held to maturity investments 1,146-1,146 1,075 d loans and receivables e financial assets available for sale 14,600-14,600 17,265 f financial assets held for trading g financial assets at fair value through profit or loss 858 4,395 5,253 1,945 Other receivables Cash and cash equivalents Financial liabilities -1,431-5,253-6,684-3,439 From: b financial liabilities at fair value through profit or loss - -5,253-5,253-1,945 c other financial liabilities -1, ,431-1,494 Total gains and losses on financial instruments 15, ,788 17,046 Real estate business From: a Gains on property trading b Rent income on owner-occupied property and property held for trading Total real estate business Total gains and losses on investments 15, ,102 17,609 The net income with the risk borne by the Group decreased from 17,609 thousand to 15,102 thousand,(-14.2%) due to the gains on government securities classified in financial assets available for sale realised in 1Q11. As up to 31 March 2012 the weighted average return on Bonds and other fixed-income securities was 4.5% as compared with 5.6% in 1Q11. 28

29 Other revenues The following table reiterates real-estate income, as shown in the previous table, and provides the link to Other revenues as shown in the consolidated income statement: Other Revenues 31/03/ /03/2011 Total income from real estate business Brokerage and management revenues Other technical captions - insurance business 941 1,153 Other revenues - real estate business Other revenues - insurance business Other revenues - service business 3 1 Total 1,688 2,165 Net Equity The breakdown of equity as at 31 March 2012 is shown in the following table: BREAKDOWN OF EQUITY 31/03/ /12/2011 Total equity attributable to the shareholders of the parent 384, ,625 Share capital 67,379 67,379 Other equity instruments - - Equity-related reserves 33,874 33,874 Income-related and other reserves 271, ,506 Translation reserve Fair value reserve ,314 Other gains or losses recognised directly in equity Group profit for the year 12,148 37,225 Total equity attributable to minority interests 24,320 24,730 Share capital and reserves attributable to minority interests 24,730 24,336 Minority interests' profit for the year Total consolidated equity 409, ,355 29

30 Significant events occurring after quarter-end Insurance Business The parent company has accepted the swap proposal submitted by the Greek authorities on the sovereign debt securities which was completed in April. Real Estate Business Vittoria Properties Srl On 27 April 2012, in execution of the share capital increase deliberated by the Shareholders Meeting on 13 December 2011, Vittoria Assicurazioni S.p.A. and Vittoria Immobiliare S.p.A. have paid the subsidiary a total of thousand, in an amount proportional to the ownership share of each. The Board of Directors Milan, 11 May

31 Consolidated interim financial statements 31

32 Vittoria Assicurazioni S.p.A. Consolidated interim financial statements as at 31 March 2012 INCOME (LOSS) STATEMENT 31/03/ /03/ /12/ Net premiums 232, , , Gross premiums 238, , , Ceded premiums 6,472 5,772 26, Commission income , Gains or losses on remeasurement of financial instruments at fair value through profit or loss Gains on investments in subsidiaries and associates and interests in joint ventures , Gains on other financial instruments and investment property 17,907 46,990 46, Interest income 15,138 12,361 53, Other income Realised gains 1,304 6,564 13, Unrealised gains 1, Other income 1,688 2,165 16,597 1 TOTAL REVENUE 252, , , Net charges relating to claims 169, , , Amounts paid and change in technical reserves 173, , , Reinsurers' share -4, , Commission expense Losses on investments in subsidiaries and associates and interests in joint ventures 646 1,186 3, Losses on other financial instruments and investment property 2,888 1,494 15, Interest expense 1,431 1,494 4, Other expense Realised losses Unrealised losses 1, , Operating costs 51,306 46, , Commissions and other acquisition costs 42,915 38, , Investment management costs Other administrative costs 8,083 7,276 35, Other costs 9,114 8,215 27,661 2 TOTAL COSTS 233, , ,439 PROFIT FOR THE YEAR BEFORE TAXATION 18,987 14,695 57,616 3 Income taxes 7,249 5,448 19,997 PROFIT FOR THE YEAR 11,738 9,247 37,619 4 GAIN (LOSS) ON DISCONTINUED OPERATIONS CONSOLIDATED PROFIT (LOSS) 11,738 9,247 37,619 of which attributable to the shareholders of the parent 12,148 9,807 37,225 of which attibutable to minority interests Basic EARNINGS per share Diluted EARNINGS per share OTHER COMPREHENSIVE INCOME (LOSS) 31/03/ /03/ /12/2011 CONSOLIDATED PROFIT (LOSS) 11,738 9,247 37,619 Translation reserve Fair value reserve 38,874-4,448-46,682 Hedging reserve Gains or losses on hedging instruments of net investment in foreign operations Reserve for changes in the equity of investees Intangible asset revaluation reserve Property, plant and equipment revaluation reserve Gains or losses on non-current assets or assets of a disposal group classified as held for sale Other reserves OTHER COMPREHENSIVE INCOME (LOSS) NET OF TAX 39,037-4,600-46,981 COMPREHENSIVE INCOME (LOSS) 50,775 4,647-9,362 of which attributable to the shareholders of the parent 51,185 5,207-9,756 of which attibutable to minority interests

33 Vittoria Assicurazioni S.p.A. Consolidated interim financial statements as at 31 March 2012 Income statement by business and business line Non-life business Life business Real estate business Service business Intersegment eliminations Net gains and costs/losses 31/03/ /03/ /03/ /03/ /03/ /03/ /03/ /03/ /03/ /03/ /03/ /03/ Net premiums 200, ,734 31,697 29, , , Gross premiums 206, ,067 32,312 29, , , Ceded premiums 5,857 5, ,472 5, Commission income Gains or losses on remeasurement of financial instruments at fair value through profit or loss Gains on investments in subsidiaries and associates and interests in joint ventures Gains on other financial instruments and investment property ,355 7,930 8,394 10, ,907 18, Other income 1,258 1, ,741 1,454-1,938-1,553 1,688 2,165 1 TOTAL REVENUE 211, ,825 40,311 40, ,167 1,761 1,466-1,954-1, , , Net charges relating to claims 136, ,403 33,521 27, , , Amounts paid and change in technical reserves 140, ,773 33,835 27, , , Reinsurers' share -3, , Commission expense Losses on investments in subsidiaries and associates and interests in joint ventures Losses on other financial instruments and investment property 644 1, ,186 1, ,192 1, ,888 1, Operating costs 46,513 40,946 3,907 4,537 2,292 1, ,938-1,545 51,306 46, Other costs 7,321 5, , , ,114 8,215 2 TOTAL COSTS 192, ,425 38,232 33,360 3,655 3,221 1,609 1,405-2,696-2, , ,328 PROFIT FOR THE YEAR BEFORE TAXATION 18,892 9,400 2,079 6,779-2,878-2, ,987 14,695 33

34 Vittoria Assicurazioni S.p.A. Consolidated interim financial statements as at 31 March 2012 Detail of insurance technical items 31/03/ /03/2011 Gross amount Reinsurer's share of amount Net amount Gross amount Reinsurers' share of amount Net amount Non-life business NET PREMIUMS 206,514 5, , ,067 5, ,734 a Premiums written 210,692 5, , ,221 6, ,184 b Change in premiums reserve 4, ,355 12, ,450 NET CLAIMS COSTS 140,704 3, , , ,403 a Amounts paid 131,181 5, , ,056 2, ,809 b Change in claims reserves 9, ,133 13,817-1,725 15,542 c Change in recoveries , ,948 d Change in other technical reserves Life business NET PREMIUMS 32, ,697 29, ,131 NET CLAIMS COSTS 33, ,521 27, ,383 a Amounts paid 33,301 1,466 31,835 34,987 1,226 33,761 b Change in reserve for amounts to be paid -2, ,305-10, ,086 c Change in mathermatical reserves 3,223-1,156 4,379 3, ,885 Change in technical reserves when investment risk is d borne by policyholders and in reserves arising from pension fund management e Change in other technical reserves