Consolidated interim report - Cattolica...Berica Vita Cattolica Previdenza Cattolica Life Lombarda Vita Cattolica Gestioni Investmi ent (i ) Cattolica Services (*) Cassa di Risparmio

Consolidated interim report

as of June 30th, 2012

Approved by the Board of Directors

on August 8th, 2012

Contents

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Directors and Officers 9 Group Structure 11 Reference Scenario 15 Interim Management Report 27 The Group during the first six months of 2012 29 Highlights of Cattolica Group business performance 32 Ways in which the Group image and information are disclosed 37 Business performance for the period 39 A brief outline of the business performance 41 Insurance business and other sectors of activities 45 Equity and financial performance 56 Risk management 59 Risk management 61 Insurance risk – non-life business 61 Insurance risk – life business 62 Market risk 64 Operating, legal and reputation risk 68 Employees and sales network 69 Human resources and training 70 Sales network 72 Significant events and other information 75 Significant events during the period 77 Other information 81 Significant events after the end of the period 85 Outlook for business activities 86 Abridged interim consolidated financial statements as of June 30th, 2012 87

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Consolidated Accounting Schedules 89 Balance sheet, income statement, statement of comprehensive income 91 Statement of changes in shareholders’ equity 99 Statement of cash flows 103 Notes to the accounts 107 Part A – General approach and scope of consolidation 109 Part B – Accounting policies and standards 117 Part C – Information on the consolidated balance sheet and income statement 122 Part D – Other information 154 Certification of the appointed Executive 158 Independent Auditors’ Report 160

Summary index of tables and charts

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Tables Table 1 - Key economic indicators 32 Table 2 - Key equity indicators 32 Table 3 - Sales network and headcount 33 Table 4 – Reclassified consolidated balance sheet 34 Table 5 – Reclassified consolidated income statement 35 Table 6 – Reclassified consolidated income statement by segment of activities 36 Table 7 - Key non-life indicators 36 Table 8 - Total premiums written 48 Table 9 – Life premiums written 49 Table 10 – Investments – breakdown 56 Table 11 – Stratification of the portfolio on the basis of the maturity date 65 Table 12 – Stratification of the bond portfolio by rating 67 Table 13 – Group headcount 70 Table 14 - Ratios for shares in circulation 85 Table 15 - Scope of consolidation (ISVAP Regulation No. 7 dated July 13th, 2007) 115 Table 16 – Balance sheet by sector of activities (ISVAP Regulation No. 7 dated July

13th, 2007) 123

Table 17 – Intangible assets 123

Table 18 - Goodwill – changes during the period 124

Table 19 – Other intangible assets – changes during the period 126 Table 20 – Tangible assets 127 Table 21 – Property and other tangible assets – changes during the period 128 Table 22 – Analysis of technical provisions – reinsurance amount (ISVAP Regulation

No. 7 dated July 13th, 2007) 129

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Table 23 – Investments 129 Table 24 – Investment property – changes during the period 130 Table 25 – Analysis of tangible and intangible assets (ISVAP Regulation No. 7 dated

July 13th, 2007) 130

Table 26 - Investments in subsidiaries, associates and joint ventures 131 Table 27 – Analysis of non-consolidated equity investments (ISVAP Regulation No. 7

dated July 13th, 2007) 131

Table 28 - Financial investments 132 Table 29 – Analysis of financial assets (ISVAP Regulation No. 7 dated July 13th, 2007) 133 Table 30 - Financial assets at fair value through profit or loss 134 Table 31 - Exposure in Greek Government debt securities 135 Table 32 - Exposure in government debt securities issued by EU zone countries -

Available for sale financial assets 135

Table 33 - Exposure in government debt securities issued by EU zone countries -

Financial assets at fair value through profit or loss 136

Table 34 - Exposure in government debt securities issued by EU zone countries - Held

to maturity assets 136

Table 35 – Analysis of financial assets and liabilities by level (ISVAP Regulation No. 7


Table 36 – Analysis of changes in level 3 financial assets and liabilities (ISVAP

Regulation No. 7 dated July 13th, 2007) 137

Table 37 - Analysis of assets and liabilities relating to policies issued by insurance

companies where the investment risk is borne by the policyholder and deriving from pension fund management (ISVAP Regulation No. 7 dated July 13th, 2007)

137

Table 38 - Sundry receivables 137 Table 39 – Other asset items 138 Table 40 - Other assets 139 Table 41 – Shareholders’ equity 140

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Table 42 – Analysis of technical provisions (ISVAP Regulation No. 7 dated July 13th, 2007)

142

Table 43 – Financial liabilities 143 Table 44 – Analysis of financial liabilities (ISVAP Regulation No. 7 dated July 13th

2007) 144

Table 45 – Payables 144 Table 46 – Employee severance indemnity and length-of-service bonus 145 Table 47 – Other liability items 146 Table 48 - Other liabilities 147 Table 49- Breakdown of direct and indirect gross premiums written by class and by

geographic area 148

Table 50 - Insurance business 149 Table 51 - Analysis of insurance operating expenses 149 Table 52 - Financial operations 150 Table 53 - Financial and investment income and charges (ISVAP Regulation No. 7


Table 54 - Analysis of other components of the statement of comprehensive income –

net amounts (ISVAP Regulation No. 7 dated July 13th, 2007) 152

Table 55 – Income statement by sector of activities (ISVAP Regulation No. 7 dated July

13th, 2007) 152

Table 56 – Analysis of technical insurance items (ISVAP Regulation No. 7 dated July

13th, 2007) 153

Table 57 – Analysis of insurance operating expenses (ISVAP Regulation No. 7 dated

July 13th, 2007) 153

Table 58 - Securities owned by the Group issued by related parties 156

Directors and Officers

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BOARD OF DIRECTORS

Chairman Paolo Bedoni (*)

Deputy Chairman Enrico Mario Ambrosetti (*)

Secretary Aldo Poli (*)

Managing Director Giovan Battista Mazzucchelli (*)

Directors Luigi Baraggia Barbara Blasevich Bettina Campedelli Paolo Garonna Giovanni Maccagnani Giuseppe Manni Angelo Nardi Pilade Riello (*) Giovanni Sandrini Giovannimaria Seccamani Mazzoli (*) Domingo Sugranyes Bickel

Enrico Zobele BOARD OF STATUTORY AUDITORS

Chairman Alessandro Lai

Statutory Auditors Luigi de Anna Cesare Brena Andrea Rossi Franco Volpato

Alternate Auditors Enrico Noris Stefano Romito GENERAL MANAGEMENT

General Manager Marco Cardinaletti Deputy General Manager Flavio Piva

(*) The Directors whose names are marked with an asterisk are members of the Executive Committee

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Group Structure

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ABC Assicura

Duomo Uni One Assicurazioni

TUA Assicurazioni (*)

Berica Vita

Cattolica Previdenza

Cattolica Life

Lombarda Vita

Cattolica Gestioni Investimenti (**)

Cattolica Services (***)

Cassa di Risparmio di San Miniato

Prisma

99.99%

51%

60%

97%

60%

60%

60%

100%

20%

25%

99.95%

100%

As of June 30th 2012

NON-LIFE LIFE OTHER

Non-life insurance Life insurance

Property and stockbrokingservices

Operating services

Financial services

Risparmio & Previdenza97.58%

Vegagest SGR17.14%

BCC Assicurazioni

(*) Tua Assicurazioni wholly owns Tua Retail.(**) formerly Cattolica Immobiliare.(***) 0.005% of the share capital of Cattolica Services is held individually by ABC Assicura,BCC Assicurazioni, BCC Vita, Berica Vita, Cattolica Previdenza, C.P. ServiziConsulenziali, Duomo Uni One, Lombarda Vita, Risparmio & Previdenza and TUAAssicurazioni.(****) 0.07% is held individually by ABC Assicura, BCC Assicurazioni, BCC Vita, BericaVita, Cattolica Gestioni Investimenti, C.P. Servizi Consulenziali, Duomo Uni One,Lombarda Vita,Risparmio & Previdenzaand TUA Assicurazioni.

Banks

BCC Vita

51%

Cattolica Assicurazioni Business School (****)

68.1%

Car Full Service

82%

0.7%

51%C. P. Servizi Consulenziali

49%

30.5%

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Reference Scenario

Reference Scenario

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Macro-economic scenario

During the first half of the year, the financial crisis continued to weigh in heavily on global markets, where the economic recession together with the rise in the cost of refinancing the public deficit became increasingly pressing, forcing politicians to try and achieve fiscal and economic union. Initially, the European Central Bank maintained the reference rates steady, however increasing the extraordinary liquidity measures for the banking system by means of a second LTRO transaction (long-term refinancing operation) over 3 years. The austerity measures requested of the various countries, so as to reduce national debt however further depressed internal demand, leading the European Central Bank to drastically review the growth and inflation estimates and to adopt an expansive monetary policy cutting the rates in the second quarter by 25 bp, taking them to the all time low of 0.75% and launching additional extraordinary liquidity measures for the banking system. In Italy, the crisis emerged in full during the interim period, with a collapse in the confidence indexes and a significant reduction in industrial production which pushed the country into a technical recession. Government securities were subject to heavy speculation on financial markets with considerable effects on the cost of refinancing for the country and increasing the pressure on the Italian banking system. Accordingly, the Monti government launched additional measures to reduce public spending, along with a number of important reforms on the labour market. The US economy by contrast revealed a satisfactory increase in industrial activities during the first quarter, thanks to the positive contribution in the cycle of stocks and the first few particularly intense months of the year which permitted certain sectors to increase their activities consequently raising the number of those in work. During the second quarter, international economic tension slowed down the growth cycle and internal demand was not able to compensate the drop in manufacturing activities and the fall in exports. Therefore, the Federal Reserve increased its expansive monetary policy, launching a further repurchase operation on government securities so as to ensure the system ample liquidity, although the budget deficit is once again close to all-time highs. High unemployment, reduced consumption and a fragile real estate market keep US growth under potential. In Japan, the economy benefited from post-earthquake reconstruction, while in Asia a drop was seen in industrial activities, linked above all else to the slow down of the Chinese and Indian economies. These effects led to a decrease in the prices of raw materials, especially non-food stuffs, leading the various central banks to increase stimulus for the real economy. Global inflation disclosed significant symptoms of a slowdown as from the second quarter. Bond markets Despite the numerous downgrades registered on global governmental issues, the return on ten-year government securities of the core countries (Germany, USA and UK) fell to minimum levels both for the US curve (1.2%) and for the German curve (1.58%), while the short-term maturities actually reported negative nominal rates. During the interim period, after an initial part of the year when the effect of the abundant liquidity on markets led to a general contraction in the returns of the curve, the trend of a

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widening of the spread between the return on government securities of the peripheral European countries with respect to German Bunds was confirmed, with record levels on all the curves. Only at the end of June, following the first solid steps for integration supporting the financial systems made by all the member countries, did the spread start to decrease despite remaining at record highs for most of the countries. Due to high aversion to risk, the sector of corporate issues reported a new and heavy drop.

Stock markets

The stock markets saw great volatility, guided above all else by the banking sector and the economy trend expectations. The share lists maintained a genuinely positive attitude for almost all the first quarter, only to then drop drastically in the second quarter with the rise in investors’ fears regarding the failure of the European Union. Only in June did the evident underweight of the investors and the conviction of the operators that the Euro Zone could tangibly resolve the problems, lead buyers to return partially to the market attracted by high dividends acknowledged in listings. On a six-monthly basis, in the USA, the S&P 500 index closed at +6.66% and the Nasdaq at +10.81%, while in Europe the Dax closed at +5.61%, the Eurostoxx50 at -4.45% and the FTSEMIB at -7.64%. In Asia, the Hang Seng index rose 2.99% and the Nikkei closed with a gain of 5.22%.

Currency markets

The fears of an economic recession in Europe and the rise in extraordinary liquidity measures adopted by the European Central Bank led the Euro to lose value both against the Dollar, with depreciation of 2.06%, and against the Yen, which gained 1.58% on the single currency. The Bank of Japan’s liquidity manoeuvres to support the domestic economy also made sure that the dollar appreciated against the Japanese economy by 3.76%.

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Insurance industry

According to the matters reported by ISVAP,1 premiums written in the life and non-life classes by national insurance companies and representative agencies in Italy of companies from outside the E.E.A. during the first quarter of 2012 amounted to € 25.9 billion, with a decrease of 15.2% with respect to the same period in 2011. In detail, life premiums, equating to € 17.3 billion, reported a decrease of 20.8%, and an incidence on the overall life and non-life portfolio which came to 66.5% (71.2% in the same period of 2011); the non-life portfolio, which came to € 8.7 billion, decreased 1.2%, with an incidence of 33.5% on the overall portfolio (28.8% in the same period of 2011).

According to the matters reported by ANIA, it is estimated that in 20122, total premiums written will be down (for the second year running). As in 2011, the drop will be concentrated in the life sector which grew sharply in the two-year period 2009-2012 thanks to the sale of class I savings products (traditional) with return forms of coverage. Total premiums written (life and non-life) for direct Italian business could come to around 106.6 billion in 2012 (-3.3% with respect to 2011). The incidence of these premiums on GDP would therefore drop from 6.98% in 2011 to 6.74%. The volume of premiums written for direct Italian business in the non-life sector could remain at the same levels in the previous year during 2012. The stability of the non-life premiums written would be the result of slight growth in premiums written for the TPL motor and TPL ships classes (+1%) and a marginal drop (-0.9%) in other non-life classes, the effect of the difficulties in the economic cycle. In detail, the most evident drop (-4%) might be seen in land vehicle hull class premiums, especially due to the brusque curbing in sales of new vehicles during the year (estimated as -18% on average in 2012 which follows the -11% in 2011). With regard to the property sector (fire and other damage to assets), the accident, injury and health classes and also the TPL - general classes, no significant changes are envisaged. During 2012, total non-life premiums written could therefore reach € 36.4 billion and the percentage with respect to GDP should remain at the same levels seen in 2011 (2.3%). In the life sector, after the drop of 18% reported in 2011, premiums written could decrease to the extent of 5% during 2012 due to both the limited capacity to save of Italian households and the aggressive competitiveness of the products offered by the banking sector, more inclined to market their own funding instruments to strengthen liquidity buffers. At the end of May, new life production came to € 21.7 billion, compared with € 26 billion in the first five months of 2011. The drop was essentially concentrated in class I products, in relation to which new life production decreased by more than 20% with respect to the same period last year, even if the rate of reduction progressively toned down as from March (in fact, from a tendential rate equal to -38% in February 2012, it rose to -30% at the end of March and around -25% at the end of April). The reduction was more emphasised in the first five months of the year due to the volume of premiums placed by the banking network (-23%). In the hypothesis of a trend in the financial markets in line with that reported in the latter part of the interim period, a further slowdown is envisageable with an estimated decrease in premiums written of around 6.5%, with a volume of € 53 billion (compared with € 56.7 billion in 2011). New production of class III products at the end of May was by contrast up (+9% with respect to

1 ISVAP Circular dated June 1st 2012. 2 Source ANIA - “L’assicurazione italiana 2011/2012” (pages 317-318 – June 2012)

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the same period last year). Again in this case, hypothesising a constant trend of the share markets, it can be estimated that the premiums written relating to insurance-financial products in this class will be up by 2% with respect to 2011, for a total amount written of € 12.7 billion. Overall, the volume of premiums written for the life sector could touch the € 70 billion mark and as a percentage of GDP would fall from 4.67% in 2011 to 4.44% in 2012.

Institutional framework

Within the articulated panorama of the measures adopted by the legislator and the sector authorities which characterised the period, some of the legislative innovations which affected the insurance sector and the Group are mentioned.

ISVAP regulations and amending measures Bonds issued by nations belonging to the European Economic Area ISVAP issued instruction No. 2957 dated January 18th, 2012, which introduced an amendment to Article 7 of the ISVAP regulation No. 32 dated June 11th, 2009 , envisaging that with regard to bonds issued by nations belonging to the European Economic Area, used by companies to cover the technical provisions in index-linked agreements, the minimum rating requirement is not applied, without prejudice to the requisites of appropriate security and negotiability which must continue to characterise the assets used to cover commitments undertaken in said agreements. Minimum contents of the life assurance agreement ISVAP published Regulation No. 40 dated May 3rd, 2012 concerning the definition of the minimum contents of the life assurance agreement. Said regulation, implementing the deregulation decree, disciplines the minimum contents of the life assurance agreements associated with the disbursement of a property mortgage loan or consumer credit. The minimum contents of the life policy set by the regulation represent the basic contractual offer and are instrumental for the comparison between the various quotes presented to the customer, who may also choose to take out a policy which envisages different conditions more in keeping with their needs, for example concerning the insured capital or the duration of the agreement. In order to facilitate the activities for comparing the quotes, a standardised facsimile has been envisaged. The customer will have ten business days as from consignment of the quote to look for a more convenient policy more in keeping with their needs with respect to that proposed by the bank or financial broker. Furthermore, adopting the suggestions of the consumer associations and private citizens, the obligation for insurance companies to provide a free on-line service issuing quotes on their websites has been envisaged, so as to facilitate consumers when looking for and comparing products. The regulation came into force on July 1st, 2012. Organisation, internal procedures and controls aimed at preventing the use of insurance companies and insurance brokers for the purpose of money laundering or the funding of terrorism ISVAP published Regulation No. 41 dated May 15th, 2012, concerning the implementing provisions regarding organisation, internal procedures and controls aimed at preventing the use of insurance companies and insurance brokers for the purpose of money laundering or the funding of terrorism, pursuant to Article 7, paragraph 2 of Italian Legislative Decree No. 231 dated November 21st, 2007. The regulation contains rules on the organisation, procedures, structures and skills of the company audit departments, which take into account the specificity of the subject of anti-money laundering. The provisions propose themselves as in line with regard to continuity with those as per ISVAP Regulation No. 20 dated March 26th, 2008,

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concerning internal audits, risk management, compliance and outsourcing of the activities of insurance companies. Specific devices are envisaged for the control of the risk of laundering and terrorism funding, requiring the insurance companies and brokers - obliged in accordance with the decree - to endow themselves with resources, procedures and organisational functions clearly identified and adequately specialised. Furthermore, the regulation is inspired by the principle of proportionality so that the recipients can implement the new provisions on a consistent basis with the nature and the dimensions of the activities carried out and the related organisational structure. Interlocking restriction On April 20th, the Bank of Italy, CONSOB and ISVAP issued a joint document by means of which they provide certain criteria for the application of Article 36 (“interlocking restriction”) of Italian Decree Law No. 201 dated December 6th, 2011, the so-called “Salva Italia”, which prohibits the cross-over of appointments between companies and groups of companies operating on the lending, insurance and financial markets. The document pauses to look at the subjective sphere of the application of the restriction, in particular indicating a threshold of size-related significance for the companies or groups of companies in which the party holds appointments (total sales revenues at national level of at least € 47 million), as well as at the notion of competing company or group and at the enforcement system. Furthermore, ISVAP published Regulation No. 42 dated June 18th, 2012 which envisages the restriction for the holders of appointments in management, supervisory and audit bodies and for senior executives of companies or groups of companies operating on the afore-mentioned markets, on undertaking or exercising similar appointments in competing companies or groups of companies, these being understood to be companies or groups of companies between which there are no controlling relationships and which operate on the same product and geographic markets. Implementation of the provisions regarding accounting policies for debt securities issued or guaranteed by European Union nations ISVAP published Regulation No. 43 dated July 12th, 2012 , published in the Italian Official Gazette on July 17th, 2012, which envisages the official cancellation of the previous regulation No. 28 dated February 17th, 2009 and regulation No. 37 dated March 15th, 2011, further to the issuance of the so-called “Milleproroghe” decree. This decree amended assumptions and methods for exercising the faculty for insurance companies to comply with regimes which were introduced by the anti-crisis decree and is applicable as from the 2012 interim report. In order to limit the pro-cyclical effect of the market phenomena which increase the volatility of the spreads on Government securities, the following innovations were envisaged: • the renewal of the anti-crisis measures until the enforcement of Solvency II; • the limitation of the same measures to just debt securities issued or guaranteed by European

Union nations; • the cancellation of the admissibility thresholds on a consistent basis with the changed

reference scenario. In continuity with the previous provisions, the companies which have availed themselves of

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these faculties must make provisions of profits to a restricted reserve and are subject to a prudent regime which is essentially a series of governance rules and public disclosure and supervisory requisites regarding the exercise of the faculty and the related effects on the individual and group solvency margin, as well as on the assets covering the technical provisions. The prescriptions regarding supervisory disclosure, governance and expected cash flow analysis devices have been enhanced, while those concerning the limitations on the distribution of dividends and correct disclosure to the market remain unchanged.

Other legislative innovations Remote cancellation of motor TPL policies Italian Law No. 217 dated December 15th, 2011 was published in the Italian Official Gazette No. 1 dated January 2nd, 2012 (Provisions for the fulfilment of obligations deriving from Italy’s membership of the European Community - 2010 EU Law). The EU Law cancelled Article 67 - duodecies, paragraph 5, letter c) of the Consumers’ Code, in the part which lays down that “the right to withdraw does not apply to mandatory third party liability insurance policies for damages deriving from the circulation of motor vehicles and vessels in relation to which an insured event has occurred”; it follows that, also in motor TPL policies entered into remotely, the contracting party shall have the possibility to withdraw within a period of 14 days from stipulation of the policy, even if an insured event occurs. The insurance company will maintain the portion of the premium relating to the period when the policy was effective, but the compensation and the sums possibly paid out to the injured party will not be repeatable. This amendment, in force as from January 17th, 2012, applies to all the policies for which, as at that date, the deadline of 14 days from stipulation of the policy has not yet elapsed. Professionalism, good standing and independence requisites The regulations containing the professionalism, good standing and independence requisites for parties who carry out administration, management and control activities care of insurance and reinsurance companies with registered offices in Italy, as well as the direct and indirect holders of equity investments, have been published in the Italian Official Gazette No. 6 dated January 9th, 2012; these regulations came into force on January 24th, 2012. Specifically: • with regard to professionalism, the requisite of prior experience is extended from three to

five years for the chairman of the board of directors, the members of the executive committees, the managing directors and at least a third of the statutory auditors for whom necessary enrolment in the register of chartered accountants is envisaged;

• with regard to good standing, Article 5 of the afore-mentioned regulations lists the situations which remove the good standing requisites for the parties concerned;

• pursuant to Article 6 (Independence requisites), the administration, management or audit role in an insurance or reinsurance company is not compatible with the performance of a similar role, with the existence of employment relationships, on-going consulting relationships or the provision of remunerated work activities or other relationships of an equitable nature care of other insurance or reinsurance companies, their subsidiaries and parent companies, such that they would compromise independence.

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Discipline of listed issuers By means of resolutions No. 18079 dated January 20th, 2012 and No. 18214 dated May 9th, 2012, CONSOB made a number of simplifications to the Issuers’ Regulations (resolution No. 11971 dated May 14th, 1999). foreseeing in particular: • the faculty to depart (opt-out) from the disclosure obligation on extraordinary transactions.

For companies already listed, resolution No. 18079 established that the choice can be made within 180 days after the enforcement of said resolution;

• the cancellation of the communication and publication provisions for information relating to compliance with codes of conduct by issuers, without prejudice to the obligation for the issuers to provide information on the failure to comply with the code of conduct;

• the specification regarding the obligation to communicate internal dealing transactions which comes into force, for transactions subsequent to the first, only when exceeding the threshold of € 5,000 over the space of one year;

• a number of specifications regarding disclosure of the issuers concerning forecast data and a number of specifications concerning the selective divulgation of accounting data;

• the cancellation of the obligation to comment on rumours, and the forecast of a threshold of € 100,000 above which purchase/sale transactions on own shares must be communicated;

• the simplification of the information to be included in shareholders’ meeting minutes. Balance between genders in the composition of the management and audit bodies On conclusion of the public consultation procedure, by means of resolution No. 18098 dated February 8th, 2012 CONSOB included a new provision in the Issuers’ Regulations. The provision lays down the balance between genders in the composition of the management and audit bodies of listed companies. Specifically, the Articles of Association of the listed companies discipline: • the methods for the formation of the lists as well as the additional criteria for the

identification of the individual components of the bodies which permit the observance of a balance between genders at the end of the voting;

• the possibility of not envisaging the observance of the criteria for the distribution between genders for the lists which present a number of candidates less than three;

• the formalities for the replacement of the members of the bodies who have left office during the mandate, taking into account the criteria of distribution between genders;

• the formalities so that the exercise of the appointment rights, if envisaged, does not contrast with the matters envisaged by Article 147-ter, paragraph 1-ter and Article 148, paragraph 1-bis, of the Consolidated Finance Law.

Handling of personal details Italian Decree Law No. 5 dated February 9th, 2012 was published in ordinary supplement No. 27/L to the Italian Official Gazette No. 33 dated February 9th, 2012, containing urgent provisions regarding simplification and development. Specifically, Article No. 45 contains important simplifications for the companies with regard to the handling of personal details establishing, among other aspects, the cancellation of letter g), paragraph 1 and paragraph 1-bis of Article No. 34 of the Privacy Code as well as, consequently, paragraphs 19 to 19.8 and 26 of attachment B) to the Code, which discipline the obligation for data controllers to prepare the annual up-date of the Programmatic Document on Security (DPS, Documento programmatico sulla sicurezza) and to report in this connection in

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the report accompanying the annual financial statements. Without prejudice to the complete autonomy of the companies to adopt any decisions in this connection, ANIA has suggested that in any event this document be up-dated by its expiry date of March 31st, 2012. By means of conversion into law (Italian Law No. 35 dated April 4th, 2012) of the afore-mentioned decree law, the elimination of the obligation to draw up and up-date the DPS as well as make mention of this same in the annual management report of the directors, was finally confirmed. Adaptation of the regulations of the separate management schemes relating to PIP By means of circular Protocol No. 761 dated February 24th 2012 concerning the “Enforcement of ISVAP regulation No. 38 dated June 3rd, 2011 Adaptation of the regulations of the separate management schemes relating to PIP”, COVIP called the attention of the companies concerned to follow the indications provided by the scheme of rules approved by Covip by means of resolution dated October 31st, 2006 (Article 7 indicates the cost items which may affect the equity of the separate internal management schemes). Provisions concerning motor TPL Italian Law No. 27 dated March 24, 2012, converting, with amendments, Italian Decree Law No. 1 dated January 24th, 2012, containing “urgent provisions for competition, development of the infrastructures and competitiveness”, was published in the Italian Official Gazette No. 71 , ordinary series No. 53 dated March 24th, 2012. The conversion law made significant changes to the original text of the decree law, especially with reference to TPL motor insurance. The most significant innovations concern the introduction of a provision aimed at contrasting speculations currently widespread on very slight physical injuries, the abolition of the faculty for insurance companies to offer compensation in specific form for damages to objects, the reduction of the deadline for making objects available for expert inspection to two business days, new and burdensome conditions for the offer of policies combined with the installation of “black boxes”, the reduction of the fine for breach of the tariff comparison obligation, the assignment to ISVAP of the authority to fix the limits of the compensatory forfeits applicable in the direct compensation system, according to new criteria which take into account the settlement efficiency and the fight against fraud. Mention is also made of a new formulation of the provision relating to life assurance associated with the disbursement of property mortgage loans and consumer credit and various amendments to the provisions concerning the fight against fraud, the falsification of documents and the breach of the obligation to take out insurance coverage for motor TPL, as well as the provisions concerning “dematerialisation” of certificates, insurance coupons and risk certificates and, in conclusion, a provision which obliges insurance companies to compensate the damage deriving from the fire and theft of an insured vehicle irrespective of the issue by the legal authorities of the certificate closing the case. At the time of conversion, new regulatory authority was introduced to the charge of ISVAP, making the enforcement of certain provisions dependent on the issue of the related regulations. Shareholders’ directive: Italian Legislative Decree No. 91 dated June 18th, 2012 Italian Legislative Decree No. 91 dated June 18th, 2012 was published in the Italian Official Gazette No. 152 dated July 2nd, 2012, amending and supplementing Italian Legislative Decree No. 27 dated January 27th, 2010, implementing the shareholders’ directive. The main innovations included the measures taken on the Consolidated Finance Law (TUF):

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• with regard to the payment of dividends, permitting the issuer to identify the legitimation to

pay profits with reference to a date identified by the shareholders’ meeting which decided on the distribution of dividends has been envisaged; the shareholders’ meeting also fixes the date and methods for the related payment;

• with reference to the notice of calling, it has been specified that the deadline for notification starts as from the publication on the company’s website; the publication of the notice in extract form in daily newspapers is also envisaged (Article 125-bis of the Consolidated Finance Law - TUF);

• the regulations relating to the possibility of presenting resolution proposals to shareholders’ meetings has been reviewed and extended.

Furthermore, pursuant to Article 5 of the afore-mentioned decree, the following provisions will apply to shareholders’ meetings whose notice of calling is published after January 1st, 2013: • the amendments to Article 2366 of the Italian Civil Code which assimilate the system of co-

operative companies to that of listed joint-stock companies with regard to the calling of meetings;

• other amendments regarding the system of co-operative companies, as per Article 135 et seq. of the Consolidated Finance Law (TUF), which rehauls the special regime envisaging an essential shift towards the ordinary discipline of joint-stock companies.

In conclusion, the regulations and implementing provisions which will have to be issued in accordance with the decree will have to be adopted within six months of enforcement of the same.

Tax measures With reference to measures of a tax nature, the main innovations which characterized the period are described as follows

Monti Decree During the previous accounting period, Italian Decree Law No. 201 dated December 6th, 2011 was issued (subsequently converted, with amendments, into Italian Law No. 214 dated December 22nd, 2011) whose effects were seen as from 2012. Full deductibility of IRAP (Regional Business Tax) referring to payroll and related costs Article No. 2, paragraphs 1 and 2 of the Decree introduced the full deductibility of IRAP relating to costs for employees and similar. As from 2012, the increase in the IRAP deduction was set, so-called “tax wedge”, i.e. the difference between the payroll and related costs which the company must meet and the net remuneration in the pay packet, relating to permanent female employees or those under 35 years of age. Consolidated municipal tax (IMU) Consolidated municipal tax has been set up on an experimental basis as from 2012 and until 2014; as from 2015, the tax will be applied as fully effective, therefore becoming a consolidated municipal tax (IMU) which for the real estate component will replace IRPEF and the related surtaxes due in relation to land-based income pertaining to assets not leased and the municipal property tax (ICI).

26

The innovations of the “Deregulation Decree” By means of publication in the Ordinary Series No. 18/L to the Italian Official Gazette No. 19 dated January 24th, 2012, Italian Decree Law No. 1 dated January 24th, 2012 came into force, the so-called “Deregulation Decree”, containing a number of significant tax-related measures. VAT system for transfers and leases of building for residential use (Art. 57) The decree in question introduces an amendment to the VAT system applicable to leases and transfers of buildings for residential use disciplined by Article 10, paragraph 1, points 8 and 8-bis of Italian Presidential Decree No. 633 dated October 26th, 1972. With regard to leases, on a general note the VAT exemption system is confirmed; with regard to transfers, the VAT exemption system is confirmed, with the exception of those transfers made, within 5 years of the date of completion of construction/work by the constructor and by the company which has carried out the renovation work. The innovations of the so-called “Tax simplification” By means of publication in the Italian Official Gazette No. 52 dated March 2nd, 2012, Italian Decree Law No. 16 dated March 2nd, 2012 came into force. “Customers and suppliers” lists (Art. 2, paragraph 6) The decree in question takes steps to amend the regulation of the customer and supplier lists, envisaging - as from 2012 - the obligation to make communication for significant transactions for VAT purposes irrespective of the related amounts (equal to or greater than € 3,000 or less) for which the obligation to issue invoices is envisaged and for amounts equal to or greater than € 3,600 (gross of VAT) if the obligation to issue invoices is not envisaged for the same. In fact, therefore, with regard to the transactions for which the issue of invoices is obligatory, the overall amount of all the transactions carried out with a specific customer or supplier will have to be communicated, irrespective of the unit amount of each invoice. IRAP rebate prior years relating to payroll and related costs (Art. 4, paragraph 12) The decree in question, considering the innovations introduced with regard to IRAP (regional business tax) as from 2012 (Italian Decree Law No. 201 dated December 6th, 2011) recognises the possibility of requesting the IRAP rebate relating to tax period priors to that underway as of December 31st, 2012. Special stamp duty on “shielded” financial assets (Art. 8, paragraphs 16, letters a) to d) and 17) The decree in question concerns the special annual stamp duty applicable to “shielded” assets introduced by Italian Decree Law No. 201 dated December 6th, 2011. With regard to 2012, the tax amounts to 10‰ and is due with reference to the value of the assets still segregated as of December 31st in the previous year. Brokers, who also include insurance companies, are obliged to make the payment each year.

27

Interim Management

Report

29

Interim Management Report The Group during the first six months of 2012 Business performance for the period Risk management Human resources, sales network and information systems Significant events and other information

The Group during the first six months of 2012

31

During the first six months of 2012, despite the continuation of the difficult economic situation and the instability of the financial markets in the Euro Zone due to heavy tension on sovereign debt, the improvement in business operations of the non-life classes continued with a combined ratio of retained business which dropped from 97.4% in June 2011 to 96.1%; the latter figure, excluding the effects of the earthquake which hit Emilia Romagna in May, came to 94.6%. As at June 30th, the Group closed with a consolidated profit of € 32 million (+28%): this result was affected by € 11 million in writedowns on the financial investments portfolio.3 The profit net of the portion pertaining to minority shareholders came to € 24 million, in line with the same period last year. Excluding the extraordinary effects of the impairments mentioned above, the consolidated profit would have come to € 43 million, and the Group net result € 35 million. Premiums written for the direct non-life business classes rose 3.6% also due to the on-going productive commitment of the agencies confirming the strategy implemented over the last few years, enhancing and consolidating the sales network as the backbone for the Group’s growth. Life premiums written were affected by the decrease in the market and dropped 25.8%, passing from € 1,248.2 million to € 925.8 million with premiums in the traditional segment for € 645.5 million, unit and index-linked premiums for € 73.3 million, capitalisation for € 124.8 million and pension funds for € 82.2 million. Financial operations4 closed with a result, gross of the tax effects, amounting to € 256 million as against € 176 million as of June 30th in the previous year, mainly as a result of the additional income from interest which rose from € 194 million to € 218 million, the increase in other net income realised which rose from € 7 million to € 26 million and the reduction in losses on valuation from € -39 million to € -15 million. The pre-tax result for the period came to € 59 million (€ 45 million as at June 30th, 2011) of which: € 40 million generated in the non-life classes (€ 37 million as of June 30th, 2011) and € 18 million in the life classes (€ 7 million as of June 30th, 2011). As at June 30th, investments amounted to € 15,110 million (€ 15,095 million as at December 31st, 2011) and technical provisions net of the reinsurance amount together with financial liabilities relating to investment contracts came to € 14,773 million (€ 14,946 million as at December 31st, 2011). Consolidated shareholders’ equity amounted to € 1,395 million (€ 1,223 million as at December 31st, 2011) and the Group’s solvency margin came to 1.45 times the regulatory minimum (1.48 taking into account the anti-crisis decree) compared with 1.25 times as at December 31st, 2011 (it was 1.40 taking into account the anti-crisis measures).

***** The merger via incorporation of San Miniato Previdenza in the Parent Company was effective for statutory purposes as from February 26th, 2012, while the accounting and tax effects of the transactions of the company absorbed were booked to the financial statements of the absorbing company as from January 1st, 2012.

3 Net of tax effects and shadow accounting. 4 With the exclusion of investments whose risk is borne by the policyholders and the change in other financial liabilities.

32

HIGHLIGHTS OF CATTOLICA GROUP BUSINESS PERFORMANCE The tables which follow show the most significant balance sheet and income statement figures regarding operating performance, the figures concerning employees and the sales network, the reclassified consolidated balance sheet and income statement and the key indicators as compared to those as at June 30th and December 31st, 2011, in accordance with the international accounting standards. The changes shown, unless indicated otherwise, refer as follows: in relation to the balance sheet items, to the situation as of June 30th, 2012 compared with that as of December 31st, 2011 and, in relation to the income statement items, the situation as of June 30th, 2012 compared with that as of June 30th, 2011. 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

(€ millions) June 30th, 2012 June 30th, 2011 Absolute amount %

Total premiums written 1,797.8 2,088.9 -291.1 -13.9

of which

Gross premiums written 1,719.7 1,989.0 -269.3 -13.5

Direct business - non-life 856.8 826.7 30.1 3.6

Direct business - life 847.7 1,148.3 -300.6 -26.2

Indirect business - non-life 15.1 14.0 1.1 7.9

Indirect business - life 0.1 0.0 0.1

of which

Investment contracts 78.1 99.9 -21.8 -21.8

Consolidated net profit for the period 32 25 7 28.0

Group net profit for the period 24 24 0 0.0

Changes

Table 2 - Key equity indicators

(€ millions) June 30th, 2012 Dec. 31st, 2011 Absolute amount %

Investments 15,110 15,095 15 0.1

Technical provisions net of reinsurance amount 13,783 13,942 -159 -1.1

Financial liabilities relating to investment contracts 990 1,004 -14 -1.4

Consolidated shareholders' equity 1,395 1,223 172 14.1

Changes

33

Table 3- Sales network and headcount

(number) June 30th, 2012 Dec. 31st, 2011 Absolute amount %

Direct network:

Agencies 1,393 1,398 -5 -0.4

including non-exclusive agencies 346 331 15 4.5

Partner networks:

Bank branches 5,966 5,990 -24 -0.4

Financial advisors 937 973 -36 -3.7

Welfare and pension product advisors 37 46 -9 -19.6

C.P. Servizi Consulenziali sub-agents 252 217 35 16.1

Headcount prior to BPVI Fondi SGR spin-off * 1,465 1,470 -5 -0.3

Employees acquired with spin-off 9 0 9 n.a.Total headcount 1,474 1,470 4 0.3

Full-Time Equivalent headcount prior to BPVI Fondi SGR spin-off * 1,409 1,410 -1 -0.1 FTE employees acquired with spin-off 9 0 9 n.a.FTE headcount 1,418 1,410 8 0.6

* On March 14th, the deed for the partial non-proportionate spin-off of B.P.Vi. Fondi SGR within Cattolica Immobiliare, subsequently Cattolica Gestione Investimenti, was finalised.

Changes

34

Table 4 – Reclassified consolidated balance sheet


Assets

Investment property 157 158 -1 -0.6 4.1

Property 19 19 0 0.0 2.1

Equity investments in subsidiaries, associates and joint ventures 74 103 -29 -28.2 4.2

Loans and receivables 1,618 1,518 100 6.6 4.4

Held to maturity investments 286 285 1 0.4 4.3

Available for sale financial assets 8,713 8,512 201 2.4 4.5

Financial assets at fair value through profit or loss 3,634 4,093 -459 -11.2 4.6

Cash and cash equivalents 609 407 202 49.6 7

Total investments 15,110 15,095 15 0.1

Intangible assets 336 328 8 2.4 1

Technical provisions - reinsurance amount 683 640 43 6.7 3

Sundry receivables, other tangible assets and other asset items 1,774 1,859 -85 -4.6 (**)

TO TAL ASSETS 17,903 17,922 -19 -0.1

Liabilities and shareholders' equity

Group capital and reserves 1,107 980 127 13.0

Group profit for the year 24 38 -14 -36.8

Shareholders' equity pertaining to the Group 1,131 1,018 113 11.1 1.1

Capital and reserves pertaining to minority shareholders 256 201 55 27.4

Profit for the period pertaining to minority shareholders 8 4 4 100.0

Net shareholders' equity pertaining to minority shareholders 264 205 59 28.8 1.2

Total capital and reserves 1,395 1,223 172 14.1 1

Provision for unearned premiums 653 626 27 4.3

Provision for outstanding claims 2,352 2,331 21 0.9

Gross technical provisions - non-life 3,005 2,957 48 1.6 3

Gross technical provisions - life 11,130 11,299 -169 -1.5 3

Other gross non-life technical provisions 2 2 0 0.0 3

Other gross life technical provisions 329 324 5 1.5 3

Financial liabilities 1,247 1,254 -7 -0.6 4

of which deposits from policyholders 990 1,004 -14 -1.4

Allowances, payables and other liability items 795 863 -68 -7.9 (***)

TO TAL LIABILITIES AND SHAREHOLDERS' EQ UITY 17,903 17,922 -19 -0.1

(**) Sundry receivables, other asset items, and other tangible assets (balance sheet items under assets = 5 + 6 + 2.2)(***) Allowances, payables and other liability items (balance sheet items under liabilities = 2 + 5 + 6)

Changes Items from obligatory statements (*)

(*) Indicates the items of the consolidated financial statements as per ISVAP Regulation No. 7 of July 13th, 2007.

35

Table 5 – Reclassified consolidated income statement


Net premiums 1,545 1,817 -272 -15.0 1.1

Net charges relating to claims -1,591 -1,703 112 6.6 2.1

Operating expenses -228 -229 1 0.4

of which commission and other acquisition costs -161 -162 1 0.6 2.5.1

of which other administrative expenses -67 -67 0 0.0 2.5.3

Other revenues net of other costs (other technical income and charges) -25 -25 0 0.0 1.6 - 2.6

Net income deriving from financial instruments at fair value through profit or loss 113 32 81 n.s. 1.3

of which class D 103 30 73 n.s.

Net income deriving from investments in subsidiaries, associates and joint ventures -3 -1 -2 n.s. 1.4 - 2.3

Net income deriving from other financial instruments and investment property 275 184 91 49.5 1.5 - 2.4

of which net interest 218 194 24 12.4 1.5.1 - 2.4.1

of which other income net of other charges 26 19 7 36.8 1.5.2 - 2.4.2

of which net profits realised 26 7 19 n.s. 1.5.3 - 2.4.3

of which net valuation profits on financial assets -15 -39 24 61.1 1.5.4 - 2.4.4 relating to assets

of which changes in other financial liabilities 20 3 17 n.s. 1.5.4 - 2.4.4 relating to liabilities

Commission income net of commission expense 2 1 1 100.0 1.2 - 2.2

Operating expenses relating to investments -8 -7 -1 -14.3 2.5.2

RESULT O F INSURANCE BUSINESS AND FINANCIAL O PERATIO NS 80 69 11 15.9

Other revenues net of other costs (excluding other technical income and charges included under insurance business)

-21 -24 3 12.5 1.6 - 2.6

PRE-TAX PRO FIT FO R THE PERIO D 59 45 14 31.1

Taxation -27 -20 -7 -35.0 3

NET PRO FIT FO R THE PERIOD 32 25 7 28.0

PRO FIT FRO M DISCO NTINUED O PERATIO NS 0 0 0 4

CONSO LIDATED PRO FIT FO R THE PERIO D 32 25 7 28.0

Profit for the period pertaining to minority shareholders 8 1 7 n.s.

PRO FIT FO R THE PERIO D PERTAINING TO THE GRO UP 24 24 0 0.0(*) Indicates the items of the consolidated financial statements as per ISVAP Regulation No. 7 of July 13th, 2007.

ChangesItems from obligatory statements (*)

36

Table 6 – Reclassified consolidated income statement by segment of activities

(€ millions) June 30th, 2012 June 30th, 2011 June 30th, 2012 June 30th, 2011 June 30th, 2012 June 30th, 2011 June 30th, 2012 June 30th, 2011

Net premiums 725 699 820 1,118 0 0 1,545 1,817

Net charges relating to claims -511 -494 -1,080 -1,209 0 0 -1,591 -1,703

Operating expenses -175 -175 -53 -54 0 0 -228 -229

of which commission and other acquisition costs -127 -127 -34 -35 0 0 -161 -162

of which other administrative expenses -48 -48 -19 -19 0 0 -67 -67

Other revenues net of other costs (other technical income and charges) -12 -12 -13 -13 0 0 -25 -25

Net income deriving from financial instruments at fair value through profit or loss

-1 1 114 31 0 0 113 32

of which class D 103 30 103 30

Net income deriving from investments in subsidiaries, associated joint ventures

0 0 -3 -1 0 0 -3 -1

Net income deriving from other financial instruments and investment property

32 36 241 145 2 3 275 184

of which changes in other financial liabilities 20 3 20 3Commission income net of commission expense 0 0 2 1 0 0 2 1

Operating expenses relating to investments -2 -2 -4 -3 -2 -2 -8 -7

RESULT OF INSURANCE BUSINESS AND FINANCIAL OPERATIONS

56 53 24 15 0 1 80 69

Other revenues net of other costs (excluding other technical income and charges included under insurance operations)

-16 -16 -6 -8 1 0 -21 -24

PRE-TAX PROFIT FOR THE PERIOD 40 37 18 7 1 1 59 45

Taxation -18 -16 -9 -4 0 0 -27 -20

NET PRO FIT FO R THE PERIO D 22 21 9 3 1 1 32 25

PRO FIT FRO M DISCO NTINUED O PERATIO NS 0 0 0 0 0 0 0 0

CONSOLIDATED PROFIT FOR THE PERIOD 22 21 9 3 1 1 32 25

NON-LIFE LIFE OTHER TOTAL

Table 7 – Key non-life indicators

June 30th, 2012 June 30th, 2011 Dec. 31st, 2011

Non-life ratios for retained business

Claims ratio (Net charges relating to claims / Net premiums) 70.5% 70.7% 72.7%

G&A ratio (Other administrative expenses / Net premiums) 6.6% 6.8% 6.8%

Commission ratio (Acquisition costs / Net premiums) 17.5% 18.2% 17.3%

Total Expense ratio (Operating expenses / Net premiums) 24.1% 25.0% 24.1%

Combined ratio (1 - (Technical balance / Net premiums)) 96.1% 97.4% 96.9%

Non-life ratios for direct business

Claims ratio (Net charges relating to claims / Premiums for the period) 72.4% 71.4% 72.4%

G&A ratio (Other administrative expenses / Premiums for the period) 5.7% 6.0% 5.8%

Commission ratio (Acquisition costs / Premiums for the period) 18.5% 18.6% 18.5%

Total Expense ratio (Operating expenses / Premiums for the period) 24.2% 24.6% 24.2%

Combined ratio (1 - (Technical balance / Premiums for the period) 98.0% 97.4% 96.8%

37

WAYS IN WHICH THE GROUP IMAGE AND INFORMATION ARE DISCLOSED

The Investor Relations Division

The Investor Relations Division maintained on-going dialogue with the financial community, involving relations marked by clarity and transparency, with a view to ensuring the market visibility on the results and on the strategies of the Group. There are four companies which follow and publish analysis and reports on Cattolica stock; individual meetings are periodically organised with the analysts so as to look in-depth at the economic-business trend. On July 11th, 2012 Carlo Ferraresi was appointed as the new Finance Director and Investor Relations Manager of the Cattolica Group. Mr. Ferraresi comes from Crédit Agricole Corporate & Investment Bank where he covered the role of Managing Director and gained important technical and managerial experience. He has covered important roles both in the finance field and in the insurance and reinsurance sector in Italy and the UK.

Rating In January, Standard & Poor’s lowered the ratings of 16 countries in the Euro Zone, including Italy with a decrease of two rungs from A to BBB+ with a negative outlook. Consequently, the agency adopted the same rating action for 15 European insurance companies including the Cattolica Group. On January 27th, the agency took the Group’s rating to “BBB” with a negative outlook in line with its view that the persistence of an unfavourable economic and financial market trend in Italy and the Euro Zone could influence the capitalisation of the company. According to the agency, the Group’s rating in any event continues to reflect the healthy operating performance of the non-life business, the maintenance of a consolidated market position and the ability of management to achieve the results. During the coming years, the usual review of the annual assessment by the rating agency Standard & Poor’s is envisaged.

39


Business performance for the period

41

A BRIEF OUTLINE OF THE BUSINESS PERFORMANCE

The Group by main financial statement aggregates Sectors of business

The Group’s activities are divided up into three business segments; non-life, life and other. The core business of the Group, headed up by Cattolica Assicurazioni, a company which is involved in both life and non-life business, is divided up between the non-life segment (ABC Assicura, BCC Assicurazioni, Car Full Service, Duomo Uni One Assicurazioni and TUA Assicurazioni) and the life segment (BCC Vita, Berica Vita, Cattolica Life, Cattolica Previdenza, C.P. Servizi Consulenziali, Lombarda Vita and Risparmio & Previdenza)5. The other activities include the property and stockbroking services of Cattolica Gestione Investimenti and the operating services of Cattolica Services and Cattolica Business School, instrumental in the execution of the Group's core business.

Premiums

Total premiums written amounted to € 1,797.8 million, disclosing a decrease of € 291.1 million (-13.9%) with respect to the € 2,088.9 million in the first half of 2011. This decrease was attributable to the direct life business classes which fell from € 1,248.2 to € 925.8 million (- 25.8%). Gross consolidated premiums (which therefore comply with the definition of insurance contracts as per IFRS 4) at the end of the six month period amounted to € 1,719.7 million, compared with € 1,989 million as of June 30th, 2011 (-13.5%).

827 857

1,248

926

14 15 0

100 200 300 400 500 600 700 800 900

1,000 1,100 1,200 1,300 1,400 1,500 1,600

June 30th, 2011 June 30th, 2012

Direct non-life premiums Direct life premiums Indirect premiums (life and non-life)

Direct non-life premiums, direct life premiums and indirect premiums (life and non-life)

€ millions

Direct business premiums written are broken down by distribution channel as follows: agencies

49.3%, banks 35.3%, brokers 5.6%, welfare and pension product advisors 0.4%, financial advisors 0.2% and other channels 9.2%.

5 Cattolica Previdenza, C.P. Servizi Consulenziali and Risparmio & Previdenza carry out their activities mainly in the life classes.

42

880

629

99 10

165

Agency network Banks Brokers Financial advisors and welfare & pension product advisors Other channels

Group premiums written by channel€ millions

Non-life business

The non-life business ended the period with net premiums of € 725 million, compared with € 699 million in the same period last year (+3.7%). The combined ratio net of reinsurance came to 96.1%, compared with 97.4% as at June 30th, 2011 and 96.9% as at December 31st, 2011 and was characterised by the essential stability of the claims ratio (claims to premiums ratio) at 70.5%, despite the negative effects deriving from the earthquake in Emilia Romagna, and by an improvement in the incidence of other administrative expenses which fell from 6.8% to 6.6%. Financial operations saw an increase in net interest which rose from € 27 million to € 36 million, accompanied by a decrease in income realised which fell from € 3 million to - € 3 million and gains from valuation which dropped from € 2 million to - € 5 million essentially due to impairment. The non-life business ended the period with a profit of € 22 million, compared with € 21 million as at June 30th, 2011.

Life business Life business was characterised by a decrease in net life premiums which fell from € 1,118 million to € 820 million (-26.7%) and by the result of financial operations6 which improved , passing from € 140 million to € 227 million. The life business ended the period with a profit of € 9 million, compared with € 3 million as at June 30th, 2011.

Other business

Other business closed the period with a positive result of € 1 million, in line with June 30th, 2011.

Sectors by geographic area

Premiums written, which are taken in Italy, are mainly concentrated in Central-Northern Italy, an area similar in terms of risk and return and therefore not significant for the purposes of the secondary segmentation envisaged by IFRS 8.

Other administrative expenses

Other administration expenses amounted to € 67 million, in line with the same period in 2011. The ratio to total insurance premiums written came to 3.7%, compared with 3.2% as of June 30th, 2011, mainly due to the decrease in life premiums written.

6 With the exclusion of investments whose risk is borne by the policyholders and the change in other financial liabilities.

43

Net profit for the period

The period closed with consolidated net profit of € 32 million, attributable to non-life classes for € 22 million (€ 21 million as of June 30th, 2011), to life business for € 9 million (€ 3 million as at June 30th, 2011) and the other sector for € 1 million in line with 2011. Group net profit amounted to € 24 million, in line with June 30th, 2011.

Investments Investments (which include real estate property investments, equity investments in subsidiary and associated companies and joint ventures, loans and receivables, investments held to maturity, financial assets available for sale, financial assets valued at fair value, cash & cash equivalents and property used for operating purposes) at the end of the period amounted to € 15,110 million, compared to € 15,095 million as of December 31st, 2011. Specifically, real estate property investments and property used for operating purposes were in line with year end and amounted to € 176 million, loans and receivables rose from € 1,518 million to € 1,618 million (+6.6%),investments held to maturity amounted to € 286 million (in line with December 31st, 2011), financial assets valued at fair value through profit or loss decreased from € 4,093 million to € 3,634 million (-11.2%) and financial assets available for sale increased from € 8,512 million to € 8,713 million (+2.4%).

15,095 15,110

0

6,000

12,000

18,000

Dec. 31st, 2011 June 30th, 2012

Investments€ millions

Technical provisions

Non-life technical provisions (premiums and claims) amounted to € 3,005 million, compared with € 2,957 million at the end of the previous year (+1.6%).

44

2,957 3,005

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Dec. 31st, 2011 June 30th, 2012

Non-life technical provisions€ millions

Life technical provisions (actuarial provisions inclusive of shadow accounting) totalled € 11,130 million, compared with € 11,299 million at the end of the previous year (-1.5%). Also taking into account financial liabilities relating to investment policies, the technical provisions and deposits relating to life business amounted to € 12,120 million (€ 12,303 million as of December 31st, 2011).

11,299 11,130

1,004 990

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

Dec. 31st, 2011 June 30th, 2012

Life technical provisions Life investment contracts

12.303 12.120

Life technical provisions and investment contracts€ millions

Shareholders' equity

Consolidated shareholders’ equity at the end of the period came to € 1,395 million, compared with € 1,223 million reported at the end of the previous year. Group shareholders’ equity came to € 1,131 million, compared with € 1,018 million reported at the end of the previous year. The Group’s shareholders’ equity includes losses on financial assets available for sale amounting to € 83 million, compared with € 168 million at the end of the previous year. Minority interests’ shareholders’ equity includes losses on financial assets available for sale amounting to € 9 million, compared with € 69 million at the end of the previous year.

45

INSURANCE BUSINESS AND OTHER SECTORS OF ACTIVITIES

Summary of the activities carried out by the Group companies

The scope of consolidation currently comprises the insurance Parent Company, ten insurance companies, a real estate property and stockbroking service company, four service companies, two real estate property investment funds and one mutual equity fund. During the first half of the year, S. Miniato Previdenza was merged via incorporation within the Parent Company.

Società Cattolica di Assicurazione – Società Cooperativa, which operates throughout Italy in

the life and non-life businesses, ideally targeting the medium/high bracket of the personal segment. It is the Parent Company of the following companies:

Non-life insurance companies

• ABC Assicura, is authorized to carry out non-life business and distributes its products using the network of branches deriving from the partnership agreement with Banca Popolare di Vicenza. The Parent Company holds 60% of the share capital;

• BCC Assicurazioni, is authorized to carry out non-life business and distributes its products

using the network of branches active within the sphere of the partnership agreement with ICCREA Holding. The Parent Company holds 51% of the share capital;

• Duomo Uni One Assicurazioni, is authorised to carry out non-life business. Following the

spin-off within Cattolica, which took place in April 2011, the insurance portfolio relating to an agency, the key account policy portfolio and the portfolio relating to indirect business remained with the company. The Parent Company holds 99.99% of the share capital;

• TUA Assicurazioni, carries out insurance activities in the non-life segment, offering the

market a specialist range of insurance and financial products/services able to meet the needs of personal line customers. The Parent Company holds 97% of the share capital.

Life insurance companies

• BCC Vita is authorized to carry out life insurance activities and distributes it products via the

network of branches of the Banche di Credito Cooperativo active within the sphere of the partnership agreement with the ICCREA Banking Group. It is controlled by Cattolica via a 51% holding;

• Berica Vita, is authorized to carry out life insurance activities and distributes its products

using the network of branches deriving from the partnership agreement with Banca Popolare di Vicenza. The Parent Company holds 60% of the share capital;

• Cattolica Life Limited, is a life insurance company with registered office in Dublin, Ireland,

specialising in the structuring of index and unit linked policies for customer segments. The Parent Company holds 60% of the share capital;

• Cattolica Previdenza. The company is authorised to carry out life insurance activities and

46

non-life activities in relation to just the accident, injury and health classes within the sphere of pension & welfare products and collective assistance. It avails itself of leading brokerage firms, 37 pension and welfare product consultants and, as from November 2011, with the launch of C.P. Servizi Consulenziali’s activities, a network of 286 sub-agents. On May 15th, with reference to the provisions originally agreed on, the Parent Company acquired the residual holding of 19.86% from Intesa Sanpaolo Vita thereby achieving complete possession of the share capital;

• Lombarda Vita. The company is authorised to carry out life insurance activities, distributing

them via the network of branches of the UBI Banca Group. The Parent Company holds 60% of the share capital;

• Risparmio & Previdenza, carries out life insurance activities and is active in the non-life

segment, limited to accident and injury and health, aimed at offering a complete range of pension and welfare products, availing itself of the branches of the UBI Banca Group, Banca di Torre del Greco and other banks. It is 97.58% owned by Cattolica, following the purchase in May of an additional holding of 2.4% from Banco di Brescia.

Non-insurance companies

Real estate property companies

• Cattolica Gestione Investimenti (formerly Cattolica Immobiliare), carries out consulting and management activities from the real estate property and stock & share assets. As from April 1st, the partial, non-proportionate spin-off of B.P.Vi. Fondi SGR to Cattolica Immobiliare was finalised; the latter consequently changed its corporate name to Cattolica Gestione Investimenti S.p.A.. It is wholly-owned by Cattolica. On May 15th, Cattolica’s Board of Directors approved the partial spin-off project for the spin-off of Cattolica Gestione Investimenti in favour of the same. The business spun-off will be absorbed into the Parent Company for the purpose of concentrating the Group’s activities pertaining to the management of financial assets within the same; the related authorisation procedure is underway for said transaction.

Closed-end real estate property funds

• Fondo Euripide, is a closed-end real estate property mutual investment fund to which Cattolica Immobiliare transferred all the properties. Cattolica holds 78.7% and Lombarda Vita holds 21.3%;

• Fondo Macquarie Office Italy, is a closed-end real estate property mutual investment fund

which was wholly acquired by the Group companies. It owns the property complex City Central in Via Lepetit, Milan. Cattolica holds an interest of 61.83%, BCC Vita 10.36%, Cattolica Previdenza 4.14%, Lombarda Vita 17.75%, and Risparmio & Previdenza 5.92%.

Closed-end equity funds

• Fondo Networth, is a closed-end mutual investment equity fund reserved for qualified investors who invest mainly in companies active on the market for the production of energy from renewable sources. Cattolica has a holding of 99.76%.

Service companies

• Cattolica Assicurazioni Business School, a consortium company, was set up in November 2010 and is a training hub suitable for ensuring the integrated management and optimisation of the costs, making it possible to utilize the skills developed within in favour of all those who work with the Group. Further to the conferral of the business segment carried out in May

47

by Cattolica Previdenza involving a correlated acquisition of 30.5% of the share capital of the company, the equity investment of Cattolica fell to 68.1%, Cattolica Services holds 0.7% and other Group companies (ABC Assicura, BCC Assicurazioni, BCC Vita, Berica Vita, Cattolica Gestione Investimenti, C.P. Servizi Consulenziali, Duomo Uni One, Lombarda Vita, Risparmio & Previdenza and TUA Assicurazioni) respectively hold 0.07% each;

• Car Full Service, is the Group company dedicated to the development of the products and

services linked to the motor industry inclusive of repair activities supporting the settlement of claims. Cattolica Services owns 82%;

• Cattolica Services, a consortium company which carries out service activities for the Group.

A division of the company handles planning, implementation and management of IT applications and operating processes, along with the services relating to telecommunications services; another deals with the settlement of Group claims with the exception of the security, hail and transport areas. It is 99.95% owned by Cattolica, while the remaining investment is held by other Group companies (ABC Assicura, BCC Assicurazioni, BCC Vita, Berica Vita, Cattolica Previdenza, C.P. Servizi Consulenziali, Duomo Uni One, Lombarda Vita, Risparmio & Previdenza and TUA Assicurazioni) with equal holdings (0.005%);

• C. P. Servizi Consulenziali, received an agency mandate in 2011 from Cattolica, Cattolica

Previdenza and TUA Assicurazioni. As from May 2012, besides the life business solely under Cattolica Previdenza mandate, it carries out non-life premium business activities (with TUA and Cattolica products) also availing itself of sub-agents, previously welfare and pension fund advisors, of Cattolica Previdenza. It is 51% owned by Cattolica and 49% owned by Cattolica Previdenza.

48

Insurance business

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 previous year, together with investment contracts.

Table 8 - Total premiums written Classes


01 - Accident and injury 64.8 3.8 63.5 3.2 1.3 2.0

02 - Health 55.9 3.3 58.8 3.0 -2.9 -4.9

03 - Land vehicle hulls 57.1 3.4 56.3 2.9 0.8 1.4

07 - Goods in transit 3.6 0.2 3.1 0.2 0.5 16.1

08 - Fire & natural forces 50.5 3.0 51.3 2.6 -0.8 -1.6

09 - Other damage to assets 60.9 3.6 57.4 2.9 3.5 6.1

10 - TPL - Land motor vehicles 446.0 26.2 422.7 21.4 23.3 5.5

13 - TPL -General 77.3 4.5 74.5 3.8 2.8 3.8

14 - Credit 0.2 n.s. 0.4 n.s. -0.2 -50.0

15 - Suretyship 6.4 0.4 7.1 0.4 -0.7 -9.9

16 - Sundry financial losses 13.8 0.8 13.0 0.6 0.8 6.2

17- Legal protection 5.9 0.3 5.6 0.3 0.3 5.4

18 - Assistance 12.7 0.7 10.3 0.5 2.4 23.3

Other classes (1) 1.7 0.1 2.7 0.1 -1.0 -37.0

Total non-life classes 856.8 50.3 826.7 41.9 30.1 3.6

Insurance on the duration of human life - class I 645.5 37.9 739.9 37.4 -94.4 -12.8Insurance on the duration of human life linked to investment funds - class III 72.6 4.2 147.6 7.5 -75.0 -50.8Health insurance - class IV - n.s. - n.s. - n.s.Capitalisation transactions - class V 124.8 7.3 255.7 12.9 -130.9 -51.2Pension funds - class VI 4.8 0.3 5.1 0.3 -0.3 -5.9Total life classes 847.7 49.7 1,148.3 58.1 -300.6 -26.2

Total direct business 1,704.5 100.0 1,975.0 100.0 -270.5 -13.7

Indirect business 15.2 14.0 1.2 8.6

Total insurance premiums 1,719.7 1,989.0 -269.3 -13.5Insurance on the duration of human life linked to investment funds - class III 0.7 0.9 1.4 1.4 -0.7 -50.0

Pension funds - class VI 77.4 99.1 98.5 98.6 -21.1 -21.4

Total investment contracts 78.1 100.0 99.9 100.0 -21.8 -21.8

TO TAL PREMIUMS WRITTEN 1,797.8 2,088.9 -291.1 -13.9

n.s. = not significant(1) includes railway rolling stock, aircraft, sea and inland water vessels/hulls and TPL aircraft and sea and inland water vessels.

Changes% of total

% of total

49

Table 9 – Life premiums written Life business (€ millions) June 30th, 2012 June 30th, 2011 Absolute amount %Insurance on the duration of human life - class I 645.5 69.7 739.9 59.3 -94.4 -12.8Insurance on the duration of human life linked to investment funds - class III 73.3 7.9 149.0 11.9 -75.7 -50.8Health insurance - class IV - n.s. - n.s. - n.s.Capitalisation transactions - class V 124.8 13.5 255.7 20.5 -130.9 -51.2Pension funds - class VI 82.2 8.9 103.6 8.3 -21.4 -20.7Total life premiums - direct business 925.8 100.0 1,248.2 100.0 -322.4 -25.8n.s. = not significant

Changes% of total

% of total

Non-life business - Premiums written

The trend in non-life premiums written was characterised by growth of 5% in the motor classes and 1.7% in the non-motor classes, in particular with reference to the accident and injury class, other damage to assets, general TPL, sundry financial losses and assistance.

423

56 51 57 75

446

57 50 61 77

0

50

100

150

200

250

300

350

400

450

500

TPL - Land motor vehicles

Land vehicle hulls Fire Other damage to assets TPL -General

June 30th, 2011June 30th, 2012

Main non-life classes, direct consolidated premiums€ million

Direct non-life premiums written were generated as follows: the agency channel with € 773.4 million (+3.9%), the banking channel with € 21.8 million (-7.2%), brokers with € 30.1 million (+3.4%) and other channels with € 31.5 million (+6.1%).

773

22 30 32

Agency network Banks Brokers Other channels

Non-life premiums written by channel€ millions

Non-life premiums attributable to the Parent Company totalled € 750 million, € 8 million to

50

ABC Assicura, € 8 million to BCC Assicurazioni, € 1 million to Duomo Uni One Assicurazioni (after spin-off), € 74 million to TUA Assicurazioni, in addition to accident/injury and health premiums written by the companies Cattolica Previdenza and Risparmio & Previdenza amounting to € 14 million and € 2 million respectively.

Non-life business - R&D activities: new products

Within the framework of the progressive renewal of the product catalogue and the standardisation of the same at Group level, the following activities were carried out. The Parent Company During the first half of the year, marketing of a number of new Group products commenced both in the retail and corporate sphere. Retail products “Cattolica&Salute INFORTUNI” was launched in March, featuring innovative coverage for the accident and injury market, such as by way of example “Mutuo Sicuro” and coverage dedicated to differently-abled individuals and housewives. Again in the Retail sphere, “Cattolica&Famiglia” was introduced, a new line of products conceived and dedicated to young families. The new line flanks products already in the catalogue and currently envisages four accident and injury products and one product for the home. Corporate products Again in March, “Cattolica&Impresa INDUSTRIA” was launched, the new Group product dedicated to small and medium-sized industrial companies, conceived and studied to help the various local manufacturing entities and further enhance the link between the Group and the business world and the development of the area in which they operate. ABC Assicura During the interim period, the company consolidated the personal line range of products already on sale within banks, introducing four new products: • a specific product for mortgages taken out in the past so as to meet the insurance needs of

customers for the event linked to demise, disability and loss of employment. The product was created in collaboration with Berica Vita;

• a multi-risk family policy, to protect the family from serious events which may affect them and which comprises, in a single solution, the following coverage: reimbursement for major surgery, third party liability for private life and legal protection;

• a multi-risk home policy which is intended to cover risks pertaining to the home. The product is not linked to the disbursement of loans, has been developed in complementary units which can be chosen by the customer providing protection for one’s properties, with maximum flexibility and completeness;

• a policy, which is the first health product of ABC Assicura, which envisages a daily convalescence allowance. A simple product with regard to coverage and particularly abundant in terms of protection which proposes an indemnity in the event of hospital stays which may compromise the ability to generate income for a freelance workers or which have eroded the resources of the household in the event of a dependent employee.

51

BCC Assicurazioni During the first half of the year, two new products were launched: • “Socio in salute”: by means of this insurance policy, the insurance company undertakes -

within the limits and under the conditions established in the specific clauses of the insurance conditions- to provide insurance coverage for the insured party in the event of major surgery (MS), third party liability (TPL), and legal protection (LP);

• “Polizza assistenza famiglia” for BCC Credito e Consumo. The product is targeted at all individuals, resident and/or domiciled in Italy, who have a loan agreement with BCC Credito e Consumo and covers the guarantee relating to family/household assistance TPL and private life TPL.

TUA Assicurazioni

In January, TUA launched the new policy “Tua Salute Maxxi”. This is a solution which comes into play with extensive coverage both in the event of serious disability and demise.

52

Life business - Premiums

Direct life business premiums came to € 847.7 million; investment contracts amounted to € 78.1 million. Total life premiums written stood at € 925.8 million (-25.8% when compared with the same period in 2011).

740

149

255

104

646

73 125

82

0

100

200

300

400

500

600

700

800

900

1.000

Class I Class III Class V Class VI

June 30th, 2011 June 30th, 2012

Main life classes, Rdirect consolidated premiums(insurance premiums and investment contracts)

€ millions

Direct life business premiums were generated by the agency channel with € 106.5 million (+5.1%), the banking channel with € 607.6 million (-29.7%), brokers with € 68.9 million (-15.1%), welfare and pension product advisors with € 6.7 million (-68.1%), financial advisors with € 2.9 million (-89.6%) and other channels with € 133.2 million (-12.9%).

106

608

69

3 7

133

Agency network BanksBrokers Financial advisorsWelfare and pension product advisors Other channels

Life premiums written by channel€ millions

As already indicated Class I fell from € 739.9 million to € 645.5 million (-12.8%); Class III fell from € 149 million to € 73.3 million (-50.8%), Class V fell from € 255.7 million to € 124.8 million disclosing a decrease of 51.2% and class VI (pension funds) dropped from € 103.6 million to € 82.2 million, down 20.7%.

53

Premiums were written for a total of € 77.4 million in relation to pension funds not promoted by the Group insurance companies; € 4.8 million in premiums was written for those promoted by Group insurance companies. On June 30, the agreements expired for the class VI management with guarantee of a minimum return for the FAP ANTONVENETA (Banca Antonveneta employees’ pension fund), the Supplementary pension fund for employees of Banca Monte dei Paschi di Siena spa who became such as from January 1st, 1991, FOPEN (ENEL Group employees’ pension fund) and Cariparma Friuladria Group pension fund. The latter pension fund was finalised with an agreement for the class V management of the resources of the segment already managed in class VI, effective as from July 1st, 2012; the related assets are conferred as an initial premium in accordance with the new agreement. Life premiums attributable to the Parent Company totalled € 273 million, BCC Vita € 100 million, Berica Vita € 123 million, Cattolica Life € 55 million, Cattolica Previdenza € 53 million, Lombarda Vita € 316 million, and Risparmio & Previdenza € 6 million.

Life business - R&D activities: new products

Besides the activities for up-dating the current product catalogue, during the first half of the year new Class I products were marketed, of which 11 for the Parent Company, 1 for Lombarda Vita, 4 for Berica Vita and 3 for Cattolica Previdenza. With regard to the range of capitalisation products, a new class V product was created for Lombarda Vita.

Parent Company, Cattolica Previdenza, Lombarda Vita and Risparmio & Previdenza During the first half of the year, product innovation activities specifically concerned the segment of protection, savings and investment, by means of the restyling of the current products and the development of a new model for approaching the segment business linked to both the investments and the protection coverage. Furthermore, given the current situation of the markets and in line with the matters envisaged by the strategic business plan, long-term investment products were developed which pay out an minimum guaranteed annual rate of return exclusively when maturing. The insurance offer placed by the Parent Company’s agency distribution network was expanded with the development of three Class I products, created with the purpose of offering a competitive mix of products in the catalogue. With regard to the banking network of the Parent Company and the other subsidiary companies, besides the network of welfare and pension product advisors and insurance brokers, the range saw the development of new Class I products of various types: • four mixed insurance products with single premium and annual revaluation of capital and

additional benefit in the event of death; • two mixed insurance products with single premium which annually make a scheduled pay

out in the form of a coupon and which provide benefits which can be revalued on maturity, as well as additional benefits in the event of demise;

54

• two temporary insurance products in the event of demise: one with capital and constant annual premium following demise due to accident; the other with decreasing capital and a limited constant annual premium;

• a temporary insurance in the event of demise with decreasing capital and a single premium. The range of class V products for the banking network saw the creation of a product with a sole premium and additional single premiums which makes it possible to establish capital which can be revalued annually in relation to the return obtained from the internal segregated fund which the policy is linked to. Various capitalization products have been developed dedicated to institutional contracting parties, which makes it possible to establish capital which can be revalued annually in relation to the return obtained by the internal segregated fund; in this case as well, the company guarantees a minimum return and the consolidation of the revalued capital. Furthermore, numerous insurance products were created for the sales networks of the Parent Company, linked to the funding of loans and other financing agreements with related insurance coverage in the event of demise and other events; for such purposes, temporary insurance in the event of demise with decreasing capital was developed for which the company, in the event the insured party dies during the terms of the contract, undertakes to settle the envisaged insured sum on the beneficiaries.

BCC Vita This insurance company continued the activities carried out in 2011 studying traditional class I insurance solutions linked to the situation of the financial markets with the issue of products with specific funding of the assets, which in a second phase of the product will rejoin the BCC Vita Garantita separate fund. These products will permit a saving for the purpose of both the safety of the capital and the payment of the coupons. During the first half of the year, with regard to individual products, the company issued “BCC Vita - Concreta. 5/2012 e 6/2012”, products with specific funding of assets, full life single premium with insurance in the event of demise, with coupons for a pre-established amount, annual revaluation of the capital for the period and an additional pay out in the event of demise. With regard to collective products, the company launched “Protezione Fido”, a product which provides coverage for the event of demise and total disability. The premium is once a year. This product is intended to cover bank credit facilities (opening of current account credit, advances on invoices and collection with due reserve) care of Banche di Credito Cooperativo. During the period, restyling activities was undertaken for CPI (credit protection insurance) policies, concerning a number of technical aspects of the product, as well as contractual ones.

Berica Vita The line dedicated to protection, savings and investments was enhanced, creating four new products for the sales networks of the company: • two full life policies in the event of demise featuring a single premium and additional single

premiums, with revaluation and an additional benefit in the event of demise;

55

• a mixed insurance product with single premium and additional single premiums with annual revaluation of capital and additional benefit in the event of death;

• a temporary insurance in the event of demise with decreasing capital and a single premium.

Cattolica Life During the first half of the year, the company continued to market “Ensemble” and “Nova Ensemble”, unit-linked products which make it possible to assign the capital conferred to a basket made up of five investment proposals diversified by risk profile, ranging from the protection of the capital to the possibility of investing in mainly share-based managed funds. During the first six months of the year, three new protected funds were launched intended for the Banca Popolare di Vicenza and Banca Nuova network which envisage a return target within the recommended timescale. The company also took steps to enhance its product catalogue introducing a new unit-linked policy with single premiums known as “Duet European Equity” which will be made available for placement initially via BPVI Group branches as from the second half of 2012. This policy, comprising two internal funds of the company which interact, a monetary fund and a European equity fund, envisages a personalised service which comes into force from the moment when the policy is taken out, transferring the fluctuations typical of the volatile phases of the stock markets to the benefit of each customer, according to a market cycle logic.

Reinsurance Non-life business

The Parent Company’s reinsurance programme maintained a standardised structure in line with that last year. Reference continued to be made to a programme of proportional transfers with the complementary nature of optional transfer where necessary. The residual retained portion of each class was further protected by claim excess coverage against the occurrence of both insured events of a significant amount and catastrophic events. With regard to TUA Assicurazioni , the transfer programme for 2012 is made up of a proportional transfer for the main classes, net of the optional transfers, with residual retention protected by claim excess agreements. With regard to the bank-assurance companies ABC Assicura and BCC Assicurazioni, the transfer programme for 2012 is made up of a proportional transfer for the main classes, net of the optional transfers, with residual retention protected by claim excess agreements vis-à-vis the Parent Company with subsequent retrocession to reinsurers for all the classes except; assistance, legal protection, general TPL for pollution, which are transferred to reinsurers specialised in these classes. The renewal of the agreements relating to the coverage of the following risks completes the reinsurance programme: • loans against salaries for employees; • health, accident and injury, loss of employment risk associated with disbursement of

loans and mortgages. With regard to Cattolica Previdenza, the reinsurance programme comprises claims excess

56

coverage for the accident and injury class (for risk and catastrophe) and health. With regard to the coverage for reimbursement of medical costs in the health class, proportional coverage has been provided in addition to the excess agreement. Life business The individual policy segment is reinsured for the risk of demise, via a risk excess structure which envisages the transfer of the life risks on a proportional basis. The collective policy segment is reinsured for the risk of demise, via a quota-related agreement, whose retention is covered by a specific claim excess agreement. For both the cases indicated above, the residual retention is protected by adequate claim excess catastrophe coverage. Agreements relating to the coverage of the following completes the life reinsurance programme: • risk of non-self sufficiency (long-term care); • loans against salaries for employees and pensioners; • risk of demise associated with disbursement of loans and mortgages.

Dealings with reinsurance companies which present the best prospects of continuity over the long-term have been preferred for all the Group companies. When selecting the partners, particular attention was paid to the solidity and reliability of the same, directing the choice towards those with the best rating (minimum Standard & Poor’s “A-” or equivalent) or those less exposed, in the composition of the portfolio, to risk categories liable to technical-economic imbalances. When defining the reinsurance programme, all the Group companies followed the provisions of the outline resolution concerning outgoing reinsurance in pursuance of Article 3 of the ISVAP circular No. 574/D dated December 23rd, 2005. The boards of directors of all the companies approved the structure and the transfer plan for 2012, in February.

EQUITY AND FINANCIAL PERFORMANCE

The table below summarises the most significant asset items which show the change in investments in the first six months of the year.

Table 10 – Investments - breakdown

(€ millions) June 30th, 2012 % of total Dec. 31st, 2011 % of total Absolute amount %

Investment property 157 1.0 158 1.0 -1 -0.6

Property 19 0.1 19 0.1 0 0.0Investments in subsidiaries, associates and joint ventures 74 0.5 103 0.7 -29 -28.2Loans and receivables 1,618 10.7 1,518 10.1 100 6.6

Held to maturity investments 286 1.9 285 1.9 1 0.4

Available for sale financial assets 8,713 57.7 8,512 56.4 201 2.4

Financial assets at fair value through profit or loss 3,634 24.1 4,093 27.1 -459 -11.2

Cash and cash equivalents 609 4.0 407 2.7 202 49.6

TOTAL 15,110 100.0 15,095 100.0 15 0.1

Changes

57

Investment property and property

Within an already deteriorated context, the European real estate property market continues to deal with a new financial crisis linked to the national debt problems of the various European countries and in particular their sustainability, which make economic recovery difficult. The Italian property market reported a drop in sales during the first quarter of 2012, up during the second quarter due to the general economic conditions. A correlation between the downwards figures of the market and the increase in taxation on properties decided under the Salva-Italia decree at the end of 2011 (source: Agenzia del Territorio), by contrast, does not emerge as identifiable.

On April 3rd, the Parent Company entered into a preliminary agreement with the Cassamarca Foundation relating to the purchase of the property complex known as “Tenuta Ca’ Tron” located in the municipalities of Roncade, in the province of Treviso, and Meolo, in the province of Venice, covering a surface area of around one thousand hectares. The agreement envisages that Cattolica acquires the agricultural area and the buildings existing thereon, for a price of € 76 million, plus legal taxes, which will be paid in three instalments by the end of 2014. Work, started in 2011, continued on the renovation of part of the property complex of the offices originally intended for residential use. No property disposals were carried out during the first half of the year.

Stock investments

During the period, investment activities aimed on the one hand to seize the opportunities offered by the market in terms of return, and on the other hand to guarantee an adequate containment of the risk in a context featuring a high level of volatility and uncertainty. During the management activities, steps were taken to try and maintain an adequate level of liquidity, capable of ensuring the Group a margin of flexibility consistent with the particular context of market volatility. Bond investments were mainly focused on Italian government issues, showing preference for medium-term maturities, while exposure to corporate bonds linked to financial issuers was reduced, since they are deemed to be excessively risky in relation to the return offered, thus by contrast preferring industrial issuers. In the life business, investments were made taking into account the financial duration restrictions laid down by asset and liability management. During the interim period, the weight of the share-based component remained more or less stable, showing preference for investments in securities capable of guaranteeing an adequate return in terms of dividend pay outs. The portfolio is denominated principally in Euro. Issuers place products primarily in Europe, and to a lesser extent in the United States.

58

285 286

1,518 1,618

177 176 407 609

8,512 8,713

4,093 3,634

15,095 15,110

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

Dec. 31st, 2011 June 30th, 2012

Held to maturity investments Loans and receivables

Investment property and property Cash at bank and in hand

Available for sale financial assets Financial assets at fair value through profit or loss

Total investments

Investments€ millions

The result of financial operations, with the exclusion of investments whose risk is borne by the

policyholders and the change in other financial liabilities, gross of the tax effects, came to € 256 million, compared with € 176 million in the same period last year. Net income relating to other financial instruments and investment property net of the change in other financial liabilities amounted to € 255 million (€ 181 million as of June 30th, 2011), while net interest rose from € 194 million to € 218 million.

Latent capital gains and losses

At the end of the half year, the balance of latent capital gains and losses net of tax effects on held to maturity investment presented a loss of € 15 million and on the loans and receivables a loss of € 116 million. Said capital losses were not deemed permanent losses in value. The overall current market value of the held to maturity investments and of loans and receivables as at June 30th, amounted to € 1,704 million. Latent capital gains net of the tax effects on properties and on property investments, on the basis of estimates made by appointed outside experts, totalled € 19 million. The overall fair value of property and investment property came to € 206 million.

Performance in the 2nd quarter

The result as of June 30th, benefited positively from the contribution of the second quarter. The change in consolidated net profit during the second quarter involved an increase of € 13 million.

59


Risk management

61

RISK MANAGEMENT

These activities are carried out by the Risk Management Division, which will be dealt with in the section “Internal controls”.

INSURANCE RISK – NON-LIFE BUSINESS

Risk concerning tariff rating, proposal selection and the estimate process for provisions and allowances

The “motor tariff - agents” and “motor tariff - banks” and “elementary classes” divisions, located within the Group’s non-life actuarial service, put together tariffs on prudent technical bases and appropriate safety loads in accordance with the type of risks. Furthermore, they carry out on-going monitoring activities so as to check any variations between the values observed and the technical bases used. When achieving their mission, each Group company must guarantee its own stability and soundness, ensuring a satisfactory risk/return ratio. So as to limit the volatility of the risk in favour of equity soundness, the Group uses common risk selection and assumption policies, and defines a re-insurance structure so as to reduce the variable nature of the portfolio results within set limits. Within the sphere of the assumptive policies, particular attention is paid to the risk concentrations relating to acquired portfolios; specifically, with reference to disaster risks (earthquakes and floods), the risk plurality is monitored, divided up by territorial area and measured by means of the amounts insured and the compensation limits, so as to quantify the overall exposure. So as to determine the foreseeable charges for claims for the Provision for outstanding claims, the Group checks the results of the inventory by means of the use of statistical-actuarial type methods, based on the analysis of the historic data. The latter represents the information flow necessary for the definition of the hypothesis on which the method structures used are based, with particular reference to the development of the average cost and the rate of inflation endogenous to the claims. Simulations are periodically carried out on these variables in order to estimate the effect of the same on the reserve, also checking the consistency with the choices adopted for the annual financial statements. In order to optimise the process for the correct reservation at last cost of the claims, particular attention was paid to the analysis and monitoring of the claims pointer.

Credit risk

The Group has adopted a prudent re-insurance and joint-insurance policy in the non-life segment with third-party delegation, showing preference for re-insurers and delegates with an adequate rating. No significant losses due to insolvency have been reported.

Mismatching risk

Due to the singularity of its process which sees the payment of the premiums (revenues) prior to the sustaining of the claims (costs), the non-life insurance business is characterised by a necessary correlation between assets and liabilities. The investments covering the non-life business technical provisions have the purpose of optimising the risk/return profile, taking into account the timing profile of the obligations vis-à-vis the policyholders, within a context of joint management of the assets and the liabilities.

62

INSURANCE RISK – LIFE BUSINESS

Risk concerning tariff rating, proposal selection, mortality/ longevity/ invalidity and the reservation process

For the determination of the pure premiums of the life assurance tariff rates, the Group insurance companies adopt prudent hypotheses in terms of population tables and financial guarantees given. The tariffs are periodically updated in order to take account of changes in the mortality of the Italian population or that of the outstanding portfolio and the change in the interest rates. This permits on-going adaptation to the demographic and financial evolution, as well as any timely adjustments to sudden changes in said factors. If appropriate, additional provisions are provided for the pre-existing portfolio, which cover any changes for the worse in the hypotheses adopted at the time of tariff rating. The products placed by the Group’s insurance companies, in particular those where the pure risk component is significant, envisage assumptive methods structured on the basis of the personal characteristics of the policyholders and the guarantees given. This limits any anti-selection phenomena. The life business insurance risks are demographic type risks (risk of mortality, longevity and invalidity), risk of insufficiency of first-order bases with respect to the costs of portfolio management (expense risk) and risk of early cancellation of the policy portfolio (redemption risk). The actuarial provisions are determined by using the first-order technical bases, in other words those used for the calculation of the pure premiums, in compliance with Italian accounting standards. So as to deal with any insufficiency (estimated on the basis of simulations of scenarios relating to the dismantling of the reference portfolios due to deaths or redemptions and to the propensity towards exercising the life annuity options on maturity) of the population and technical bases with respect to the guarantees given and commitments, additional provisions are provided, if necessary. On a yearly basis, the effective deaths are compared with those anticipated by the population bases adopted for the calculation of the pure premiums of the tariffs placed. Over the last few accounting periods, the effective mortality in total did not exceed 50% of that envisaged, estimated using updated population bases, with any mortality peaks due to non-recurrent and statistically insignificant events. The technical hypotheses, such as the propensity towards exercising the contractual options (for example: maturity and return), the mortality incidences, the exercise of early redemptions, are adopted on the basis of the time series detected on the portfolios of the insurance companies and by means of a comparison with the available market data. Such hypotheses are subsequently corrected as a result of qualitative valuations, such as the analysis of the commercial agreements with the placers, the legislative amendments and the type of the new products being placed. The international accounting standards envisage that the insurance companies assess the adequacy of their insurance liabilities, recording any deficit in the income statement. Accordingly, the liability adequacy test verifies whether the provisions are adequate for covering the future cash flows relating to financial insurance policies with Discretionary Participation Features, according to hypotheses which define the scenario considered to be the best and most consistent for the representation of the corporate situation.

63

The analysis performed reveals the suitability of the Group’s insurance liabilities as at June 30th, 2012. This result is confirmed both at individual insurance company level and at aggregate level. Therefore no integration of the provisions was necessary according to the liability adequacy test.

Credit risk The Group has adopted a prudent re-insurance and joint-insurance policy, showing preference

for re-insurers and delegates with an adequate rating. No significant losses due to insolvency have been reported.

Mismatching risk

Due to the singularity of its process which sees the payment of the premiums (revenues) prior to the sustaining of the services (costs), the life insurance business is characterised by a necessary correlation between assets and liabilities. This implies a potential mismatching risk which is dealt with by means of Asset and Liability Management techniques, thanks to which the Group adopts policies for the investment of the assets covering the provisions linked to the duration and the return. The technical provisions are influenced by the interest rate trends. So as to deal with the risk of insufficiency of the interest rates, additional provisions are provided in accordance with Italian legislation which requires simulations of the performance scenarios of the interest rates and hypotheses on the strategies of re-investment or sale of the assets covering the actuarial provisions. The financial hypotheses, such as the interest rate curves or the strategies adopted for reinvestment purposes, are adopted on the basis of interest rates published by leading financial providers and the comparison between the durations of assets and liabilities within an ALM context. By means of the latter process, in its various forms, the Group controls the liquidity and mismatching risk, in relation to the residual contractual obligations.

Sensitivity / disclosure risk analysis

The hypotheses adopted in the various assessments and estimates are usually modified so as to check the impact on the valorisations and eventually gain indications for subsequent strategies. In particular, scenarios concerning positive and negative shocks regarding the interest rates, change in the propensity towards the exercise of the options on maturity, change in the recourse to early redemptions, changes in the mortality of the policyholders and change in the spending hypotheses for the management of the policy portfolio, are adopted. In detail, within the context of the liability adequacy test, sensitivity analysis is performed on the main risk factors with an impact on the valuation of the liabilities. The scenario of best estimate hypotheses, adopted as the basis for the determination of any deficit to be recorded in the income statement, is changed by adopting a second scenario of worst case hypothesis for all the risk factors considered potentially significant. With reference to market risks, both a variation of the foreseeable return rates of the benefits and the change in the risk free curve used for the discounting of future cash, are simulated. In relation to the analysis of the population risks, fundamentally the mortality and longevity risk, mortality tables or survival tables increased to the extent of 10% are adopted. The hypotheses of propensity towards redemption are modified by 50%, up or down on a differentiated basis for sub-portfolios with a view to prudence. Lastly, a deterioration hypothesis of 10% of the annual operating costs for the policy portfolio is adopted. The measurement of the shocks adopted is based on similar worst-case scenarios adopted at the time of market analysis carried out within a

64

context of the Solvency II Quantitative Impact Studies. The valuation of the liabilities obtained in this second prudent scenario makes it possible to estimate the reduction in the adequacy margin of the liabilities, or the eventual deficit which should be recorded in the income statement, if the extreme shock hypotheses simulated on all the significant risk factors were to be achieved at the same time. The adequacy of the Group’s insurance liabilities as of June 30th, 2012 has been confirmed.

MARKET RISK

Risk management activities relating to investments are aimed at identifying, assessing and

controlling market risks, or the probability of suffering losses due to: • changes in financial market conditions (interest rates, share prices, credit spreads, exchange

rates, etc.); • misalignments between the timing profiles of assets and liabilities; • unforeseen liquidity requirements that call for the liquidation of portfolios of assets, in order

to preserve the solvency of the Parent Company and companies in the Group. The basis of the control system is defined by the outline resolutions approved by the Boards of Directors which discipline the investment activities of the individual Group insurance companies. Specifically, each resolution contains a definition of the qualitative and quantitative limits of the investments for each type of financial instrument, distinguishing between life classes, non-life classes and unrestricted equity. The management of the securities portfolio is carried out in part within the Group and in part by professional outside managers. In the latter case, the management appointments are granted in line with the investment limits established by the Boards of Directors in the outline resolutions, in order to guarantee consistency, correctness, prudence and observance of the legislation in the asset management policies. The close collaboration between the divisions tasked with managing the assets and liabilities of each insurance company, guarantees continual attention towards the objectives of optimising and stabilising the operating results and represents the basis for the adoption of the financial and commercial management strategies.

Interest rate risk

The Group’s investment policy is focused on the optimisation of the management results and on the reduction of the volatility of the same, taking into account the Asset and Liability Management requirements. During the first half of the year, the extraordinary liquidity manoeuvres of the European Central Bank led to the government component outweighing the rest, given the sharp squeeze of the spreads on the Italian curve. However, as from the second quarter, the deterioration of the European financial crisis and the prospects for a further reduction in interest rates significantly increased the risk premiums and the volatility on all the asset classes, suggesting that liquidity in the portfolio should be kept exceptionally high along with purchase activities on industrial and high yield corporate securities, mainly unrelated with respect to traditional investment markets. For the same reason, the decision was made to constantly reduce the financial component; only towards the end of June, coinciding with the Euromeeting, was the decision made to increase the Italian government component in the portfolio, partly further to the sharp expansion registered in the return differential between BTP and Bund, despite however always

65

maintaining a trading stance on the majority of the investments. The most significant component is attributable to Italian government securities, while the rest of the portfolio is diversified by sector and issuer so as to obtain returns compatible with the coverage provided to the policyholders. In particular, within the life sector the time mismatching is monitored between the liabilities due to policyholders (provisions) and the covering assets, taking into account the fact that the liabilities incorporate guaranteed minimums. The Group uses a procedure to manage the exposure to interest rates which considers:

• the assets pertaining to each segregated management fund and all the associated future flows;

• the liabilities represented by the aggregation of the policies outstanding per individual tariff and by the recurrent premiums which they will develop.

The system, having set the interest rate scenario variables, simulates the annual return of the segregated life management fund, taking into account both the stripping of the liabilities and any re-investments of the liquidity generated by the financial assets. In order to illustrate the Group’s exposure to interest rate risk, steps were taken to make a stratification of the portfolio by maturity. The analysis below shows that the portfolio is 50% invested in securities with a maturity of less than 5 years and cumulatively around 87.7% invested in securities with a maturity of less than 10 years.

The table below and the subsequent ones contained in this section, do not include the investments associated with index or unit-linked policies and pension funds, since the risk is borne by the policyholders for nearly all the former.

Table 11 – Stratification of the portfolio on the basis of the maturity date

Loans and receivables

Hel to maturity investments

Available for sale financial assets

Financial assets at fair value through profit or

loss

Total % of total

(€ millions)

Within 12 months 93 0 612 310 1,015 10.0Between 2 and 3 years 223 32 1,885 17 2,157 21.3Between 4 and 5 years 54 5 1,807 25 1,891 18.7Between 6 and 10 years 675 123 2,997 16 3,811 37.6Between 11 and 15 years 433 111 309 2 855 8.4More than 15 years 110 15 268 1 394 3.9TOTAL 1,588 286 7,878 371 10,123 100.0

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Sensitivity analysis

The sensitivity analysis on the interest rate was carried out by hypothesising parallel shocks on the rates curve. Two scenarios were considered, a negative one, with hypothesis of an increase in the rates of 75 bp, and a positive one, featuring a decrease of an equal extent. The extent of the duration was used as modified in order to quantify, security by security, the amount of the deviation in the market value prior and post shock. For certain particular types of securities, in a prudential light, the residual duration data item of the security was considered more representative in this estimate. The results obtained reveal that the effect of the negative shock hypothesised, net of tax effects, would come to around € 139 million on shareholders’ equity and around € 791 thousand on the result. With reference to loans and receivables, the effect would have come to around € 21 million in latent capital losses and with reference to investments held until maturity, the effect would have come to around € 9 million. The effect would be perfectly symmetrical in the case of positive rate shocks. The sensitivity analysis indicates a concentration of exposure to rate risk, for an ample portion of investments held by the Company in the bond segment, both at fixed and floating rate.

Share risk

With a view to a medium/long-term investment policy, a limited position was maintained, on shares with solid fundamentals and reasonable prospects of dividends, splitting the investment during the period. Preference has been shown for Italian issuers and, to a reduced extent, those of other European Union countries, chosen on the basis of the individual growth prospects with a view to sector-based diversification and dividend sustainability.

Sensitivity analysis

The sensitivity analysis on the share component was carried out by hypothesising a first shock of 5% and a second shock of 25% on share market indicators. The results obtained show that the impact, net of the tax component, of the first shock would come to roughly € 17 million on shareholders’ equity and around € 62 thousand on the income statement; that of the second shock would come to roughly € 87 million on shareholders’ equity and around € 312 thousand on the income statement. Again in this case, the greater volatility on the shareholders’ equity derives from the classification of securities, for which reference should be made to the notes to the accounts. With reference to total Group investments, the low component of investments in shares and UCITs referable to the share segment leads to a low exposure to this risk.

Credit risk

During 2012, the explosion of the sovereign debt crisis translated into strong volatility of the spreads on the credit risk. Constant due diligence activities were however carried out so as to monitor the quality of the significant investments made. So as to limit the risk, constant sector-related diversification was carried out on the portfolio, preferring investment in issuers with a good risk profile, observing the instructions of the Outline Resolutions which establish precise limits in terms of the credit quality of the portfolio and exposure towards an individual issuer. With regard to the information on the activities carried out on Greek securities, reference should be made to the notes to the accounts and the tables contained therein.

The extent of the exposure of the bond portfolio to credit risk is expressed by the stratification by rating which follows. The table discloses the satisfactory credit quality of the Group portfolio which is primarily invested in securities with a rating of no less than BBB

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Table 12 – Stratification of the bond portfolio by rating

Loans and receivables Held to maturity investments


Financial assets at fair value through profit or loss

Total % of total

(€ millions)

AAA 0 0 62 35 97 1.0%AA 171 0 152 1 324 3.2%A 608 21 687 26 1,342 13.3%BBB 809 250 6,777 304 8,140 80.4%BB 0 0 144 3 147 1.5%B 0 15 39 1 55 0.5%CCC 0 0 9 0 9 0.1%Without rating 0 0 8 1 9 0.1%Default 0 0 0 0 0 0.0%TOTAL 1,588 286 7,878 371 10,123 100.0% Sensitivity analysis

In order to assess the credit risk, the application of a margin to the corporate bond portfolio, equal to the deviation between the returns of a reference curve and a rating curve lower by two notches was hypothesised. The A/A+ curve was taken as the reference curve, since it is representative of the average rating level of our corporate bond investment portfolio. In this analysis, only the negative scenario was taken into consideration, which envisages an adjustment from the A/A+ curve to the BBB one; the positive scenario was not hypothesised, with adjustment from the A/A+ curve to the higher one. The results obtained reveal that the effect of the negative shock hypothesised, net of tax effects, would come to around € 37 million on shareholders’ equity and around € 247 thousand on the income statement. With reference to loans and receivables, the effect - net of taxation - would have come to around € 17 million in latent capital losses and with reference to investments held until maturity, the effect would have come to around € 700 thousand.

Liquidity risk

The liquidity risk is associated with the possibility that the portfolio assets are difficult to disinvest or that said difficulty translates into a capital loss. The Group handles this type of risk by following the guidelines adopted in the outline resolutions. In particular, as already mentioned, it is envisaged that the portfolio be invested in listed financial instruments with an adequate rating, on the basis of pre-established quantitative and qualitative limits, to encourage the rapid disinvestment of the financial instruments.

Derivatives

The use of derivative products within the Group complies with the needs to optimise the return and risk profile of the assets covering the provisions, taking into account the restrictions placed by the liability structure. These are mainly call options linked to index-linked contracts.

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OPERATING, LEGAL AND REPUTATION RISK

Operating, legal and reputation risk

The operating, legal and reputation risk gauges the probability of suffering losses due to the inefficiency of individuals, processes and systems, external events (such as fraud or supplier activities), difficulty in adapting to the developments in legislation or conduct which may damage the corporate image. The operational risk management system sets itself the objective of reducing and preventing the losses deriving from operating risks by means of the correct identification, gauging, mitigation and control of the operating risks, the periodic assessment of the exposure to operating risks of the Group insurance companies and the systematic disclosure of a consistent and standardised operating risk management culture. This approach makes it possible to enhance the system of internal controls and improve the management processes. During the first half of the year, risk assessment activities continued on Group processes, by means of meetings with process representatives (risk owners) for the recording of risks and the related checks. Furthermore, functional analysis was carried out for the additional evolution of the operating risk management framework.

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Interim Management Report The Group during the first six months of 2012 Business performance for the period Risk management Employees and sales network Significant events and other information

Employees and sales network

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HUMAN RESOURCES AND TRAINING

Human resources

As of June 30th, the Group employee headcount included 1,474 staff, compared with 1,470 as of December 31st, 2011. As from April, 9 employees joined Cattolica Gestione Investimenti following the spin-off transaction of BPVI Fondi SGR within the same. Net of these, employees fell from 1,470 to 1,465. The headcount was made up of 38 executives (-2), 256 officials (+9) and 1,180 office workers (-3). The number of full time equivalent employees totalled 1,418 (1,410 as at December 31st, 2011).

1,183 1,180

247 256

40 38

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Dec. 31st, 2011 June 30th, 2012

HeadcountNumber

Employees Officers Executives

1,470 1,474

Table 13 – Group headcount

Group companies (*) Registered

officesDec. 31st,

2011Change

June 30th, 2012

ABC Assicura Verona 7 0 0 0 7BCC Assicurazioni M ilan 8 1 0 1 9BCC Vita M ilan 24 0 1 -1 23Berica Vita Vicenza 7 0 0 0 7Cattolica Assicuraz ioni Verona 696 15 1) 11 2 ) 4 700Cattolica Assicuraz ioni Business School M ilan 6 16 3) 1 15 21Cattolica Life Dublin (Ireland) 10 1 0 1 11Cattolica Previdenza M ilan 119 3 22 4 ) -19 100C.P. Serviz i Consulenz iali M ilan 1 0 0 0 1Duomo Uni One Assicurazioni M ilan 7 0 1 -1 6Lombarda Vita Brescia 11 0 0 0 11Risp armio & Previdenza Verona 39 0 3 5 ) -3 36San M iniato Previdenza San M iniato (PI) 4 0 4 6 ) -4 0TUA Assicuraz ioni M ilan 49 3 1 2 51Cattolica Gestione Investimenti Verona 6 9 7) 0 9 15Cattolica Services Verona 476 5 5 8 ) 0 476

Group total 1,470 53 49 4 1,474

Increases

(*) Number o f emplo yees re la ting to co mpanies co ns o lidated line-by-line and pro po rtio nally exc luding the res o urces co vering maternity leave.

Decreases

1) of which 2 employees from Cat to lica Services, 2 from R&P and 4 due t o t he merger of San Miniat o P revidenza2) of which 1 employee went t o Cat to lica Business School3) of which 16 employees from Cat t olica P revidenza

6) of which 4 employees went to Cat t olica Assicurazioni7) employees jo in ing the Group following the spin-off of BP VI Fondi SGR8) of which 2 employees went to Cat t olica Assicurazioni

5) of which 2 employees went to Cat t olica Assicurazioni

4) of which 16 employees went t o Cat tolica Business School

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Once again in this period, the valorisation and development of the staff played a central role in the activities and aims of the Human Resources Division. In this context, activities for the creation of the professional system received an important boost, proposing to identify and formalise the roles and professional technical skills for a correct and effective functioning of the business over a three-year period. The professional system represents a systemic basis on which the initiatives relating to the human resources rest, from assessment to growth plans. Individual encounters also continued, with the aim of establishing a direct relationship with the co-workers and getting to know their needs and expectations. More than 200 were arranged during the first half of the year.

Internal staff training

During the first half of the year, Cattolica Assicurazioni Business School, which covers training activities for staff, held 2,618 man days of training, involving 2,013 participations, benefiting internal staff. The training aims to support management so as to encourage involvement, accountability and the contribution of the individuals in generating innovation and recovering efficiency. Within this sphere, two workshops associated with the “Programma di Aggiornamento per i Dirigenti 2012” were organised on the subject of “Recovering efficiency and competitiveness” and “Evolution of the economic scenario”. The “Mercurio” programme, addressing middle managers, proposes a method for optimising and innovating the processes of the organisational units, activating the contribution of the individuals. The COS programme for individuals with potential, encourages the enlistment for seeking innovative models and processes and for improving internal communication. Once again in this period, a widespread survey of the training requirements was carried out and we are taking steps to respond to this by means of: the Group training catalogue, the specific training plans by role, external specialisation courses, university masters courses and higher training courses. Within the legislative sphere, measures were put together for on-going up-dating of the subject of the administrative responsibility of the companies, internal auditing and governance.

Sales network training

During the first half of the year, a total of 221 training course editions involving the same amount of classroom-based days of training were held, for a total of around 4,000 man training days, which saw the participation of 4,266 agents and co-workers of the Cattolica agency network. The majority of the courses were created and provided by Group staff. During the first half of the year, 67 Group collaborators were involved in training activities as trainers. Specifically, the following were held: • “2012 Training Plan” - professional refresher course: training for the agency network in

relation to the training fulfilments required by ISVAP regulation No. 5 dated October 16th, 2006;

• courses supporting the marketing of new products, in detail: “Cattolica&Impresa Industria” and “Cattolica&Salute Infortuni”;

• courses for new agents: 39 people took part in 5 editions of the course;

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• courses for co-workers: “Road Runner”, addressing a selected group of agency co-workers; • co-workers course: “60 hours”, for acquiring the knowledge envisaged for the initial training

necessary as a requisite required for presenting application for enrolment in the RUI. The course involved 22 agency co-workers.

On-line training 80 on-line training courses are available on the training platform, all endowed with the functions which make it possible to print out the course certificate pursuant to Articles 17, paragraph 2 and 18, paragraph 2 of ISVAP Regulation No. 5 dated October 16th, 2006. Of these, 6 were up-dated during 2012. The number of uses of the same came to 3,105 as of June 30th.

SALES NETWORK

1,398 1,393

5,990 5,966

973 937

46 37 217 252 0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Dec. 31st, 2011 June 30th, 2012

Sales channelsNumber

Agencies Bank branches Financial advisors Welfare and pension product advisors C.P.S.P. subagents

Agency coverage

As of June 30th, there were a total of 1,393 agencies (-5 with respect to the end of 2011), of which 346 non-exclusive, distributed as follows: 55.2% in Northern Italy, 24.8% in Central Italy and 20% in Southern Italy and the islands. The Parent Company had 978 agencies (1,010 as of December 31st, 2011). During the period, 11 Cattolica agencies and 51 TUA Assicurazioni agencies were opened.

Bank branch coverage

The number of branches distributing Pension Planning products increased from 5,990 at the end of last year to 5,966. The branches of UBI Group banks came to 716. The alliance with ICREEA HOLDING launched in the second half of 2009 makes it possible to distribute products via 3,642 branches (+11 with respect to December 31st, 2011) of the Banche di Credito Cooperativo, while that with Banca Popolare di Vicenza, underway since 2007, permits the Cattolica Group to access a network of 636 branches. The leading banks operating as Cattolica’s partner, in addition to those already indicated,

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include the Banca di Torre del Greco, Barclays Bank, Banca Carim, Cassa di Risparmio di Ferrara and Cassa di Risparmio di San Miniato.

Pension and welfare product advisor coverage

The Cattolica Previdenza sales network, further to reorganisation at the end of 2011, was represented by 323 individuals of which 37 pension and welfare product consultants, 252 sub-agents of C.P. Servizi Consulenziali and 34 Cattolica sub-agents. C.P. Servizi Consulenziali is the sales company established last year for the purpose of rationalising the activities of the pension and welfare product consultants within the sphere of the Group networks. The number of Group financial advisors fell to 937 compared with 973 at the end of the previous year.

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Interim Management Report The Group during the first six months of 2012 Business performance for the period Risk management Organisation and resources Significant events and other information

Significant events and other information

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SIGNIFICANT EVENTS DURING THE PERIOD

The significant events that occurred during the first half of the year as part of the management of the equity investments in Group companies, the corporate reorganization and the consequent rationalization of activities are set out below, in addition to the other events during the period.

Group and companies

The merger via incorporation of San Miniato Previdenza in the Parent Company was effective for statutory purposes as from 00:01 of February 26th, 2012, while the accounting and tax effects of the transactions of the company absorbed were booked to the financial statements of the absorbing company as from January 1st, 2012. Executing the agreements signed in 2010 between the Parent Company and Banca Popolare di Vicenza as part of the renewal of the strategic partnership, on March 14th the non-proportional - so-called asymmetrical - partial spin-off of B.P.Vi Fondi SGR to Cattolica Immobiliare was finalised. As from April 1st, Cattolica Immobiliare thus changed its corporate name to Cattolica Gestione Investimenti s.p.a.. On March 15th, Cattolica Assicurazioni Business School resolved a share capital increase against payment for € 175 thousand, reserving it under option for Cattolica Previdenza, as per Article 2441, paragraph 4 of the Italian Civil Code. The same company subscribed and fully freed up the shares as from April 1st, via the conferral in kind of its business segment, subject to appraisal by an independent expert which established the value as € 175 thousand. As a result of the transaction, the share capital of Cattolica Assicurazioni Business School was increased from € 400 thousand to € 575 thousand. The Parent Company continues to hold a majority interest (68.1%); the holding of Cattolica Previdenza rose to 30.5% while those of the other shareholders fell proportionally. With an exchange of communications dated March 28th and 29th, Cattolica, Cassa di Risparmio di Ferrara and Cassa di Risparmio di San Miniato agreed to wind up the agreement for the governance of Vegagest SGR, entered into on June 10th, 2005, early, with effect as of March 29th. The agreements mentioned above did not change the shareholding structure of the company. On May 15th, Cattolica made a payment towards share capital in favour of Vegagest for around € 97 thousand, as the pertinent portion of a measure requested by the SGR made to all the shareholders for a total of € 571 thousand. Subsequently, complying with the share capital increase resolved by the shareholders’ meeting of the investee company held on June 29th, subject to reduction of the share capital due losses, Cattolica paid over € 363 thousand. Cattolica’s equity investment as of June 30th came to 17.14% (it was 16.99% as of March 31st, 2012) since the subscription period for the share capital increase as of that date was still open and the entire share capital was not yet fully subscribed.

On the basis of the provisions originally agreed on, on May 15th, Intesa Sanpaolo Vita transferred the whole remaining holding (19.86%) in Cattolica Previdenza to the majority shareholder Cattolica, which became the sole shareholder of the subsidiary. On May 15th, Cattolica’s Board of Directors approved the partial spin-off project for the spin-off of Cattolica Gestione Investimenti s.p.a. in favour of the same. The business spun-off will

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be absorbed into the Parent Company for the purpose of concentrating the Group’s activities pertaining to the management of financial assets within the same. The transaction is subject to obtaining the necessary authorisations from the competent authorities. The document required by current legislation will be filed by the deadlines and under the formalities envisaged by current legislative and regulatory provisions. On May 22nd, Banco di Brescia transferred the entire holding (2.4%) in Risparmio & Previdenza to Cattolica, the majority shareholder. At present, therefore, the shareholding structure of the company is as follows: Cattolica Assicurazioni 97.58% and Cassa Risparmio Fabriano e Cupramontana 2.42%. With reference to the purchase of the property complex known as “Tenuta Ca’ Tron”, on June 8th, ISVAP authorised the formation, by the Parent Company, of two new single-member limited liability companies: Cattolica Agricola, which will be involved exclusively in the agricultural activities pursuant to Article 2135 of the Italian Civil Code, and Cattolica Beni Immobili, destined to manage the properties not used for agricultural activities existing on the estate. On June 28th, the Board of Directors of Cattolica Assicurazioni Business School and Cattolica Services approved the project for the merger via incorporation of the former into the latter on the basis of the balance sheet contained in the financial statements of the companies as of December 31st, 2012.

Other events The Group took part in the exchange offering on Greek government securities. The transaction involves the exchange for every € 1,000 of par value of old securities of 20 securities with an overall par value of € 315 maturing between 11 and 30 years, 1 warrant index-linked to the trend in Greek GDP, € 150 of par value divided up into 2 new securities issued by the European Fund for financial stability and one bond again issued by the European Fund for financial stability maturing in 6 months. On March 27th, Intermonte issued 617,667 shares in favour of ICCREA Holding. The new share capital therefore amounted to € 45.95 million, represented by 45,950,000 shares with a par value of € 1 each. Cattolica’s equity investments, represented by 5,333,333 shares, fell from 11.76% to 11.61%. On April 2nd, the Managing Director, Giovan Battista Mazzucchelli, received the “Insurance élite” award within the sphere of the 2012 Milano Finanza Insurance Awards. The prize is an important acknowledgement of the results achieved by Cattolica Assicurazioni and its management especially considering the complexity and turbulence in the financial and economic context in which the companies operated during 2011. The ordinary and extraordinary shareholders’ meeting of Cattolica was held on April 21st. The meeting approved the financial statements as of December 31st, 2011, and appointed 6 members of the Board of Directors and Board of Statutory Auditors. The shareholders’ meeting also established the remuneration policies in compliance with current Article of Association and legislative provisions and granted the appointment for the legal audit of the accounts for the years 2012-2020.

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In conclusion, in ordinary session the meeting approved the plan for the purchase and sale of own shares. Subsequently, during the extraordinary session, the meeting approved the Article of Association amendments and authorised the share capital increase for € 8,113,293 by means of use of part of the share premium reserve available and consequent proportional assignment to the shareholders of one bonus share for every twenty shares held, with dividend enjoyment rights as of January 1st, 2012. It is hereby stated that, having obtained the prescribed authorisations, the following were deposited with the Companies’ Register: i) on June 27th, the Article of Association amendments resolved and adopted by the shareholders’ meeting held on April 21st, 2012, including that relating to the bonus share capital increase; ii) on June 29th, the amendments further to the approval of the financial statements, pursuant to Article No. 5 of ISVAP Regulation No. 17. The balance sheet as of June 30th, therefore reflected the afore-mentioned Article of Association amendments. The bonus share capital increase transaction was therefore carried out (“detachment date”) on July 23rd. The transaction envisaged the issue of 2,704,431 new ordinary shares with a par value of € 3 each, involving partial use of the share premium reserve for € 8,113,293. The coupon representative of the allocation right is No. 21. The new shares will benefit from the same rights as the shares currently in circulation and will be made available to those with the right to them via the authorised intermediaries who are members of Monte Titoli S.p.A. on the third business day after the detachment date. As a result of the execution of the bonus share capital increase, Cattolica Assicurazioni’s share capital amounts to € 170,379,138 represented by 56,793,046 ordinary shares with a par value of € 3 each. On May 30th, the Parent Company communicated that, pursuant to Article 144-bis, paragraph 3, of CONSOB regulation No. 11971 dated May 14th, 1999, the Board of Directors resolved to avail itself of the authorisation granted by the shareholders’ meeting held on April 21st, 2012 relating to the transactions on own shares, to the extent of a maximum number of 1,622,640 own shares equal to 3% of the share capital and for a maximum value of the shares held of € 30 million, for the purposes and as per the conditions indicated in the afore-mentioned shareholders’ resolution as already made known.

Appointments On April 23rd, in view of the provisions pursuant to Article 36 of Italian Law No. 214 dated December 22nd, 2011 and the related interpretative criteria jointly formulated by the Bank of Italy, CONSOB and ISVAP, announced to the public on April 20th, in consideration of the incompatibility deriving from the positions covered in banking groups and the characteristics of the operations of the same on insurance markets, Mr. Giuseppe Camadini tendered his resignation, and Mr. Zonin and Mr. Sorato tendered their resignation on April 26th, as non-independent and non-executive members of the Board of Directors and Executive Committee of the Parent Company. On May 15th, Cattolica Assicurazioni’s Board of Directors assigned the following corporate offices: Acting Deputy Chairman Giulio Magagni, Secretary Aldo Poli, and also appointed Pilade Riello and Giovannimaria Seccamani Mazzoli as members of the Executive Committee.

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Recapitalisations In order to ensure an adequate level of capitalisation of the insurance companies, also in consideration of the risk tolerance limits which the Cattolica Group has prudently intended to provide itself with and the unresolved uncertainties regarding the trend of the financial markets, during the period the Parent Company and the banking partners made payments towards the share capital in favour of certain subsidiary companies: • ABC Assicura: the Parent Company made a payment with a value date of June 30th, for €

1.8 million by way of the portion of the payment towards capital totalling € 3 million; • Cattolica Previdenza: the Parent Company made a payment with a value date of March

30th, for a total of € 7 million towards capital; • Duomo Uni One: the Parent Company made a payment with a value date of January 27th,

towards capital for € 7 million. During the period, Cattolica Services took steps to provide a total of € 1.6 million to support Car Full Services.

Supervisory Authority (ISVAP) The inspection assessments care of the Parent Company’s head offices, commenced in November by the Supervisory Authority, concluded in June 2012. In the same month, the company received a communication from ISVAP containing a number of findings relating to the following areas: • the governance system, with particular reference to the system of proxies, certain

procedures inherent to the organisation of the Board of Directors, the functioning of the internal audit committee and the appointment of the Board of Statutory Auditors;

• audit divisions, relating to the compliance and risk management divisions or related organisational profiles;

• reservation risk, with reference to the methods for determining the provision for outstanding claims relating to the general TPL class and certain components of the TPL motor claims provisions as well as a number of procedural profiles inherent to the handling of the claims of said classes.

It is also hereby revealed that the inspection concerned other aspects of the corporate operations, on which what is more the Authority has not reported any findings. In July, the Parent Company therefore took steps to provide the appropriate deductions and related clarification to ISVAP, also making or scheduling a number of changes to its set ups and/or processes complying with the observations of the Authority. The inspection assessment care of the Turin Non-Life Claims Settlement Unit concluded with the imposition of fine No. 1882/12 dated May 21st, 2012 amounting to around € 109 thousand.

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Inland Revenue Duomo Uni One On June 4th, a settlement proposal was signed, thereby defining all the outstanding disputes relating to the formal notice of assessment and subsequent notice of inspection relating to 2006 served on Duomo Uni One. This settlement led to a total cost for taxes and fines of € 1.9 million (in the face of assessed findings for € 5.8 million which would have generated additional IRES (company earnings’ tax) of nearly € 2 million plus fines for more than € 3.2 million).

OTHER INFORMATION

INTERNAL AUDITING

Compliance During the first half of the year, the Group’s compliance division furthered a number of activities aimed at consolidating the culture of compliance and controls in-house. The division continued with the furthering of the governance & control operational round table (set up in 2011), which involves not only the same compliance division but also the risk management, internal audit, organisation and legal and corporate affairs divisions; as well as the anti-money laundering, terrorism and organised crime operational round table (ATCO) in which the life market area, the operational anti-money laundering service and the IT division take part. Ex ante activities (identification and handling of the legislative and internal change) The ex ante activities of the division involved the prior assessment of the effects of the legislative change on the corporate processes and procedures, as well as the analysis of the endogenous changes. Within this sphere, during the first half of the year we hereby reveal that the compliance division provided its contribution (which will continue throughout the entire year) to the organisation function for the accurate and constant update of the project template. On-going activities (monitoring of the performance and risk indicators and progress of the corrective action) The division performs on-going monitoring activities on the performance of certain indicators, relating to both performance (KPI’s, key performance indicators) and relating directly to the risks (KRI’s, key risk indicators). Ex post activities (remote checks and on-site checks) The ex post activities of the division involve, on the one hand remote checks, and on the other checks carried out on site, and in other words at the division subject to audit. The checks concern both the detection of the level of compliance with the norms of the processes and the operating practices adopted, and the observance of the recommendations imparted by the division and the stage of progress of the planned corrective measures. Consulting activities The division worked together with the business areas during the first half of the year: consulting activities in the first instance concerned the regulatory and legislative innovations introduced with regard to conflicts of interest of banking insurance brokers and deregulation of

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the market. Internal audit The internal audit division is tasked with monitoring and assessing the efficacy and efficiency

of the internal audit system, in accordance with the provisions contained in ISVAP Regulation No. 20 dated March 26th, 2008. It is centralised in the Parent Company’s audit division, the latter directly providing its services to the subsidiary insurance companies operating in Italy and overseeing the activities of the local auditor for Cattolica Life. The division structures its activities in a distinct manner according to whether internal management processes or peripheral processes relating to the agency network are concerned. During the period, the internal audit unit executed its annual plan of activities, operating in line with the timescales envisaged therein. It also finalised its internal standards relating to the monitoring phase of the recommendations triggered off by the audits and obtained renewal of the ISO 9001:2008 quality certification. With regard to consulting for the operating areas, it set up and held training courses for internal staff concerning the culture of auditing in corporate governance and anti-money laundering monitoring.

Risk management

The risk management division, pursuant to section IV of ISVAP Regulation No. 20 dated March 26th, 2008, is responsible for monitoring the risk management system, in order to identify, evaluate and control the most significant risks, the results of which can undermine the solvency of the company or provide an obstacle to the reaching of company goals. The aim of the division is to develop an effective system for the identification, modelling and handling of the risk with a view to the efficient use of the capital, aimed at achieving value. Within the sphere of the risk management process, during the period the risk management division took part in the following activities: • definition of the policies for the undertaking and handling of the risks also in relation to

the business plan; • analysis of the mapping of the current and forecast risks; • assessment of the impacts of the risk stress analysis; • definition of the tolerance to risk at insurance company and Group level and related

monitoring; • definition and assignment of the operating limits to the operational divisions. With regard to the effects of the new Solvency II regulations, activities continued relating to the compliancy master plan drawn up internally on conclusion of in-depth gap analysis.

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Appointed Executive

Once again in 2012, the Appointed Executive continued with the action for strengthening the coverage of the risks and internal controls pertaining to the formation of the accounting and financial disclosure. Accordingly: • the administrative processes risk control division on the staff of the Appointed Executive

was enhanced, a unit which not only sees to the risk assessment activities for the purposes of Italian Law No. 262 dated December 28th, 2005, but also organises the up-dating of the key controls, the risk and controls template, drafts the reporting for the purpose of informing the Board of Directors and the audit bodies;

• the IT module for the handling of risks and controls 262 has been implemented, via which test activities are performed and an initial evaluation is carried out via self-assessment on the efficacy of the checks in relation to the foreseen risks;

• training sessions have been organised for the use of the application and for the tracing and formalisation of the controls;

• with the collaboration of the organisation, intense rationalisation and review activities were launched for the 262 controls so as to reflect organisational process changes which have occurred.

OTHER CONTROL BODIES

Anti-fraud service

The anti-fraud service continued its activities in the claims sector and the assumption area. Following the petitions presented in previous years, during 2012, 24 prison sentences were imposed (26 as at June 30th, 2011) and compensation in favour of the Group Companies was obtained for € 23 thousand (€ 50 thousand as at June 30th, 2011). In the claims area, a saving of roughly € 3.8 million was possible (€ 2.4 million as of June 30th, 2011) following investigative activities that ascertained fraud before the settlement of claims for which legal action was brought before the judicial authorities.

GROUP COMPLAINTS SERVICE The Group complaints service constantly monitors the complaints originating from those who avail of the insurance activities (customers, injured parties, legal advisors, consumer associations) and sets out to identify the areas on which action should be taken so as to provide its associates with increasingly thorough and speedy answers. During the period, a total of 1,890 written complaints were registered, of which 613 were upheld. These complaints were dealt with, on average, in 20.28 days. With respect to first half of 2011, a decrease of 29% was seen in claims received.

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INFORMATION SYSTEMS Action taken during the period by Cattolica Services IT division falls within a long-term programme of intervention aimed at: • organising the progressive convergence of the various systems within the single Group

platforms with a significant simplification of the current applications base; • passing over from an IT architecture where the agency and head office systems are separate

and interact asynchronously, to an interconnected company model characterised by integrated and on-line management of the main processes;

• achieving the casting off of AS400 and the downsizing of the role of the mainframe and at the same time enabling the Group for the widespread use of innovative business-serving technologies;

• reducing IT costs mainly by means of the rationalisation of the applications architecture and the infrastructure and the insourcing of the software maintenance in certain key areas.

Own shares held by the Parent Company and by its subsidiaries

As already reported under significant events during the period, the shareholders’ meeting held on April 21st, 2012 approved the plan for the purchase and disposal of own shares proposed by the Board of Directors. This plan concerns a maximum number of shares equal to 3% of the share capital, for a maximum total equivalent book value of the own shares of € 30 million for a period of 18 months as from the date of the shareholders’ meeting resolution. The authorisation granted by the shareholders’ meeting envisages that the purchase and disposal of own shares has a twofold purpose: the possibility of availing in advance of a block of shares available for extraordinary transactions; and for contained measures on the market aimed at providing liquidity and stable volumes for security trading, and to avoid uncertainties and unjustified fluctuations in listed prices. On May 30th, the Board of Directors resolved to avail itself of the afore-mentioned authorisation; the first transactions took place on June 7th. As of June 30th, the Parent Company held 108,526 own shares, equal to 0.2% of the share capital, for an equivalent book value of € 1,037,681. None of the Group companies hold shares in the Parent Company.

TRANSACTIONS WITH RELATED PARTIES Pursuant to CONSOB Regulation No. 17221 dated March 12th, 2010, and subsequent amendments and additions, as from January 1st, 2011 the “Procedure for the handling of related party transactions” approved on November 29th, 2010, applies to the situations envisaged by the regulations. The document relating to this procedure - which should be referred to for details - is published on the Parent Company’s website - www.cattolica.it - in the “Corporate Governance” section. With reference to disclosure on related parties, please see Part D – Other information in the notes to the accounts.

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Atypical and unusual transactions and non-recurring significant events and operations

Pursuant to CONSOB Communication DEM/6064293 dated July 28th, 2006 you are hereby informed that no atypical and/or unusual transactions were entered into during the year, nor were there any significant non-recurrent events or transactions with significant effects on the company’s accounts.

Performance of Cattolica stock

During the first six months of 2012, Cattolica shares recorded a minimum price of € 9.3 and a maximum price of € 16.8. Average capitalisation of the share on the Stock Market during the first half of 2012 stood at € 742 million. Average daily volumes traded in the first six months of 2012 stood at 28,313 transactions.

Ratios for shares in circulation

A summary of the main ratios for shares in circulation is presented below as of June 30th (note that the Parent Company’s share capital is divided up into 56,793,046 ordinary shares with a par value of € 3 each):

Table 14 - Ratios for outstanding shares (in €) June 30th, 2012 June 30th, 2011

Number of shares in circulation (*) 56,787,823 56,793,046

Premiums written per share (insurance premiums and investment policies) 31.66 36.78

Group profit per share 0.42 0.42

Group shareholders' equity per share 19.92 19.69

(*) the number of outstanding shares during the period is calculated in pursuance of IAS 33

SIGNIFICANT EVENTS AFTER THE END OF THE PERIOD On July 18th, Cattolica’s Board of Directors co-opted the following individuals, Enrico Mario Ambrosetti, Giovanni Sandrini and Paolo Garonna, as new directors. Enrico Mario Ambrosetti was also appointed as Deputy Chairman of the Parent Company and member of the Executive Committee. On July 20th, in view of the provisions pursuant to Article 36 of Italian Law No. 214 dated December 22nd, 2011 and the related interpretative criteria jointly formulated by the Bank of Italy, CONSOB and ISVAP, announced to the public on April 20th, Mr. Giulio Magagni, Acting Deputy Chairman, and Alessandro Bandini, director, tendered their resignation from the Board of Directors. On July 25th, the notary public Giuseppe Camadini, member of Cattolica’s Board of Directors between December 21st, 1985 and April 2012 and Chairman between July 4th, 1997 and November 29th, 2006, passed away; a man of recognised professional prestige and great moral standing. Partly thanks to his contribution, a great co-operative such as Cattolica, which aspires to the principles and values of the social teachings of the Church, has over time been able to maintain and increase a deep and genuine bond with the area which it traditionally represents. The heartfelt thoughts and esteem of the Board of Directors, the Board of Statutory Auditors, the executives, employees and co-workers of Cattolica go with him.

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OUTLOOK FOR BUSINESS ACTIVITIES

A consolidation is envisaged for the second half of 2012 with regard to the life and non-life business results. Development action will continue in the non-life classes along with attention to the trend in the life classes in relation to the complex market situation, with the aim of pursuing adequate profitability in both segments. The continuation of the great volatility of the financial markets will lead to the need to continue with the handling of investments on a highly prudent basis.

Verona, Italy, August, 8th, 2012

THE BOARD OF DIRECTORS

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Abridged interim consolidated financial statements

as of June 30th, 2012

89

Consolidated accounting

schedules

91

Balance sheet, income statement and statement of comprehensive income

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Company: CATTOLICA ASSICURAZIONI GROUP (€ millions)

BALANCE SHEET - ASSETS June 30th, 2012 Dec. 31st, 2011

1 INTANGIBLE ASSETS 336 3281.1 Goodwill 223 2071.2 Other intangible assets 113 121

2 TANGIBLE ASSETS 27 282.1 Property 19 192.2 Other tangible assets 8 9

3 TECHNICAL PROVISIONS - REINSURANCE AMOUNT 683 6404 INVESTMENTS 14,482 14,6694.1 Investment Property 157 1584.2 Investments in subsidiares, associates and joint ventures 74 1034.3 Held to maturity investments 286 2854.4 Loans and receivables 1,618 1,5184.5 Available for sale financial assets 8,713 8,5124.6 Financial assets at fair value through profit or loss 3,634 4,093

5 SUNDRY RECEIVABLES 712 7875.1 Receivables deriving from direct insurance transactions 566 6165.2 Receivables deriving from reinsurance transactions 86 1135.3 Other receivables 60 58

6 OTHER ASSET ITEMS 1,054 1,0636.1 Non current assets or disposal group held for sale 0 06.2 Deferred acquisition costs 11 96.3 Deferred tax assets 325 4906.4 Current tax assets 403 3336.5 Other assets 315 231

7 CASH AND CASH EQUIVALENTS 609 407TOTAL ASSETS 17,903 17,922

2012 CONSOLIDATED INTERIM REPORT

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BALANCE SHEET - LIABILITIES AND SHAREHOLDERS' EQUITY June 30th, 2012 Dec. 31st, 2011

1 SHAREHOLDERS' EQUITY 1,395 1,2231.1 pertaining to the Group 1,131 1,0181.1.1 Share capital 170 1621.1.2 Other equity instruments 0 01.1.3 Capital reserves 656 6791.1.4 Net profit reserves and other equity reserves 368 3101.1.5 (Own shares) -1 01.1.6 Reserve for net exchange differences 0 01.1.7 Gains or losses on financial assets available for sale -83 -168 1.1.8 Other gains or losses recorded directly under equity -3 -3 1.1.9 Net profit (loss) for the period pertaining to the Group 24 381.2 pertaining to minority shareholders 264 2051.2.1 Capital and reserves pertaining to minority shareholders 265 2701.2.2 Net income recorded directly under equity -9 -69 1.2.3 Net income for the year pertaining to minority shareholders 8 4

2 PROVISIONS AND ALLOWANCES 26 283 TECHNICAL PROVISIONS 14,466 14,5824 FINANCIAL LIABILITIES 1,247 1,2544.1 Financial liabilities at fair value through profit and loss 978 9624.2 Other financial liabilities 269 2925 PAYABLES 351 4035.1 Payables deriving from direct insurance transactions 73 815.2 Payables deriving from reinsurance transactions 82 1125.3 Other payables 196 2106 OTHER LIABILITY ITEMS 418 4326.1 Liabilities of disposal group held for sale 0 06.2 Deferred tax liabilities 171 2406.3 Current tax liabilities 156 1226.4 Other liabilities 91 70

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 17,903 17,922


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INCOME STATEMENT June 30th, 2012 June 30th, 2011

1.1 Net premiums 1,545 1,817 1.1.1 Gross premiums written 1,692 1,958 1.1.2 Premiums transferred under reinsurance -147 -141 1.2 Commission income 2 3 1.3 Income and charges deriving from financial instruments at fair value through profit or loss 113 32 1.4 Income from investments in subsidiaries, associates and joint ventures 0 0 1.5 Income from other financial instruments and investment property 369 269 1.5.1 Interest income 226 204 1.5.2 Other income 30 21 1.5.3 Realised gains 92 38 1.5.4 Valuation gains 21 6 1.6 Other revenues 16 21 1 TOTAL REVENUES AND INCOME 2,045 2,142 2.1 Net charges relating to claims -1,591 -1,703 2.1.1 Amounts paid and change in technical provisions -1,704 -1,804 2.1.2 Reinsurance amount 113 101 2.2 Commission expense 0 -2 2.3 Charges from investments in subsidiaries, associates and joint ventures -3 -1 2.4 Charges from other financial instruments and investment property -94 -85 2.4.1 Interest expense -8 -10 2.4.2 Other charges -4 -2 2.4.3 Realised losses -66 -31 2.4.4 Valuation losses -16 -42 2.5 Operating expenses -236 -236 2.5.1 Commission and other acquisition costs -161 -162 2.5.2 Operating expenses relating to investments -8 -7 2.5.3 Other administrative expenses -67 -67 2.6 Other costs -62 -70 2 TOTAL COSTS AND CHARGES -1,986 -2,097

PROFIT (LOSS) FOR THE YEAR BEFORE TAXATION 59 45 3 Taxation -27 -20

PROFIT (LOSS) FOR THE YEAR NET OF TAXATION 32 25 4 PROFIT (LOSS) FROM DISCONTINUED OPERATIONS 0 0

CONSOLIDATED RESULT 32 25 pertaining to the Group 24 24 pertaining to minority shareholders 8 1

Earnings per shareEarnings per share (€) 0.42 0.42Diluted earnings per share (€) 0.42 0.42

Continuing operations Base earnings per share (€) 0.42 0.42Diluted earnings per share (€) 0.42 0.42


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Company: CATTOLICA ASSICURAZIONI GROUP

(€ millions) June 30th, 2012 June 30th, 2011

CONSOLIDATED RESULT 32 25Change in reserve for net exchange differences 0 0Gains or losses on available for sale financial assets 145 6Profits or losses on cash flow hedging instruments 0 0Profits or losses on instruments hedging a net investment in a foreign operation 0 0Change in the shareholders' equity of investee companies 0 0Change in intangible assets revaluation reserve 0 0Change in tangible assets revaluation reserve 0 0Income and charges relating to non current assets or disposal group held for sale 0 0Actuarial gains and losses and adjustments related to defined-benefit plans 0 0Other items 0 0TOTAL OTHER COMPONENTS OF THE STATEMENT OF COMPREHENSIVE INCOME 145 6

TOTAL OF THE CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 177 31pertaining to the Group 109 26pertaining to minority shareholders 68 5

STATEMENT OF COMPREHENSIVE INCOME - Net amounts

99

Statement of changes in shareholders’ equity

101

Company: CATTOLICA ASSICURAZIONI GROUP

STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

(€ millions) Balance Dec. 31st,

2010

Change in closing

balances Charges

Adjustments from reclassification to income statement Transfers

Balance June 30th,

2011Capital 162 0 0 0 162Other equity instruments 0 0 0 0 0Capital reserves 691 0 -12 0 679

Net profit reserves and other equity reserves 292 0 71 -49 314

(Own shares) 0 0 0 0 0Profit (loss) for the year 62 0 -38 0 24Other components of the statement of comprehensive income

-63 0 -24 26 0 -61

Total pertaining to the Group 1,144 0 -3 26 -49 1,118Capital and reserves pertaining to minority shareholders

227 0 6 -1 232

Profit (loss) for the year 8 0 -7 0 1Other components of the statement of comprehensive income

-26 0 -6 10 0 -22

Total pertaining to minority shareholders 209 0 -7 10 -1 211TOTAL 1,353 0 -10 36 -50 1,329

Balance Dec. 31st,

2011

Change in closing

balances Charges

Adjustments from reclassification to income statement Transfers

Balance June 30th,

2012

Capital 162 0 8 0 170

Other equity instruments 0 0 0 0 0

Capital reserves 679 0 -23 0 656

Net profit reserves and other equity reserves 310 0 58 0 368(Own shares) 0 0 0 -1 -1Profit (loss) for the year 38 0 -14 0 24Other components of the statement of comprehensive income

-171 0 47 38 0 -86

Total pertaining to the Group 1,018 0 76 38 -1 1,131Capital and reserves pertaining to minority shareholders

270 0 -3 -2 265

Profit (loss) for the year 4 0 4 0 8Other components of the statement of comprehensive income

-69 0 50 10 0 -9

Total pertaining to minority shareholders 205 0 51 10 -2 264

TOTAL 1,223 0 127 48 -3 1,395


pertaining to the Group

Net shareholders'

equity pertaining to

minority shareholders

CONSOLIDATED INTERIM REPORT AS OF JUNE 30TH, 2012


pertaining to the Group

Net shareholders'

equity pertaining to

minority shareholders

103

Statement of cash flows

105


STATEMENT OF CASH FLOWS DRAWN UP ACCORDING TO INDIRECT METHODJune 30th, 2012 June 30th, 2011

Net profit (loss) for the year before taxation 59 45Changes in non-monetary items -319 -24Change in non-life premiums provision, net 20 36Change in provision for outstanding claims and other non-life technical provisions -11 -21Change in actuarial provisions and other life technical provisions -344 -130Change in deferred acquisition costs, net -2 1Change in provisions and allowances -2 -3Non-monetary income and charges deriving from financial instruments, property investments and equity investments -81 12Other changes 101 81Change in receivables and payables generated by operating activities -69 7Change in receivables and payables deriving from direct insurance and reinsurance transactions 37 29Change on other receivables/payables, other asset/liabilities -106 -22Taxes paid -33 -55Net liquidity generated/absorbed by monetary items pertaining to investments and financing activities -27 -27Liabilities from financial policies issued by insurance companies -27 -19Payables due to banking and interbank customers 0 0Loans and receivables due from banking and interbank customers 0 0Other financial instruments valued at fair value recorded in the income statement 0 -8TOTAL NET LIQUIDITY DERIVING FROM OPERATING ACTIVITIES -389 -54Net liquidity generated/absorbed by investment property 0 0Net liquidity generated/absorbed by equity investments in subsidiaries, associates and joint ventures 26 1Net liquidity generated/absorbed by business combinations 0 0Net liquidity generated/absorbed by loans and receivables -98 -12Net liquidity generated/absorbed by held to maturity investments 0 -195Net liquidity generated/absorbed by available for sale financial assets 125 -256Net liquidity generated/absorbed by tangible and intangible assets -9 -15Other flows of net liquidity generated/absorbed by investment activities 556 401TOTAL NET LIQUIDITY DERIVING FROM INVESTMENT ACTIVITIES 600 -76Net liquidity generated/absorbed by capital instruments pertaining to the Group 6 25Net liquidity generated/absorbed by own shares -1 0Distribution of dividends pertaining to the Group 0 -50Net liquidity generated/absorbed by capital and reserves pertaining to minority shareholders -11 8Net liquidity generated/absorbed by subordinated liabilities and by participative financial instruments 0 0Net liquidity generated/absorbed by sundry financial liabilities -3 0TOTAL NET LIQUIDITY DERIVING FROM FINANCING ACTIVITIES -9 -17

Effect of the exchange differences on cash and cash equivalents 0 0

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 407 586INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 202 -147CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 609 439

106

107

Notes to the accounts

109

Notes to the accounts Part A – General approach and

scope of consolidation

Part A General approach and Scope of consolidation

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Applicable legislation

The consolidated interim report has been prepared by the Parent Company Società Cattolica di Assicurazione – Soc. Coop. in pursuance of Article 154-ter, paragraphs 2, 3, and 4 of Italian Legislative Decree No. 58 dated February 24th, 1998 “Consolidated Law on financial brokerage provisions” and is compliant with the provisions concerning consolidated interim reports pursuant to ISVAP Regulation No. 7 dated July 13th, 2007. The abridged consolidated interim financial statements have been drawn up in observance of the provisions of the IAS/IFRS international accounting standards approved by the European Commission and the SIC/IFRIC interpretations. They comprise the balance sheet, the income statement and the statement of comprehensive income, the statement of changes in shareholders’ equity, the statement of cash flows and the notes to the accounts drawn up in compliance with IAS 34 and ISVAP Regulation No. 7 dated July 13th, 2007. The provisions set forth by CONSOB Regulation No. 11971 dated May 14th, 1999 and subsequent additions and amendments, and Consob recommendations, have also been followed. Account was also taken of the recommendations contained in the Bank of Italy/CONSOB/ISVAP Joint Document No. 4 dated March 3rd, 2010 regarding the application of the IAS/IFRS.

Accounting reference date

The accounting reference date of this consolidated interim report is June 30th, 2012, a date which coincides with that of the interim reports of all the companies included within the scope of consolidation. The statements drawn up according to the international accounting standards (IAS/IFRS) as approved by the Boards’ of Directors of the respective companies who are not obliged to adopt the afore-mentioned international accounting standards for the purpose of drawing up the interim report, have been used for the preparation of the consolidated interim report. Cattolica Life prepared its interim report in compliance with the international accounting standards. The statements drawn up by the companies have been used for the mutual funds.

CONSOLIDATION METHODS

a) Line-by-line- consolidation

The use of the line-by-line consolidation method, in accordance with IAS 27, involves the consolidation of all the subsidiary companies in which the Parent Company directly or indirectly holds more than half the voting rights, or those in relation to which the Parent Company has the power to determine the financial and operating policies so as to obtain the benefits of their activities, despite not availing of more than half of the voting rights. When using the line-by-line consolidation method, the book value of the equity investments is eliminated against the related shareholders’ equity and all the assets and liabilities of the subsidiary company, including potential liabilities, are included. The positive difference which is generated between the purchase cost and the fair value of the net interest holdings acquired, independently identifiable, with reference to the date of acquisition of control over the equity investment, is recorded under the item “Goodwill”. This value is subject to an impairment test as disciplined by IAS 36. In the periods subsequent to the acquisition of control, the difference between the book value of the equity investment and the portion of shareholders’ equity pertaining to the Group is

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recorded, for the part exceeding the above described assignment referring to the acquisition date, in the item “profit reserves and other equity reserves”. The portions of shareholders’ equity, inclusive of the fair value as of the date of acquisition of the equity investment, and of the net result for the year pertaining to minority shareholders, are recorded in specific balance sheet liability and income statement accounts.

b) Equity method

In accordance with IAS 28, the equity method is applied to equity investments in associated companies. By means of this method, the book value of the equity investment is adjusted in the consolidated financial statements in order to reflect the book value of the shareholders’ equity pertaining to the Group, which can be taken from the last set of financial statements of the investee company and adjusted by the sum total of the dividends distributed by said company. If the cost is greater than the pertinent portion of shareholders’ equity, the difference remaining from the charging to the amortisable/depreciable assets is identified as “goodwill” and subject to an impairment test as disciplined by IAS 36. The effects on the Group’s shareholders’ equity and consolidated result for the year are identical to those produced by line-by-line consolidation.

c) Companies carried at cost

Equity investment in subsidiary companies which, due to their size, are considered not to be significant (not material) and whose exclusion from the scope of consolidation does not prejudice the reliability of the representation of the equity and financial standing, the economic result and the financial flows of the Group, are carried at cost.

d) Main consolidation adjustments

The main consolidation adjustments are: • the elimination of balances and of infragroup transactions, including revenues, costs and

dividends collected; • the elimination of gains and losses deriving from infragroup transactions included in the

book value of the assets and liabilities; • the determination of the deferred taxation, in accordance with the methods envisaged by

IAS 12, on the temporary differences deriving from the elimination of gains or losses originating from infragroup transactions;

• the adjustment of the effects recorded in the individual financial statements, generated by extraordinary infragroup transactions.

The decreases in value emerging subsequent to infragroup transactions are maintained in the consolidated financial statements.

SCOPE OF CONSOLIDATION

The scope of consolidation includes the financial statements of the Parent Company and those of the subsidiary companies, in accordance with IAS 27.

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During the first half of the year, the scope of consolidation changed with respect to December 31st, 2011 due to the merger via incorporation of San Miniato Previdenza in the Parent Company. As at June 30th, the scope of consolidation comprised eleven insurance companies, a real estate property and stockbroking service company, four service companies, two real estate investment mutual funds and one mutual equity fund. Besides the companies included within the scope of consolidation, the Group comprises a banking company, one asset management company and two service companies. B.P.Vi Fondi SGR was subject to the partial non-proportional spin-off transaction in Cattolica Gestione Investimenti.

1) The following companies are included in the consolidated financial statements on a line-by-line basis in accordance with IAS 27:

• Società Cattolica di Assicurazione – soc. coop. with registered offices in Verona, share

capital of € 170.379 million – the Parent Company; • ABC Assicura s.p.a. with registered offices in Verona, share capital of € 8.925 million. It

carries out non-life insurance activities. The Parent Company owns a direct equity investment of 60%;

• BCC Assicurazioni s.p.a. with registered offices in Milan, share capital of € 14.448 million. It carries out non-life insurance activities. The Parent Company owns a direct equity investment of 51%;

• BCC Vita s.p.a. with registered offices in Milan, share capital of € 62 million. It carries out life insurance activities. The Parent Company owns a direct equity investment of 51%;

• Berica Vita s.p.a. with registered offices in Vicenza, share capital of € 31 million. It carries out life insurance activities. The Parent Company owns a direct equity investment of 60%;

• Cattolica Assicurazioni Business School s.c.p.a. with registered offices in Milan, share capital of € 575 thousand, sees to the supply of teaching and training services. The company is 68.1% invested in by the Parent Company, 30.5% by Cattolica Previdenza and 0.07% by Cattolica Services; the remaining holding is held individually for 0.07% by ABC Assicura, BCC Assicurazioni, BCC Vita, Berica Vita, Cattolica Gestioni Investimenti, C.P. Servizi Consulenziali, Duomo Uni One, Lombarda Vita, Risparmio & Previdenza and TUA Assicurazioni;

• Cattolica Gestione Investimenti s.p.a. with registered offices in Verona, share capital of € 400 thousand; the company carries out real estate and stockbroking services. The Parent Company owns a direct equity investment of 100%;

• Cattolica Life ltd with registered offices in Dublin, Ireland, share capital € 635 thousand; it carries out life insurance activities. The Parent Company owns a direct equity investment of 60%;

• Cattolica Previdenza s.p.a. with registered offices in Milan, share capital of € 14.35 million; the company is authorised to carry out life insurance activities and non-life activities in relation to the accident, injury and health classes only. It is wholly-owned by the Parent Company;

• Cattolica Services s.c.p.a., with registered offices in Verona, share capital of € 20.954 million; it carries out its activities for the Group companies, offering them IT and telecommunications services and handling the claims settlements with the exception of the security, hail and transport areas. The Parent Company owns a direct equity investment of

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99.95% and the remainder is held individually for 0.005% by ABC Assicura, BCC Assicurazioni, BCC Vita, Berica Vita, Cattolica Previdenza, C.P. Servizi Consulenziali, Duomo Uni One, Lombarda Vita, Risparmio & Previdenza and TUA Assicurazioni;

• Car Full Service s.p.a. with registered offices in Milan, share capital of € 150 thousand, is dedicated to the development of the products and services linked to the motor industry. Cattolica Services’ direct equity investment comes to 82%;

• C.P. Servizi Consulenziali s.r.l. with registered offices in Milan, share capital of € 15 thousand. carries out brokerage activities for premiums written in the life and non-life sectors. The Parent Company owns a direct equity investment of 51%, while that of Cattolica Previdenza comes to 49%;

• Duomo Uni One Assicurazioni s.p.a. with registered offices in Milan, share capital of € 8,878 million. It carries out non-life insurance activities. The Parent Company holds a 99.99% direct equity investment in the company;

• Fondo Euripide, managed by Finanziaria Internazionale Alternative Investment, is a closed-end real estate property mutual investment fund. Cattolica holds 78.7% and Lombarda Vita holds 21.3%;

• Fondo Macquarie Office Italy, managed by CB Richard Ellis Investors, is a closed-end real estate property mutual investment fund. Cattolica holds an interest of 61.83%, BCC Vita 10.36%, Cattolica Previdenza 4.14%, Lombarda Vita 17.75%, and Risparmio & Previdenza 5.92%;

• Fondo Networth, managed by Vegagest SGR, is a closed-end mutual investment equity fund reserved for qualified investors who invest mainly in companies active on the market for the production of energy from renewable sources. It is 99.76% owned by Cattolica;

• Lombarda Vita s.p.a. with registered offices in Brescia, share capital of € 185.3 million. It carries out life insurance activities. The Parent Company owns a direct equity investment of 60%;

• Risparmio & Previdenza s.p.a. with registered offices in Verona, share capital of € 73.75 million. The subsidiary is a life insurer and has been active in non-life insurance in the accident, injury and health classes only. The Parent Company owns a direct equity investment of 97.58%.

• TUA Assicurazioni s.p.a. with registered offices in Milan, share capital of € 15.66 million. It carries out non-life insurance activities. The Parent Company holds a 97% direct equity investment in the company.

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Table 15 - Scope of consolidation (ISVAP Regulation No. 7 dated July 13th, 2007)

State Method Activities% direct

investment % total holding

% of votes available during ordinary shareholders'

meetings % consolidationName (1) (2) (3) (4)

Società Cattolica di Assicurazione - Soc. Coop. 086 G 1ABC Assicura s.p.a. 086 G 1 60.00% 60.00% 100%BCC Assicurazioni s.p.a. 086 G 1 51.00% 51.00% 51.02% 100%BCC Vita s.p.a. 086 G 1 51.00% 51.00% 100%Berica Vita s.p.a. 086 G 1 60.00% 60.00% 100%Car Full Service s.p.a. 086 G 11 0.00% 81.99% 100%Cattolica Assicurazioni Business School s.c.p.a. 086 G 11 68.10% 99.84% 100%C. P. Servizi Consulenziali s.r.l. 086 G 11 51.00% 100.00% 100%Cattolica Gestione Investimenti s.p.a. 086 G 10 100.00% 100.00% 100%Cattolica Life l.t.d. 040 G 2 60.00% 60.00% 100%Cattolica Previdenza s.p.a. 086 G 1 100.00% 100.00% 100%Cattolica Services s.c.p.a 086 G 11 99.95% 99.99% 100%Duomo Uni One Assicurazioni s.p.a. 086 G 1 99.99% 99.99% 100%Fondo Euripide 086 G 10 78.70% 91.48% 100%Fondo Macquarie Office Italy 086 G 10 61.83% 87.68% 100%Fondo Networth 086 G 11 99.76% 99.76% 100%Lombarda Vita s.p.a. 086 G 1 60.00% 60.00% 100%Risparmio & Previdenza s.p.a. 086 G 1 97.58% 97.58% 100%TUA Assicurazioni s.p.a. 086 G 1 97.00% 97.00% 100%

(4) Overall percentage available of the votes at ordinary shareholders' meeting if different from direct or indirect shareholding.

(1) Method of consolidation: Line-by-line =G, Proportional=P, Line-by-line for management unit.

(2) 1=Italian insurance; 2=EU insurance; 3=non-EU insurance; 4=insurance holding company; 5=EU reinsurance; 6=non-EU reinsurance; 7=banks; 8=SGR; 9=other holding; 10=property 11=other.(3) this is the product of the investment relationships relating to all the companies which, placed along the investment chain, may be interposed between the company that draws up theconsolidated financial statements and the company in question. If the latter is directly invested in by several subsidiary companies, it is necessary to add together the individual products.

2) The following companies are accounted for using the equity method in accordance with IAS 28: Associated companies

• Cassa di Risparmio di San Miniato s.p.a. with registered offices in San Miniato (PI), share capital of € 140.216 million; it carries out banking activities. The Parent Company holds a direct equity investment of 25%.

• Prisma s.r.l. with registered offices in Milan, share capital of € 120 thousand, carries out insurance agency activities. The Parent Company holds a direct equity investment of 20%;

• Vegagest SGR s.p.a., with registered offices in Milan, share capital of € 25.451 million. This is an independent asset management company invested in by banking and insurance partners of considerable trustworthiness and primary standing. The Parent Company holds an interest of 17.14% in the company.

3) The following company is carried in the consolidated financial statements at cost, since it is

not significant (not material) and its exclusion from the scope of consolidation does not prejudice the reliability of the representation of the financial and equity standing, the economic result and the financial flows of the Group:

Subsidiary company

• TUA Retail s.r.l. with registered offices in Milan, share capital of € 50 thousand, carries out the general agency activities of TUA Assicurazioni. It is wholly-owned by TUA Assicurazioni.

A schedule of the Group companies with indication of the consolidation method adopted is shown below.

116

Consolidated line-by-line

Cattolica Previdenza

Lombarda Vita

Risparmio & Previdenza

Cattolica Life

60%

100%

60%

97.58%

60%

ABC Assicura

BCC Assicurazioni

Duomo Uni One Assicurazioni

TUA Assicurazioni

60%

51%

99.99%

Cattolica Gestioni Investimenti (*)

100%

Equity method

PrismaCassa di Risparmio di San Miniato

17.14%25%

Carried at cost

TUA Retail

Non-life insurance Life insurance Financial services Operating services Property and stockbroking services

Banks

100%

78.7%

20%

As of June 30th 2012

Berica Vita

Vegagest SGR

(*) formerly Cattolica Immobiliare(**) The remaining 38.17% is held as follows: 10.36% by BCC Vita, 4.14% by Cattolica Previdenza, 17.75% by Lombarda Vita, and 5.92% by Risparmio & Previdenza.(***) 0.005% of the share capital of Cattolica Services is held individually by ABC Assicura, BCC Assicurazioni, BCC Vita, Berica Vita, Cattolica Previdenza, C.P. Servizi Consulenziali, Duomo Uni One,Lombarda Vita, Risparmio & Previdenza and TUA Assicurazioni.(****) 0.07% of Cattolica Assicurazioni Business School is held individually by ABC Assicura, BCC Assicurazioni, BCC Vita, Berica Vita, Cattolica Gestioni Investimenti, C.P. ServiziConsulenziali, Duomo Uni One, Lombarda Vita, Risparmio & Previdenza and TUA Assicurazioni.

99.95%BCC Vita

51%

61.83%

Fondo Networth99.76%

Cattolica Assicurazioni Business School (****)

21.3%

97%

82%68.1%

0.7%

49%51%

Cattolica Services (***)

Car Full Service

C.P. ServiziConsulenziali

Euripide Fund

Fondo Macquarie OfficeItaly (**)

30.5%

Real estate property funds Equity funds

117

Notes to the accounts Part B – Accounting policies and

standards

Part B Accounting policies and standards

119

Format

The balance sheet, income statement, the statement of comprehensive income, the statement of changes in shareholders’ equity, the statement of cash flows and these notes to the accounts have been drawn up in accordance with IAS 34 and the formats laid down by the instructions in ISVAP Regulation No. 7 dated July 13th, 2007.

Accounting standards

The accounting standards adopted are those used for the preparation of the consolidated financial statements and are consistent with the provisions of each IAS/IFRS standard and each SIC/IFRIC taking as reference those ratified by the European Commission.

Reporting currency used in the financial statements

The reporting currency for the consolidated interim report is the Euro. The report has been drawn up in millions of Euro, duly rounded off as per the applicable legislation. The amounts have been rounded up or down to the closest unit. The rounded off amount of totals and subtotals in the balance sheet and income statement is the sum of the rounded off amounts of the individual items.

Foreign currency items

In accordance with IAS 21, monetary assets and liabilities in foreign currency are recorded using the spot exchange rate ruling as of the period end date and the related exchange gains and losses are booked to the income statement.

Estimates The figures stated in the schedules are taken from the accounts and, in some cases, supplemented by estimates, while maintaining the features of consistency and comparability with those used for preparing the consolidated financial statements. When drawing up the abridged interim consolidated financial statements, recourse was made to estimates and assumptions which concerned balance sheet asset and liability items, and generate certain economic effects associated with valuation processes which did not however affect the reliability of the results.

Section 1 Illustration of the accounting policies

The accounting policies and standards adopted to draw up this consolidated interim report are

compliant with those used for the consolidated financial statements as of December 31st, 2011; therefore, reference should be made to Part B of the notes to the consolidated annual accounts for a detailed illustration of the accounting standards and the contents of the items in the accounting schedules. The accounting policies and standards adopted for the drafting of the consolidated interim report are the same as those used to prepare the IAS/IFRS statements of the Parent Company and the other Group companies who are not obliged to adopt the afore-mentioned international accounting standards for the purpose of drawing up the interim report. Cattolica Life prepared its interim report in compliance with the international accounting standards. No significant consolidation adjustments were necessary in order to adapt the consolidated companies’ accounting standards and policies to those of the Parent Company, with the exception of the real estate property investments held by the Euripide and Macquarie Office Italy funds which in their accounts value said properties at fair value and therefore, for the purpose of the consolidated financial statements, are stated at historic cost net of the related accumulated depreciation.

120

Going concern

According to the provisions of Bank of Italy/CONSOB/ISVAP document No. 2 dated February 6th, 2009, it should be noted that the economic outlook is positive, even though there are uncertainties linked to the performance of the markets and rates in particular, taking account of the timescales and ways in which the current situation is developing; the Group’s solid fundamentals do not generate or leave any doubts regarding the company as a going concern.

121

Notes to the accounts Part C – Information on the

consolidated balance sheet and income

statement

Part C Balance Sheet – Assets

123

ASSETS In accordance with ISVAP Regulation No. 7 dated July 13th, 2007, the balance sheet by sector of activities is presented below.

Table 16 – Balance sheet by sector of activities (ISVAP Regulation No. 7 dated July 13th, 2007)

(€ millions) June 30th, 2012

Dec. 31st, 2011

June 30th, 2012

Dec. 31st, 2011

June 30th, 2012

Dec. 31st, 2011

June 30th, 2012

Dec. 31st, 2011

June 30th, 2012

Dec. 31st, 2011

1 INTANGIBLE ASSETS 173 174 70 55 89 93 4 6 336 328

2 TANGIBLE ASSETS 22 22 1 1 4 5 0 0 27 28

3 TECHNICAL PROVISIONS - REINSURANCE AMOUNT 603 563 99 96 0 0 -19 -19 683 640

4 INVESTMENTS 2,636 2,607 12,595 12,806 182 176 -931 -920 14,482 14,669

4.1 Investment property 0 0 0 0 158 159 -1 -1 157 158

4.2 Investments in subsidiaries, associates and joint ventures 661 663 230 241 1 0 -818 -801 74 103

4.3 Held to maturity investments 106 105 180 180 0 0 0 0 286 285

4.4 Loans and receivables 399 332 1,219 1,186 0 0 0 0 1,618 1,518

4.5 Financial assets available for sale 1,404 1,481 7,398 7,132 23 17 -112 -118 8,713 8,512

4.6 Financial assets at fair value through profit or loss 66 26 3,568 4,067 0 0 0 0 3,634 4,093

5 SUNDRY RECEIVABLES 632 730 172 130 13 17 -105 -90 712 787

6 OTHER ASSET ITEMS 381 374 664 677 10 6 -1 6 1,054 1,063

6.1 Deferred acquisition costs 0 0 11 9 0 0 0 0 11 9

6.2 Other assets 381 374 653 668 10 6 -1 6 1,043 1,054

7 CASH AND CASH EQUIVALENTS 92 37 500 355 17 15 0 0 609 407

TOTAL ASSETS 4,539 4,507 14,101 14,120 315 312 -1,052 -1,017 17,903 17,922

1 SHAREHOLDERS' EQUITY 1,032 964 1,092 974 194 187 -923 -902 1,395 1,223

2 PROVISIONS AND ALLOWANCES 19 20 6 7 1 1 0 0 26 28

3 TECHNICAL PROVISIONS 3,026 2,978 11,462 11,628 0 0 -22 -24 14,466 14,582

4 FINANCIAL LIABILITIES 80 82 1,090 1,094 77 78 0 0 1,247 1,254

4.1 Financial liabilities valued at fair value recorded in the income statement 0 0 978 962 0 0 0 0 978 962

4.2 Other financial liabilities 80 82 112 132 77 78 0 0 269 292

5 PAYABLES 263 329 152 121 41 43 -105 -90 351 403

6 OTHER LIABILITY ITEMS 119 134 299 296 2 3 -2 -1 418 432

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 4,539 4,507 14,101 14,120 315 312 -1,052 -1,017 17,903 17,922

Eliminations between sectors

TotalNon-life business Life business Other

1. INTANGIBLE ASSETS Table 17 – Intangible assets

(€ m illions) June 30th, 2012 Dec. 31st, 2011 Absolute amount %

Goodwill 223 207 16 7.7Other intangible assets: 113 121 -8 -6.6

insurance portfolios 18 22 -4 -18.2software 63 70 -7 -10.0models and p rojects 3 2 1 50.0patent rights, trademarks and similar rights 0 0 0 n.a.assets in p rocess of formation 29 27 2 7.4

Total 336 328 8 2.4

Changes

1.1 Goodwill This goodwill is recorded at the related cost net of any impairment according to section 45 of IFRS 3.

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Table 18 - Goodwill – changes during the period

(€ millions) GoodwillDec. 31st, 2011Gross balance as of Dec. 31st, 2011 230Accumulated amortisation as of Dec. 31st, 2011 23Cumulative permanent losses as of Dec. 31st, 2011 0Net balance as of Dec. 31st, 2011 207Increases due to: 16

business combinations 16other 0

Decreases due to: 0business combinations 0other 0

Gross balance as of June 30th, 2012 246Accumulated amortisation as of June 30th, 2012 23

permanent losses in value 0Cumulative permanent losses as of June 30th, 2012 0Net balance as of June 30th, 2012 223

The accumulated amortisation in the above table refers to amortisation prior to the application of the international accounting standards. The increase in the period concerned the goodwill generated by the partial non-proportionate spin-off of B.P.Vi. Fondi SGR within Cattolica Gestione Investimenti. So as to ascertain any permanent losses in value, the goodwill has been allocated to the cash generating units (or CGU) or to groups of units in observance of the maximum aggregation restriction which cannot exceed the individual sector of business (non-life, life and other). Therefore, when assigning the goodwill to the cash generating units, the minimum level at which the goodwill is monitored for internal management control purposes was considered, or rather the Cattolica Danni and Vita CGUs and the legal entities included within the scope of consolidation, taking into account the corporate restructuring operations that took place over the years which do not make it possible in the future to map out the value of the individual goodwill amounts which were allocated previously to the cash generating units identified in C.I.R.A., Duomo Previdenza, Duomo Uni One Assicurazioni, Eurosav, Persona Life and San Miniato Previdenza. The goodwill was assigned to the following business units: • € 123 million concerning the cash flow generating unit known as Cattolica Danni, represented by the goodwill

relating to the purchase transactions of Duomo Assicurazioni and Uni One Assicurazioni which are now included in the Cattolica Danni CGU;

• € 43 million concerning the cash flow generating unit known as Cattolica Vita, represented by the goodwill relating to the purchase transactions of Duomo Previdenza and Persona Life which are now included in the Cattolica Vita CGU;

• € 22 million in BCC Vita, relating to the purchase of 51% of the company; • € 16.7 million in Cattolica Gestione Investimenti, relating to the partial spin-off of B.P.Vi. Fondi SGR within

the same; • € 5 million concerning the cash flow generating unit Risparmio & Previdenza, represented by the goodwill

relating to the acquisition of Eurosav which is now included in the Risparmio & Previdenza CGU; • € 4 million in TUA Assicurazioni, relating to the purchase of the UBI business segment; • € 3 million in Cattolica Life, relating to the initial purchase of 50% of the company; • € 3 million in Berica Vita, relating to the initial purchase of 50% of the company; • € 3 million in BCC Assicurazioni, relating to the acquisition of the company in various instalments; • € 257 thousand in Cattolica Previdenza relating to the purchase of a further 50% of the company.

125

The recoverable amount of the CGUs is defined as the higher between the fair value less costs to sell and the value in use. It should be noted that due to the significant drop in Cattolica stock prices, the test based on the fair value - which refers the goodwill to the listed prices of the entity under review - fails to express the real value of the CGUs in question, considering that the stock market capitalisation expresses values lower than the pro-rata shareholders’ equity. So as to establish the recoverable value and subsequently compare with the book value of the CGUs, the value in use was therefore used since it is able to permit an impairment opinion guided by principles of economic rationality. The value in use of all the insurance companies is estimated on the basis of a two or three-stage accounting approach of the economic capital, with the exception of TUA Assicurazioni, valued on the basis of an income approach. In the application of the economic capital method, the first stage is represented by the discounting back of the economic profit (calculated on the basis of the RoEV - return on Embedded Value – for life insurance companies, or the profitability of the Embedded Value and on the basis of the RoNAV - return on Net Asset Value – for the non-life insurance companies, or the profitability of the adjusted shareholders’ equity, net of intangible assets). The second stage is gained by hypothesising the linear convergence of the economic profit of the last plan year towards the perpetually sustainable level. The third stage derives from the terminal value of the business unit, obtained by capitalising the perpetually sustainable economic profit by means of an appropriate capitalisation rate. The impairment tests carried out as at June 30th, 2012, were based on the results for the first six months of 2012 as well as the 2012-2014 forecast results for each CGU approved by the board of directors of the Parent Company; they take into account the historic track record of the technical results achieved by each company, as well as the trends, in the estimate of the funding and profitability hypotheses, which are highlighted by the market, insurance and financial scenarios. With reference to the partnership in Cattolica Life, account was taken of a 10-year plan, as envisaged by the bank-assurance agreements renewed during 2011; also with reference to Cattolica Previdenza, a start-up company, a 10-year plan was used since the three-year time span is too short for being able to represent the future income-earning prospects of the venture. With reference to TUA Assicurazioni, a company that still does not have a business model with a level of stability that would allow a reliable projection of profits beyond the usual field of planning, an evaluation algorithm was used, based on the discounting back of profit forecasts for the 2012-2014 period and a terminal value obtained from a normalised P/NAV multiple. For the calculation of the terminal values, recourse was made to long-term estimates of two key variables, specified below: the book rate of return on the Economic capital (RoEC) and the long-term nominal growth rate. The underlying hypothesis which the value in use of each group of units is the most sensitive to, are: • the combined ratio for the cash generating units falling within the non-life segment and the new business value

for the cash generating units falling within the life segment; • the cost of own capital (Rs); • the long-term RoEC (the RoEC is the ratio between the economic profit and the economic capital); • the long-term growth rate (“g”). The cost of the capital has been estimated using the CAPM - Capital Asset Pricing Model. The parameters used for the purposes of the estimate of the value in use are: the beta ratio by class of activities, formulated on the basis of the market betas of the European insurance companies; the equity risk premium, in line with the consensus value disclosed in the reports of the market analysts; the risk free rates.

126

The cost of own capital (Rs) for each business unit has been estimated on the basis of these elements, equal to 9.18% for life insurance companies and 7.20% for non-life companies. By contrast, the long-term growth rate ("g”) was 2% for all the CGUs. These basic assumptions, besides being in line with the long-term nominal growth rate of Italian GDP, are also consistent with the values used by the financial analysts of the insurance sector. Sensitivity analysis was also carried out with reference to the cost of capital (+/- 0.5%) and the growth rate (+/- 0.5%). Adopting the worst-case scenario (Rs +0.5% and g -0.5%), the recoverable value emerges as higher than the book value for just the BCC Vita and Risparmio & Previdenza CGUs, each for around € 3 million. For all the other CGUs, the recoverable value emerges as higher than the book value. No permanent losses in value emerged from the tests conducted. 1.2 Other intangible assets As per IAS 38, the item “other intangible assets” includes assets which can be autonomously identified and which will generate future economic benefits in terms of cost savings or future income. Table 19 – Other intangible assets – changes during the period

(€ millions)insurance portfolios software

models and projects

patent rights, trademarks and

similar rights

assets in process of formation Total

Gross balance as of Dec. 31st, 2011 52 213 3 2 27 297Accumulated amortisation as of Dec. 31st, 2011 30 142 1 2 - 175Cumulative permanent losses as of Dec. 31st, 2011 - 1 - - - 1Net balance as of Dec. 31st, 2011 22 70 2 - 27 121Increases due to: - 7 1 - 3 11

purchase - 7 1 - 3 11business combinations - - - - - -internal development - - - - - -other - - - - - -

Decreases due to: - 1 - - 1 2sale - 1 - - - 1business combinations - - - - - -other - - - - 1 1

Gross balance as of June 30th, 2012 52 219 4 2 29 306Amortisation 4 13 - - - 17Other changes in acc. amortisation - - - - - -Accumulated amortisation as of June 30th, 2012 34 155 1 2 - 192

value writebacks - - - - - -permanent losses in value - - - - - -

Cumulative permanent losses as of June 30th, 2012 - 1 - - - 1Net balance as of June 30th, 2012 18 63 3 - 29 113 The “other intangible assets” held by the Group are characterised by a finite useful life and as such these are subjected to a systematic amortisation process whose period: • varies between 4 and 11 years for the insurance portfolios, on the basis of the average residual duration of the

underlying contracts; • is on average 5 years for software, models and projects, patent rights, trademarks and similar, except in specific

cases. There were no significant changes in the amortisation methods used during the accounting period. In pursuance of the matters anticipated by section 31 of IFRS 4, other intangible assets specifically include the following values of the insurance policies portfolios acquired as a result of business combinations:

127

• € 5 million in relation to the matters envisaged in the non-life agreement entered into with ICCREA Holding

which became effective due to the transfer of 49% in BCC Assicurazioni, in October 2010; • € 4 million in relation to the purchase of BCC Vita, in July 2009. The related amortisation period is 7 years. • € 3 million relating to the cash generating unit known as Cattolica Vita, deriving, as mentioned above, from the

mergers of Duomo Previdenza and Persona Life within the Parent Company during 2007. This portfolio, net of the portion assigned to Cattolica, has an amortisation plan envisaged over 10 years;

• € 3 million relating to the cash generating unit known as Cattolica Danni, deriving from the spin-off of Duomo Uni One within Cattolica Assicurazioni. This portfolio, estimated with reference to the forecast income flows which can be achieved, has an amortisation plan envisaged over 11 years;

• € 3 million, for the conclusion of a business transaction with the banking partner Banco di Credito Popolare di Torre del Greco by Cattolica and Risparmio & Previdenza;

• € 361 thousand in relation to the acquisition of Cattolica Life Ltd, which took place in 2007. The related amortisation period is 5 years;

• € 159 thousand relating to the cash generating unit Risparmio & Previdenza which derives from the merger of Eurosav into Risparmio & Previdenza. The related amortization period is 10 years;

• € 82 thousand in relation to the acquisition of Berica Vita which took place in 2007. The related amortisation period is 5 years;

• € 27 thousand obtained from the acquisition of a further 50% of the policy portfolio of Cattolica Previdenza. The related amortisation period is 5 years.

Other intangible assets held by the group include software and assets in process of formation relating to projects being developed on software which mainly refer to Cattolica Services and include both projects completed and in use during the period and systems already operative, used in recent years and which during the period have been subject to development processes and adaptation in line with legal provisions, along with projects underway not yet completed and not functioning in 2012. The impairment tests on other intangible assets, as disciplined by IAS 36, carried out during the half year, did not reveal any losses in value (impairment losses). 2. TANGIBLE ASSETS The changes in tangible assets, governed by IAS 16, were as follows during the period: Table 20 – Tangible assets


Property 19 19 0 0.0Other tangible assets 8 9 -1 -11.1

furniture, office machines and internal means of transport 8 9 -1 -11.1plant and equipment 0 0 0 n.a.

Total 27 28 -1 -3.6

Changes

2.1 Property The item includes property used for the performance of the Group’s activities; in particular it includes the property belonging to the Parent Company. The fair value of the properties owned by the Group came to € 42 million.

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2.2 Other tangible assets The item comprises the assets disciplined by IAS 16, not included under the property category. Table 21 – Property and other tangible assets – changes during the period

Property

(€ millions)

Furniture, office machines and

internal means of transport Plant and equipment TOTAL

Gross balance as of Dec. 31st, 2011 27 80 3 110Accumulated depreciation as of Dec. 31st, 2011 8 71 3 82Cumulative permanent losses - - - -Net balance as of Dec. 31st, 2011 19 9 - 28Increases due to: - 1 - 1

purchase - 1 - 1business combinations - - - -change of use - - - -internal development - - - -exchange gains - - - -other - - - -

Decreases due to: - - - -sale - - - -business combinations - - - -change of use - - - -exchange losses - - - -other - - - -

Gross balance as of June 30th, 2012 27 81 3 111depreciation - 2 - 2other changes in acc. depreciation - - - -

Accumulated depreciation as of June 30th, 2012 8 73 3 84value writebacks - - - -permanent losses in value - - - -

Cumulative permanent losses as of June 30th, 2012 - - - -Net balance as of June 30th, 2012 19 8 - 27

Other tangible assets

Total property and other tangible assets held by the Group are subject to a systematic depreciation process using an annual rate of 3% for properties used for the Group’s business activities and, except in specific cases, using an annual rate: • of 12% for furniture and ordinary office machines; • of 20% for electronic machines and hardware; • of 25% for movable assets recorded in public registers; • of 15% for plant and equipment. No significant changes took place during the period, either in the accounting estimates or the depreciation methods used.

129

3. TECHNICAL PROVISIONS - REINSURANCE AMOUNT Table 22 – Analysis of technical provisions – reinsurance amount (ISVAP Regulation No. 7 dated July 13th, 2007) (€ millions)

,2012

,2011

Non-life provisions 584 544

Life provisions 99 96Technical provisions where the investment risk is borne by the policyholders and provisions deriving from the management of pension funds - -

Actuarial provisions and other provisions 99 96Total technical provisions - reinsurance amount 683 640 The technical provisions – reinsurance amount are calculated using the method adopted for those pertaining to direct business. 4. INVESTMENTS “Investments” comprise the following items: Table 23 - Investments (€ millions) June 30th, 2012 Dec. 31st, 2011 Absolute amount %

Investment property 157 158 -1 -0.6

Investments in subsidiaries, associates and joint ventures 74 103 -29 -28.2

Held to maturity investments 286 285 1 0.4

Loans and receivables 1,618 1,518 100 6.6

Available for sale financial assets 8,713 8,512 201 2.4

Financial assets at fair value through profit or loss 3,634 4,093 -459 -11.2

Total 14,482 14,669 -187 -1.3 4.1 Investment Property “Investment Property” is represented by the properties, not occupied by Group companies. The item includes land and buildings belonging to Fondo Macquarie Office Italy and Fondo Euripide The fair value of the investment property held by the Group, estimated by an external and independent expert, amounted to € 164 million at the end of the period.

130

Table 24 – Investment property – changes during the period (€ millions) Property investments

Gross balance as of Dec. 31st, 2011 163Accumulated depreciation as of Dec. 31st, 2011 5Cumulative permanent losses -Net balance as of Dec. 31st, 2011 158Increases due to: -

purchase -business combinations -change of use -internal development -exchange gains -other -

Decreases due to: -sale -business combinations -change of use -exchange losses -other -

Gross balance as of June 30th, 2012 163depreciation 1other changes in acc. depreciation -

Accumulated depreciation as of June 30th, 2012 6value writebacks -permanent losses in value -

Cumulative permanent losses as of June 30th, 2012 -Net balance as of June 30th, 2012 157 The buildings included under investment property are subject to a systematic depreciation process using a depreciation rate of 2%. No significant changes took place during the period, either in the accounting estimates or in the depreciation methods used. Following the implementation of the impairment test, as disciplined by IAS 36, no losses in value were reported (impairment losses). The Group has applied the criteria of cost net of the accumulated depreciation and any impairment losses to total assets disciplined by IAS 40, IAS 16 and IAS 38. Table 25 – Analysis of tangible and intangible assets (ISVAP Regulation No. 7 dated July 13th, 2007)

(€ millions) At costAt re-determined value or

at fair value Total value for the period

Investment property 157 115 157Other property 19 94 19Other tangible assets 8 8 8Other intangible assets 113 113 113

4.2 Investments in subsidiaries, associates and joint ventures The item includes equity investments in subsidiary companies excluded from the scope of consolidation and in associated companies over which the Group exercises significant influence, which are accounted for using equity method.

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Table 26 - Investments in subsidiaries, associates and joint ventures


Subsidiaries 0 0 0 n.a.Associates 74 103 -29 -28.2Joint ventures 0 0 0 n.a.Total 74 103 -29 -28.2

Changes

Investments in subsidiaries The item, totalling € 50 thousand (unchanged with respect to December 31st, 2011), comprises the cost of the equity investment in TUA Retail, a company not significant (not material) for consolidation purposes. Investments in associates The item includes the equity investments accounted for using equity method, in companies over which the Group exercises a significant influence. As already mentioned in the section dedicated to the scope of consolidation, equity investments in associated companies also include the investment relating to Vegagest SGR, in which the Parent Company owns 17.14%. Despite the threshold of this equity investment falls below the limits established by legislation for the assumption of the existence of a relationship, the same is considered to exist given the significant influence which the Parent Company exercises over Vegagest SGR due to the representation held on the Board of the investee company. The decrease with respect to the previous period is attributable to the spin-off of B.P.Vi. Fondi SGR for € 26 million in Cattolica Gestione Investimenti and the reduction in the shareholders’ equity of the associated companies due to the losses reported during the interim period. No impairment losses emerged from the tests conducted. Table 27 – Analysis of non-consolidated equity investments (ISVAP Regulation No. 7 dated July 13th, 2007) (thousands)

State Activities Type% direct

investment% total holding

% of votes available during

ordinary shareholders'

meetings

Value as of June

30th, 2012Name (1) (2) (3) (4)

Cassa di Risparmio di San Miniato s.p.a. 086 7 b 25.00% 25.00% 72Prisma s.r.l. 086 11 b 20.00% 20.00% 0TUA Retail s.r.l. 086 11 a 0.00% 97.00% 0Vegagest SGR s.p.a 086 8 b 17.14% 17.14% 2(1) 1=Italian insurance; 2=EU insurance; 3=non-EU insurance; 4=insurance holding companies; 5=EU reinsurance; 6=non-EU reinsurance; 7=banks; 8=SGR;9=other holding; 10=property 11=other.(2) a=subsidiaries (IAS 27) ; b=associated companies (IAS 28); c=joint ventures (IAS 31).(3) this is the product of the investment relationships relating to all the companies which, placed along the investment chain, may be interposed betweenthe company that draws up the consolidated financial statements and the company in question. If the latter is directly invested in by several subsidiarycompanies, it is necessary to add together the individual products.(4) Overall percentage available of the votes at ordinary shareholders' meeting if different from direct or indirect shareholding.

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Financial Investments Financial investments include financial instruments disciplined by IAS 39: held to maturity investments, loans and receivables, available for sale financial assets and financial assets at fair value through profit or loss. No significant category reclassifications have taken place during the period and in previous periods, therefore compilation of the analysis of reclassified financial assets and the effects on the income statement and on comprehensive income pursuant to Article 28, paragraph 4 of ISVAP Regulation No. 7 dated July 13th, 2007 was not carried out. The benefits for the income statement as of June 30th deriving from reclassification carried out in 2008 amounted to € 18 million while the benefits for shareholders’ equity amounted to € 9 million (net of tax effects); the fair value of securities transferred as of June 30th stood at € 119 million. Table 28 - Financial investments


Held to maturity investments 286 285 1 0.4Loans and receivables 1,618 1,518 100 6.6Available for sale financial assets 8,713 8,512 201 2.4Financial assets at fair value through profit or loss 3,634 4,093 -459 -11.2Total 14,251 14,408 -157 -1.1

Changes

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Table 29 – Analysis of financial assets (ISVAP Regulation No. 7 dated July 13th, 2007)

(€ millions) June 30th, 2012 Dec. 31st, 2011 June 30th, 2012 Dec. 31st, 2011 June 30th, 2012 Dec. 31st, 2011 June 30th, 2012 Dec. 31st, 2011 June 30th, 2012 Dec. 31st, 2011 June 30th, 2012 Dec. 31st, 2011

Equities and derivatives valued at cost

0 0 0 0 9 0 0 0 0 0 9 0

Equities at fair value 0 0 0 0 308 340 0 1 7 19 315 360

of which listed securities 0 0 0 0 135 157 0 1 7 19 142 177

Debt securities 286 285 1,588 1,498 7,878 7,727 371 403 2,720 3,133 12,843 13,046

of which listed securities 286 285 0 0 7,784 7,649 369 389 1,747 2,583 10,186 10,906

UCI units 0 0 0 0 518 445 0 1 422 414 940 860

Loans and receivables due from banking customers

0 0 0 0 0 0 0 0 0 0 0 0

Interbank loans and receivables 0 0 0 0 0 0 0 0 0 0 0 0

Deposits with transferors 0 0 9 9 0 0 0 0 0 0 9 9

Receivable financial components of insurance policies

0 0 0 0 0 0 0 0 0 0 0 0

Other loans and receivables 0 0 10 10 0 0 0 0 0 0 10 10

Non-hedging derivatives 0 0 0 0 0 0 6 11 85 92 91 103

Hedging derivatives 0 0 0 0 0 0 13 10 0 0 13 10

Other financial investments 0 0 11 1 0 0 10 1 0 8 21 10

Total 286 285 1,618 1,518 8,713 8,512 400 427 3,234 3,666 14,251 14,408

Financial investments (disciplined by IAS 39) Investments held to maturity Loans and receivables Financial assets available for sale

Financial assets at fair value through profit or lossTotal

book value

Financial assets held for tradingFinancial assets designated at fair

value through profit or loss

Reference should be made to the related table in the comments on the income statement for an analysis of the financial income and charges from investments. 4.3 Held to maturity investments All the 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 June 30th, the held to maturity investments represented 2% of total financial instruments disciplined by IAS 39 included under investments. In detail, the item mainly includes Italian government securities. 4.4 Loans and receivables The 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 classified in this category. Specifically, the category includes all the loans and financing, the deposits from re-insurers with transferring companies and bonds not listed on active markets. As of the end of the period, loans and receivables represented 11.4% of total financial instruments disciplined by IAS 39 included under investments. 4.5 Available for sale financial assets This category includes all the financial assets, 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, this category comprises the equity investments deemed to be strategic in companies which are not subsidiaries or associates, 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. Specifically, the valuation methods adopted were chosen taking into account the pertinent sector.

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As of the end of the period, available for sale financial assets represented 61.1% of total financial instruments disciplined by IAS 39 included under investments. ***** During the first half of the year, following the performance of the impairment test on all the financial instruments included in the “loans and receivables”, “held to maturity investments”, and “available for sale financial assets” categories, as disciplined by IAS 39, permanent losses in value were revealed (impairment losses), before tax effects, on shares totalling € 15 million. 4.6 Financial assets at fair value through profit or loss This category comprises the classification of financial assets, including derivatives, held for trading and those designated by the Group as valued at fair value, with a balancing entry in the income statement. Specifically, besides assets held for trading purposes, the item also includes the financial assets at fair value through profit or loss relating to: • insurance or investment contracs issued by the Group whose investment risk is borne by the policyholders; • the management of pension funds. As of the end of the period, financial assets at fair value through profit or loss represented 25.5% of total financial instruments disciplined by IAS 39 included under investments.

*** Furthermore, with reference to the securities positions issued by the Lehman Brothers Group and by Icelandic banks, a recovery value was adopted, in line with that used in previous years, respectively 20% for Lehman, 6.625% for Kaupthing, 3% for Glitnir and 1.25% for Landsbanki. The incidence of the Group’s exposure in instruments issued by Lehman Brothers and Icelandic banks, included in the category “Financial assets at fair value through profit or loss”, comes to 0.01% overall. Table 30 - Financial assets at fair value through profit or loss


Trading assets 400 427 -27 -6.3 Shares 0 1 -1 -100.0 Bonds 371 403 -32 -7.9 Investment funds 0 1 -1 -100.0 Derivatives 19 21 -2 -9.5 Other 10 1 9 n.s.

Assets designated by the Group 3,234 3,666 -432 -11.8 Shares 7 19 -12 -63.2 Bonds 2,720 3,133 -413 -13.2 Investment funds 422 414 8 1.9Derivatives 85 92 -7 -7.6 Other 0 8 -8 -100.0 Total 3,634 4,093 -459 -11.2

Changes

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Derivatives The Group owns three hedging derivatives: one represented by the option deriving from the agreement with Veneto Banca Holding regarding CARIFAC shares and two implicit cash flow hedge interest rate swaps in financial instruments acquired during the period; steps were taken to separate the same. The derivatives separated off and designated for hedging purposes were acquired so as to hedge the risk deriving from the fluctuations in the financial flows of the underlying elements represented by Italian floating-rate Government securities (inflation-linked). The two swaps have the follows features: • purchase with effect as from May 31st, maturity September 15th, 2017, underlying element: € 50 million in

Italian inflation-linked Government securities; the fair value of the derivative as of June 30th was negative for a total of € 719 thousand. The company pays the floating rate of the reference security and receives a fixed rate; the payments are made on March 15th and September 15th each year;

• purchase with effect as from June 14th, maturity September 15th, 2014, underlying element: € 50 million in Italian inflation-linked Government securities; the fair value of the derivative as of June 30th was negative for a total of € 8.480 million. The company pays the floating rate of the reference security and receives a fixed rate; the payments are made on March 15th and September 15th each year.

With regard to non-hedging derivatives, those classified as for trading amount to € 6 million and essentially comprise swap agreements and options, while those designated at fair value through profit or loss come to € 85 million and are mainly represented by options and swaps. Furthermore, the Group possesses other financial instruments characterised by embedded derivatives; these instruments are classified in the category “Financial assets at fair value through profit or loss” and are valued at fair value; therefore steps were not taken to separate the embedded derivative as permitted by IAS 39.

***

As already mentioned under Significant events and other information in the Management report, the Group took part in the exchange offering on Greek government securities. The table below provides a breakdown of the Cattolica Group’s exposures in Greek government debt securities and further below the exposure in government debt securities issued by other European Union nations. Table 31 - Exposure in Greek Government debt securities

(€ millions)Nominal value as at

June 30th, 2012Fair value as at June 30th, 2012

Impairment in the income statement

Gross AFS provision

AFS reserve net of discretional profit

sharing of life policyholders (*)

Available for sale financial assets 78 6 - (3) (1) Financial assets at fair value through profit or loss - - - - -

Total 78 6 - (3) (1) (*) gross of tax effects Table 32 - Exposure in government debt securities issued by EU zone countries - Financial assets available for sale (€ millions)

StateMaturing between 1

and 5 yearsMaturing between 6

and 10 yearsMaturing beyond 10

yearsTotal fair value Gross AFS provision

Italy 2,447 2,821 400 5,668 -383Spain 2 0 0 2 0Portugal 0 0 0 0 0Ireland 24 157 49 230 -16Other EU countries 0 12 6 18 -3TOTAL 2,473 2,990 455 5,918 -402

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Table 33 - Exposure in government debt securities issued by EU zone countries - Financial assets at fair value through profit or loss (€ millions)




yearsTotal fair value*

Italy 763 231 26 1,020 Spain 32 - - 32 Portugal - - - - Ireland - - - - Other EU countries 45 14 2 61 TOTAL 840 245 28 1,113

* of which the value of financial assets designated at fair value through profit or loss amounts to: € 825 million. Table 34 - Exposure in government debt securities issued by EU zone countries - Held to maturity financial assets (€ millions)




yearsTotal book value Fair value

Italy - 100 114 214 199 Spain - 15 - 15 14 Portugal - - - 0 - Ireland - - - 0 - Other EU countries - - - 0 - TOTAL 0 115 114 229 213

***

Table 35 – Analysis of financial assets and liabilities by level (ISVAP Regulation No. 7 dated July 13th, 2010)

Total

June 30th, 2012 Dec. 31st, 2011 June 30th, 2012 Dec. 31st, 2011 June 30th, 2012 Dec. 31st, 2011 June 30th, 2012 Dec. 31st, 2011

7,678 7,503 546 564 480 445 8,704 8,512Financial assets held for trading 342 356 42 49 16 22 400 427Financial assets at fair value through profit or loss 980 924 2,249 2,741 5 1 3,234 3,666

9,000 8,783 2,837 3,354 501 468 12,338 12,605Financial liabilities held for trading 0 0 20 10 0 0 20 10Financial liabilities at fair value through profit or loss 0 0 958 952 0 0 958 952

0 0 978 962 0 0 978 962

Level 2 Level 3

Total


Financial assets at fair value through profit or loss

Total

Financial liabilities at fair value through profit or loss

Level 1

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Table 36 – Analysis of changes in level 3 financial assets and liabilities (ISVAP Regulation No. 7 dated July 13th, 2007)

Financial assets held for trading

Financial assets designated at fair value

through profit or loss

Financial liabilities held for trading

Financial liabilities designated at fair value


Opening balance 445 22 1 0 0

Purchases/Issues 45 0 0 0 0

Sales/Repurchases -1 -8 0 0 0

Reimbursements 0 0 0 0 0

Gain or loss recorded in the income statement 0 2 -2 0 0

Gain or loss recorded in other components of the statement of comprehensive income 0 0 0 0 0

Transfers in level 3 0 0 6 0 0

Transfers to other levels 0 0 0 0 0

Other changes -9 0 0 0 0

Closing balance 480 16 5 0 0

(€ millions)

Financial assetsFinancial liabilities valued at fair value



Financial assets valued at fair valuethrough profit or loss

Table 37 - Analysis of assets and liabilities relating to contracts issued by insurance companies where the investment risk is borne by the policyholder and deriving from pension fund management (ISVAP Regulation No. 7 dated July 13th, 2007)

(€ millions) June 30th, 2012 Dec. 31st, 2011 June 30th, 2012 Dec. 31st, 2011 June 30th, 2012 Dec. 31st, 2011

Assets in the financial statements 2,600 3,021 707 683 3,307 3,704Intercompany assets* 0 0 0 0 0 0Total assets 2,600 3,021 707 683 3,307 3,704

Financial liabilities in the financial statements 234 283 645 626 879 909Technical provisions in the financial statements 2,366 2,738 62 57 2,428 2,795Intercompany liabilities * 0 0 0 0 0 0Total liabilities 2,600 3,021 707 683 3,307 3,704* Assets and liabilities eliminated during the consolidation process

Totalinvestment funds and stock market indices

Benefits associated with the management of pension funds

5. SUNDRY RECEIVABLES Table 38 - Sundry receivables (€ millions) June 30th, 2012 Dec. 31st, 2011 Absolute amount %

Receivables deriving from direct insurance transactions 566 616 -50 -8.1Policyholders 255 281 -26 -9.3Insurance brokers 187 215 -28 -13.0Insurance companies - current accounts 88 84 4 4.8Policyholders and third parties for sums to be recovered 36 36 0 0.0

Receivables deriving from reinsurance transactions 86 113 -27 -23.9Insurance and reinsurance companies 79 106 -27 -25.5Reinsurance brokers 7 7 0 0.0

Other receivables 60 58 2 3.4Total 712 787 -75 -9.5 The item “Other receivables” mainly comprises amounts due from guarantee funds, for guarantee deposits, from employees and amounts receivable for advances to suppliers.

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6. OTHER ASSET ITEMS “Other assets items ” are made up as follows: Table 39 – Other asset items


Non current assets or disposal group held for sale 0 0 0 n.a.Deferred acquisition costs 11 9 2 22.2Deferred tax assets 325 490 -165 -33.7Current tax assets 403 333 70 21.0Other assets 315 231 84 36.4Total 1,054 1,063 -9 -0.8

Changes

6.2 Deferred acquisition costs This item includes the deferred acquisition costs relating to insurance policies, as agreed upon by IFRS 4. Deferred and current tax assets Current and deferred tax assets at the end of the period amounted to € 728 million (-11.5% with respect to the end of the previous period). 6.3 Deferred tax assets In accordance with the definition contained in IAS 12, these comprise the amounts of the income taxes recoverable in future accounting periods. Amounts receivable for deferred tax assets, recorded under “deferred tax assets” derive from the deductible timing differences, such as the write-down of receivables, the deductible portion of the change in the provision for outstanding non-life business claims, the valuation losses on securities, the amortisation of the insurance portfolio, the allowances to provisions for risks and charges, as well as from the carrying forward of tax losses not used and the freeing up as per Italian Decree Law No. 185/2008 of prepaid taxes recorded on goodwill and other intangible assets for € 103 million. They also comprise the deferred tax assets which have arisen from the temporary misalignment between the principle of economic competence laid down by the international accounting standards and Italian tax legislation. This misalignment is mainly due to the representation in the income statement and under shareholders’ equity of the capital gains from valuation generated respectively on financial assets at fair value through profit or loss and on available for sale financial assets, the re-determination of the employee severance indemnity in accordance with IAS 19, the determination of the deferred commission income (DIR) associated with the investment policies held by the Group, the re-determination of the depreciation plans for property investments and properties in accordance with IAS 16 and 40 and the recording of the shadow accounting provision. Deferred tax assets were determined according to the rate established by Article 1, paragraph 33 (with reference to IRES – company earnings’ tax) and Article 1, paragraph 50 (with reference to IRAP - regional business tax) of Italian Law No. 244 dated December 24th, 2007, “2008 Finance Bill”, taking into account the amendments introduced by Article 23, paragraph 5 of Italian Decree Law No. 98 dated July 6th, 2011 containing “Urgent provisions for financial stabilisation” (so-called “corrective manoeuvre”). 6.4 Current tax assets They are represented by the amounts due from the tax authorities and mainly derive from the surplus emerging from the tax returns presented, withholdings made on bank interest, tax credits on income deriving from the equity investments in mutual investment funds, the advance tax on employee severance indemnities as per Article 3, paragraph 213 of Italian Law No. 662 dated December 23rd, 1996 and from amounts due from the tax authorities

139

transferred to the Parent Company by the subsidiary companies who have complied with the tax consolidation system. The amounts due from the tax authorities also comprise the prepaid taxes pursuant to Italian Law No. 265 dated November 22nd, 2002, concerning the taxation of the life provisions, and the amounts due from the tax authorities for the payment of the annual tax advance on premiums, envisaged by Article 9, paragraph 1-bis of Italian Law No. 1216. 6.5 Other assets This item includes accrued income and prepaid expenses, transitory reinsurance accounts, deferred commission expense (DAC - deferred acquisition cost), and other assets. Table 40 - Other assets


Transitory reinsurance accounts 0 20 -20 -100.0Deferred commission expense associated with investment contracs 2 3 -1 -33.3Accruals and deferrals 185 172 13 7.6

of which for interest 180 169 11 6.5of which for rental and other fees 5 3 2 66.7

Sundry assets 128 36 92 n.s.Total 315 231 84 36.4

Changes

The item “deferred commission expense relating to investment contracts” refers to the deferred acquisition costs associated with investment contracts or contracts not complying with the definition of insurance contracts as per IFRS 4. The item “accruals and deferrals” almost entirely comprises accruals relating to interest income on securities, pertaining to the period, whose coupon matures after the end of the period. The item “sundry assets” comprises the balance of the liaison account between the life and non-life sectors of the Group insurance companies which carry out insurance activities in both sectors. The amount of € 16 million is matched by an equal balance under “Other liabilities”. 7. CASH AND CASH EQUIVALENTS The item “cash and cash equivalents” represents the balance as of the end of the accounting period of the current accounts held with various banks. Cash and cash equivalents amount to € 609 million and during the year disclosed an increase of € 202 million. The book value of these assets significantly approximates their fair value. Deposits and bank current accounts are remunerated at both fixed and floating rates.

Part C Balance Sheet- Liabilities

140

1. SHAREHOLDERS' EQUITY As of June 30th, this item was made up as follows: Table 41 – Shareholders’ equity (€ millions) June 30th, 2012 Dec. 31st, 2011 Absolute amount %

Shareholders' equity pertaining to the Group 1,131 1,018 113 11.1

Share capital 170 162 8 4.9Other equity instruments 0 0 0 n.a.Capital reserves 656 679 -23 -3.4Net profit reserves and other equity reserves 368 310 58 18.7Own shares -1 0 -1 n.a.Reserve for net exchange differences 0 0 0 n.a.Gains or losses on financial assets available for sale -83 -168 85 50.6Other gains or losses recorded directly under equity -3 -3 0 0.0Profit (loss) for the period pertaining to the Group 24 38 -14 -36.8

pertaining to third parties 264 205 59 28.8Capital and reserves pertaining to minority shareholders 265 270 -5 -1.9Gains and losses recorded directly under equity -9 -69 60 87.0Profit (loss) for the period pertaining to minority shareholders 8 4 4 100.0

Total 1,395 1,223 172 14.1 1.1 Shareholders' equity pertaining to the Group This item totals € 1,131 million and comprises the following items. 1.1.1 Share capital The fully subscribed share capital amounts to € 170 million and is made up of 56,793,046 ordinary shares with a par value of € 3 each. The shares totalled 54,088,615 as of December 31st, 2011, increased due to the share capital increase via the bonus allocation of shares resolved by the Parent Company’s shareholders’ meeting on April 21st, 2012. The related Article of Association amendments were recorded with the Companies’ Register on June 27th. 1.1.2 Capital reserves This item includes the share premium reserve of the Parent Company. The decrease is attributable to the coverage of the loss registered by the Parent Company in the previous period in the life sector and the use of these reserves to increase the share capital as illustrated above. 1.1.4 Net profit reserves and other equity reserves This item comprises the gains and losses deriving from the initial application of the international accounting standards (IFRS 1), the reserves envisaged by the Italian Civil Code (consolidation reserve and legal reserve) and by special laws prior to the adoption of the international accounting standards. The change is attributable to the distribution of the profit for the previous year and the performance of the consolidation reserves, of which € 9 million deriving from the purchase transaction of Cattolica Previdenza’s minority interests. 1.1.5 Own shares At June 30th, the Parent Company held 108,526 shares.

141

1.1.7 Gains or losses on available for sale financial assets The changes during the period net of the related deferred taxation, are mainly attributable to: • the transfer of net capital losses to the income statement following disposals, € 30 million, and impairment for

€ 8 million; • net positive fair value changes in financial instruments included in the corresponding asset item for € 47

million. 1.2 Shareholders' equity pertaining to minority shareholders This account comprises the values pertaining to minority shareholders regarding the companies included in the scope of consolidation. With reference to the item gains or losses recorded directly under equity, changes were recorded during the year, net of the related deferred taxation, essentially due to: • the transfer of net capital losses to the income statement following disposals, € 9 million, and impairment for €

1 million; • net positive fair value changes in financial instruments included in the corresponding asset item for € 50

million. 2. PROVISIONS AND ALLOWANCES As of June 30th, the item provisions and allowances amounted to € 26 million (€ 28 million at the end of the previous period) and mainly comprises provisions for:

• legal disputes and costs for € 11 million (during the interim period € 1 million was set aside and € 1 million was used);

• formal notices or reports on findings which can be served by the ISVAP for the violations of Italian Law No. 57/01 or for other findings for € 5 million (€ 1 million was provided and € 1 million used during the interim period);

• sums which will be paid for the acceptance of any requests by beneficiaries for services depending on life assurance policies in relation to which prescription has taken place in favour of the Group for € 2 million (€ 130 thousand used during the interim period);

• disputes outstanding with regard to labour or tax dealings for € 5 million (€ 2 million was used during the interim period);

• the risk provision for defence costs for € 1 million (no changes took place during the interim period). The outlays are envisaged over the short-term and therefore are not subject to any discounting. With regard to the legal and tax-related disputes, account is taken of the advice of legal/tax advisors with regard to the outcome of the same. With regard to the ISVAP sanctions, it has taken into account those already communicated as well as the time series in the past registered by the insurance companies in the Group.

142

3. TECHNICAL PROVISIONS This item includes the provisions associated with insurance contracts, and those deriving from investment contracts involving discretionary profit sharing (DPF), net of the outward reinsurance. The fairness of the liabilities as of June 30th, was ascertained by means of the method envisaged by section 15 et seq. of IFRS 4 (liability adequacy test). The assessment was carried out on the liabilities relating to portfolios classified as insurance contracts or financial contracts with Discretionary Participation Features (DPF). At the time of half year valuation, the test is carried out by means of analysis by components, which envisages specific adequacy checks on the provision for future expenses, the additional provision for guaranteed rate and interest risk and the additional provision for population risk. In the event of insufficiency of the provisions, the difference is booked to the income statement with an increase of the liabilities. Since the current estimates have confirmed that the provisions provided as of June 30th, 2012 emerge as adequate, no supplementary provision is required. Table 42 – Analysis of technical provisions (ISVAP Regulation No. 7 dated July 13th, 2007) (€ millions) June 30th, 2012 Dec. 31st, 2011

Non-life provisions 3,007 2,959Provision for unearned premiums 653 626Provision for outstanding claims 2,352 2,331Other provisions 2 2

of which provisions provided following the assessment of fairness of the liabilities 0 0

Life provisions 11,459 11,623Outlay provision 274 270Actuarial provisions 9,129 9,142Technical provisions where the investment risk is borne by the policyholders and provisions deriving from the management of pension funds 2,428 2,795Other provisions -372 -584

of which provisions provided following the assessment of fairness of the liabilities 0 0of which deferred liabilities due from policyholders -427 -638

Total technical provisions 14,466 14,582 NON-LIFE BUSINESS Provision for unearned premiums In accordance with Italian legislation, the item comprises both the provision for premium fractions, supplemented by the premium provision calculated for certain classes as per specific ministerial requirements, and the provision for unexpired risks. LIFE BUSINESS Actuarial provisions The actuarial provisions include those envisaged by ISVAP Regulation No. 21 dated March 28th, 2008. Technical provisions where the investment risk is borne by the policyholders and provisions deriving from the management of pension funds. This item exclusively comprises the provisions relating to index-linked and unit-linked polices and the provisions relating to pension funds.

143

Other provisions Other provisions mainly comprise provisions for future costs associated with insurance contracts for € 48 million and the negative shadow accounting provision totalling € 427 million. 4. FINANCIAL LIABILITIES Table 43 – Financial liabilities


Financial liabilities valued at fair value through profit or loss 978 962 16 1.7Other financial liabilities 269 292 -23 -7.9Total 1,247 1,254 -7 -0.6

Changes

4.1 Financial liabilities at fair through profit or loss The item includes the financial liabilities at fair value through profit or loss, defined and disciplined by IAS 39, relating to: • the investment contracts, not falling within the scope of IFRS 4, issued by Group insurance companies, where

the risk of the investment is borne by the policyholders; • the management of pension funds, not falling within the scope of IFRS 4. The item represents 78.4% of total financial liabilities. In detail, the technical provisions relating to investment contracts, which mainly comprise the provisions against index and unit-linked contracts, amount to € 234 million (€ 283 million at the end of the previous year), and the technical provisions against pension funds, amount in total to € 645 million (€ 626 million at the end of the previous year). 4.2 Other financial liabilities The item represents 21.6% of total financial liabilities. The item includes the financial liabilities defined and disciplined by IAS 39 not included in the category “Financial liabilities valued at fair value through profit or loss”, and therefore subordinated liabilities for € 80 million, deposits received from re-insurers which totalled € 80 million, technical provisions associated with investment policies valued at amortised cost for € 32 million and the mortgage loans of the Euripide and Macquarie Office Italy property funds for € 77 million. Specifically, loans were as follows:

• a mortgage loan of € 7 million taken out with the Banca Intesa Group on March 24th, 2004 pertaining to Fondo Euripide. The interest rate equates to the 3-month Euribor uplifted by 85 basis points and is repayable in quarterly instalments until December 31st, 2019;

• a mortgage loan of € 70 million taken out with ING Real Estate Finance on October 4th, 2007 pertaining to Fondo Macquarie Office Italy. Following the amending document dated June 11th, 2009, the expiry was extended until October 4th, 2014. The interest rate equates to the 3-month Euribor uplifted by 175 basis points. The repayment of the principal is envisaged on expiry of the agreement, while the settlement of the interest is in quarterly instalments;

• a subordinated loan with an unspecified maturity amounting to € 80 million taken out with UBI and disbursed on September 30th, 2010. The interest rate equates to the 6-month Euribor uplifted by 200 basis

144

points. The possibility of early repayment is envisaged as from September 30th, 2020. A subordination condition is envisaged with respect to all the unsubordinated creditors including the policyholders. This loan is allowed in full within the calculation of the elements making up the solvency margin.

The table below provides an analysis of the financial liabilities undertaken by the Group, expressed according to nature and in accordance with the IAS classification criteria. Table 44 – Analysis of financial liabilities (ISVAP Regulation No. 7 dated July 13th 2007)

June 30th, 2012 Dec. 31st, 2011 June 30th, 2012 Dec. 31st, 2011 June 30th, 2012 Dec. 31st, 2011 June 30th, 2012 Dec. 31st, 2011

Participative financial instruments 0 0 0 0 0 0 0 0Subordinated liabilities 0 0 0 0 80 80 80 80

Liabilities from financial policies issued by insurance companies deriving:

0 0 958 952 32 52 990 1,004

from contracts where the investment risk is borne by the policyholders

0 0 234 283 0 0 234 283

from the management of pension funds 0 0 645 626 0 0 645 626from other policies 0 0 79 43 32 52 111 95

Deposits received from re-insurers 0 0 0 0 80 82 80 82Financial liability components of insurance contracts 0 0 0 0 0 0 0 0Debt securities issued 0 0 0 0 0 0 0 0Payables due to banking customers 0 0 0 0 0 0 0 0Interbanking payables 0 0 0 0 0 0 0 0Other loans received 0 0 0 0 0 0 0 0Non-hedging derivatives 10 10 0 0 0 0 10 10Hedging derivatives 10 0 0 0 0 0 10 0Sundry financial liabilities 0 0 0 0 77 78 77 78Total 20 10 958 952 269 292 1,247 1,254

(€ millions)

Financial liabilities at fair value through profit or loss

Other financial liabilities Total value for the periodFinancial liabilities held for

tradingFinancial liabilities designated at fair value


5. PAYABLES The account group comprises trade payables disciplined by IAS 39, mainly represented by payables deriving from direct insurance transactions, reinsurance payables and other payables. Table 45 – Payables (€ millions) June 30th, 2012 Dec. 31st, 2011 Absolute amount %

Payables deriving from direct insurance transactions 73 81 -8 -9.9Insurance brokers 50 60 -10 -16.7Insurance companies - current accounts 18 15 3 20.0Policyholders for guarantee deposits and premiums 0 0 0 n.a.Guarantee funds in favour of policyholders 5 6 -1 -16.7

Payables deriving from reinsurance transactions 82 112 -30 -26.8Insurance and reinsurance companies 81 111 -30 -27.0Insurance brokers 1 1 0 0.0

Other payables 196 210 -14 -6.7For taxes payable by policyholders 32 37 -5 -13.5Amounts due to social security and welfare institutions 4 4 0 0.0Sundry payables 160 169 -9 -5.3

Total 351 403 -52 -12.9

145

5.1 Payables deriving from direct insurance transactions “Payables deriving from direct insurance transactions” mainly comprise the amounts due to insurance brokers. 5.2 Payables deriving from reinsurance transactions “Payables deriving from reinsurance transactions” include the items with debt balances associated with reinsurance. 5.3 Other payables These include payables for taxes payable by insurers, amounts due to welfare and social security institutions and other sundry payables. In detail, the item sundry payables included amounts due to suppliers, due to employees, commissions being collected and for the allowance for employee severance indemnities. The employee severance indemnity, amounting to € 20 million, is subject to actuarial calculation which takes into account the future developments of the employment relationship. The future flows of the employee severance indemnity have been discounted back as of the reference date on the basis of the method expressly requested by section 64 of IAS 19, known as the Projected Unit Credit Method. The projected benefits which can be disbursed in the event of death, incapacity, resignation or retirement based on the applicable actuarial bases have been determined for all the employees active as of the date of assessment and distributed uniformly over all the years of service for each employee as from the date of employment until the date the events take place. With regard to Group companies with at least 50 employees, the employee severance indemnity accrued up to December 31st, 2006 is treated like a defined benefit plan and is therefore subject to actuarial calculation, while the employee severance indemnity allocated as from January 1st, 2007 to a specific Treasury Fund set up with INPS (national social security institute) is treated as a defined contribution plan. For the companies with less than 50 employees, the entire liability has been treated as a defined benefit plan. The employee severance indemnity recorded in the financial statements represents the effective value of the foreseeable obligation, net of any assets serving the plans, adjusted to reflect any actuarial losses or gains not amortised. The discounting back of the future cash flows is carried out on the basis of the interest rate of high quality corporate securities. The main hypotheses used are: discount rate of 3.13%, inflation rate of 2%, revaluation rate of 2.67% (already net of taxation), salary increase of 3%, mortality according to the IPS55 table with rejuvenation of 5 years for women, invalidity equating to 100% of the mortality, retirement age of 65 years for men and 60 years for women. In relation to the resignation frequency, a table has been used in line with the expected value of the resignation rate over the long-term for the Parent Company. Table 46 – Employee severance indemnity and length-of-service bonus (€ millions) EMPLOYEE SEVERANCE INDEMNITY

Balance as of Dec. 31st, 2011 19Provision made 4Used for indemnities paid out/advances 3Other -Balance as of June 30th, 2012 20

146

6. OTHER LIABILITY ITEMS Table 47 – Other liability items


Liabilities of disposal group held for sale 0 0 0 n.a.Deferred tax liabilities 171 240 -69 -28.8Current tax liabilities 156 122 34 27.9Other liabilities 91 70 21 30.0Total 418 432 -14 -3.2

Changes

Deferred and current tax liabilities Current and deferred tax liabilities at the end of the period amounted to € 327 million (-9.7% with respect to the end of the previous period). 6.2 Deferred tax liabilities This item comprises the deferred tax liabilities defined and disciplined by IAS 12. As of June 30th, deferred tax liabilities included:

• the deferred taxes which have arisen from taxable timing differences due to the deferral of the taxability of positive income elements realised and recorded in the income statement, which will be settled when the afore-mentioned revenues will be taxed;

• the deferred taxes which have arisen from the temporary misalignment between the principle of economic competence laid down by the international accounting standards and tax legislation, due mainly to the statement in the income statement and under shareholders’ equity of the capital gains on valuations recorded respectively on the “financial assets at fair value through profit or loss” and on the “available for sale financial assets”, and to the recording of the shadow accounting provision.

Deferred tax liabilities were determined according to the rate established by Article 1, paragraph 33 (with reference to IRES - company earnings’ tax) and Article 1, paragraph 50 (with reference to IRAP - regional business tax) of Italian Law No. 244 dated December 24th, 2007, “2008 Finance Bill”, taking into account the amendments introduced by Article 23, paragraph 5 of Italian Decree Law No. 98 dated July 6th, 2011, containing “Urgent provisions for financial stabilisation” (so-called “corrective manoeuvre”). 6.3 Current tax liabilities This item comprises the current tax liabilities defined and disciplined under IAS 12. The item comprises the current residual liability for income taxes for the year, the liability deriving from the assessment of taxation on the life business actuarial provisions pertaining to the year, liabilities for withholding taxes made, as well as VAT to be paid over, along with the liability for substitute tax to be paid amounting to € 22 million, relating to the freeing up of prepaid taxes recorded on goodwill and intangible assets as per Italian Decree Law No. 185/2008.

147

6.4 Other liabilities The item mainly comprises transitory reinsurance accounts, the deferred commission income associated with policies not falling with the sphere of application of IFRS 4, accrued expenses and deferred income and sundry liabilities. Table 48 - Other liabilities (€ millions) June 30th, 2012 Dec. 31st, 2011 Absolute amount %

Deferred commission income (DIR) 2 4 -2 -50.0Transitory reinsurance accounts 1 21 -20 -95.2Liaison account 16 13 3 23.1Other liabilities 53 14 39 n.s.Accrued expenses and deferred income, of which: 19 18 1 5.6

for interest 14 14 0 0.0other accruals and deferrals 5 4 1 25.0

Total 91 70 21 30.0 The “deferred commission income” was mainly chargeable to index and unit-linked type investment policies, where the risk of the investments is borne by the policyholders. The item “Transitory reinsurance accounts (liabilities)” comprises the positive components of income from receivable reinsurance which will be recorded as revenues when all the cost and revenue components are known. The item “other liabilities” also comprises the liaison account between the life and non-life sectors of the Group insurance companies which carry out insurance activities in both sectors. The amount of € 16 million is matched by an equal balance under assets. Deferred income includes the Parent Company’s portion of the extraordinary coupon relating to the bonds acquired with reference to the restructuring transactions of the main segregated fund entered into in 2005 and deferred to subsequent years on the basis of the residual duration of the securities.

Part C Income statement

148

The income statement closed with a consolidated net profit of € 32 million (€ 25 million as at June 30th, 2011), of which € 22 million due to the non-life segment (€ 21 million as at June 30th, 2011), € 9 million to the life segment (€ 3 million as at June 30th, 2011) and € 1 million to the other segment (unchanged with respect to June 30th, 2011). INSURANCE BUSINESS With reference to insurance business, in addition to the matters illustrated below, reference should be made to the table in the interim management report “Reclassified consolidated income statement by segment of activities”. Table 49 - Breakdown of direct and indirect gross premiums written by class and by geographic area Classes Direct business Total %(€ millions) Italy Italy Abroad business of total1 - Accident and injury 64.8 0.0 0.3 65.1 3.62 - Health 55.9 0.0 0.0 55.9 3.13 - Land vehicle hulls 57.1 0.0 0.0 57.1 3.24 - Railway rolling stock 0.0 0.0 0.0 0.0 0.05 - Aircraft hulls 0.1 0.0 0.0 0.1 0.06 - Ships (sea and inland water vessels) 0.8 0.0 0.2 1.0 0.17 - Goods in transit 3.6 0.0 0.2 3.8 0.28 - Fire & natural forces 50.5 0.0 12.6 63.1 3.59 - Other damage to assets 60.9 0.4 0.4 61.7 3.510 - TPL - Land motor vehicles 446.0 0.0 0.4 446.4 24.811 - TPL - Aircraft 0.0 0.0 0.0 0.0 0.012 - TPL - Shipping (sea & inland) 0.8 0.0 0.0 0.8 0.013 - TPL -General 77.3 0.5 0.0 77.8 4.314 - Credit 0.2 0.0 0.0 0.2 0.015 - Suretyship 6.4 0.0 0.1 6.5 0.416 - Sundry financial losses 13.8 0.0 0.0 13.8 0.817- Legal protection 5.9 0.0 0.0 5.9 0.318 - Assistance 12.7 0.0 0.0 12.7 0.7Total non-life classes 856.8 0.9 14.2 871.9 48.5Class I 645.5 0.1 0.0 645.6 35.9Class III 72.6 0.0 0.0 72.6 4.0Class IV 0.0 0.0 0.0 0.0 0.0Class V 124.8 0.0 0.0 124.8 6.9Class VI 4.8 0.0 0.0 4.8 0.3Total life classes 847.7 0.1 0.0 847.8 47.1Total insurance premiums 1,704.5 1.0 14.2 1,719.7 95.6Class III 0.7 0.0 0.0 0.7 0.1Class VI 77.4 0.0 0.0 77.4 4.3Total investment policies 78.1 0.0 0.0 78.1 4.4TOTAL PREMIUMS WRITTEN 1,782.6 1.0 14.2 1,797.8 100.0

Indirect business

149

Table 50 - Insurance business

(€ millions)Gross

balanceReinsurance

amountNet

balanceGross

balanceReinsurance

amountNet

balance

844 -119 725 810 -111 699

a Premiums written 872 -131 741 841 -110 731

b Change in provision for unearned premiums -28 12 -16 -31 -1 -32

-608 97 -511 -579 85 -494

a Amounts settled -595 64 -531 -595 58 -537

b Change in provision for outstanding claims -21 33 12 7 27 34

c Change in recoveries 8 0 8 10 0 10

d Change in other technical provisions 0 0 0 -1 0 -1

848 -28 820 1,148 -30 1,118

-1,096 16 -1,080 -1,225 16 -1,209

a Amounts settled -1,437 13 -1,424 -1,329 12 -1,317

b Change in outlay provision -3 -2 -5 29 -2 27

c Change in actuarial provisions 14 5 19 -211 6 -205d Change in technical provisions where the investment risk is

borne by the policyholders and deriving from the management of pension funds

366 0 366 271 0 271

e Change in other technical provisions -36 0 -36 15 0 15

June 30th, 2012 June 30th, 2011

NET PREMIUMS

NET CHARGES RELATING TO CLAIMS

Non-life business

NET PREMIUMS


Life business

Table 51 - Analysis of insurance operating expenses

(€ millions) June 30th, 2012 June 30th, 2011 June 30th, 2012 June 30th, 2011

Commission and other acquisition costs, net of commission and profit-sharing received from re-insurers

-127 -127 -34 -35

Acquisition commission -132 -120 -27 -31Other acquisition costs -24 -27 -14 -11Change in deferred acquisition costs 0 0 1 0Collection commission -3 -5 -4 -6Commission and profit-sharing received from re-insurers 32 25 10 13

Operating expenses relating to investments -2 -2 -4 -3Other administrative expenses -48 -48 -19 -19Total -177 -177 -57 -57

Non-life business Life business

150

FINANCIAL OPERATIONS The table which follows discloses the income and charges deriving from financial operations as presented in the income statement for the first half of the year. Table 52 - Financial operations (€ millions) June 30th, 2012 June 30th, 2011 Abs. amount %

Net income deriving from financial instruments at fair value through profit or loss 113 32 81 n.s.

Income from investments in subsidiaries, associates and joint ventures 0 0 0 n.a.Charges from investments in subsidiaries, associates and joint ventures -3 -1 -2 n.s.Result from investments in subsidiaries, associates and joint ventures -3 -1 -2 n.s.

Income deriving from other financial instruments and investment property 369 269 100 37.2Charges deriving from other financial instruments and investment property -94 -85 -9 -10.6Result deriving from other financial instruments and investment property 275 184 91 49.5 Table 53 - Financial and investment income and charges (ISVAP Regulation No. 7 dated July 13th, 2007)

Valuation gain

Value write-back Valuation loss

Value reduction

278 42 -12 128 -71 365 85 0 -36 -15 34 399 218

a Deriving from investment property 0 6 0 0 0 6 0 0 -1 0 -1 5 5b Deriving from investments in

subsidiaries, associates and joint ventures

0 0 -3 0 0 -3 0 0 0 0 0 -3 -1

c Deriving from held to maturity investments

7 0 0 0 0 7 0 0 0 0 0 7 4

d Deriving from loans and receivables 39 3 0 5 -2 45 0 0 0 0 0 45 32e Deriving from held for sale financial

assets 174 21 -4 87 -64 214 0 0 0 -15 -15 199 143

f Deriving from held for trading financial assets

6 0 -1 10 -1 14 5 0 -9 0 -4 10 2

g Deriving from financial assets at fair value through profit or loss

52 12 -4 26 -4 82 80 0 -26 0 54 136 33

0 0 0 0 0 0 0 0 0 0 0 0 0

1 0 0 0 0 1 0 0 0 0 0 1 1

-3 0 0 0 0 -3 21 0 -33 0 -12 -15 -2

a Deriving from financial liabilities held for trading

0 0 0 0 0 0 0 0 0 0 0 0 0

b Deriving from financial liabilities designated at fair value through profit or loss

0 0 0 0 0 0 0 0 -33 0 -33 -33 -3

c Deriving from other financial liabilities -3 0 0 0 0 -3 21 0 0 0 21 18 1

0 0 0 0 0 0 0 0 0 0 0 0 -2

276 42 -12 128 -71 363 106 0 -69 -15 22 385 215Total

Result of payables

Total unrealised

income and charges

Result of cash and cash equivalents

Result of financial liabilities

Result of sundry receivables

Result of investments

Total income and

chargesrealisedInterest(€ millions)

Total income and

charges - June 30th,

2012

Total income and

charges - June 30th,

2011

Valuation income Valuation losses

Other income

Other charges

Realised losses

Realised gains

Commission income Commission income mainly comprises the commission relating to investment contracts issued by the Group's insurance companies (DIR); specifically, the item includes the explicit and implicit premium loading encumbering the investment contracts issued. Commission expense The item comprises the acquisition costs associated with investment contracts (DAC) recorded during the period.

151

OTHER REVENUES AND OTHER COSTS Other revenues The item amounts to € 16 million, down with respect to the € 21 million in the same period last year, and mainly comprises other net technical income associated with insurance policies for € 7 million and recoveries from provisions for risks and charges for € 4 million. Other costs The item presents a balance of € 62 million, disclosing a decrease of € 8 million when compared with June 30th, 2011 and mainly includes other net technical expense associated with insurance contracts for € 31 million, amortisation/depreciation for € 17 million and provisions for risks and charges for € 2 million. INCOME TAXES FOR THE YEAR The item which totals € 27 million includes current taxes (IRES - company earnings’ tax and IRAP - regional business tax), the deferred taxes of the individual Group companies recorded in observance of Accounting Standard No. 25 on income taxes, and deferred taxes which have arisen from the temporary misalignment between the principle of economic competence laid down by the international accounting standards and Italian tax legislation. The change in the balance of deferred taxation is essentially ascribable to the valuation of the provisions associated with investment contracts and the valuation at fair value of the financial instruments net of shadow accounting. BREAKDOWN OF THE STATEMENT OF COMPREHENSIVE INCOME As of June 30th, the other components of the statement of comprehensive income, net of tax effects, presented a positive balance of € 145 million and refer to the change in the provision for gains or losses on financial assets available for sale. The statement of comprehensive income amounted to € 177 million (€ 31 million as at June 30th, 2011), of which € 109 million pertaining to the Group (€ 26 million as at June 30th, 2011). The analysis of other components in the statement of comprehensive income pursuant to ISVAP Regulation No. 7 dated July 13th, 2007, is presented below. The balances are stated net of taxation which is in any event indicated in the specific column.

152

Table 54 - Analysis of other components of the statement of comprehensive income – net amounts (ISVAP Regulation No. 7 dated July 13th, 2007) (€ millions)

June 30th, 2012 June 30th, 2011 June 30th, 2012 June 30th, 2011 June 30th, 2012 June 30th, 2011 June 30th, 2012 June 30th, 2011 June 30th, 2012 June 30th, 2011 June 30th, 2012 Dec. 31st, 2011TO TAL O THER CO MPO NENTS O F STATEMENT O F CO MPREHENSIVE INCO ME 97 -30 48 36 0 0 145 6 76 3 -95 -240Reserve for net exchange differences 0 0 0 0 0 0 0 0 0 0 0 0Gains or losses on available for sale financial assets 97 -30 48 36 0 0 145 6 76 3 -92 -237Profits or losses on cash flow hedging instruments 0 0 0 0 0 0 0 0 0 0 0 0Profits or losses on instruments hedging a net investment in a foreign operation 0 0 0 0 0 0 0 0 0 0 0 0Provisions deriving from changes in the shareholders' equity of investee companies 0 0 0 0 0 0 0 0 0 0 -3 -3Intangible assets revaluation reserve 0 0 0 0 0 0 0 0 0 0 0 0Tangible assets revaluation reserve 0 0 0 0 0 0 0 0 0 0 0 0Income and charges relating to non current assets or of disposal group held for sale 0 0 0 0 0 0 0 0 0 0 0 0Actuarial gains and losses and adjustments related to defined-benefit plans 0 0 0 0 0 0 0 0 0 0 0 0Other items 0 0 0 0 0 0 0 0 0 0 0 0

Taxation BalanceCharges Adjustments from reclassification to income statement

O ther changes Total changes

OTHER ISVAP TABLES Pursuant to ISVAP Regulation No. 7 dated July 13th, 2007, the income statement by sector of activities, the analysis of the technical insurance items and the analysis of the insurance operating expenses, gross of elimination within sectors, are presented as follows. Table 55 – Income statement by sector of activities (ISVAP Regulation No. 7 dated July 13th, 2007)

(€ millions)June 30th,

2012June 30th,

2011June 30th,

2012June 30th,

2011June 30th,

2012June 30th,

2011June 30th,

2012June 30th,

2011June 30th,

2012June 30th,

2011

1.1 Net premiums 725 699 820 1,118 0 0 0 0 1,545 1,817

1.1.11.1.1 Gross premiums written 850 945 848 1,148 0 0 -6 -135 1,692 1,958

1.1.21.1.2 Premiums transferred under reinsurance -125 -246 -28 -30 0 0 6 135 -147 -141

1.2 Commission income 0 0 2 3 0 0 0 0 2 3

1.3Income and charges from financial instruments at fair value through profit or loss

-1 1 114 31 0 0 0 0 113 32

1.4Income from investments in subsidiaries, associates and joint ventures

1 0 1 2 0 0 -2 -2 0 0

1.5Income from other financial instruments and investment property

58 51 309 217 5 6 -3 -5 369 269

1.6 Other revenues 57 60 22 19 1 0 -64 -58 16 21

1 TOTAL REVENUES AND INCOME 840 811 1,268 1,390 6 6 -69 -65 2,045 2,142

2.1 Net charges relating to claims -533 -514 -1,078 -1,209 0 0 20 20 -1,591 -1,703

2.1.22.1.2 Amounts paid and change in technical provisions -633 -696 -1,094 -1,225 0 0 23 36 -1,704 -1,885

2.1.32.1.3 Reinsurance portion 100 182 16 16 0 0 -3 -16 113 182

2.2 Commission expense 0 0 0 -2 0 0 0 0 0 -2

2.3Charges deriving from investments in subsidiaries, associates and joint ventures

0 0 -1 0 0 0 -2 -1 -3 -1

2.4Charges deriving from other financial instruments and property investments

-24 -14 -66 -69 -3 -2 -1 0 -94 -85

2.5 Operating expenses -200 -197 -69 -67 -2 -2 35 30 -236 -236

2.6 Other costs -40 -48 -27 -29 0 0 5 7 -62 -70

2 TOTAL COSTS AND CHARGES -797 -773 -1,241 -1,376 -5 -4 57 56 -1,986 -2,097

43 38 27 14 1 2 -12 -9 59 45PRE-TAX PROFIT (LOSS) FOR THE PERIOD

Non-life Business Life Business Other Eliminations between sectors

Total

153

Table 56 – Analysis of technical insurance items (ISVAP Regulation No. 7 dated July 13th, 2007)

(€ millions) June 30th, 2012 June 30th, 2011

725 699

a Premiums written 741 731

b Change in provision for unearned premiums -16 -32

-533 -514

a Amounts settled -553 -557

b Change in provision for outstanding claims 12 34

c Change in recoveries 8 10

d Change in other technical provisions 0 -1

820 1,118

-1,078 -1,209

a Amounts settled -1,424 -1,317

b Change in outlay provision -5 27

c Change in actuarial provisions 21 -205d Change in technical provisions where the investment risk is borne by the policyholders and deriving from the management of pension funds 366 271

e Change in other technical provisions -36 15

Life business

NET PREMIUMS


Non-life business

NET PREMIUMS


Table 57 – Analysis of insurance operating expenses (ISVAP Regulation No. 7 dated July 13th, 2007)

(€ millions) June 30th, 2012 June 30th, 2011 June 30th, 2012 June 30th, 2011

Gross commission and other acquisition costs, net of commission and profit-sharing received from re-insurers -133 -130 -36 -36

Operating expenses relating to investments -2 -2 -6 -4Other administrative expenses -65 -65 -27 -27Total -200 -197 -69 -67

Non-life business Life business

154

Notes to the accounts Part D – Other information

Part D Other information

155

Group headcount

Group employees calculated as FTE, amounted to 1,418, as against 1,410 as at December 31st of the previous year.

Atypical and unusual transactions and non-recurring significant events and operations

With reference to non-recurrent significant events and transactions and positions or transactions deriving from atypical and/or unusual operations, reference should be made to the section “Other information” in the Interim Management Report.

Earnings per shares

With reference to earnings per shares, reference should be made to the section “Significant events and other information” in the Interim Management Report.

Information on risks

With regard to all the disclosure required by IFRS 7 concerning outstanding risks, reference should be made to the section “Risk management” in the Interim Management Report.

Transactions with related parties

As already disclosed in the interim management report, pursuant to CONSOB Regulation No. 17221 dated March 12th, 2010, and subsequent amendments and additions, as from January 1st, 2011 the “Procedure for the handling of related party transactions” approved on November 29th, 2010, applies to the situations envisaged by the regulations. The document relating to this procedure - which should be referred to for details - is published on the Parent Company’s website - www.cattolica.it - in the “Corporate Governance” section. The following should be noted: • the Cattolica Group has entered into several extraordinary transactions, not atypical and/or

unusual, aimed at rationalising and reorganising the corporate structure of the same, or growth by external lines. These transactions, some of which saw the direct involvement of the Parent Company, are illustrated in another section of the interim management report;

• with regard to transactions with other related parties, without prejudice to the resolution procedures described in the Parent Company’s Report on Corporate Governance on the website www.cattolica.it, shareholders are hereby informed that, for reporting purposes, a procedure has been set up for detecting the outstanding transactions, via the prior acquisition from Group representatives of the necessary information in relation to international accounting standard IAS 24 and ISVAP Regulation No. 25 dated May 27th, 2008, and subsequent extrapolation of the transactions relating to the same.

The amount of the securities owned by the Group, issued by the related parties Banca Popolare di Vicenza Group and Cassa di Risparmio di San Miniato Group which, it should be pointed out, were subscribed/purchased under market conditions, are shown below.

156

Table 58 - Securities owned by the Group issued by related parties (€ millions)

Company Type of security

Securities

issued by the BPVI

Group

Securities issued by the

CARISMI Group

BCC Vita bonds 9 -Berica Vita bonds 37 -Berica Vita derivatives -1 -Berica Vita funds 3 -Total Berica Vita 39 -Lombarda Vita bonds 10 -Risparmio & Previdenza bonds 2 -Cattolica Gestione Investimenti bonds 2 -Cattolica Life bonds 487 1Cattolica Life derivatives 21 -Cattolica Life funds 27 -Total Cattolica Life 535 1

Cattolica Assicurazioni shares 21 - Cattolica Assicurazioni bonds 90 14Total Cattolica Assicurazioni 111 14Grand total 708 15

On the basis of the agreements in place between the Group companies and Banca Popolare di

Vicenza, current account dealings also exist with said bank, under market conditions.

Overall, the other transactions with related parties, which are formally acknowledged as having taken place in line with market values, are not considered to be significant for disclosure purposes.

Certification of the abridged interim consolidated financial statements pursuant to Article 81-ter of Consob Regulation No. 11971 dated May 14th, 1999 and subsequent amendments and additions

1. The undersigned, Giovan Battista Mazzucchelli, in his capacity as Managing Director, and Giuseppe Milone, in his capacity as Executive appointed to draw up the corporate accounting documents of Cattolica Assicurazioni Soc. Coop., hereby certify, having also taken into account the matters envisaged by Article 154-bis, paragraphs 3 and 4 of Italian Legislation Decree No. 58 dated February 24th, 1998:

• the adequacy in relation to the company’s characteristics and

• the effective application

of the administrative and accounting procedures for the formation of the abridged interim consolidated financial statements during the first half of 2012.

2. The assessment of the adequacy of the administrative and accounting procedures for the formation of the abridged interim consolidated financial statements as of June 30th, 2012 is based on a process defined by Cattolica Assicurazioni Soc. Coop. on a consistent basis with the Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission which represents a reference framework generally accepted at international level.

3. It is also hereby declared that:

3.1 The abridged interim consolidated financial statements as of June 30th, 2012:

a) have been drawn up in compliance with the applicable international accounting standards recognised in the EU in accordance with (EC) Regulation No. 1606/2002 of the European Parliament and Council dated July 19th, 2002, the Italian Civil Code and the provisions pursuant to Italian Legislative Decree No. 38 dated February 28th, 2005, Italian Legislative Decree No. 209 dated September 7th, 2005 and the applicable ISVAP provisions, regulations and circulars;

b) comply with the results of the books and the underlying accounting records;

c) are suitable for providing a true and fair view of the equity, economic and financial position of the Company and all the companies included in the scope of consolidation.

3.2 The interim management report includes a reliable analysis of the references to important events which took place during the first six months of the year and to their effect on the abridged interim consolidated financial statements, together with a description of the main risks and uncertainties for the remaining six months of the year. The interim management report also includes an reliable analysis of the information on significant related party transactions.

Verona, Italy, August, 8th, 2012

Signature of the Managing Director Signature of the Executive appointed to draw up the corporate accounting documents

Documents

Consolidated interim report - Cattolica...Berica Vita Cattolica Previdenza Cattolica Life Lombarda Vita Cattolica Gestioni Investmi ent (i **) Cattolica Services (***) Cassa di Risparmio

Consolidated interim report - Cattolica...Berica Vita Cattolica Previdenza Cattolica Life Lombarda Vita Cattolica Gestioni Investmi ent (i ) Cattolica Services (*) Cassa di Risparmio