UNIPOL GROUP 2006-2009 STRATEGIC PLAN...Unibox, Aurobox) –0.5 pp–0.5 pp Group, Non-Life on Gross Domestic Written Premiums Key Initiatives. 16 Improve Life new business value with

UNIPOL GROUP2006-2009 STRATEGIC PLAN

Carlo Salvatori, CEOMilan, September 14, 2006

1

Contents

2 Strategic guidelines and 2006-2009 targets

3 Key economics of the plan

11 Group’s positioning

2

Unipol is an integrated group offering insurance and banking services

Insurance Area Banking Area

Premiums above 10 billion Euro~4,500 points of sales; distribution agreements with ~1,500 branchesGroup technical results better than the marketBalanced mix of premiums

(~40% Non-Life and ~60% Life)

More than 250 branches nationwideMore than 50% of the branches are co-located with insurance agencies~50 financial counters1st half 2006 deposits above 33,5 billion Euro

Composite companies

Specialisedcompanies

Bancas-surance

3

The Group is the third insurance player in the market

Italian Insurance market

* Proforma, Toro Group includedSource: ANIA

27.8Generali*

14.6Allianz

10.7Unipol

10.2FonSAI

5.3Cattolica

GroupPremiums€ billion

Life

19.7Generali*

9.0Allianz

6.8Unipol

5.8Poste Vita

4.6Eurizon

Non-Life

8.0Generali*

7.1FondSAI

5.6Allianz

3.9Unipol

1.8Reale Mutua

2005, Gross Direct Written Premiums, Italian GAAP



25.325.3

13.313.3

9.89.8

9.39.3

4.84.8

Market share

26.926.9

12.212.2

9.29.2

7.97.9

6.36.3

22.022.0

19.719.7

15.415.4

10.910.9

5.05.0

4

Both business areas grew at very fast pace

Insurance growthGross Domestic Written Premiums€ billion

1.10.8

1.9

1999

2.0

1.2

3.2

2000

2.1

2.8

4.9

2001

2.3

3.7

6.0

2002

3.8

5.1

8.9

2003

3.9

5.7

9.6

2004

3.9

6.8

10.7

2005

P&C

Life

Banking growthCustomer deposits + Customer funds€ billion

0.4

2.2

2.6

1999

0.5

3.4

3.9

2000

1.1

6.3

7.4

2001

2.2

7.0

9.2

2002

2.6

11.5

14.1

2003

4.3

15.9

20.2

2004

4.9

23.6

28.5

2005

Customer deposits

Customer funds

656

389

88

1,108

Acquisition of 60 branches from Capitalia

Acquisition of 22 branches from Antonveneta

Acquisition of 51 branches from BancaIntesa

1,929

Acquisition

Premiums

Acquisition

Premiums

140

CAGR 1999-2005

49%49%

33.5%33.5%

Acquisition

Premiums

1999-2005, Italian GAAP

5

Business growth and profitability

Unipol Ass. business overperformed market growth (since 1999: Unipol Ass. +15.4% vsMarket + 10.0%)Combined ratio constantly below market averageProfitable business development with Affinity Group (33% of Unipol Ass. Non-Life business)

Steady growth of insurance original business

Merger competencies

Acquisition and integration of 6 companies since 2000Strengthen Aurora up to the 3° composite Italian companyFast integration of key shared functions (IT, claims)

Fast integration

after acquisitions

Innovation and growth options

Development of Unipol Banca based on an integrated model (banking branch + insurance agency) innovative in the Italian marketDevelopment of channel/product specialized companies (e.g., Linear, Unisalute)

Development of new

businesses

Three core skills enabled the Group to grow considerably in the last years

6

Half-yearly results confirm growth trend and excellent technical performance in insurance business

Gross Domestic Written Premiums € million, percent

+5.5%+5.5%

Combined ratio** Percent

Exp

S/P

751712

1,245

3,144*

5,101

1H ’05

1,256

3,350*

5,357

1H ’06

+5.0%+5.0% 22.3

74.1

96.4

1H ’05

21.9

74.4

96.3

1H ’06

Non Motor

Motor

Life

+0.9%+0.9%

+6.6%+6.6%

New Business Value € million

97.3

FY ’05

98.8***

1H ’06

* IFRS Proforma including 100% BNL Vita and 50% of Quadrifoglio. Investment products included (410 million in 1H’05 and 15 million in 1H’06)

** Net of reinsurance effect*** Annualized

7

In banking business, the ‘integrated model’ is proving its effectiveness…

Banking clientsThousands of clients, percent As of 31/12

42%

58%

170

2002

35%

65%

242

2005

Gross operating income per client Euro

56%

44%

938

2004

62%

38%

969

2005

Clients are growing and cross selling is increasing

Income per client is steadily growing

Single product

Multi product +3.3%+3.3%Non-interestincomeNet InterestincomeCurrently

over 250Currently over 250

Italian GAAP

8

Evolution of customer needs makes the difference more and more artificial

Need Offer required

Mortgage loans

Home insurance

Payment protection coverage

Buy a house

Car financing

Motor coverage

Road assistance

…

Own a car

Mutual funds

Life assurance

Saving plan

Pension Funds

Save for retirement

Death coverage

Health coverage

LTC

Protect the family

Reverse mortgage

Annuity

…

De-cumulate assets

A large customer base in insurance makes the opportunity real and feasible to boost the banking client portfolio

Unipol has 6 million customers

Top 40% of agencies have average portfolio of 4,000 customers

20% of client of Unipol Banca comes from insurance (35% on average in the branches co-located with insurance agencies)

Break even level for Unipol Bancabranch is low (around 500 current accounts)

Develop integrated

insurance and banking offer

… based on increasing convergence of households’financial needs

9

Half-yearly results confirm the bank’s ongoing growth

Net profit € million

6.1

1H ’05

16.0

1H ’06

Gross operating incomeincreased by 27.6%

Customer deposits from ‘non group’ clients grew by 24.7%

Customer loans rose by 27.9%

6 new branches opened in the first half of 2006 (current total branches: 256)

Unipol Banca, June ’06 vs. June ’05

10

Contents

22 Strategic guidelines and 2006-2009 targets



11

Strategic guidelines and key targets

Insurance

Reinforce current market position and improve profitability

Banking

Scale up and improve profitability

Corporate Center

Reinforce ‘holding functions’ to increase integration and to strengthen commercial coordination

Capital Management

Enhance value and identify external growth opportunities in line with the Group’s strategy and profitability targets

+50% Insurance technical result

Banking net profit above 90 millions

x2 EPS

Expected ROE at 14%

2009

12

Improve offering and sales performanceCut operating costs by exploiting unrealized synergiesMaintain technical excellence mainly focusing on claimsIncrease Life New Business Value with a more profitable mix


Insurance


Banking


Corporate Center


Capital Management

Enhance value and identify external growth opportunities in line with the group’s strategy and profitability targets

13

Improve offering and sales performance

Gross Domestic Written Premiums€ million, percent

1,492

2,456

3,948

2005

1,950

2,850

4,800

2009

Non motor

Motor

+5.0%+5.0%

+6.9%+6.9%

+3.8%+3.8%

Increase Aurora sales performance after the impact of integrationMaintain growth in Motor through:

Further TPL personalizationNew products in land vehicles own damage or loss

Boost commercial skills in non motor and redesign the offer by distribution channel:

Sophisticated, high service products for medium-large agenciesStandard products for small agenciesSimple and low cost products for direct channel

Group, Non-Life CAGR 2005-2009

Key Initiatives

14

Cut operating costs by exploiting unrealized synergies

Expense ratio Percent

22.7

2005

21.5

2009

Further integration of shared services

Capturing of increased efficiency minimizing new hires and converting existing resources in new initiatives (e.g., Unipol Banca)

Improve IT support

–1.2 pp–1.2 pp

Group, Non-Life on Gross Domestic Written Premiums

Key Initiatives

15

Maintain technical excellence mainly focusing on claims

Loss ratioPercent

71.0

2005

70.5

2009

Cap on average claims cost due to claims performance improvement and direct indemnity procedure impact

Better pricing segmentation based on a Group-wide shared database

Re-design parameters and mutual structure of tariffs

Further improvement in portfolio quality as regards non motor lines and specialized companies (up pricing and cancellations)

Product innovation (e.g., Unibox, Aurobox)

–0.5 pp–0.5 pp

Group, Non-Life on Gross Domestic Written Premiums

Key Initiatives

16

Improve Life new business value with a more profitable mix

Key Initiatives

Group, Life€ million, percent

CAGR 2005-2009

Annual Premium Equivalent

470

2005

580

2009

+5.3%+5.3%

New Business Value

+9.0%+9.0%

97

2005

137

2009

Life traditional product innovation also leveraging Unipol Banca services Increased monitoring of expiring policiesOngoing training program of the network on new developed marketing tools and ‘counseling’ approachRigorous performance management approach linked to incentive systemDevelopment plan of insurance advisor networkProduct range extension (Pension funds and FIP) to cater the needs for the third pillar

17

Strategic guidelines and key target

Improve cost/income ratio leveraging on strong revenue growth increasing:

Align recently opened branches to the average performanceIncrease network sales productivity

Expand branch network

Insurance


Banking


Corporate Center


Capital Management


18

Improve cost income leveraging on strong increase in income …

84.3

2005

56.4

2009

126

2005

206

2009

106

2005

116

2009

Gross Operating Income per employee€ thousand

Operating costs per employee€ thousand

–27.9 p.p.–27.9 p.p.

+13.1%+13.1%

+2.3%+2.3%

CAGR 2005-2009Unipol Banca, IFRS compliant

Cost/IncomePercent

19

Asset under custody

65

122

187

2005

173

273

446

2009

Non-interestincome

Net interestincome

Unipol Banca, IFRS compliant, Stock as of 31/12€ million, percent

Gross operating income

* Including securitized mortgage (∼3.2 net securitization)

Asset under management

21,590

2005

27,300

2009

6.0%6.0%

2,055

2005

4,900

2009

24.3%24.3%

Customer deposits Customer loans

7,021

2005

9,000

2009

6.4%6.4%

5,261*

2005

8,600

2009

13.1%13.1%

CAGR 2005-2009

…thanks to stock growth

+24.3%+24.3%

20

Align newly-opened branches to the Group average performance

Branches opened in 2003-2005

Revenues

Unipol Banca has an high number of recently opened branches still in their start up phase

On average, branches break-even within their second year of activity

15% revenue increase is expected just by the alignment of new branches to the average performance (~28.2 million € at current revenues level)

~25%

~10%

Recent branchesPercent on total

21

Increase network commercial productivity

Gross operating income per branch€ thousand, 31/12

748

2005

1,120

2009

10.6%10.6% Variance reduction in branch performances

Network specialization:

Integrated branches focus on retail customers

Development of SME dedicated branches

Further increase in cross selling

Increasing conversion of insurance clients in banking clients

Key initiatives

Unipol Banca

22

Expand branch network

250

2005

398

2009

Involvement of agencies with high commercial opportunitiesLaunch of integration program within Aurora network (already 3 co-located new branches)

Number of branches Penetration of insurance portfolio

Integration of banking and insurance business can still be largely exploited:

– Insurance client coverage still limited (15% of total insurance client base potentially served by a branch)

Only 20% of the Unipol Ass. agencies have a co-located banking branch Aurora still open field

– Conversion rate up and growing (co-located average already ∼12%)

– Successful experiences are increasingly attracting agents on both networks

23

ROE is expected to reach almost 10%

3.5*

1H2006

9.5

2009

ROEPercent

* Annualized data

Unipol Banca

Net profit€ million

16.0

1H2006

>90

2009

24


Rationalize Group structurePromote coordination among business areas

Insurance


Banking


Corporate Center


Capital Management


25

Centralization of holding functions to effectively ensure:

Direction and controlImproved relation with markets and stakeholdersStronger risk and capital managementBetter and unified operating costs controlStronger business areas coordination and integration

HoldingHolding

Rationalize Group structure

Insurance AreaInsurance Area

Banking AreaBanking Area

Clarify roles and objectives between Group and operating companiesEnsure effective managerial governance of the GroupDevelop a shared Group cultureReap distribution synergies Increase overall Group efficiency

Initiative/Goal Rationale

26


Minorities buy-outSeize external growth opportunitiesConfirm pay-out policy

Insurance


Banking


Corporate Center


Capital Management


27

Excess capital provides resources to tackle market opportunities

2,700

800

∼300 ∼400∼2,000

Excess capital YE ‘05

Capital required to finance growth, net of retained earnings

Excess of regulatory capital available across the plan

Minorities buy-out

€ million

Issuing of subordinated notes

Potential add-on of 1 bln € of hybrid capital to be issued in case of acquisition

28

EPS will double across the three-year plan and ROE is expected to match 14%

9.2

2005

∼14

2009

Group ROE*Percent

* Net of excess capital

Group Net Profit€ million

254

2005

570

2009

EPS€ Cent.

1111 2424

29

Contents

2



Strategic guidelines and 2006-2009 targets

30

Key economicsInsurance business, Gross Domestic Written Premiums€ million, percent

20092005

3,948 4,800Non-Life Premiums

CAGR 05-09

5.0%

93.7% 92.0% –1.7 p.p.Combined Ratio

Life Premiums* 5,188 7,150 8.3%

Life New Business Margin

20.6% 23.6% +3.0 p.p.

Non-Life Technical Result

245 350 9.3%

* IFRS Proforma including 100% of BNL Vita and 50% of Quadrifoglio.

31

Key economicsUnipol Banca€ million, percent

20092005 CAGR 05-09

7,021 9,000Customer Deposits 6.4%

Customer Funds 23,645 32,200 8.0%

Gross operating income 187 446 24.3%

5,261 8,600 13.1%Customer Loans

Cost Income 84.3% 56.4% –27.9 p.p.

94–4* -Net profit

9.5%n.s. -ROE

* +20.4 Italian GAAP

32

Key performance indicatorsGroup€ million, percent

* IFRS Proforma including 100% BNL Vita and 50% of Quadrifoglio** Net of excess capital

*** Across the 3-years plan

20092005

9,136 11,950Total Gross Domestic Written Premiums*

6.9%

CAGR ‘05-’09

Group Net profit 254 22.3%570

ROE** 9.2 ∼5 p.p.∼14

EPS (€ Cent.) 11 22.3%24

Excess regulatory capital

2,700 ∼2,000*** -

33

Glossary

Domestic premiums relating to insurance direct contracts pertaining to the operating fiscal year

Gross Domestic Written Premiums

Loss ratio + Expense ratioCombined ratio

Operating expenses/Premiums written, gross of reinsurance

Expense ratio

Claims occurred/Premiums earned, gross of reinsuranceLoss ratio

Annual Premium Equivalent: 100% of annual premiums written + 10% of single premiums written

APE

Net Profit/average net equity not including same year net profits

ROE

UNIPOL GROUP: FIRST HALF RESULTS

ANNEXES

Milan, September 14, 2006

35

Unipol Group 1H06 Key Consolidated Figures

Insurance businessGross Domestic Written Premiums – Local GAAP

Unipol GroupTotal Investments

Banking businessIncome and loans to customers (IFRS figures)

Net profit (gross of minorities)

Life Premium€ million

709Unipol

1,061Aurora

237Spec.

Var %

+2.3%+2.3%

+2.4%+2.4%

+3.8%+3.8%

Non-Life Premium€ million

1,098Unipol

595Aurora

1,414BNL-Vita

483Quadrifoglio

+7.0%+7.0%

-10.0%-10.0%

+13.6%+13.6%

+14.9%+14.9%

+1.5%+1.5%

€ billion (IFRS figures)

35.9

F.Y. 2005

36.5

1H 2006

2.7%2.7%

€ million (IFRS figures)

224

1H 2005

230

1H 2006

€ million

6,951*

23,645

5,5058,618*

25,030

6,360

F.Y. 2005 1H 2006

+24%+24%

+6%+6%

+16%+16%

Customer depositsCustomer fundsLoans to customers

Var % Var %

Var % Var %

* 7,021 (FY2005) and 8,747 (1H2006) including financial liabilities held for trading

36

1H2006 Key figures€ million euro, percent

1H 2005

Insurance sector gross profit

Net profit

1H 2006

Banking sector gross profit

323.8

223.8

12.9

322.7

230.0

25.4

Of which pertaining to minorities 32.818.3

∆%

-0.4

2.7

97.0

79.2

37

Consolidated P&L – IAS/IFRS data

1H 2005 1H 2006 ∆%

Net Direct Written Premiums

Net commissions

Income/charges from financial instrumentNet claims charges

Operating expenses

Other income/charges

Profit (loss) before taxation

Taxation

Consolidated profit (loss)

Minorities profit (loss)

Group profit (loss)

4,104 4,452 8.5

40 42 6.5

563 532 -5.5

(3,809) (4,082) 7.1

(557) (577) 3.6

(14) (39)

327 329 0.9

(103) (99) -3.2

224 230 2.7

18 33 78.6

205 197 -4.0

€ million, percent

38

DISCLAIMER

This presentation contains information relating to

forecasts of figures, results and events which reflect

the current management outlook, but these could

differ from what actually happens owing to events,

risks and market factors that it is presently impossible

either to know or to predict.

39

Contacts

Adriano Donati

[email protected]

Francesco Fronzoni

[email protected]

Investor Relations

Unipol Assicurazioni - Via Stalingrado 45, Bologna

Tel. +39 051.507.6166

Tel. +39 051.507.6563

Documents

UNIPOL GROUP 2006-2009 STRATEGIC PLAN...Unibox, Aurobox) –0.5 pp–0.5 pp Group, Non-Life on Gross Domestic Written Premiums Key Initiatives. 16 Improve Life new business value with