AG Insurance

FORTIS I 9/25/2009 I page 2

Agenda

1. Profile and track record

2. The market and the competition

3. Strategic initiatives

4. Conclusion

FORTIS I 9/25/2009 I page 3

Profile AG Insurance

* Before minority interest of 10 EUR mio to Fortis Bank

Key financial data Mission/strategy

Key competences Product and distribution mix

FY 08 H1 09Gross inflow (EUR bn)

LifeNon-Life

Operating costs (EUR mio)Net profit (EUR mio)

LifeNon-Life

Combined ratio (%)APE (EUR mio)EV (EUR bn)VANB (EUR mio)

6.34.81.5

(405)6

(85)91

100.94193.853

3.52.70.8

(209)20418123

105.6223n.a.n.a.

The mission of AG Insurance is: To be the leading and most profitable multi-distribution

service provider of insurance products To strengthen our market leadership position in our three

main market segments: Life, Group Life, and Non-Life

By focusing on the following strategic levers: Multi-channel distribution Product innovation Operational excellence

Market leader in Belgium, with total market share of 22.3% in FY 08�N�1 in Life: 26.3% �N�2 in Non-Life: 14.8% Integrated multi-channel operating model

(Brokers, Bancassurance and Assurfinance) Full product range, covering the needs of all market

segments Customer and channel centric organisation

FY 08 Inflow: 100% = EUR 6.3 bn

(24%) Non-Life

(76%) Life (33%) Broker (48%) Bank

(19%) Employee Benefits

FORTIS I 9/25/2009 I page 4

Key figures 06-09

FY 08FY 06 H1 09 FY 07

Gross inflow (EUR mio)LifeNon-Life

Operating costs (EUR mio)Net profit (EUR mio)

LifeNon-Life

Incidentals*:Impact market turmoilDRD tax benefit

Combined ratio (%)FUM Life (EUR bn)APE (EUR mio)EV (EUR mio)VANB ** (EUR mio)Total solvency (EUR mio)

6,7445,4751,269(378)

553434119

0

99.1%38.2511

4,832189n.a.

* Before minority interest to BNP Paribas Fortis Bank. On 12 May ‘09 Fortis sold 25% + 1 share of AG Insurance to Fortis Bank, resulting in a minority interest of EUR 10 mio for the first half of FY 09

** VANB : As of FY 08, VANB is calculated after Result-Related Commission (RRC), therefore, comparable figures on 3 years are not available *** EUR 189 mio before RRC

**** EUR 209 mio before RRC – EUR 151 mio after RRC***** EUR 53 mio after RRC

7,5186,1511,367(389)

52242597

(89)

100.4%42.1585

5,307151

3,682

6,2834,8181,465(405)

6(85)

91

(534)

100.9%41.8419

3,81753

3,536

3,5542,746

808(209)

20418123

(82)94

105.6%43.4223n.a.n.a.

3,732*** **** *****

*

Stable underlying earnings over the past years Commercial momentum maintained

FORTIS I 9/25/2009 I page 5

Combined ratio

* Based on H1 09 results** Based on annualized H1 2009 premiums

Relation between Combined Ratio and Return on Required Capital (EUR mio)

Target is to have a positive underwriting result, but … … high reserve to premium ratio, driven by product mix,

allows to have combined ratios of more than 100% while still having adequate returns

Workmen’s CompProperty

Motor Third-Party Liability

Premiums earned

Required Capital

Reserve /premium

Investment income

Technical result excl fin income

Combined ratio

Net Profit

Return on Required Capital

100

32

40%

2.9

3.0

97.0%

3.9

12.0%

100

32

190%

8.9

(3.0)

103.0%

3.9

12.0%

100

47

550%

23.9

15.4

115.4%

5.6

12.0%

TOTAL Non-Life*726

468**

175%

68

(40)

105.5%

22.8

9.7%

FORTIS I 9/25/2009 I page 6

Agenda

1. Profile and track record

2. The market and the competition

3. Strategic initiatives

4. Conclusion

FORTIS I 9/25/2009

531 544

1,854

651348

495

522 102 110

1,514

117

116

59

60

H1 08 H1 09 H1 08 H1 09 H1 08 H1 09

I page 7

Leading market position in Belgium remains intact

LifeFY 07 market shares (based on FY 08 Assuralia publication*)

Bank Broker Employee Benefits

1,630

1,971

1,206

929

633 654

(28%) AG Insurance

(13% Ethias

(14%) AXA -incl. Winterthur(11%) KBC

(12%) Dexia

(22%) Others

Individual Life

Non-Life

Workmen’s Comp

Group Life

Health Care

(22%) AXA -incl. Winterthur

(16%) AG Insurance

(14%) Ethias(9%) KBC

(6%) P&V

(33%) Others

Inflow per distribution channel (EUR mio)

Non-LifeFY 07 market shares (based on FY 08 Assuralia publication*)

* FY 07 are latest available market shares published in Assuralia newsletter Assurinfo nr 34 -16 October ‘08

FORTIS I 9/25/2009 I page 8

AG Insurance has a major foothold in dominant distribution channels

* Direct includes B2B, B2C, E-commerce, other direct (affinity groups, captives & pools) but also mutuals and cooperatives

Market shares of AG Insurance’s three main channels (Broker, Bancassurance, Assurfinance) are not under pressure

Life market Non-Life market

45

21

6

13

1443

134

22 20

0%

20%

40%

60%

80%

100%

FY 9

4

FY 9

5

FY 9

6

FY 9

7

FY 9

8

FY 9

9

FY 0

0

FY 0

1

FY 0

1

FY 0

3

FY 0

4

FY 0

5

FY 0

6

FY 0

7

Brokers Assurfinance Bancassurance Agents Direct*

6070

41 6

3 1013

2013

0%

20%

40%

60%

80%

100%

FY 9

4

FY 9

5

FY 9

6

FY 9

7

FY 9

8

FY 9

9

FY 0

0

FY 0

1

FY 0

1

FY 0

3

FY 0

4

FY 0

5

FY 0

6

FY 0

7

Non-Life: market share of Brokers, Banks and Assurfinance 70% in FY 07, down 4% vs FY 95

Life: market share of Brokers, Banks & Assurfinance 77% in FY 07, up 12% vs FY 95

FORTIS I 9/25/2009

Competition

Competition with focus on price, new market formulas and distribution approaches

Aggressive niche players attacking specific segments

War for talent and specific profiles

Bundling of products/solutions Shift from 0-% guarantee to

savings products with guaranteed interest rate

Shift to unit-linked products with capital guarantee

Entry of retirement solutions (annuities)

Increasingly vigilant regulators with focus on governance, compliance and transparency

Faster pace of regulatory change, especially in customer protection and transparency

Solvency 2 & IFRS phase 2 leading to a convergence of regulatory and economic capital

Unstable tax environment

Customers becoming more knowledgeable, price conscious, looking for convenience and transparency

Ageing population and wealth shift Increasing Corporate Social

Responsibility (CSR) awareness

I page 9

FORTIS I 9/25/2009 I page 10

Agenda

1. Profile and track record

2. The market and the competition

3. Strategic initiatives

4. Conclusion

FORTIS I 9/25/2009

Key strategic objectives

Non-Life

Retail Life

Group Life

Return to higher profitability (target combined ratio below 100% over next years) while keeping portfolio stable through� Tariff increases where required� Reduction of cost ratio� Adjust product features when needed

Re-entering market of medium sized companies

Simplification of Unit-Linked offer Move to one IST platform in individual life Promote products that are not in direct competition with banking products

(“backwaters”, such as risk, disability, and traditional products)

Further reinforce the embedded customer intimacy strategy Focus on segment below Top 300 companies, currently not being well served Operational excellence with new IST platforms

I page 11

FORTIS I 9/25/2009

Key Strategic Objectives

I page 12

Multi-channel Distribution

Product-market innovation

Operational excellence

Enhance cross-selling strategy and exploit untapped distribution synergies Successfully implement Modulis VIP and ‘Back-to-the-front’� Modulis VIP, exploiting distribution synergies between bank and broker channel� Enhance cross-selling Group Life with Fortis Bank� Back-to-the-front: sales support staff and insurance experts to further increase

insurance sales in the Bank channel

Be recognized as the product champion in the industry Continue high pace of innovation� Strengthen Non-Life offering for Retail & SME market� Pack-strategy: offer extended solutions to specific client segments� Pension@work: Group Life offer for SME market

Continue to be among the most cost efficient multi-channel insurer, while providing best-in-class services to clients and distributors� Non-Life platform integration has been finalized� Reengineering of Group Life and Individual Life platforms

FORTIS I 9/25/2009 I page 13

Non-Life Strategy - Focus on the strengths of both distribution channels and make them work in synergy

Retail market approach Business market approach

Both channels (Bank & Broker) with limited cannibalisation

With one common product set (same products, same acceptation & tarification rules; bank branches can sell these products at the best price a top-broker can get)

On one IT system(costs synergy)

Broker channel only(often deep technical knowledge required)

Specific products (more „tailor made“)

A new synergetic model: Modulis VIP

FORTIS I 9/25/2009 I page 14

Non-Life Strategy - The Modulis VIP Model synergy

Banking Clients Insurance Relationships Modulis VIP strategy will …

Cut the current insurance relationship with the competition (Ethias, KBC, etc.) that might endanger the banking relationship

Propose to these clients without broker the services of a broker

Bank receives lead remuneration plus 2% portfolio commission

Modulis VIP client enjoys higherno-claim bonus

Push the business client to insure his risks with AG Insurance, respecting his current broker relation (if any) Stimulate the client of the broker to

choose BNP Paribas Fortis as banking partner

BNP ParibasFortis

400,000

OtherBanks

800,000

Other CiesThrough Broker

OtherChannels

AG InsuranceThrough Broker

130,000

800,000

FORTIS I 9/25/2009 I page 15

Modulis VIP: First Results

Commercial achievements Contribution in new business and portfolio

Number of leads Modulis VIP Conversion of Leads Modulis VIP

After 16 months, Modulis VIP represents:�8% of the Modulis portfolio�3.6% of the SME portfolio New Modulis VIP = 20% of the new Modulis files

>16,000 leads received by end June ‘09 >6,400 Modulis VIP files in portfolio One offer in 2 is converted into a contract Practically all 1,000 BNP Paribas Fortis branches involved >2,500 brokers involved

(max. 4,000 professional active brokers)

SITUATION 27/06/’09

ExistingModulis files

NewModulis files

Leads/Offersin progress

Leads/Offersnot converted

22%18%

31%

29%

3,4692,928

4,885

4,61640% conversion

3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6FY 08 FY 09

1,500

1,000

500

FORTIS I 9/25/2009 I page 16

Agenda

1. Profile and track record

2. The market and the competition

3. Strategic initiatives

4. Conclusion

FORTIS I 9/25/2009 I page 17

Conclusion

Stable underlying profitability, in a difficult market context, with commercial momentum holding well

Maintain leadership position in Life

Return to higher profitability (target combined ratio <100%) in Non-Life

Still room for further growth through cross-selling and product and service innovation