BNP Paribas Cardif in Italy Rome 17042015 BNP

BNP Paribas Cardif in Italy Rome, 17/04/2015

BNP Paribas Group A leading bank in the Eurozone A responsible bank which undertakes on a daily basis to combine ethics and economic performance, serves and finances its clients and support growth. 27 million clients and 6, 800 branches across its retail network Nearly 185, 000 employees of which 145. 000 in Europe 4 domestic markets in Europe: France, Italy, Belgium and Luxembourg 2 core business: • Retail Banking & Services • Corporate & Institutional Banking Presente in 75 paesi Presence in 75 countries 2014 KEY FIGURES 39, 2 Billion € REVENUES EXCLUDING EXCEPTIONAL ITEMS 7 157 Billion € Million € NET INCOME ATTRIBUTABLE TO EQUITY HOLDERS EXCLUDING EXCEPTIONAL ITEMS 2

BNP Paribas Group Organizational structure 3

BNP Paribas Group in Italy Present since more than 40 years BNP Paribas is represented in Italy by 26 companies counting on nearly 19, 000 employees competences and constituting the 3 rd Banking Group for revenues 18, 000 employees Responsiveness, Creativity, Commitment and Ambition: the values driving daily actions as business strategies Leadership in each sectors: a complete and quality offer 28 Companies More than 5 million clients among individual and corporate clients 4

BNP Paribas Cardif in the world Insurance Leader in the Eurozone Innovative business model based on partnerships Present since more than 40 years 2 business sectors: Savings Protection 90 million clients insured around the world 10, 000 employees* Present in 37 countries across Europe, Asia and Latin America. 2014 KEY FIGURES 27, 5 Billion € GROSS WRITTEN PREMIUMS 2, 2 Billion € NET BANKING INCOME 1, 1 Billion € PRE-TAX NET PROFIT 5 * Headcount for legal entities controlled by BNP Paribas Cardif: nearly 8, 000 employees.

BNP Paribas Cardif in the world Strong positions in the world An organization which allows to monitor partnerships locally or globally and an efficient replication of successful products Europe Activities in 24 countries Algeria, Austria, Belgium, Bulgaria, Croatia, France, Czech Republic, Denmark, Germany, Hungary, Italy, Luxembourg, Norway, Poland, Portugal, Romania, Russia, Slowakia, Spain, Sweden, The Netherlands, Turkey, Ukraine, United Kingdom Latin America Activities in 6 countries Argentina, Brasil, Chile, Colombia, Mexico, Peru Asia Activities in 7 countries China, India, Japan, South Korea, Taiwan, Thailand, Vietnam 6

BNP Paribas Cardif in Italy The second domestic market after France Since 1989 BNP Paribas Cardif develops and markets in Italy Savings and Protection insurance products through several channels. Its range of innovative solutions is able to meet the needs of every type of customer. 5°player life bancassurance & 1°for productivity CPI , Employees and Pension Loans, multisupport Leader 7 th Insurance Company in Italy* Nearly 390 employees 30 multichannel 3 main business sectors: distributors: • Savings banks, consumer credit, • Individual Protection financial institutions, financial captive car, large retail • Goods Protection organization, utilities 3 million clients: 6% of the adult Italian population 3 distribution networks: • Retail Banking • Partnership • Digital Present since more than 25 years Digital approach in the damage industry: 1°telematic home insurance in Europe Strong Commitment in CSR projects especially in financial education 7 * 2013 ANIA ranking 2013

BNP Paribas Cardif in Italy Key Figures 2014 5, 554 173, 2 Billion € GROSS WRITTEN PREMIUMS Million € NET BANKING INCOME 99, 4 Million € GROSS OPERATING INCOME 8

Our History Since 25 years in Italy 1989 1996 2009 2011 2013 2014 • Entrance of the two legal entities Cardif Assurance Vie and Cardif Assurances Risques Divers in the Italian market • Setting up of the Italian branch Cardif Assicurazion i S. p. A. • Creation of F&B, the JV between Ageas and BNP Paribas Cardif (50/50) • Acquisition through F&B of the 50% stake in UBI Assicurazion i • Long-term distribution agreement with UBI Banca (P&C) • 100% acquisition of Cardif Vita S. p. A. • Launch of E-commerce website www. cardif. it and of innovative insurance product Habit@t • Merger between Cardif Assicurazion i and Cardif Vita and change of the company name to Cardif Vita S. p. A. BNP Paribas Cardif and Ageas acquire 100% of UBI Assicurazioni (now CARGEAS Assicurazioni S. p. A. ) 9

Our organizational structure AGEAS CARDIF ASSURANCES RISQUES DIVERS CARDIF ASSURANCE VIE Francia Italia CARDIF ASSURANCE VIE Rappresentanza per l’Italia CARDIF VITA S. P. A. CARDIF ASSURANCES RISQUES DIVERS Rappresentanza per l’Italia CARGEAS ASSICURAZIONI S. P. A 10

A comprehensive offer range n Credit Cards Protection n Bill Protection n Shopping basket n Income Protection n Personal Loans Creditor Insurance n Current Account n Car Loans n Purchase Loans n Leasing n Mortgages Lifestyle Protection n Employees and Pension Loans Multi. Support Investmentlinked contracts Property & Casualty (P&C) n Payment Protection (PPI) n GAP n Fraudulent Use of Credit CUSTOMER n n Critical Illness n n Hospitalization n n Recover Plan n n Surgery Health Cards Extended Warranty Goods Protection Household Family TPL Pension Funds Savings Protection Individual Protection n Personal Accident n Term Life 11

Business model with multichannel approach BUSINESS MODEL MULTICHANNEL APPROACH DISTRIBUTION CHANNELS B 2 B&C Savings RETAIL § Banks § Financial advisors Products PARTNERSHIP - Banks - Financial Institutions - Auto Captive Finance Houses - Big retailers DIGITAL Protection Products CUSTOMERS § § § § § Banks Consumer Credit Companies Auto Captive Finance Houses Leasing Companies Brokers Big retailers Telemarketing platforms Utilities Internet 12

The partnership culture, part of our DNA The bancassurance model developed by BNP Paribas Cardif for its own partners is unique and represents a distinctive element in the insurance market. It evolves according to the life cycle of the partnership and is based on 5 key success factors: KNOWLEDGE OF CUSTOMER NEEDS • Market knowledge • Competitive intelligence • Best practice sharing • Value for money • Client Journey Client Focus RISK MANAGEMENT PROFIT MAXIMIZATION • Specialized • Marketing tools • Training & actuarial teams • International experience • Monitoring tools Sustainable profitability Incentive programs • Product innovation • Claims management • Multichannel approach Value Creation DEVELOPMENT OF THE PARTNERSHIP CULTURE ADAPTATION TO NEW REGULATORY FRAMEWORKS • Regular meetings • Reporting sharing • Demand • Legal, managers • Definition of service levels with the Partner • Common approach with global Partners Transparency Compliance and Institutional Affairs teams for relations with Consumer Associations and the EU • Benchmarking Reputation and market risks control END CUSTOMER SATISFACTION 13

Our 7 key points 1 Bancassurance expertise, our main strength resulting from twenty-five years experience on Italian market 2 Partnership culture, our key distinctive expertise and our key growth factor 3 A complete product range in 3 business sectors: ü Savings ü Individual protection ü Goods protection 4 Customer Focus, the customer is our first priority Customer centricity is a commitment rooted in our offer: from product creation to service delivery, from distribution to contact with the end customers. High service standards are confirmed by Quality Certification UNI EN ISO 9001: 2008 for the Claims Management Area 5 Socially responsible player, strong commitment in CSR projects 6 People Care, we value the strengths of human resources taking care of our employees, promoting equal opportunities, recognizing performances and developing their skills and talents 7 Innovation, at the center of our offer and an integral part of our culture . 14

Our responsible growth In line with the objectives of the BNP Paribas Group, Corporate Social Responsibility represents for BNP Paribas Cardif an ongoing commitment and an integral part of our strategy. OUR ECONOMIC RESPONSABILITY OUR SOCIAL RESPONSABILITY To insure people, their families and their property ethically To develop a committed and loyal management of our human resorces OUR CIVIC RESPONSABILITY Combating exclusion and promoting education OUR ENVIRONMENTAL RESPONSABILITY Combating climate change THE 4 PILLARS AT THE BASIS OF OUR CORPORATE SOCIAL RESPONSABILITY POLICY 15

Our values and management principles OUR VALUES REACTIVITY COMMITMENT CREATIVITY OUR MANAGEMENT PRINCIPLES CLIENT FOCUS RISK-AWARE ENTREPRENEURSHIP LEAD BY EXAMPLE PEOPLE CARE INNOVATION ASSERTIVENESS AMBITION 16

Cost Allocation Process Principles & Methodology Rome, 17/04/2015

Financial Planning & Control dept @ BNP Paribas Cardif Italy International Overheads Report Turnover Report Budget and Forecast process Cost Management Information System Redditivity Analysis Closing Process Cost Model Business Planning Enterprise Reporting Dashboard

Cost Allocation Keywords Profit Center 1 Full Costs by Cost Center Task B Profit Center 2 Profit Center 3 Profit Center 4 Task C Profit Center 5 Value Chain Task A Profit Center 6 ü Cost Center: A segment of a business or other organization in which costs can be segregated, with the head of that segment being held accountable for expenses. Cost centers are established to identify responsibility and to control costs. ü Task: service provided by a principal cost center to its clients. A list of tasks is defined for each cost center. This list must cover all activities of all the individuals attached to the cost centre. ü Profit Center: A segment of a business for which costs, revenues, and profits are separately calculated at the crossroads of a segment (ie product or group of products) and a distributor (corresponding to partners, but also distribution modes and distribution channels) – many level of granularity exist. ü Value chain: categorization of the generic value-adding activities of an organization. A distinction is made in the value chain between "core business" and "support activities". 19

Aim of Cost Allocation The aim of cost allocation is to apportion all costs incurred to profit centers and to split them along the value chain of the business. This, along with a similar apportioning of revenues, allows the establishment of a profit and loss account by profit center. 20

Cost Model – Scope & Objectives Reliable and exhaustive Data Profitability Analysis, Costs Projections Complete cost base and Cost structure and profitability consistent with Group data analysis, benchmarks; Evaluation of the costs in future years in BP Purpose Exceptional items will remain in the cost base but will be isolated on the Cost Centers axis. Cost model Direct Costs (payroll, travels, training, …) This is necessary in order to analyze the full cost base. However, in some cases, those costs should be removed from the base. Cost base Indirect Costs (office rent, phone, computers, …) Exceptional costs Treating them on the cost center axis will give us flexibility. Cost base Report total costs base Tech. cost bases for BP, Solovency II, Man. DR Direct Costs All other Cost centers Indirect Costs Isolated on the cost center « exceptional costs » Exceptional costs Those costs will remain in the cost base but will be isolated. Depending on the need, they can be excluded in order not to impact the projection. Neutralize exceptional costs, restatements The Cost Model has 2 principal objectives: 1. It is a base for countries' cost structure & profit center profitability analysis 2. The annual Cost Study is a basis for countries’ cost projection (BPs, Solvency II, Man day rate) and it can be converted to a technical cost base for costs’ projection 21

Cost Model – Step by Step (1/3) Keys Direct allocation 22

Cost Model – Step by Step (2/3) Examples of tasks characteristics 23

Cost Model – Step by Step (3/3) A program can be defined as an analytic notion that allows to identify all the costs related to IT applications (Accounting system (such as SAP/Sun Account), Portfolio Management Systems, HR System. . ) 24

The specific case of the Telemarketing Cost Center 25

Protection Business Allocation Phases (1/2) 26

Protection Business Allocation Phases (2/2) Each task should be allocated to one of the following destinations: Ø Acquisition of new conventions: all the tasks performed to acquire new agreement/Convention. They are usually performed by the sales, by the actuarial department when quoting and developing new products, marketing and legal. Ø Acquisition of new insured: tasks performed to get new insured for an existing convention or to cash in and manage individual's first premiums. They correspond to the activities held directly with the customers (underwriting). The acquisition costs of annual recurrent premium will be allocated to this category only for the first payment. The cash in costs of the next payments will be administration costs. The acquisition costs of monthly recurrent premium will be allocated to this category only the first year. The cash in costs of the next years payments will be administration costs. Ø Claims Management All the tasks performed to manage these events should be allocated to this destination. Ø Administration of products in portfolio: accounting closing (Actuarial affairs, accounting and controlling). All the tasks that would set a little more time in case of a new convention. Ø Fix administration. You would find here all the management tasks, the general tasks, audit dept and finance. They are supposed to be constant in time. The costs linked to the renewal or of the continuation of a contract are allocated to this category. As far as Recurrent Premium are concerned, the costs linked to the management of the second year premiums (not considered as new business) should be allocated to fix administration (see above "Acquisition of new insured") 27

Savings Business Allocation Phases (1/2) 28

Savings Business Allocation Phases (2/2) Each task should be allocated to one of the following 5 destinations: Ø Initial Premium also called Acquisition costs. All the tasks performed to get new business (commercial prospecting, pricing) or to manage new business (premium collection). As far as Recurrent Premiums are concerned, the costs linked to their initial acquisition are to be allocated in this category, whereas the premium management of the next premiums will be allocated to "Fix Administration". For the specific case of "Surrender-Initial Premium" operations, the costs spent to manage the new Initial Premium are to be allocated in this category. Ø Top Up Premium (or renewal premium). We consider it as New Business but as these premiums come naturally without the commercial intervention, the related costs have to be isolated in this category. These costs are mainly coming from the cost centre managing the premium. Ø Portfolio Switching. The costs related to this category are mainly coming from the cost centres managing the portfolio switching. Ø Claims: surrender; death and matures endowments. All the tasks performed to manage these events should be allocated to this destination. In some particular cases, management, sales or legal advisors also intervene. Ø Fix Administration = all the other costs. You would find here all the management tasks, the general tasks, the accounting and planning departments, audit dept and finance. They are supposed to be constant in time. As far as Recurrent Premiums are concerned, the premium management costs of the next premiums will be allocated to "Fix Administration" (see above "Initial Premium"). 29

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