Creating value in a deleveraging environment

Bart De SmetCEO Ageas

Morgan Stanley Conference London – 29 March 2012

1Morgan Stanley Conference I 29 March 2012

Value creation at AgeasWork on various levers to come to a more comprehensive story

9/30/2009

Insurance Operational performance

Life: investment yield Non-Life: combined ratio

Profit generation Value creation

Embedded Value New business

General Account

Reduce complexity & volatility Solve legacies

Simplify Ageas’s story

Constant strive to optimize the use of capital

2Morgan Stanley Conference I 29 March 2012

Value Life InsuranceMix of ensuring sustained profit levels vs. long term value enhancing initiatives

(600)(425)

(172) (99) +147**

309342 309

Norm

alize

d 201

0

FY 20

11Gr

eek i

mpairm

ents

Equit

ies Im

pairm

ents

Good

willCa

p Ga

ins/L

osse

s

Othe

rNo

rmali

zed 2

011

+ EUR 734 mio

3,360 2,446

157 162814 440

4,980 3,686

649 638

Year‐start 2011 Year‐end 2011

Asia

Continental  Europe

UK

Belgium43

51

(1)

0

(15)

64 32

(2)

(3)

23

Year‐start 2011 Year‐end 2011

Embedded Value (EV) (EUR mio) Value added by New Business (VANB) (EUR mio)

3Morgan Stanley Conference I 29 March 2012

81145

+2(38)

+10(9)

82

(27)

Norm

alize

d 201

0

FY 20

11Gre

ek Im

pairm

ents

Equit

ies Im

pairm

ents

Cap G

ains/

Losse

sAdv

erse

Wea

ther

Othe

rNo

rmali

zed 2

011

+ EUR 63 mio

Combined ratio Belgium*

102.4%104.2%

99.9%

90%

95%

100%

105%

110%

115%

2009 2010 2011

Combined ratio UK108.2%

109.5%

99.9%

90%

95%

100%

105%

110%

115%

2009 2010 2011

Value Non-Life InsuranceImproved operational performance should drive higher net profits

* Excluding Workmen’s Compensation

4Morgan Stanley Conference I 29 March 2012

1,025 984

505

108

20856

(271)

(290)

(275)(82)

Q4 09 Q4 11

581436

759 836

609 611694

361 395

Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11

(316)(442)

(340)(496) (465)

(722)(583)

(145) (190)

Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11

760 760 8401,027 933 913 899 850 779

Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11

RPI Sum of legacies +/- EUR 1bn

Call option on BNP Paribas sharesIn EUR mio

Value General Account: Clarity gained on valuation legacy issuesVolatility remains but partially offsetting

RPN(i)In EUR mio

In EUR mio In EUR mio

Average 587

Average (411)

Average 876

5Morgan Stanley Conference I 29 March 2012

Solution around CASHES is important step forwardTransaction settled on 26 March 2012

Rationale for Ageas Reduced credit risk to Fortis Bank EUR 4.6 bn EUR 2.8 bn

Decreased volatility in results RPN(I) volatility

Improved liquidity position

Result of the offer : 63% converted

Impact on Net Cash position: EUR 953 mio redemption Tier 1

EUR (287) mio indemnifications paid---------------------EUR 666 mio

Limited influence on equity & solvency of General Account +/- (2%)

Impact on Net Result (in Q1 12) : EUR 131 mio Tier 1 redemption

EUR 21 mio release RPN(I) liability

EUR (299) mio indemnifications paid---------------------EUR (147) mio

6Morgan Stanley Conference I 29 March 2012

General Account: good grasp of outstanding legacy issues Ageas does not expect new major litigation issues to rise

November 11Receipt report Belgian experts (Cats, Smets, De Bodt)

May 10US class actiondismissed

June 10Receipt report Dutch experts (Ondernemingskamer)

Sep- Dec 10Ageas starts legal procedure against Dutch State & ABN AMRO to obtain compensation in return for conversion of Mandatory Convertible Securities (MCS) into Ageas’ shares

June 09Ageas claims compensation with respect to “FCC preferred shares” from Fortis Bank NL

June 09Receipt report Belgian experts (Van Gerven/Horsmans)

February 11Claim re FRESH hybrid instrument dismissed by Brussels Court

Timing and (financial) outcome remains hard to estimate….In many legal proceedings still at the stage of first instance

To be expected before end June 2012 Judgment of Ondernemingskamer re mismanagement

May 11- Claim dismissed of

VEB/Deminor and FortisEffect by Amsterdam Court

- Rotterdam court confirmedfine AFM I: appeal filed

March 12Brussels Commercial Court dismissed all claims initiated by former MCS holders

February 12- Rotterdam court confirmed

fine AFM II; appeal to be filed- Utrecht court re

communication May-June2008 in favour of plaintiffs; appeal to be filed

201120102009 2012

7Morgan Stanley Conference I 29 March 2012

Ageas’ solvency calculation methodology : any unrealized loss on fixed income on balance is deducted, any net unrealized gain is eliminated.

Ageas applies a conservative solvency calculation methodologyIFRS Solvency remains solid & well above required minimum

Ageas passed very successfully the EIOPA solvency stress tests for Belgium & Portugal with simulated Solvency II ratios exceeding the average of the European industry in all stress test scenarios adopted.

6.4 6.6 6.8 6.47.5

229% 226% 227% 207%

3.13.02.92.8 3.6

207%

Q4 09 Q2 10 Q4 10 Q2 11 Q4 11

Total available capital Required Minimum Margin (RMM)

Insurance Solvency Ratio Ageasas reportedIn EUR bn

Solvency I Belgium

IFRS Solvency ratio :198% Ageas Insurance ratio: 227%

Solvency II Belgium

AG Insurance EIOPA solvency II ratio (MCR): 517%Average Insurance industry : 380%

Based on 31/12/10 data

8Morgan Stanley Conference I 29 March 2012

Ageas strives for an optimal use of cash Almost equal share of three alternative uses of cash since 2009

Going forward :Insurance: Lower growth in capital intense savings business

Increased proportion of Non-Life and Fee related businessGeneral Account: Net cash position at EUR 1.3 bn (before dividend payment)

9/30/2009

Invest in Businesses

Organic growth Selective acquisitions Create new partnerships

Return to debtholders

Debt buy back (EMTN)

Return to shareholders

Dividend payment Share buy back

May 2009 – March 2012:

+/- EUR 740 mio

+/- EUR 450 mio UK (Tesco, KFIS, Castle Cover)

+/- EUR 190 mio CEU (Italy, Turkey) +/- EUR 100 mio Asia (India, HK)

+/- EUR 850 mio

+/- EUR 600 mio constant dividend over 2009, 2010 & 2011

EUR 250 mio share buy-back finalized early 2012

+/- EUR 700 mio

+/- EUR 700 mio EMTN program redeemed (31/12/2011)

9Morgan Stanley Conference I 29 March 2012

0.9

1

1.1

1.2

1.3

1.4

1.5

1.6

23/08/2011Day before announcement of share buy-back program Ageas at EUR 1.09/share

25/01/2012Announcement of finalization

share buy-back program Ageas at EUR 1.46/share

Ageas announced a share buy-back program on 24 August 2011Program successfully completed on 25 January 2012

Ageas stock price in EUR

192 mio shares bought back (7.33%) for EUR 250 mio

Cancellation of acquired shares proposed at next shareholders’ meetings (25 & 26/04/12)

Share price + 34%

10Morgan Stanley Conference I 29 March 2012

Confirm & further improve operational performance

Ageas’s operational priorities 2012

Review/ Rethink strategic assetallocation

Make further progress on unwindinglegacy issues

Disciplined capital management

Prepare for regulatory changes