Consolidated Quarterly Report as at 31 March 2005
Approved by the Board of Directors on 10 May 2005
1
Disclaimer
This is a translation into English from the original in Italian, which alone is to be used for all legal purposes. The original text is at the disposal of the general public at the registered place of business of CATTOLICA and at Borsa Italiana S.p.A. The responsibility for the use of the information in the English language version is understood, within the maximum limits allowed by the law, as exclusively borne by those who decide to use it for any use, purpose or aim whatsoever. CATTOLICA shall not, however, be held responsible for any direct or indirect loss or damage, claimed by anybody and for whatever reason following the use of incomplete or inaccurate information.
Index First Part Statutory Bodies
5
Introduction
7
Group Structure
9
Second Part Consolidated accounts
13
General approach and consolidation area
19
Notes to the consolidated accounts
25
Third Part Data and results of the first quarter
33
Comments of the Directors
37
3
Summary index of tables and charts Tables Tab. 1 - Investments
27
Tab. 2 – Technical provisions – reinsurance amount
27
Tab. 3 - Technical provisions
28
Tab. 4 - Class D technical provisions
29
Tab. 5 - Consolidated premiums
30
Tab. 6 - Premiums by channel
31
Charts Chart no. 1 – Main data and results of the first quarter 2005
35
Chart no. 2 - Consolidated reclassified Income Statement
36
4
Statutory bodies Chairman
Giuseppe Camadini*
Senior Vice-Chairman
Ermanno Rho*
Vice-Chairman
Danilo Andrioli*
Secretary
Giuseppe Nicolò *
Directors
Pierluigi Angeli Luigi Baraggia* Paolo Bedoni * Carlo Casini Angelo Ferro Stefano Gnecchi Ruscone Felice Martinelli Giuseppe Martinengo Gaetano Migliarini Carlo Alberto Pelliciardi Giorgio Petroni Luigi Righetti Nicola Rotolo Giordano Veronesi
Statutory Auditors’ Committee
Franco Giarolli, President Alessandro Lai Giovannimaria Seccamani Mazzoli Marco Bronzato (Acting) Francesco Passerini Glazel (Acting)
General Manager Vice-General Manager Assistant Vice-General Manager Assistant Vice General Manager
Ezio Paolo Reggia Giancarlo Battisti Maria Paola Boscaini Paolo Rubini * Those Directors whose names are marked with an asterisk are members of the Executive Committee.
5
Introduction The consolidated quarterly report for Gruppo Cattolica Assicurazioni relative to the first quarter of 2005 has been drafted in compliance with article 82 of Consob decision of 14 May 1999 no. 11971 and subsequent amendments. The accounts comply with what is specified in annex 3D of the above-mentioned decision. In the consolidated quarterly report drafted by the Cattolica Parent Company: • The economic data relative to the first quarter of 2005 are compared with the data relative to the first quarter of 2004; • The data for the net financial position relative to the end of the first quarter are compared with the corresponding data as at 31 December 2004. The consolidated quarterly report is provided with accounts as set out below: • Net Financial Situation (annex 3D Point 2 Consob decision no. 11971); • Income Statement (annex 3D Point 2 Consob decision no. 11971); • General approach and consolidation area; • Notes to the consolidated accounts; • Main data and results; • Comments of the Directors on management performance in the first quarter of the year and on foreseeable business developments during the current year.
7
Group structure
9
CATTOLICA ASSICURAZIONI GROUP As at 31 March 2005
99.98
100
Duomo DuomoAssicurazioni Assicurazioni 100
99.99
85.71
Verona VeronaAssicurazioni Assicurazioni
90
30 70
Duomo DuomoPrevidenza Previdenza
Cattolica CattolicaInvestimenti InvestimentiSIM SIM
Eurosav Eurosav
diCa diCa
Risparmio&Previdenza Risparmio&Previdenza
Verona VeronaGestioni GestioniSGR SGR
100
100
66
Cattolica CattolicaAziende Aziende
San SanMiniato MiniatoPrevidenza Previdenza 50
Tua TuaAssicurazioni Assicurazioni
97
Cattolica CattolicaImmobiliare Immobiliare 75.25
BPV BPVVita Vita
Nuova NuovaSan SanZeno Zeno Immobiliare Immobiliare
50.1
Lombarda LombardaVita Vita
100
Tua TuaRetail Retail
50
100
8.8
Axa AxaCattolica CattolicaPrevidenza Previdenza In InAzienda Azienda 30
Non-life insurance Life insurance Banking
0.21
Cattolica CattolicaIT ITServices Services
5
Verona VeronaServizi Servizi
90.99
65
Cassa Cassadi diRisparmio Risparmio di diSan SanMiniato Miniato
24.72
Prisma Prisma
20
Vegagest VegagestSGR SGR
20
Other Services Property
BANKING INVESTEE COMPANIES Società Cattolica di Assicurazione
3.17
6.62
6.38
1
Banca Lombarda SpA Banca Lombarda SpA
Banca Regionale Europea SpA Banca Regionale Europea SpA
Banca di Valle Camonica SpA Banca di Valle Camonica SpA
17.42
7.78
Cassa di Risparmio di Fabriano e Cassa di Risparmio di Fabriano e Cupramontana SpA Cupramontana SpA
Banca Popolare S. Angelo Scrl Banca Popolare S. Angelo Scrl
Banca di Cividale SpA Banca di Cividale SpA
Emil Banca Scarl Emil Banca Scarl
Banca Popolare di Intra Scrl Banca Popolare di Intra Scrl
0.49
0.20
0.51
Credito Bergamasco SpA Credito Bergamasco SpA
11
Consolidated accounts
13
COMPANY: CATTOLICA ASSICURAZIONI GROUP Section A - CONSOLIDATED NET FINANCIAL POSITION (Amounts in € millions)
ASSETS
C.
Amount
215
II - Investments in affiliated companies and other shareholdings 1. Shares and holdings 2. Bonds 3. Loans
422 70 0
417 92 1
492
510
88 392 7,041 15 29
65 365 6,630 14 8
7,565
7,082
16
14
8,291
7,821
8,177
7,563
347 100
345 90
447
435
480 0
396 0
480
396
17,395
16,215
Total other financial investments IV - Deposits with reinsuring companies Total Investments for benefit of life assurance policyholders who bear the investment risk and relating to the administration of pension funds
Technical provisions - reinsurance amount I I Non-life technical provisions II II Life technical provisions (excluding technical provisions in section III) III III Life technical provisions where the investment risk is borne by the policyholders and provisions relating to the administration of pension funds Total
F.
as at 31/12/2004
Amount
218
III - Other financial investments 1. Shares and holdings 2. Quotas in mutual investment funds 3. Bonds and other fixed-income securities 4. Loans 5. Others
D/2
Consolidated FY
as at 31/03/2005
Investments I - Land and buildings
Total investments in affiliated companies and other shareholdings
D.
Consolidated 1Q
Other asset items I - Attivi materiali e scorte II - Cash at banks and in hand III - Own shares Total TOTAL
COMPANY: CATTOLICA ASSICURAZIONI GROUP Section A - CONSOLIDATED NET FINANCIAL POSITION (Amounts in € millions)
LIABILITIES
B.
Subordinated liabilities
C.
Technical provisions I - Non-life business 1. Provisions for unearned premiums 2. Provisions for claims outstanding 3. Equalisation provision 4. Other technical provisions Total non-life technical provisions II Life business 1. Actuarial provisions 2. Provision for claims outstanding 3. Other technical provisions Total life technical provisions Total
D.
Technical provisions where the investment risk is borne by the policyholders and provisions relating to the administration of pension funds
F.
Deposits received by reinsurers
G.
Financial payables I - Debiti derivanti da operazioni di assicurazione diretta - Debenture loans - Amounts payable to banks and financial institutions Total
TOTAL
Consolidated 1Q
Consolidated FY
as at 31/03/2005
as at 31/12/2004
Amount
Amount
0
1
489 1,869 1 5 2,364
505 1,810 1 4 2,320
5,972 63 97 6,132
5,501 108 97 5,706
8,496
8,026
8,176
7,563
144
124
0 0
0 0
0
0
16,816
15,714
COMPANY: CATTOLICA ASSICURAZIONI GROUP
Section B - CONSOLIDATED QUARTERLY INCOME STATEMENT (Amounts in € millions) Consolidated 1Q
Consolidated 1Q
as at 31/03/2005
as at 31/03/2004
Amount
Amount
I. TECHNICAL TECHNICAL ACCOUNT ACCOUNT -- NON-LIFE NON-LIFE INSURANCE INSURANCE BUSINESS BUSINESS 1. Earned premiums, net of reinsurance
329
320
2. Other technical income/(charges) net of reinsurance
-14
-12
3. Claims incurred, net of recoveries and reinsurance
246
248
4. Change in other technical provisions net of reinsurance
0
0
5. Profit-sharing and reversals net of reinsurance
0
0
61
56
7. Change in equalisation provisions
0
0
8. Technical account result - non-life insurance business
8
6. Operating expenses
4
II. TECHNICAL ACCOUNT - LIFE INSURANCE BUSINESS 1. Earned premiums, net of reinsurance 2. Net income from investments 3. Income and unrealised capital gains on investments for the benefit of policyholders who bear investment risk and on investments relating to pension funds 4. Other technical income net of reinsurance 5. Claims incurred, net of reinsurance 6. Change in actuarial and other technical provisions, net of reinsurance a) Actuarial provisions, premium provisions for complementary policies, and other technical provisions b) Technical provisions for policies where the investment risk is borne by policyholders and those relating to the administration of pension funds Total 7. Profit-sharing and reversals net of reinsurance 8. Operating expenses
966
800
48
49
111
166
7
7
440
353
297
395
279
172
576
567
1
0
41
38
COMPANY: CATTOLICA ASSICURAZIONI GROUP
Section B - CONSOLIDATED QUARTERLY INCOME STATEMENT (Amounts in € millions) Consolidated 1Q
Consolidated 1Q
as at 31/03/2005
as at 31/03/2004
Amount
Amount
9. Capital and financial charges and unrealised losses on investments for the benefit of policyholders who bear investment risk and on investments relating to pension funds
55
50
10. Technical account result - Life insurance business
19
14
8
4
2. Technical account - Life insurance business (Item II.10)
19
14
3. Net investment income
19
18
4. Other income
4
2
5. Other charges
6
9
44
29
7. Extraordinary income
6
24
8. Extraordinary charges
4
3
9. Result from extraordinary actvity
2
21
10. Pre-tax result
46
50
11. Income taxes
14
22
12. Net income/(loss)
32
28
4
2
28
26
III. NON-TECHNICAL ACCOUNT 1. Technical account - Non-life insurance business (Item 1.8)
6. Result from ordinary actvity
13. Minority shareholders' interest in profit (loss) for the year 14. Profit (loss) of the Group
General approach and consolidation area
19
General approach and consolidation area GENERAL APPROACH The consolidated quarterly report closed as at 31 March 2005, a date coinciding with that of the corresponding reports by the Group companies. The quarterly reports for all insurance companies within the consolidation area were approved by the respective Boards of Directors. CONSOLIDATION TECHNIQUES The consolidation techniques adopted comply with those used in the consolidated financial statements closing as at 31 December 2004. ACCOUNTING POLICIES AND STANDARDS The accounting policies and standards, together with the reference accounting policies adopted by the companies, are those used by the Parent Company in drafting the consolidated quarterly report and are also those used for the consolidated financial statement as at 31 December 2004. In order to guarantee prompt communication of the quarterly information to the market, estimate processes were employed for some of the less significant components. CONSOLIDATION AREA The consolidation area comprises the financial statements of Società Cattolica di Assicurazione – Società Cooperativa and that of the companies in which the Parent Company directly or indirectly holds 50% of the shareholding as a permanent stake. During the quarter the consolidation area was enlarged by the effect of the line-by-line consolidation of Cattolica IT Services following the contribution of the respective branches of activity by Group companies, and Eurosav, following the acquisition of total control of same in execution of the agreement signed last 27 December 2004, as described in the Comments of the Directors. As at 31 March the consolidation area comprises eleven insurance companies, two real-estate companies and two services companies. In addition to those companies included within the consolidation area, the Group comprises an insurance company, a banking company, two savings management companies, a brokerage company and two services companies. 1) The following companies are included in the consolidated financial statements, using the line-by-line method in compliance with Legislative Decree of 26 May 1997, no. 173, art. 68: - Società Cattolica di Assicurazione – Società Cooperativa, with registered office in Verona, company capital 142.174 million, Parent Company; - Il Duomo Assicurazioni e Riassicurazioni s.p.a., (hereafter referred to as “Duomo
21
Assicurazioni”), with registered office in Milan, company capital 56.96 million. The Parent Company has a direct 99.98% shareholding in the company. The subsidiary is active in the non-life insurance sector; - Verona Assicurazioni s.p.a., with registered office in Verona, company capital 8.925 million; the direct shareholding of the Parent Company amounts to 99.99%. The subsidiary is active in the non-life insurance sector; - Cattolica Aziende s.p.a., with registered office in Verona, company capital 14.448 million; the Parent Company has a direct shareholding equal to 85.71%. It is active in the non-life insurance sector; - TUA Assicurazioni s.p.a., with registered office in Milan, company capital 9.16 million; with Duomo Assicurazioni holding a 97% shareholding. The subsidiary is active in the non-life insurance sector; - Duomo Previdenza s.p.a., with registered office in Milan, company capital 67.564 million; the Parent Company has a direct 100% shareholding. The subsidiary is active in the life insurance sector; - Eurosav s.p.a., with registered office in Milan, company capital 6.45 million; the Parent Company has a direct 100% shareholding. The subsidiary is active in the life insurance sector; - Risparmio & Previdenza s.p.a., with registered office in Verona, company capital 35.625 million; the Parent Company’s direct shareholding is 90%. The subsidiary is active in the life insurance sector and, since 1998, the non-life sector with specific reference to the accident and injury and health branches, in compliance with the provision of Legislative Decree of 17 March 1995, no 174, art. 16; - San Miniato Previdenza s.p.a. with registered office in San Miniato (PI), company capital 5 million; the Parent Company’s direct shareholding is 66%. The subsidiary is active in the I, III, IV and V life insurance classes in compliance with Annex I, table A) of Legislative Decree no 174 of 17 March 1995; - BPV Vita s.p.a., with registered office in Verona, company capital 72.6 million; the Parent Company has a direct shareholding of 50%. The subsidiary is active in the life and non-life insurance sector, with specific reference to the accident and injury and health branches, in compliance with the provision of Legislative Decree of 17 March 1995, no. 174, art.16; - Lombarda Vita s.p.a., with registered office in Brescia, company capital 80 million; the Parent Company has a direct shareholding of 50.1%. The subsidiary is active in the life insurance sector; - Cattolica Immobiliare s.p.a., with registered office in Verona, company capital 115.753 million; the Parent Company has a direct shareholding of 100%. The company is active in the real-estate business;
22
- Nuova San Zeno Immobiliare s.p.a., with registered office in Verona, company capital 16 million; the shareholding of Cattolica Immobiliare stands at 75.25%; - Cattolica IT Services s.r.l., with registered office in Verona, share capital 20.954 million, incorporated on 30 September 2004. The Parent Company has a direct shareholding of 90.99%, with shareholdings of Duomo Assicurazioni at 8.8% and Duomo Previdenza at 0.21%. The company’s purpose is the supply services and products for the design, implementation and management of IT applications, operative processes and the related organisational structure, as well as services related to telecommunications systems to controlled companies or subsidiaries of the Parent company; - diCA s.p.a., with registered office in Verona, company capital 2.58 million; the Parent Company has a direct shareholding of 100%. The company is active in the call center business, serving claims settlement. 2) Using the proportional method, and in compliance with Legislative Decree of 26 May 1997, no. 173, art. 70, the consolidation includes the following company: Associated company - Axa-Cattolica Previdenza in Azienda s.p.a., with registered office in Milan, company capital 7.5 million, with a shareholding on the part of both the Parent Company and Axa Assicurazioni. The company has been authorised to operate in life insurance and in the non-life sector with specific reference to accident and injury and health branches, with Isvap Provision of 2 March 2004, published in the Official Gazette on 9 March 2004; 3) The following companies are evaluated using the net equity method and are excluded from the consolidation since they carry out non homogeneous activities: Subsidiary companies - Verona Gestioni SGR s.p.a., with registered office in Verona, company capital 3.825 million; the Parent Company has a direct shareholding of 100%. The company provides investment services exclusively for institutional operators; - Cattolica Investimenti SIM s.p.a., with registered office in Verona, company capital one million; the Parent Company has a direct shareholding of 70%, with Duomo Assicurazioni holding the remaining 30%. The company places bank and financial products through the Group’s agency networks. 4)
The following companies are evaluated using the net equity method: Associated companies - Cassa di Risparmio di San Miniato s.p.a., with registered office in San Miniato, company capital of 126.2 million; the Parent Company has a direct shareholding of 24.72%. The company specialises in the banking business; - Prisma s.r.l., with registered office in Milan, company capital 520 thousand euro; the Parent Company has a direct shareholding of 20%. It operates as an insurance agency;
23
- Vegagest SGR, with registered office in Ferrara, share capital 10 million. The company provides independent savings management services; Leading banking and insurance partners of good standing have shareholdings. Cattolica has a 20% shareholding. 5)
The following company is evaluated at cost in the consolidated financial statements, in so far as it is not yet operative: Subsidiary - Verona Servizi s.r.l. (formerly V.P. Servizi Assicurativi s.r.l.) with registered office in Milan, share capital 100 thousand euro; the Parent Company has a direct shareholding of 65% with Duomo Assicurazioni holding 30%, and Duomo Previdenza 5%. The company is active in the recruitment, selection and training of new agents.
6)
The following company is evaluated at cost in the consolidated financial statements, in so far as it is not significant: Subsidiary - TUA Retail s.r.l. (formerly Sopass s.r.l.) with registered office in Milan, company capital equal to 50 thousand euro. The company is active as a TUA Assicurazioni general agency.
A Chart of the Group companies follows showing the consolidation techniques adopted.
Consolidated on a lyne-by-line basis 99.99
Verona VeronaAssicurazioni Assicurazioni
Cattolica CattolicaAziende Aziende
85.71
99.98
50.1
50
97
Duomo DuomoAssicurazioni Assicurazioni
TUA TUAAssicurazioni Assicurazioni
BPV BPVVita Vita
Eurosav Eurosav
100
Duomo DuomoPrevidenza Previdenza
Lombarda LombardaVita Vita
100
100
Cattolica CattolicaImmobiliare Immobiliare 75.25
Nuova NuovaSan SanZeno Zeno Immobiliare Immobiliare
Risparmio&Previdenza Risparmio&Previdenza
diCA diCA
100
0.21
90
66
San SanMiniato MiniatoPrevidenza Previdenza
8.8
Cattolica CattolicaIT ITServices Servicess.r.l. s.r.l.
90.99
Proportionally consolidated 50
Axa AxaCattolica CattolicaPrevidenza Previdenza In InAzienda Azienda
Valued by the equity method 70
Cattolica CattolicaInvestimenti Investimenti SIM SIM
30
24.72 20
Cassa Cassadi diRisparmio Risparmio di diSan SanMiniato Miniato
Vegagest VegagestSGR SGR
100
Prisma Prisma
20
Verona VeronaGestioni GestioniSGR SGR
Valued at cost 100
TUA TUARetail Retail
30 5
Non-life
Life
Banking
Other
Services
VERONA VERONASERVIZI SERVIZI
65
Propoerty
24
Notes to the consolidated accounts
25
Notes to the consolidated charts NET FINANCIAL SITUATION Investments
At the end of the first quarter investments come to 16,948 million with respect to 15,780 million as at 31 December 2004 (+7.4%). The entry for land and buildings records an increase of 3 million due mainly to the effect of the increase in value to the premises located in Binasco belonging to Nuova San Zeno Immobiliare and the transfer of the premises and two building units of Cattolica Immobiliare located respectively in Verona, via Cattaneo, in Naples, via Monteoliveto and in Rovigo, Piazzale D’Annunzio. The entry for investments in group companies, with reference to the shareholdings in subsidiary companies, for the quarter, registers a decrease of 1.4 million which can be attributed to the Cattolica IT Services, previously valued at cost, now being valued using the line-by-line method and the effects of subsidiary companies being valued at net equity. The entry also includes the costs of shareholdings in companies which are not significant for the purposes of consolidation, such as Verona Servizi and TUA Retail. The entry for shareholdings in associated companies has increased by a total of 1.2 million due to the effect of subsidiary companies being valued at net equity. Investments in other investee companies have not undergone any significant variations.
Tab. 1 – Investments Change 31.03.2005
31.12.2004
Abs. val.
%
Land and buildings
218
215
3
1.40
Affiliated companies and other associated companies
492
510
-18
-3.53
7,565
7,082
483
6.82
16
14
2
14.29
480
396
84
21.21
8,177
7,563
614
8.12
16,948
15,780
1,168
7.40
(in millions)
Other financial investments Deposits lodged with reinsuring companies Cash and own shares/holdings Class D Investments TOTAL
Technical provisions on the part of reinsurers
Technical provisions on the part of reinsurers come to 447 million, those for the non-life business come to 347 million and those for life branches total 100 million.
Tab. 2 – Technical provisions - reinsurance amount Change 31.03.2005
31.12.2004
Abs. val.
%
Non-life business
347
345
2
0.58
Life business
100
90
10
11.11
TOTAL (item D bis)
447
435
12
2.76
(in millions)
27
Technical provisions
The technical provisions for life and non-life business come to 8,496 million with an increase of 5.9% with respect to 31 December 2004.
Tav. 3 – Technical provisions Change 31.03.2005
31.12.2004
Abs. val.
%
489
505
-16
-3.17
1,869
1,810
59
3.26
Provisions for equalisation
5
4
1
25.00
Other technical provisions
1
1
-
0.00
Total non-life business (item C.I)
2,364
2,320
44
1.90
Actuarial provisions
5,972
5,501
471
8.56
Outlay provisions
63
108
-45
-41.67
Other technical provisions
97
97
-
0.00
Total life business (item C.II)
6,132
5,706
426
7.47
TOTAL (item C)
8,496
8,026
470
5.86
(in millions)
Provision for unearned premiums Provision for claims outstanding
Non-life unearned premiums provision The entry includes, in compliance with article 32 of Legislative Decree 26 May 1997, no. 173, both the provision for fractions of premiums, together with the unearned premiums provision calculated on cautionary classes, hail, other natural calamities, damages deriving from nuclear energy, in accordance with the criteria set out in specific ministerial regulations, and the provision for current risks. Non-life outstanding claims provision The entry includes, in compliance with article 33 of Legislative Decree 26 May 1997, no. 173, the amount relative to the evaluation of claims which were made during the period and in previous financial years but which have not yet been liquidated, the relative cost of liquidation, as well as the evaluation of claims which occurred but which were not declared as of the date of closure of the period, estimated on the basis of the dispositions issued by Isvap with the provision issued in compliance with article 26 of Legislative Decree, 17 March 1995, no. 175. Life business provisions The actuarial provisions comprise the provision for pure premiums, the premiums carried forward relative to annual premium policies, the provision deriving from the variation in demographic bases and the mortality-risk provision relative to policies of an index-linked and unit-linked type. The other technical provisions are comprised by provisions for future expenses.
28
Technical provisions where the risk of investment is borne by the policyholders and provisions deriving from the management of pension funds Tab. 4 - Class D technical provisions Change (in millions)
Provisions relative to contracts whose performance is related to investment funds and market indices Provisions deriving from pension funds management TOTAL (item C)
31.03.2005
31.12.2004
Abs. val.
%
8,173
7,560
613
8.11
3
3
-
0.00
8,176
7,563
613
8.11
The entry solely concerns provisions in relation to policies of an index-linked and unit-linked type and those in relation to open Pension Funds and records a total increase of 8.1% with respect to the figure as at 31 December 2004.
29
SIGNIFICANT ITEMS OF AN ECONOMIC NATURE Consolidated quarterly report premium highlights
The table below contains registered gross premiums, subdivided into direct and indirect business, with reference to the first quarter of 2005 compared with the data relative to the corresponding period for the previous financial year.
Tab. 5 – Consolidated premiums Classes
Change Abs. val.
31.03.2005
% of tot.
31.03.2004
% of tot.
18
1.38
17
1.50
1
5.88
Assistence
3
0.23
3
0.26
-
0.00
Suretyship
2
0.15
2
0.18
-
0.00
Railway rolling stock
-
n.s.
-
n.s.
-
n.s.
Ships (sea and inland water vessels)
-
n.s.
-
n.s.
-
n.s.
Land vehicle hulls
23
1.76
24
2.12
-1
-4.17
Fire and natural forces
19
1.45
17
1.50
2
11.76
(in millions)
Other damage to assets
%
Accident and Injury
22
1.68
22
1.95
-
0.00
Health
12
0.92
10
0.88
2
20.00
goods in transit
1
0.08
1
0.09
-
0.00
Sundry financial loss
2
0.15
2
0.18
-
0.00
TPL - Aviation
-
n.s.
0
0.00
-
n.s.
207
15.83
210
18.57
-3
-1.43
28
2.14
20
1.77
8
40.00
TPL- Shipping (sea and inland)
-
n.s.
-
n.s.
-
n.s.
Legal expenses
1
0.07
1
0.09
-
0.00
Non-life classes total
338
25.84
329
29.09
9
2.74
Class I
282
21.56
300
26.53
-18
-6.00
Class III
504
38.53
433
38.28
71
16.40
Class IV
-
n.s.
-
n.s.
-
n.s.
184
14.07
69
6.10
115
166.67
TPL - Land motor vehicles TPL - General
Class V Class VI
-
n.s.
-
n.s.
-
n.s.
Life classes total (1)
970
74.16
802
70.91
168
20.95
Direct business total
1,308
100.00
1,131
100.00
177
15.65
Indirect business GROUP GENERAL TOTAL
10
11
-1
-9.09
1,318
1,142
176
15.41
n.s. = not significant (1) Class I = Life insurance Class III = Life insurance related to investment funds Class IV = Health insurance as set out in art. 1, number 1, letter d) , of EEC directive no. 79/267 of 5 March 1979 Class V = Capitalisation operations Class VI = Pension funds
The registered total consolidated gross premiums as at 31 March 2005 come to 1,318 million with respect to the 1,142 million in the first quarter of 2004 with an increase of 15.41%. The premiums for non-life direct business come to 338 million with an increase of 2.74% with respect to the first quarter of 2004 (+ 9 million).
30
The premiums for life direct business come to 970 million with an increase of 20.95% with respect to the first quarter of 2004 (+168 million). The table below shows the allocation of premiums by distribution channels in accordance with the criteria adopted in respect of the ISTAT Communication implemented in compliance with ISVAP circular no. 365 of 1st March 1999: Tab. 6 – Premiums by channel
(in millions)
Non-life business
Weight on channel
Life business
Weight on channel
General total
Weight on channel
Agency
313
92.60
70
7.22
383
29.28
Banking
5
1.48
854
88.04
859
65.68
Brokers
8
2.37
20
2.06
28
2.14
Advisers
0
0.00
11
1.13
11
0.84
12
3.55
15
1.55
27
2.06
338
100.00
970
100.00
1,308
100.00
Other channels GENERAL TOTAL
The data set out in the table particularly highlights that 92.6% of the premiums for the non-life business, in the first quarter of 2005, were placed through the agency channel and 88.04% of the premiums for the life business were placed through the banking channel. Net income from investments
Net ordinary income from investments in the life and non-life business comes to 67 million.
Consolidated profit
Consolidated profit comes to 32 million net of income tax for 14 million.
31
Data and results of the first quarter
33
Data and results of the first quarter Chart no. 1 - Main data and results of the first quarter 2005 S ummary data
Change Abs. val.
31.03.2005
31.03.2004
Gross premiums written
1,318
1,142
176
15.41
Direct business - non-life
338
329
9
2.74
Direct business - life
970
802
168
20.95
(in millions)
Indirect business
%
10
11
-1
-9.09
Net investment income
67
67
0
0.00
Class III income and gains net of charges
56
116
-60
-51.72
8
4
4
100.00
Non-life underwriting result Life underwriting result
19
14
5
35.71
Consolidated net income for the period
32
28
4
14.29
Group net income for the period
28
26
2
7.69
Balance sheet highlights
Change 31.03.2005
31.12.2004
Abs. val.
%
Investments
16,948
15,780
1,168
7.40
Non-life and life technical provisions
16,506
15,379
1,127
7.33
(in millions)
Technical provisions - non-life (premiums + claims) Technical provisions - life (actuarial + Class D) of which provisions for the benefit of policyholders
2,358
2,315
43
1.86
14,148
13,064
1,084
8.30
8,176
7,563
613
8.11
Change 31.03.2005
Other data
31.12.2004
Abs. val.
%
n.
1,238
1,192
46
3.86
n.
1,107
1,092
15
1.37
n.
2,823
2,702
121
4.48
Financial promoters
n.
1,109
1,138
-29
-2.55
Brokers
n.
153
152
1
0.66
Employees * Direct Network: Agencies Networks partner: Bank branches
* Full T im e Equiv ale nt
35
Chart n. 2 – Consolidated reclassified Income Statement Change 31.03.2005
(in millions)
31.03.2004
Abs. val.
%
NON-LIFE BUSINESS
Net premiums
329
320
9
2.81
Net claims
246
248
-2
-0.81
Operating expenses Other technical items Non-life technical result
61
56
5
8.93
-14
-12
-2
-16.67
8
4
4
100.00
966
800
166
20.75
1,016
920
96
10.43
LIFE BUSINESS
Net premiums Net claims and technical provisions variation Operating expenses
41
38
3
7.89
Net income from class D investments
56
116
-60
-51.72
6
7
-1
-14.29
48
49
-1
-2.04
19
14
5
35.71
Net income from class C investments
67
67
0
0.00
Portion of investment income transferred to the life technical account
48
49
-1
-2.04
Other income net of other charges
-2
-7
5
71.43
44
29
15
51.72
2
21
-19
-90.48
Pre-tax result
46
50
-4
-8.00
14
22
-8
-36.36
Consolidated result
32
28
4
14.29
Minority interest in profits/loss for the period
4
2
2
100.00
GROUP PROFIT
28
26
2
7.69
Other technical items Portion of investment income transferred from the non technical account Life underwriting result NON TECHNICAL ACCOUNT
Result from ordinary activity Extraordinary management result Tax on income for the period
36
Comments of the Directors
37
Comments of the Directors Gruppo Cattolica
Following the positive results achieved in 2004, the Group has set itself, from the very first months of the year, important benchmarks to achieve based on the new Business Plan approved in the month of January. A focus on the insurance core business, continuation of the consolidation of current businesses and initiating new growth routes are the levers which will make it possible for the Group to consolidate its market share and develop with growing profitability. The quarter closed with a net consolidated profit of 32 million, representing a 14.3% increase with respect to the corresponding period in the previous year. This result was achieved despite the minor contribution of 6 million in total consolidated extraordinary income from the gross gains realised by Cattolica Immobiliare (compared to total extraordinary income in the first quarter 2004 of 24 million) and benefit from the reduction to the consolidated tax rate from 43.7% to 30.4%. Insurance management registered an overall underwriting result of 27 million (+ 50%) consisting in 8 million in non-life and 19 million in life business and a financial profitability trend in line with that of the previous year. Consolidated net profit Euro/Million 34 32
32
30
28
28
26
24
22
20 31/03/04
31/03/05
In the first months of the financial year, the agreement signed in December 2004 to purchase the remaining 50% of Eurosav from Banca Popolare di Bari was executed. During the quarter, the action programme underlying the 2005-2007 Business Plan was initiated. In particular, the continuing integration of all Group structures and activities was put into operation in the IT strategic area starting 1st January 2005 with the perfection of the transfer of the Cattolica Assicurazioni, Duomo Assicurazioni and Duomo Previdenza IT branches of activity to Cattolica IT Services. The purpose was to unify the organizational structure and improve performance. In the first months of the year, moreover, a review and implementation of the new bancassurance non-life business was carried out. The company specialises in the distribution of non-life products at the bank branches of the Gruppo Banco Popolare di Verona e Novara. The number of agencies has grown with respect to 31 December by 15 units, increasing from
39
1,092 to 1,107. In addition, there are the 141 Eurosav multi-card agencies to be added to these. Bank branches increased from 2,702 to 2,823 also due to the effect of the new agreement with Cassa di Risparmio di Volterra. The number of financial promoters stands at 1,109. The number of brokers with which Cattolica Aziende has collaborative relations is 153. CORE BUSINESS MANAGEMENT Preliminary highlights
The overall collection of consolidated premiums in the first quarter was equal to 1,318 million, with respect to the 1,142 million as at 31 March 2004, as already set out in the notes to the consolidated accounts. More specifically, premiums for non-life direct business come to 338 million with an increase of 2.74% with respect to the corresponding period in the previous financial year, while premiums for the life direct business stand at 970 million, displaying an increase of 20.95%.
Euro/Million 1.200
970
1.000
802
800
600
400
338
329
200 11
10
0 31/03/04 Direct non-life premiums
31/03/05 Direct life premiums
Total indirect premiums (non-life and life)
Investments now stand at 16,948 million, representing growth of 7.4% with respect to the financial statements closing as at 31 December 2004, in absolute value equal to 1,168 million. Investments Euro/Million 17.200 16.948
17.000 16.800 16.600 16.400 16.200 16.000 15.800
15.780
15.600 15.400 15.200 15.000 31/12/04
31/03/05
Technical provisions for the non-life business (premiums and claims) come to 2,358 million, displaying an increase, with respect to the closure of financial year 2004, of 1.86%; in absolute
40
value terms the increase is equal to 43 million. Provisions for the life business (actuarial and class D) come to 14,148 million with respect to 13,064 million for the year 2004 (+ 8.3%). Life and non-life technical provisions Euro/Million 18,000 16,506
16,000
15,379 14,148
14,000
13,064
12,000 10,000 8,000 6,000 4,000 2,358
2,315
2,000 0 31/12/04 Non-life technical provisions
31/03/05 Life technical provisions
Total provisions
Ordinary net capital and financial income stands at 67 million. The quarter closed with a net profit for the period of 32 million, registering a 14.3% increase with respect to the corresponding period for the previous year, net of tax for 14 million. The development of premiums collection in Italy, for the most part takes place in North Italy. The following comprises comments on the development of the insurance portfolio with reference to the main classes which display significant variations in the quarter.
41
Non-life business
The development of premiums collection in the non-life business has been mainly sustained by the following classes T.P.L. – General (+40%), health (+20%), fire and natural forces (+11.76%). Direct consolidated non-life premiums in the first quarter by class groups % Weight of the total Other classes 2.7%
Fire & Natural forces 5.2% Other damage to assets 5.2% TPL - General 6.1%
Accident and Inquiry 9.7%
TPL-land motor vehicles and land vehicles hulls 71.1%
New non-life products At the start of the financial year, the Parent Company began distribution of the insurance plan for parishes: Omnia. This is a product that substitutes the previous parish multi-risk with broader guarantees to protect a composite group in continuous change such as that of the parish. This insurance plan covers health and third party liability risks. The plan covers not only the Parish but its associated organisations as well that carry out activities with aims related to parish activities. In the month of March, a new product called Grandine was released that reflects the provisions of the new legislation (Legislative Decree of 29 March 2004, no. 102) which reformed the regulatory framework related to facilitated insurance for farming as a priority public instrument to support farming business. Work continues as well to finalise the new health insurance product, Tuttasalute, and products dedicated to Religious and Volunteer Organisations. During the quarter, TUA Assicurazioni planned activities to enrich its catalogue with multi-risk insurance products; Three lines are confirmed: Assicurì, TUA per TE, Solo TUA. During 2005, the TUA Auto line will be launched as well as a product catalogue dedicated to the motor industry. With respect to elementary classes, release of farming and agritourism products as well as implementation of health insurance products within the Solo TUA line have been planned. The Assicurì line will be implemented with the travel insurance product, Viaggi With reference to Duomo Assicurazioni, activities relating to the review and implementation of new products to be released during the year continued in the quarter.
42
Life business
The premiums for direct life business rose from 802 to 970 million, as already reported, with an increase of 20.95%. An important and significantly growing contribution is provided by Lombarda Vita and BPV Vita, with 371 and 332 million respectively and Eurosav with 162 million. Premium collections were down 6% for traditional class I policies which reached 282 million. The limited contribution from the banking and agency network was felt. The impact of the class on total direct business premiums amounted to 21.56% compared to 26.53% in the prior year. Class III grew by 16.4%, increasing from 433 to 504 million. The impact of the class on total direct business premiums rose to 38.53%. Collections are broken down as follows: index-linked policies for 298 million and unit-linked policies for 215 million Class V showed an increase of 166.67% with premium collections up from 69 to 184 million in large part due to significant agreements entered into by Eurosav (85.5 million), Lombarda Vita (40.6 million) and BPV Vita (33.5 million). With respect to distribution channels, banking channel premium collections increased by 15.09% (from 742 to 854 million) and agency channel collections were up 42.9% increasing from 49 to 70 million. Direct consolidated life premiums in the first quarter by class groups % Weight of the total
Other Classes 19,0%
Class I 29,1% Class III 51,9%
43
New life products The product mix does not appear to have been substantially modified with respect to 2004. The quarter was characterised by continuous development in diversified index-linked issues in order to back-up and respond to requests from the sales networks involved in achieving significant collection results. The traditional Class I single premium forms, pure capitalisation products and the new indexlinked have all made it possible to effectively manage the significant customer demand for investment typologies with a controlled and limited risk profile, confirmed by general market trends. During the first quarter, 30 new index-linked series were established. Several forms of guaranteed capital unit-linked products were developed as well within the secure-return products group. In the period, 6 new series were issued. Efforts on the timely update of the new ISVAP circular of 1 March 2005, no. 551/D actively continued. The circular regards transparency of life products and has a decidedly significant impact. With respect to Duomo Previdenza, distribution through TUA was started up and the relaunching of the sales agency network is underway. During the quarter, the capitalisation product “Duomo Capitale Elite” and the temporary death benefits policy “Duomo Vita Protetta” were updated. In addition, the index-linked product “Duomo Index Nuove Frontiere” was made available. Placement of this product is foreseen between 15 April and 31 May.
CAPITAL AND FINANCIAL PERFORMANCE The first months of 2004 have been characterised by a reduction in the instability of the international geo-political scenario. However, a conservative climate persists as reflected in the entrepreneur and consumer confidence indexes. The strong economic growth phase recorded in 2004 is, based on preliminary data from the first months of 2005, diminishing. However, the most dynamic world economies continue to progress at a satisfactory rate, driven mostly by the USA and China, the countries responsible for the most positive results over the last year, and are still in a phase of expansion. In the remaining economies outside the euro area, a slowdown in growth rates occurred in the Asian economies, apart from, as mentioned, China where at the end of Feburary industrial production was still growing by 20%. Growth registered by the main Latin American countries was noteworthy. There appears to be more discussion regarding the reading of the macroeconomic data for the Euro area countries where growth is having difficulty taking off and the situation between the different economies is not homogeneous. In particular, Italy has not succeeded in increasing growth to the main productive sectors. The stock markets maintained the positive trend shown in the last few months of 2004, although
44
with greater selectivity and repeated change to sector. Generally, the growth rate and quality of company profits appear comforting. At the same time, the operating conditions of most groups seem to have achieved greater levels of efficiency with a stable or falling financial borrowing rate, except for the auto industry. Industrial and company restructuring operations seem to have had positive effects while the focus is now shifting to growth to turnover and acquisition operations which are on the rise in the old continent and aboveall, in the United States. In the first months of 2005, financial management continued to be characterised by a conservative approach, with a preference for bond type investments in the Euro area, in accordance with regulatory restrictions and commitments towards the policyholders. Generally, the Group has tended to optimise its risk-yield profile with respect to its financial assets management activities, avoiding positions with little coherence with its liability structure. The credit worthiness of its bond portfolio remained high since, in a reduced spread scenario, an increase in exposure towards lesser quality corporate bonds was not considered advantageous. The proportion of investments in shares has not changed. This asset class remains under represented in the Group portfolios. There were no special derivative or structured finance operations concluded in the quarter to report, nor investments relating to developing countries. SIGNIFICANT OPERATIONS IN THE FIRST QUARTER OF 2005 The Parent Company has entered into a new syndicated loan agreement with Banca Lombarda e Piemontese with respect to a shareholding in the Credit Institution of 3.17%. The agreement takes effect 1st January and expires on 31 December 2007. On 20 January, functionaries of the Anti-Trust & Fair Trading Authority carried out an inspection at the Cattolica and at the diCA subsidiary as part of the investigation opened 15 July 2004 regarding the “ANIA-periti assicurativi” agreement. The reasons given for access by the functionaries was the need to gather information in order to better evaluate the purpose and effects of the above-mentioned agreement, as well as the need to gather information regarding the adjustment policies adopted by the insurance companies. No investigation was opened vis-a-vis Cattolica. On 31 January, the Parent Company, Banca Popolare di Verona e Novara and the Fondazione Cassa di Risparmio di Verona, Vicenza, Belluno and Ancona signed an private agreement. The purpose of the agreement is the promotion, implementation and development of the so-called “Polo Finanziario”, namely the real estate initiative that is forerunner to the logistic concentration of the agreement promoters’ operating and financial activities. On 2 February (following release last 25 January 2005 of the required authorisation on the part of the Regulatory Body) the agreement signed 27 December 2004 was given execution with the transfer to Cattolica by Banca Popolare di Bari of 625,000 ordinary shares in Eurosun Assicurazioni Vita S.p.A (shortform name Eurosav) equal to 50% of the Eurosav share capital for the overall price of 40 million. On the same day, the Company paid 2.5 million for a 50% shareholding to become a party to the subordinated loan issued by Eurosav, in which, moreover, it already held a further shareholding of 50%. On 22 February, the Anti-Trust & Fair Trading Authority notified the Company of its intention not to proceed, with respect to the acquisition operation in question, with an investigation since
45
the operation fails to give rise to the creation or strengthening of a dominant position so as to eliminate or reduce in a substantial and permanent manner, competition. On 10 February, in accordance with the resolution adopted by the Shareholders’ Meeting of the Cassa di Risparmio di Fabriano e Cupramontana last 15 December 2004, the Parent Company subscribed to 1,296,429 ordinary shares of the Cassa di Risparmio in proportion to its prior shareholding, at a price per share of 2.6 euro for a total of 3.37 million. Pursuant to the request made at the time of subscription, the Parent Company also subscribed to 531,501 shares of the Cassa di Risparmio di Fabriano e Cupramontana, that remained unopted, at a price per share of 2.6 Euro for a total of 1.382 million paid on 17 February. Following this operation, the percentage of shares held increases from 16% to 17.41%. On 15 February, Cattolica granted a loan in favour of Cattolica IT Services to a maximum of 5 million which Cattolica IT Services may utilise, even in several instalments, up to the maximum amount with a duration of eighteen months less a day. The loan was granted to the subsidiary to provide the same with the financial means necessary to carry out its business, especially in the start up phase. On account of the further appraisal of the value of the TUA Assicurazioni financial capital, delivered by the appraiser last 24 December 2004, the Parent Company paid in favour of Duomo Assicurazioni 1.1 million on 10 March. The payment constituted the balance on the price paid by the Company for purchase of the shareholding in TUA Assicurazioni. Likewise, Risparmio & Previdenza paid in favour of Duomo Assicurazioni the sum of about 22,500 Euro on the same date and for the same reason. On 16 March and on account of the mandate given the Board of Directors of Cattolica IT Services by the Shareholders’ Meeting held last 27 December 2004, the Board resolved upon a total capital increase of 3.391 million euro. The increase became necessary following the review carried out on the values attributed to the branches of activity contributed in kind to the Parent Company, by Duomo Assicurazioni and by Duomo Previdenza at the time of the prior share capital increase (resolved upon 27 December and perfected by way of the contribution of the branches of activity with effect 1st January 2005). The appointed appraiser performed an appraisal with values updated to 31 December 2004 showing the differences with respect to the values in the appraisal drafted as at 30 September 2004. The latter appraisal was used as a basis at the time of the capital contribution. Considering the differentials shown by the above-mentioned appraisal, the share capital increase was attributed with 2.996 million in favour of Cattolica and 395 thousand euro in favour of Duomo Assicurazioni. On account of the shortfall, Duomo Previdenza paid 126 thousand euro in cash. As a result, the share capital of Cattolica IT Services increased by 20.954 million euro and is represented as follows: 19.066 million amounting to 90.99% in favour of the Parent Company , 1.844 million equal to 8.80% in favour of Duomo Assicurazioni, 44 thousand euro equal to 0.21% in favour of Duomo Previdenza. Cattolica subscribed to a pro quota capital increase resolved upon by Mapfre Re, subscribing to 146,658 newly issued shares at a share price of 7.33 euro, including a 4.23 euro premium for a total expenditure of 1,075,003.14 euro.
46
SIGNIFICANT EVENTS SUBSEQUENT TO THE CLOSURE OF THE FIRST QUARTER On 4 April Cattolica subscribed to a capital increase resolved upon the subsidiary Verona Gestioni SGR paying the sum of 2.175 million with respect to the issue of 2,175 ordinary shares with a nominal value of 1,000.00 euro each. On 8 April Duomo Assicurazioni paid in favour of the subsidiary TUA Assicurazioni the sum of 1.94 million to cover losses. OTHER INFORMATION IAS project (International Accounting Standard) On 15 April 2005 CONSOB (Italian listed-company and stock-market regulatory commission) issued the final amendments to the Issuers’ Rules no. 11971/1999 implementing the changes introduced by the coming into force of EU regulation no. 1606/2002 (the so-called IAS/IFRS regulation) regarding application of the international accounting standards (IAS/IFRS). Based on the new Issuers’ Rules, mandatory publication of initial data calculated in accordance with the international accounting standards (IAS/IFRS) is to take place with the consolidated half-year report 2005. As a result, the Group will begin disseminating information with respect to the quantitative impact of the requirements. During the quarter, development of the Group’s transition to the new accounting standards (IAS/IFRS) continued for the purpose of drafting the consolidated financial statements. The transition project involves a significant commitment with respect to development of a new information system, which alongside the current system, must produce the new consolidated financial statements. At the same time this system is developed, the required IT support is being designed and made ready to input and process the IAS/IFRS data. In addition, the employee training programme to enhance knowledge regarding the international accounting standards continues. Investor Relations and shares performance on the Stock Exchange
Dialogue with investors and analysts who follow Cattolica shares performance also continued in the first months of 2005, both in Italy and abroad, with the aim of ensuring greater visibility and transparency to the market as regards the Group’s business results and strategies. On 27 January an analyst meeting was organised in Milan at the Italian stock exchange (Borsa Italiana) to illustrate the 2005-2007 Group business plan. The presentation was chaired by General Manager Ezio Paolo Reggia and about 130 people participated from among financial analysts and institutional investors. In the month of February, top management was directly involved in the banking-insurance annual conference organised by UBS Warburg in Rome. Several of the leading Italian and foreign institutional investors participated. The Group further intensified its Investor Relations activities with road-shows, one-to-one meetings and telephone conferences with investors in the most important European financial
47
centres including Amsterdam, Edinburgh, Frankfurt, Geneva, London, Madrid and Paris. There are seven companies that periodically publish analysis and commentaries on Cattolica shares. The Investor Relations section on the Company’s institutional website (www. cattolica.it) is an important communication tool. It has been completely updated and its contents enriched with pages dedicated to corporate governance, analyst coverage of Cattolica shares, and corporate responsibility. The information on the website is also available in English, with a view to guaranteeing foreign investors equality of access to both information and the main company data relative to Gruppo Cattolica. Share performance During the period 1 January - 31 March Cattolica shares registered a minimum price of 32.75 euro and a maximum of 36.59 euro. Capitalisation of the share in the stock exchange as at 31 March was equal to 1,734 million. The performance of Cattolica shares in the first quarter of 2005 recorded an increase in their quotation of 8.13% with respect to 4.31% for the mibtel index and 2.06% for the Italian insurance index. The positive performance of Cattolica shares also emerges from comparison to the European Dow Jones Eurostoxx Insurance Index which recorded performance of 3.67% in the first quarter of 2005. In addition, in the first three months of 2005 average volumes recorded an increase of 2.65% with respect to the same period in 2004. The share enjoys a beta indicator equal to 0.50 which marks those shares that behave better than the index during falling share price phases. Human Resources
As at 31 March Group personnel comprises 1,302 collaborators, with respect to 1,273 as at 31 December, subdivided as follows: 36 managers (-2), 162 officers (+2), 1,104 Office workers (+29). Full time equivalent employees stand at 1,238 with respect to 1,192 at the end of the year. Employees Number 1,500 1,302 1,273
1,250
36
38
162
160
1,000
750 1,104
1,075
500
250
0 31/12/04
31/03/05 Impiegati
Funzionari
Dirigenti
48
Rating
At the start of 2005 the American company, A.M. Best, one of the world’s oldest and most authoritative rating companies, specialising in the insurance compartment, confirmed its “A” classification for the Parent Company corresponding to a qualification of “excellent” as regards the Group’s financial solidity. The same company had already attributed an “A” in the previous five analyses, the last of which referred to January 2004. The assessment is accompanied by a forecast of stability for the immediate future. In the month of January 2005 Standard & Poor’s, one of the most important international rating companies, gave Cattolica an assessment of “Api”, based on analysis of data from the financial year 2003. FUTURE BUSINESS OUTLOOK With reference to the insurance business, it is expected that the results achieved during the quarter will be further consolidated based on the 2005-2007 Business Plan’s strategic objectives, unless external circumstances arise due to exceptional and unforeseeable events. With reference to non-life business and life business, growth to collections is expected in line with the Business Plan objectives. On the basis of current market trends, there are no serious issues to be noted with respect to Group financial management and positive growth to overall results is expected.
THE BOARD OF DIRECTORS
Brescia, 10 May 2005
49
