Consolidated Interim Report

 as of June 30th 2007 

Approved by the Board of Directors on September 12th, 2007

Table of contents

Statutory Governance Bodies 9

Group structure 11

Context in which the Group operates 15

Management report 25

The Group during the first six months of 2007 27 Key indicators of Cattolica Group business performance 29 The Group’s New Strategic Plan and re-organization of the business model 36 Ways in which the Group image and information are disclosed 38

Business performance 41 A brief outline of the business performance for the period (by main financial 43 statement aggregates and by segment) Insurance business and other sectors of activities 47 Equity and financial performance 57

Risk management 61 Risk management 63 Insurance and market risk 63

Organization and resources 65 Sales activities 67 Information systems 68 Compliance 70 Audit 71 Human resources 71

Significant events and other information 73 Significant events during the period 75 Other information 80 Significant events subsequent to the end of the six month period 83 Outlook for business activities 84

Statement of reconciliation between the shareholders’ equity and profit for the year 85 of the Parent Company and the corresponding consolidated balances

Prospects

Consolidated balance sheet and income statement 87 Statement of changes in shareholders’ equity and statement of cash flows 91

Notes to the accounts 95

Part A - General Accounting Policies and Consolidation Data 99

Part B – Accounting policies and standards 105

Part C – Information on the consolidated balance sheet and income statement 123

Part D – Other information 161

Part E – Acquisitions and Transfers 165

Summary index of tables and charts

Tables

Table 1 – Key economic indicators 30

Table 2 – Key equity indicators 30

Table 3 – Employees and sales network 30

Table 4 – Reclassified consolidated balance sheet 31

Table 5 – Reclassified consolidated income statement 32

Table 6 – Reclassified consolidated income statement by segment of activities 33

Table 7 – Key indicators 33

Table 8 – Total premiums written 50

Table 9 - Investments - breakdown 57

Table 10 – Group employee headcount 72

Table 11 – Ratios per share 82

Table 12 – Scope of consolidation (ISVAP Instruction No. 2460 dated August 10th, 103 2006)

Table 13 – Consolidated balance sheet by sector of activities (ISVAP Instruction No. 127 2460 dated August 10th, 2006)

Table 14 – Intangible assets 128

Table 15 - Goodwill – changes during the period 128

Table 16 – Other intangible assets – changes during the period 130

Table 17 – Tangible assets 131

Table 18 – Real estate property and other tangible assets – changes during the period 132

Table 19 – Analysis of the technical provisions – reinsurance amounts (ISVAP 133 Instruction No. 2460 dated August 10th, 2006)

Table 20 – Investments 133

Table 21 – Real estate property investments – changes during the period 134

Table 22 – Analysis of tangible and intangible assets (ISVAP Instruction No. 2460 136

dated August 10th, 2006)

Table 23 – Equity investments in subsidiary and associated companies and joint 135 ventures

Table 24 – Analysis of non-consolidated equity investments (ISVAP Instruction No. 136 2460 dated August 10th, 2006)

Table 25 – Classification of financial investments 136

Table 26 – Financial investments 137

Table 27 – Analysis of financial assets (ISVAP Instruction No. 2460 dated August 10th, 137 2006)

Table 28 – Financial assets valued at fair value recorded in the income statement 139

Table 29 – Analysis of assets and liabilities relating to contracts issued by insurance 139 companies where the risk is borne by the policyholder and deriving from pension fund management (ISVAP Instruction No. 2460 dated August 10th, 2006)

Table 30 – Sundry receivables 140

Table 31 – Other asset items 140

Table 32 – Other assets 142

Table 33 – Shareholders’ equity 143

Table 34 – Analysis of technical provisions (ISVAP Instruction No. 2460 dated August 144 10th, 2006)

Table 35 –Financial liabilities 146

Table 36 – Analysis of financial liabilities (ISVAP Instruction No. 2460 dated August 146 10th, 2006)

Table 37 – Payables 147

Table 38 – Employee severance indemnity and length of service bonus 149

Table 39 – Other liability items 149

Table 40 – Other liabilities 151

Table 41 - Breakdown of direct and indirect gross premiums written by insurance class 151 group

Table 42 - Breakdown of premiums written by geographic area 152

Table 43 – Insurance business 152

Table 44 – Analysis of insurance operating expenses 152

Table 45 – Financial operations 155

Table 46 – Financial and investment income and charges (ISVAP Instruction No. 2460 155 dated August 10th, 2006)

Table 47 – Consolidated income statement by segment of activities (ISVAP Instruction 158 No. 2460 dated August 10th, 2006)

Table 48 – Analysis of technical insurance items (ISVAP Instruction No. 2460 dated 158 August 10th, 2006)

Table 49 – Analysis of insurance operating expenses (ISVAP Instruction No. 2460 158 dated August 10th, 2006)

Table 50 – Technical provisions to be covered 161

Table 51 – Assets allocated for coverage 162

Table 52 – Claims handling speed 163

Table 53 – Balance sheet and income statement transactions 163

Table 54 – Balance sheet of the group subject to disposal held for sale 169

Table 55 – Breakdown of the financial investments of the group subject to disposal held 170 for sale

Table 56 - Breakdown of technical reserves of the group subject to disposal held for sale 171

Table 57 - Income statement of the group subject to disposal held for sale 172

Table 58 - Premiums of the group subject to disposal held for sale 173

Table 59 – Insurance business 174

Table 60 - Analysis of insurance operating expenses 174

Table 61 - Financial operations 175

Statutory Governance Bodies

BOARD OF DIRECTORS

Chairman Mr. Paolo Bedoni (*)

Acting Deputy Chairman Mr. Giovannimaria Seccamani Mazzoli (*)

Deputy Chairman Mr. Giovanni Zonin (*)

Secretary Mr. Ermanno Rho (*)

Directors Mr. Pierluigi Angeli Mr. Luigi Baraggia (*) Prof. Angelo Caloia Mr. Giuseppe Camadini (*) Mr. Luciano Colombini Prof. Angelo Ferro Mr. Stefano Gnecchi Ruscone Prof. Felice Martinelli Mr. Aldo Poli Mr. Pilade Riello, Cavaliere di Lavoro Mr. Pier Giorgio Ruggiero Mr. Domingo Sugranyes Bickel Prof. Antonio Tessitore

BOARD OF STATUTORY AUDITORS

Chairman Prof. Alessandro Lai

Statutory Auditors Mr. Marco Bronzato Mr. Luigi de Anna

Alternate Auditors Mr. Massimo Ghetti Mr. Giovanni Glisenti

GENERAL MANAGEMENT

General Manager Mr. Giovan Battista Mazzucchelli Deputy General Manager Mr. Marco Cardinaletti

(*) The Directors whose names are marked with an asterisk are part of the Executive Committee

Group structure

As of June 30°, 2007

NON-LIFE LIFE OTHER

100% 100% 50% (*) ABC Assicura BPV Vita Cattolica Immobiliare

33,33% 100% 100% C.I.R.A. Duomo Previdenza Polo Finanziario

Duomo Uni One 100% 99,99% Assicurazioni Persona Life

100% 50,1% Lombarda Assicurazioni Lombarda Vita

8,8% 90,99% 95,17% 0,21% 97% Cattolica IT Services Risparmio & Previdenza TUA Assicurazioni 7,53% 92,47% di.CA 66% San Miniato Previdenza 100% TUA Retail

50% Axa Cattolica Uni One Servizi Previdenza in Azienda 100%

5% 65% Verona Servizi (**) 30%

20% Prisma Non-life insurance

30% Life assurance 70% Cattolica Investimenti SIM Property

100% Operating services Verona Gestioni SGR

Financial services 16,99% Vegagest SGR Banks

Dormant, not authorized to carry out activities as of June 30th, 2007 Cassa di Risparmio 24,72% di San Miniato (*) Represented as an asset subject to disposal as of June 30th, 2007 (**) Undergoing disposal

As of June 30th, 2007

17,24% 1,24% UBI Banca Cassa di Risparmio di Fabriano e Cupramontana

6,62% 0,47% Banca Regionale Europea Banca Popolare S. Angelo

0,15% 6,38% Banca di Valle Camonica Emil Banca

Context in which the Group operates

Macroeconomic Bond markets scenario The European Central Bank continued raising interest rates, also in the second quarter of 2007. From the beginning of the year, it raised the official interest rate, bringing the Repo rate from 3.5% to 4%, as well as confirming the trend of continuing with the monetary tightening.

By contrast, in the first six months of 2007, the Federal Reserve left interest rates unchanged at 5.25%.

With regards to the bond markets, the yield on ten-year U.S. government bonds rose by 37 basis points during the second quarter, to 5.01% (4.64% at the end of the first quarter of 2007), with a positive yield differential, up for short-term securities, leading to the expectation that interest rates will hold steady over the next few months.

The levelling off of the curve was also confirmed by the trend in interest rates in the Euro area, with a spread for German 10-year bonds of 5 basis points on 2-year yields.

Stock markets

Despite the curbing which occurred during the first week of June, the US stock markets maintained a favourable trend in the second quarter of 2007 as well, with the S&P 500 showing positive performance and the Nasdaq increasing by over 7%. The sectors favoured by investors were wholesale consumer, industrial and banking products.

The European markets also performed positively, with an increase of over 8% in the Eurostoxx index, and positive performance for the German market, with the Dax increasing by almost 20%. The performance of the Italian market was more contested and volatile, with the S&P/Mib index disclosing a positive performance of 1.34%. The satisfactory performance of the markets was mainly due to expected mergers and acquisitions, primarily in the energy, chemicals, motor vehicles and financial sectors.

As regards the stock markets in emerging countries, the Chinese stock market recorded positive performance. Despite the fact that it is considered by many analysts to be overvalued and at the limit of its potential, the Hang Seng Index recorded an increase of over 10%, with growth of 35.10% in more than a year and a half.

The Japanese market’s performance disclosed a sharp improvement, managing to positively close the first half of 2007 with an increase of 5.36% in the Nikkei index, exceeding 18,000 points.

Monetary markets

The first half of 2007 closed with the strengthening of the Euro against the Dollar, with the US currency which returned above quota 1.36, and against the Yen, at an all-time low of 167.04.

Institutional Within the articulated panorama of the measures adopted by the legislator and the sector framework authorities which characterized the period, some of the legislative innovations which affected the insurance sector are mentioned.

Provisions concerning the protection of consumers, promotion of competition and development of economic activities

Italian Law No. 40 dated April 2nd, 2007 was published in the ordinary supplement No. 91 to the Italian Official Gazette No. 77 dated April 2nd, 2007, converting Italian Legislative Decree No. 7 dated January 31st, 2007 with amendments, which originally contained urgent measures for the protection of consumers, the promotion of competition, the development of economic activities and the creation of new businesses. The various articles include Article 5 which contemplates a series of measures concerning the insurance sector:

• extension to all the non-life classes of the restriction on exclusive brand distribution clauses; • provisions imperatively applicable to the clauses of the TPL motor no-claims bonus tariff formulas, excess and similar; • creation of a public information service for permitting the consumer to compare the TPL motor tariffs applied by the various insurance companies in relation to each individual profile; • amendment to Article 1899 of the Italian Civil Code, with provision of the annual withdrawal faculty – without charges and involving notice of 60 days – from long-term non-life insurance policies, stipulated as from the date the law came into force, with the possibility what is more of withdrawing from previous policies which have had a duration of at least three years.

The provisions in question came into force on April 3rd. The nullity of the current clauses is confirmed, subject to the possibility of their adaptation within the deadline of 60 days as from the applicability or, limited to the faculty to withdraw from long-term policies, within the deadline of 180 days.

In conclusion, note that the restriction concerning exclusive distribution clauses applies as from the date of applicability of the conversion law, subject to the faculty to adapt, by January 1, 2008, the distribution agreements stipulated prior to this date.

Provisions concerning the annual and consolidated accounts

Italian Legislative Decree No. 32 dated February 2nd, 2007, implementing directive 2003/51/CE which amends directives 78/660, 83/349, 86/635 and 91/674/CEE, has been published in the Italian Official Gazette No. 73 dated March 23rd, 2007; said legislation concerns the annual accounts and consolidated accounts of certain types of companies, banks and other financial institutions and insurance companies, specifically in relation to the contents of the management report and the audit report, as well as containing the obligations to provide specific disclosure on the fair value valuations of derivative financial instruments. The new provisions will apply as from the 2008 statutory financial statements.

Amendments to the Finance Consolidation Act

Italian Legislative Decree No. 51 dated March 28th 2007, published in the Italian Official Gazette No. 94 et seq. dated April 23rd, 2007, concerns the “implementation of directive 2003/71/CE concerning the prospectus to be published for the public offer or admission to trading of financial instruments, which amends directive 2001/34/CE”. The decree, which came into force on April 24th, 2007, has made numerous amendments and integrations to Italian Legislative Decree No. 58 dated February 24th, 1998 (hereinafter the TUF), also affects the insurance sector since, on the one hand, Italian Law No. 262 dated December 28th, 2005 (law on the protection of savings), repealed letter f) of Article 100.1 of the TUF, thereby also subjecting financial products issued by insurance companies to the legislation on the raising of investment (information prospectus) and, on the other hand, Italian Legislative Decree No. 303 dated December 29th, 2006, introducing the new letter w-bis) into Article 1.1 of the TUF, stated that “financial products issued by insurance companies” must be understood to be Class III policies (with the exception of supplementary welfare-related ones) and capitalization transactions. Further to the afore-mentioned legislative innovations, the CONSOB had taken steps to adapt its regulations concerning issuers, providing specific information prospectus layouts to be used for the placement of the afore-mentioned insurance-related financial products.

CONSOB – Amendments to the Issuers’ Regulations

In pursuance of the provisions contained in Italian Law No. 262 dated December 28th, 2005, as amended by means of Italian Legislative Decree No. 303/2006, the CONSOB adopted resolution No. 15915 dated May 3rd, 2007, which contains a series of amendments to the Issuers’ Regulation. Specifically, these concern:

• the governance of the listed issuers (presentation of the lists of candidates for the office of director, election formalities for the minority statutory auditor and the limits to the accumulation of offices, declaration of the appointed executive); • the discipline of the accounts auditing; • corporate disclosure (mergers between listed and unlisted companies, control of the information to the general public, information on compliance with codes of conduct, information on plans pursuant to Article 114-bis of the TUF, exclusion of the rating firms from the regulations of the searches and appraisals); • placement of financial products, including those issued by insurance companies.

Innovations regarding the appointment of the management and auditing bodies include the following matters:

• it has been envisaged that the CONSOB publish – within thirty days of the end of the accounting period – the portion of shareholdings required for the presentation of the lists of candidates (see Article 144-septies of the Issuers’ Regulations); • a differentiated regime is envisaged, with regards to the thresholds for the presentation of the lists, for privatized companies for which the provisions of Article 4 of Italian Law No. 474/1994 (see Article 144-undecies of the Issuers’ Regulations) remain valid. By way of adapting to the provisions contained in the afore-mentioned resolution, on June 27th the Board of Directors of the Parent Company resolved the necessary amendments

to the Articles of Association.

Under Resolution No. 15960 dated May 30th, 2007 the CONSOB also approved the amendments to the Issuers’ Regulations (Articles 150-152) concerning the accounts auditing of groups, by way of implementation of Article 165 and 165 bis of the Finance Consolidation Act.

CONSOB Resolution No. 15961 dated May 30th, 2007, containing amendments and additions to Regulation No. 11522 dated 1998, which concerns the regulation of financial brokers (hereinafter, CONSOB Brokers’ Regulations) was published in the Italian Official Gazette No. 134 et seq. dated June 12th 2007. In detail, the resolution in question introduced, as part of the more general discipline of brokers, new provisions concerning the distribution of financial products issued by insurance companies, in accordance with Article 25-bis of Italian Legislative Decree No. 58 dated February 24th, 1998 (T.U.F.). It therefore follows that, for the purpose of placement of the “insurance-related financial products”:

• the adequate training and professional updating of the sales networks will have to be guaranteed, together with the observance of the rules of conduct which said companies are charged with in accordance with Article 36.1 quinquies of the CONSOB Brokers’ Regulations; • the agents, the brokers and the direct producers will have to apply the ISVAP Regulation No. 5, as well as observe the instructions they have been provided with by the proposing company concerning the observance of the rules of conduct pursuant Article 36.1 quinquies of the CONSOB Brokers’ Regulations; • the “parties qualified to carry out insurance brokerage” (banks, stockbroking firms, brokers pursuant to Article 107 of the T.U.B. and Banco Posta) will have to observe the instructions laid down by Articles 36 ter and 36 quater of the CONSOB Brokers’ Regulations.

Measures of a With reference to measures of a fiscal nature, the main innovations which characterized the fiscal nature period are described as follows.

Communication to the tax register of the sums paid out to injured parties

The provision of the Director of the Inland Revenue dated January 19th, 2006 set April 30th 2007 as the deadline for the forwarding via screen-based methods of the data relating to sums paid out to injured parties. In this connection, the Inland Revenue circular No. 28/E dated August 4th, 2006 clarified that the communication of such data was compulsory for the sums disbursed as from October 1, 2006, even if they related to payments made and policies stipulated beforehand.

Shareholders are reminded that the obligation for the insurance companies was introduced by Italian Law Decree No. 223 dated August 4th, 2006, converted by Italian Law No. 248 dated August 4th, 2006.

List of customers and suppliers

Section 4-bis of Article 8 bis of Italian Presidential Decree No. 322 dated 1998, in addition to Article 37.8 letter a) of Italian Law Decree No. 223 dated 2006, reinstated the obligation to present, via screen-based transmission, the list of customers and suppliers.

This provision envisaged that tax payers are obliged to present the list of the parties in relation to whom invoices have been issued in the year to which the communication refers, as well as - in relation to the same period – the list of parties with a VAT Number from whom purchases - significant for VAT purposes - have been made.

The deadline for the first transmission of the list relating to the transactions concluded in 2006 is fixed for October 15th, for monthly tax payers.

IRAP tax rate

The 2007 finance bill has confirmed the increase in the IRAP (regional business tax) rate for the years subsequent to 2006 as well. The increased rate of 5.25 percent continues to apply in the Veneto and Lombardia regions.

Company vehicles

As a result of the amendments caused by Article 2.71 of Italian Decree Law No. 262 dated 2006, to letter b) of Article 164.1 of the ITCA, the costs and the other negative components relating to motor transport used for business purposes are to be considered as non-deductible from company earnings.

Costs incurred for telephone services

For the purpose of determining the company’s earnings, the portions of amortization/depreciation, lease payments, financial or otherwise, or rental payments, and the usage and maintenance costs relating to terminal equipment for electronic communication services intended for public use, are deductible to the extent of 80 percent. Specifically, in accordance with the new wording of Article 102.9 of the ITCA (as amended by the 2007 Finance Bill), this provision is also applicable in relation to telephone services, both mobile and land-line, as well as those for the screen-based transmission of electronic data. Shareholders are reminded that, prior to the amendment made by the 2007 Finance Bill, the deduction, to the extent of 50 percent, was envisaged exclusively with reference to mobile telephone services. The provisions apply as from the tax period subsequent to that underway as of December 31st, 2006.

Capital losses and negative differences deriving from the disposal of equity investments

Article 5-quinquies, comma 3, of Italian Decree Law No. 203 dated 2005, converted by Italian Law No. 248 dated December 2nd, 2005 envisaged that, in relation to capital losses and negative differences for an amount greater than € 50,000, deriving from transactions on

shares or other traded securities, also further to several transactions, on Italian or foreign organized markets which have been carried out as from the 2004 tax period, the tax payer is obliged to inform the Inland Revenue of the data and information necessary for the purposes of permitting the assessment of the compliance of the related transactions with anti-evasion provisions, pursuant to Article 37-bis of Italian Presidential Decree No. 600 dated September 29th, 1973.

The provision of the Director of the Inland Revenue dated March 29th, 2007, published in the Italian Official Gazette No. 86 dated April 13th, 2007, lists the data and information forming the subject matter of the communications and established the procedures and the deadlines which are set as of the forty-fifth day subsequent to that of expiry for the presentation of the income tax declarations.

In the event of omitted, incomplete or inaccurate communication, the capital losses and the negative differences are not tax deductible.

Buildings used for operating purposes

Article 36, sections 7, 7-bis and 8 of Italian Decree Law No. 223 dated 2006, introduced the non-deductibility of the portions of depreciation referable to areas on which buildings used for operating purposes exist.

For the purpose of the determination of the portion of depreciation of such buildings deductible for tax purposes, the overall cost of the buildings must be adopted net of the cost of the areas occupied by the construction. The legislative amendment is strictly associated with the adoption of the IAS/IFRS International Accounting Standards.

Insurance According to the provisional figures relating to the Italian insurance industry, published by industry1 the trade association (ANIA) in June, the rise in overall premiums for 2007 should be in line with that for 2006. It is in fact estimated that the volume of premiums written should reach 107 billion, disclosing growth of 0.7% when compared with 2006 premiums and an incidence on GDP of 7.1%, practically unchanged with respect to last year.

In the non-life classes, growth of 2.5% is estimated (2.4% in 2006), involving total premiums written of 38.1 billion. This performance is influenced by the TPL motor class whose premiums should increase in 2007 by 0.8%.

The increase in property sector premiums (fire and other damage to property) should come to around 4%, thanks to the pick-up in economic activities.

Higher than average growth in the non-life sector should also concern the accident & injury, health and general TPL classes. By contrast, the change in the land vehicle hulls class (+ 1.8%) should be below average.

Life class premiums written should remain at last year’s levels (around 69 billion).

1 Source ANIA – “Italian Insurance Industry 2006/2007” (pages 233 et seq.) – June 2007

With regards to the individual life classes, contained growth is estimated for class I-human life (equating to 1.1%, compared with a decrease of 3.3% in 2006), as well as growth in class III-investment funds (+ 5.7% compared with 3.8% in 2006), whilst with regards to the other life classes, the decrease in written premiums of class V-capitalization should continue, having already commenced in 2006, and significant growth in class VI should be seen, influenced by the new premiums associated with the reform on supplementary welfare.

Management report

The Group during the first six months of 2007

Business performance

Risk management

Organization and resources

Significant events and other information

The Group during the first six months of 2007

The Cattolica Group, which comprises twelve insurance companies, of which one undergoing disposal, five service companies, an asset management company, a stockbroking company and two property companies, closed the first half of 2007 with consolidated net profit of € 29 million.

KEY INDICATORS OF CATTOLICA GROUP BUSINESS PERFORMANCE AS OF JUNE 30th, 2007

The tables which follow show the most significant performance indicators, the figures concerning employees and the sales network, the reclassified consolidated balance sheet and income statement and the key indicators compared to those of the previous six-month period and those as of December 31st, 2006, all of which in accordance with the international accounting standards.

The changes shown, unless indicated otherwise, refer as follows: in relation to the balance sheet items, to the situation as of June 30th, 2007 compared with that as of December 31st, 2006 and, in relation to the income statement items, the situation as of June 30th, 2007 compared with that as of June 30th, 2006.

Further to the transactions underway as of June 30th, 2007, which will lead to transfer of control of the equity investment in BPV Vita from the Parent Company, pursuant to IFRS 5, sections 33 and 35, the related assets and liabilities were classified under the specifically envisaged items: “6.1 Non-current assets or of a group subject to disposal held for sale”, “6.1 Liabilities of a group subject to disposal held for sale” and the economic results were classified under “4 Profit (Loss) from business activities suspended”.

This reclassification was also made on the economic figures for the corresponding period of the previous year, according to IFRS 5, section 34.

Shareholders are reminded that, as indicated in the 2005 consolidated financial statements, the term “premiums written” means the sum total of the insurance premiums (as defined by IFRS 4) and the amounts relating to investment policies (as defined by IFRS 4 which refers the related discipline to IAS 39).

Table 1 – Key economic indicators Change (€ millions) 30.06.2007 30.06.2006 Amount %

Gross premiums written 2.016 1.922 94 4,89 Direct business - non-life 803 815 -12 -1,47 Direct business - life 1.200 1.091 109 9,99 Indirect business 13 16 -3 -18,75 Investment policies Life 41 33 8 24,24 Total premiums 2.057 1.955 102 5,22

Pre tax result 23 39 -16 -41,03 Profit from discontinued operations 6 11 -5 -45,45 Consolidated net profit 29 50 -21 -42,00 Group net profit of the period 19 43 -24 -55,81

Table 2 – Key equity indicators Change (€ millions) 30.06.2007 31.12.2006 Amount %

Investments 14,130 18,125 -3,995 -22.04 Assets of a group subject to disposal held for sale 3,114 0 3,114

Technical provisions 12,889 16,013 -3,124 -19.51 Financial liabilities relating to investment policies 1,213 1,969 -756 -38.40 Liabilities of a group held for sale 3,021 0 3,021 Consolidated net shareholders' equity 1,264 1,376 -112 -8.14

Table 3 – Employees and sales network Change (number) 30.06.2007 31.12.2006 Abs. Amount %

Employees (1) 1,437 1,466 -29 -1.98

Direct network: Agencies 1,454 1,482 -28 -1.89 including non-exclusive agencies 125 127 -2 -1.57 Partner networks: Bank branches(2) 3,075 3,049 26 0.85 Financial advisors 906 926 -20 -2.16 Brokers 282 269 13 4.83

(1) Full Time Equivalent (2) Does not include branches of Banca Popolare di Vicenza

Table 4 – Reclassified consolidated balance sheet

Change Compulsory (€ millions) 30.06.2007 31.12.2006 Abs. Amount % format items(*)

Assets Property investments 1100.004.1 Property 30 31 -1 -3.23 2.1 Equity investments in subsidiary and associated companies and joint ventures 81 80 1 1.25 4.2 Loans and receivables 357 359 -2 -0.56 4.4 Investments held to maturity 112 137 -25 -18.25 4.3 Financial assets available for sale 6,186 6,566 -380 -5.79 4.5 Financial assets valued at fair value stated in the income statement 6,891 10,361 -3,470 -33.49 4.6 Cash and cash equivalents 472 590 -118 -20.00 7 Investments 14,130 18,125 -3,995 -22.04 Intangible assets 226 222 4 1.80 1 Technical provisions - reinsurance amount 500 500 0 0.00 3 Sundry receivables, other tangible assets and other asset items 4,259 1,206 3,053 253.15 (***) of which assets of a group held for sale 3,114 0 3,114 6.1

TOTAL ASSETS 19,115 20,053 -938 -4.68

Liabilities and net shareholders' equity Group capital and reserves 1,123 1,095 28 2.56 Group net income for the year 19 139 -120 -86.33 Shareholders' equity pertaining to the Group 1,142 1,234 -92 -7.46 1.1 Capital and reserves pertaining to minority shareholders 112 121 -9 -7.44 Net income for the period pertaining to minority shareholders 10 21 -11 -52.38 Shareholders' equity pertaining to minority shareholders 122 142 -20 -14.08 1.2 Total capital and reserves 1,264 1,376 -112 -8.14 1 Provision for unearned premiums 578 572 6 1.05 Provision for outstanding claims 2,612 2,589 23 0.89 Gross technical provisions - non-life 3,190 3,161 29 0.92 3 Actuarial provisions 9,556 12,632 -3,076 -24.35 Shadow accounting provision -34 -6 -28 -466.67 Gross technical provisions - life 9,522 12,626 -3,104 -24.58 3 Other gross non-life technical provisions 1 1 0 0.00 3 Other gross life technical provisions 176 225 -49 -21.78 3 Financial liabilities 1,346 2,109 -763 -36.18 4 of which deposits from policyholders 1,213 1,969 -756 -38.40 Allowances, payables and other liability items 3,616 555 3,061 551.53 (***) of which liabilities of a group subject to disposal held for sale 3,021 0 3,021 6.1

TOTAL LIABILITIES AND NET SHAREHOLDERS' EQUITY 19,115 20,053 -938 -4.68 (*) Indicates the items on the statements in the consolidated interim report as per ISVAP instruction No. 2460 of August 10th, 2006 (**) Sundry receivables, other asset items, and other tangible assets (balance sheet items under assets = 5 + 6 + 2.2) (***) Allowances, payables and other liability items (balance sheet items under liabilities = 2 + 5 + 6)

Table 5 – Reclassified consolidated income statement

Change Compulsory format (€ millions) 30.06.2007 30.06.2006 Abs. Amount % items (*)

INSURANCE BUSINESS Net premiums 1,909 1,825 84 4.60 1.1 Net charges relating to claims 1,784 1,673 111 6.63 2.1 Operating expenses 227 220 7 3.18 of which commission and other acquisition costs 151 151 0 0.00 2.5.1 of which other administrative expenses 76 69 7 10.14 2.5.3 Other revenues net of other costs (other technical income and charges) -23 -20 -3 -15.00 1.6 - 2.6

FINANCIAL OPERATIONS Net income deriving from financial instruments valued at fair value stated in the income 47 -11 58 527.27 1.3 statement Net income deriving from equity investments in subsidiary and associated companies and 11 00.001.4 - 2.3 joint ventures Net income deriving from other financial instruments and property investments 135 201 -66 -32.84 1.5 - 2.4 Commission income net of commission expense 1 5 -4 -80.00 1.2 - 2.2 Operating expenses relating to investments 3 8 -5 -62.50 2.5.2 Result of financial operations 181 188 -7 -3.72 RESULT OF INSURANCE BUSINESS AND FINANCIAL OPERATIONS 56 100 -44 -44.00 Other revenues net of other costs (excluding other technical income and charges included -4 -18 14 77.78 1.6 - 2.6 under financial operations) PRE-TAX PROFIT FOR THE PERIOD 52 82 -30 -36.59 Taxation 29 43 -14 -32.56 3

NET PROFIT FOR THE PERIOD 23 39 -16 -41.03 PROFIT FROM BUSINESS ACTIVITIES SUSPENDED 6 11 -5 -45.45 4 CONSOLIDATED PROFIT FOR THE PERIOD 29 50 -21 -42.00 Net income for the period pertaining to minority shareholders 10 7 3 42.86 NET INCOME FOR THE PERIOD PERTAINING TO THE GROUP 19 43 -24 -55.81 (*) Indicates the items on the statements in the consolidated interim report as per ISVAP instruction No. 2460 of August 10th, 2006

Table 6 – Reclassified consolidated income statement by segment of activities

NON-LIFE LIFE OTHER TOTAL (€ millions) 30.06.2007 30.06.2006 30.06.2007 30.06.2006 30.06.2007 30.06.2006 30.06.2007 30.06.2006

INSURANCE BUSINESS Net premiums 718 741 1,191 1,084 0 0 1,909 1,825 Net charges relating to claims 561 603 1,223 1,070 0 0 1,784 1,673 Operating expenses 161 160 64 58 2 2 227 220 of which commission and other acquisition costs 100 106 51 45 0 0 151 151 of which other administrative expenses 61 54 13 13 2 2 76 69

Other revenues net of other costs (other technical income and charges) -23 -20 0 0 0 0 -23 -20

FINANCIAL OPERATIONS Net income deriving from financial instruments valued at fair value 8 10 39 -21 0 0 47 -11 stated in the income statement Net income deriving from equity investments in subsidiary and 00 1 1 00 1 1 associated companies and joint ventures Net income deriving from other financial instruments and property 41 109 93 69 1 23 135 201 investments Commission income net of commission expense 1 0 -1 2 1 3 1 5 Operating expenses relating to investments 1 2 1 4 1 2 3 8 Result of financial operations 49 117 131 47 1 24 181 188 RESULT OF INSURANCE BUSINESS AND FINANCIAL 22 75 35 3 -1 22 56 100 OPERATIONS Other revenues net of other costs (excluding other technical income -7 -5 2 -12 1 -1 -4 -18 and charges included under financial operations) PRE-TAX PROFIT FOR THE PERIOD 15 70 37 -9 0 21 52 82 Taxation 8 33 20 1 1 9 29 43

NET PROFIT FOR THE PERIOD 7 37 17 -10 -1 12 23 39 PROFIT FROM BUSINESS ACTIVITIES SUSPENDED 00 6 1100 6 11 CONSOLIDATED PROFIT FOR THE PERIOD 7 37 23 1 -1 12 29 50

Table 7 – Key indicators

30.06.2007 30.06.2006 31.12.2006

Non-life ratios Claims ratio (Net charges relating to claims / Net premiums) 78.1% 81.4% 85.6% G&A ratio (Other administrative expenses / Net premiums) 8.5% 7.3% 6.8% Commission ratio (Acquisition costs / Net premiums) 13.9% 14.3% 14.2% Total Expense ratio (Operating expenses / Net premiums) 22.4% 21.6% 21.0% Combined ratio (1 - (Technical balance / Net premiums)) 103.8% 105.7% 109.2%

Life ratios G&A ratio (Other administrative expenses / Premiums written) 1.0% 1.2% 1.0% Commission ratio (Acquisition costs / Premiums written) 4.1% 4.0% 4.2% Total Expense ratio (Operating expenses/ Premiums written) 5.2% 5.2% 5.2%

Total ratios G&A ratio (Other administrative expenses / Premiums written) 3.7% 3.5% 2.9%

Note: "net premiums" of the non-life branch mean the premiums accrued in the period. "Total premiums written" in the life business refer to the amount of gross insurance premiums and of the investment policies

The Cattolica The consolidated result, taking into account the dynamics of the insurance market and the trends Group of the financial markets during the period, in line with short-term expectations, within the sphere of the objectives represented in the Strategic Plan presented to the market on March 1st, 2007, is mainly ascribable to the following:

• the amount of direct business premiums written in the non-life classes, which decreased from € 815 million in 2006 to € 803 million (- 1.47%), the positive effect of the continuing initiatives aimed at sustaining stable, long-lasting future profitability of the business, specifically the increased selectivity in choosing contracts is represented by a consolidated combined ratio which fell from 105.7% in 2006 to 103.8% (109.2% as of December 31st, 2007). Particular mention should be made of the reduction in the claims ratio (claims to premiums ratio) which fell from 81.4% in the same period in 2006 to 78.1% (85.6% as of December 31st); • the increase in life premiums written, which rose from € 1,124 million to € 1,241 million, involving an increase of 10.41%, taking into account that the premiums of BPV Vita, considered as subject to disposal, were reclassified in the summary item profits from assets subject to disposal, both in 2007 and in the corresponding item for the previous period; • the improvement in the results of financial operations, excluding income deriving from the sale of real estate properties and strategic equity investments and the component of financial instruments valued at fair value, which closed the period with a result of € 134 million, compared with € 80 million as of June 30th, 2006 (+ 67.50%); • the lack of positive extraordinary components with respect to 2006, which had reported gross income deriving from the sale of real estate properties for € 109 million and profits generated on the sale of strategic equity investments totalling € 10 million.

Direct business premiums collection was as follows: agencies 41.19%, banks 53.38%, financial advisors 1.17%, brokers 0.88%, other channels 3.38%. Mention should be made of the increase of 66.67% in premiums written for the banking channel for non-life business.

The market share, on the basis of the figures as of December 31st, 2006, in the non-life business, rose from 4.19% to 4.28% and in the life business from 4.96% to 4.19%2. Group life and non-life premiums written (insurance premiums and investment policies) rose from € 1,955 million as of June 30th, 2006, to € 2,057 million (+ 5.22%), taking into account that the premiums of BPV Vita, considered as subject to disposal, were reclassified in the summary item profits from assets subject to disposal, both in 2007 and in the corresponding item for the previous period. Premiums written by channel € millions

18 24 69

1,091 842

Brokers Financial Advisors Other channels Agencies Banks

2 Source ANIA – “Italian Insurance Industry 2006/2007” (page 235).

Direct premiums from non-life business fell, as already mentioned, by 1.47% to € 803 million, compared with € 815 million in the same period last year. Satisfactory performance was seen in the non-motor elementary classes (+ 6.74%): accident & injury to € 57 million (+ 7.55%), health to € 35 million (+ 25%), fire to € 40 million (2.56%) and general TPL to € 71 million (+ 2.9%).

The contribution of the motor sector was down, to € 518 million from € 548 as of June 30th, 2006 disclosing a decrease of 5.47%. This is attributable to the effects of the operations for realigning the motor portfolio being concluded, which led to a reduction of 6.31% in the land vehicle TPL class which came to € 460 million. The land vehicle hull class, more profitable, by contrast rose to € 58 million (+ 1.75%).

Consolidated premiums written for life business, as mentioned, rose 10.41%: € 1,241 million compared with € 1,124 million during the same period in 2006.

Besides the Parent Company which reported an increase of 124.45%, life business benefited from the growth of Lombarda Vita with € 775 million (+ 5.5%).

New life production amounted to € 958 million and was channelled as follows: banks 89.51%, agencies 6.90%, other channels 0.63%, brokers 0.37% and financial advisors 2.59%.

Within the sphere of financial operations, as already mentioned in the introduction, the trend of the markets did not negatively effect the performances for the interim period, with total net income deriving from fair value financial instruments recorded in the financial statements which rose from a negative balance of € 11 million to a positive balance of 47 million.

The branches which distribute Pension and Welfare sector products rose during the interim period from 3,049 to 3,075 (+ 0.85%). The calculation did not take into account the branches of Banca Popolare di Vicenza, while those pertaining to the Banco Popolare Group networks are still included, having produced residual premiums during the period.

As of June 30th, there were a total of 1,454 agencies (- 28 units) distributed as follows: 51.8% in Northern Italy, 25.2% in Central Italy and 23% in Southern Italy and the islands.

Agency and bank channel Number

3,500

3,049 3,075 3,000

2,500

2,000

1,482 1,454 1,500

1,000

500

0 31.12.2006 30.06.2007 Agencies Branches

All the transactions which concerned the Group are described in detail in the section “Significant events and other information”.

THE GROUP’S NEW STRATEGIC PLAN AND RE-ORGANIZATION OF THE BUSINESS MODEL

The guidelines of the Strategic Plan intend to confirm the Group as the key player in the insurance industry for personal and small business clients, developing endogenous growth courses according to principles of product specialization, valorisation of the system of relationships and focusing on the growth in value in terms of innovation, operating efficiency and governance of the risks and the capital. This is accompanied by the systematic search for external growth opportunities in Italy and abroad.

During the first half of the year, the project sites were launched relating to the initiatives envisaged in the new 2007-2010 Strategic Plan, presented to the financial community on March 1, 2007 in Milan.

With regards to the initiatives supporting the creation of the new business model which is based on the concentration, rationalization and verticalization of the operating structures under the governance of the Parent Company, procedural routes have been set up preparatory to a series of extraordinary transactions involving corporate simplification and rationalization:

• the transfer of the corporate/broker business segment from C.I.R.A. to Cattolica; • the transfer of the motor business segments from Cattolica and Duomo Uni One to C.I.R.A., which will subsequently be renamed Mapfre Cattolica Auto (MCA); • the merger of Duomo Previdenza into Cattolica; • the merger of Persona Life into Cattolica.

Furthermore, in accordance with the industrial policies outlined in the Plan, which envisages the enhancement of claims handling partly in light of the new legislative developments, so as to increase the focus on the customer service and on the integrated governance of the post-sales process, the conferral of the respective business segments represented by the assets and liabilities relating to the claims handling processes within di.CA - the call-centre which initiates and handles claims - was finalized by Cattolica Assicurazioni and Duomo Uni One. di.CA therefore incorporates all the head office and network settlement structures thereby becoming the Group claims handling company for the purpose of enabling both the reduction in operating and claims settlement costs and the synergies deriving from the unification of the three claims settlement networks of the Group.

The measures on the shared operating platforms will tend to maximize the efficiencies deriving: from corporate simplification transactions, which follow those already achieved towards the end of 2006, from the focusing of the organizational model and from the consequent review of the set up of the Group’s human resources, from the rationalization of the activities under outsourcing, from the technological turnaround and from the introduction of new centralized cost management processes.

Aided by the corporate simplification transactions described above, a unit will be formed within the Parent Company dedicated to the agency channel, with the aim of increasing the rate of penetration of the non-motor non-life and life products within the agency network, and with the

special support of Mapfre, pursuing selective growth, thereby increasing profitability in the motor insurance business sector.

The new business unit will support a vast agency network with points of sale located throughout the entire country, even though they will be mainly concentrated in the northern regions of Italy. The unification and integration of the agency networks will take place on the basis of profitability and sustainability logics, for the company and for the agent, on a parallel with the development of the products portfolio towards greater modular structure, innovation and expansion of the range, focused by customer segment, and the launch of new loyalty-retention initiatives. In this sense, during the first half of the year the reorganization was started of both the sales structure and the agency network by means of the identification of various clusters of agencies and the consequent re-hashing of the sales division so as to ensure greater coverage of the area and create a new consolidated Parent Company sales structure characterized by overhauled and enhanced marketing, sales and management expertise

With reference to the development of the motor business, the processes have been launched for the integration, implementation of the operating platform and concentration of the claims settlement centres supporting the new Mapfre Cattolica Auto (MCA) joint venture which, thanks to the selective introduction on the Italian market of the industrial capabilities of Mapfre, leader in the motor insurance sector in Spain, will make it possible for the Group to mix the legislative developments with the logic and the approach of a new specialized competitor. In this context, analysis was launched for an innovative motor tariff in light of the introduction of direct compensation.

With regards to the banking channel, the strategic policies confirm the Group’s desire to enhance and expand partnerships with the regional banks, intensify the historic relationship with UBI Banca and develop the new strategic agreement with Banca Popolare di Vicenza, consolidating the life business, with a focus on supplementary pension funds, the selective introduction of innovative elements and targeted commercial action. During the first half of the year, in line with the plan, besides launching all the corporate transactions necessary for the creation of the new partnership with Banca Popolare di Vicenza, the non-life bankassurance sector was developed by means of: the launch of the range of products and services on all the major partner networks, the increase of penetration with the current partnerships, the continued focus on the coverage of the individual and the introduction of insurance solutions protecting against credit risk to be combined with banking disbursement products.

With reference to information technology, during the first six months of the year the investment plan was defined in detail and at the end of the plan period will amount to € 60 million; in addition, the managerial structure of the Group’s IT company was further enhanced with the introduction of a new General Manager, and the IT consultant who will represent a factor for accelerating and enabling the programme’s execution was identified.

During the first half of the year, the Group’s organizational structure underwent a number of changes at various levels so as to adapt the various business units and make them as flexible as possible for the achievement of the plan objectives.

WAYS IN WHICH THE GROUP IMAGE AND INFORMATION ARE DISCLOSED

The Investor During the first half of 2007, the Investor Relations Division intensified its dialogue with the Relations Italian and international financial community, via clear and transparent dealings, with a view to division ensuring the market greater visibility of the results, objectives and the business strategies of the Group, providing various opportunities for meeting for both the institutional investors and the financial analysts: institutional presentations, conference calls, road shows and one-to-one meetings.

For the fifth consecutive year, Cattolica participated in the 2007 Italian Financial Conference, in Milan on February 1st and 2nd. This conference is one of the most important Italian conferences in the banking and insurance sector, with approximately 400 institutional investors from all over the world in attendance.

On March 1st, the Group’s 2007-2010 Strategic Plan was presented to the financial community in Milan; 150 people attended this presentation, including journalists, financial analysts and institutional investors. The presentation of the Plan then continued in London with a roadshow organized by Mediobanca, and subsequently in Madrid with the co-ordination of Santander.

On April 16th and 17th, the Parent Company took part in the 2007 edition of Italian Investor in New York organized by Borsa Italiana with the support of important Italian and international brokers; 22 of the most important Italian companies listed on the Stock Exchange took part in order to encourage investment in Italian companies by the international financial community. During the Conference, one-to-one meetings were held between management and the investors, presentations were held in conference rooms together with four round tables dedicated to topics of particular relevance for the Italian economy.

On May 18th, representatives of top management took part in the eighth edition of the Italian Conference organized by Deutsche Bank in Milan; the international stock market conferences then continued on May 24th in Paris and June 19th in London, in collaboration with BNP Paribas and Morgan Stanley, respectively.

Over the next few months, participation in roadshows and conferences in London, Frankfurt and Amsterdam is envisaged.

An important communication instrument is the Investor Relations section of the corporate website (www.cattolica.it), continuously updated and enhanced with regards to the content matter including pages dedicated to corporate governance, coverage of the Cattolica stock by analysts and social responsibility. The information contained therein can also be found in an English version, with a view to guaranteeing the foreign investors equal access to the information relating to the Cattolica Group.

Rating and In February 2007, Standard & Poor’s cancelled the credit watch with negative implications, studies on the assigned to Cattolica in November 2006 on the eve of the breakdown of negotiations with Group Banco Popolare di Verona e Novara, assigning the Cattolica Group an “A-” rating with regards to the long-term credit risk and the financial solidity. Standard & Poors’ specified that the rating remains high both as a result of the solid capitalization and the strong financial flexibility which characterize the Group, completing the

rating with a stable outlook for the near future.

In December 2006, the American firm A.M. Best revised the “A” rating assigned to Cattolica in December 2005 and on December 7th, 2007 confirmed the Cattolica Group the “A” rating (eliminating the “under review”) which corresponds with the qualification of “excellent” as far as financial soundness and the ability to meet the commitments vis-à-vis its policyholders is concerned.

Management report

The Group during the first six months of 2007

Business performance

Risk management

Organization and resources

Significant events and other information

Business performance

A BRIEF OUTLINE OF THE BUSINESS PERFORMANCE

The Group by main financial statement aggregates

As mentioned previously, further to the transactions underway as of June 30th, 2007, which will lead to the transfer of control of the equity investment in BPV Vita from the Parent Company, pursuant to IFRS 5, sections 33 and 35, the related assets and liabilities were classified under the specifically envisaged items: “6.1 Non-current assets or of a group subject to disposal held for sale”, “6.1 Liabilities of a group subject to disposal held for sale” and the economic results were classified under “4 Profit (Loss) from business activities suspended”.

This reclassification was also made on the economic figures for the corresponding period of the previous year, according to IFRS 5, section 34.

Account must be taken of this in the analysis of the changes during the period.

Premiums Gross consolidated premiums (which comply with the definition of “insurance policy” as per IFRS 4) at the end of the period amounted to € 2,016 million compared with € 1,922 million as of June 30th, 2006 (+ 4.89%). Also taking into account investment policies, total premiums written came to € 2,057 million, disclosing an increase of € 102 million (+ 5.22%) with respect to € 1,955 million in the same period last year.

In detail, gross direct non-life premiums amounted to € 803 million, registering a decrease of 1.47% with respect to the end of the first half of 2006 and represent 40.11% of the total of direct business in insurance premiums (42.75% in June 2006).

Gross direct life premiums amounted to € 1,200 million; total life premiums came to € 1,241 million (+ 10.41%). Once again, life premiums represented the majority of total direct business (59.89% in the period with respect to 57.25% in the same period in 2006).

Direct life and non-life premiums, indirect premiums (insurance premiums and investment policies) € millions

2,000

1,600

1,241 1,200 1,124

815 803 800

400

16 13 0 30.06.2006 30.06.2007 Direct non-life prmiums Direct life premiums Total indirect premiums (life and non-life)

Investments Investments (which include real estate property investments, equity investments in subsidiary and associated companies and joint ventures, loans and receivables, investments held to

maturity, financial assets available for sale, financial assets valued at fair value, cash & cash equivalents and property used for operating purposes) at the end of the period amounted to € 14,130 million, down when compared with € 18,125 million as of December 31st, 2006 (- 22.04%).

Specifically real estate property and property investments dropped from € 32 million to € 31 million (- 3.23%), financial assets valued at fair value recorded in the income statement decreased from € 10,361 to € 6,891 (- 33.49%), while financial assets available for sale decreased from € 6,566 to € 6,186 million (- 5.79%).

Investments € millions

25.000

20.000 18.125

15.000 14.130

10.000

5.000

0 31.12.2006 30.06.2007 Technical Non-life technical provisions (premiums and claims) amounted to € 3,190 million, compared provisions with € 3,161 million at the end of the previous year (+ 0.92%). Non-life technical provisions € millions 4.000

3.500 3.161 3.190

3.000

2.500

2.000

1.500

1.000

500

0 31.12.2006 30.06.2007

Life technical provisions (inclusive of shadow accounting) totalled € 9,522 million, compared with € 12,626 million allocated at the end of the previous year (- 24.58%). Also taking into account financial liabilities relating to investment policies, the technical provisions and deposits relating to life business amounted to € 10,735 million (€ 14,595 million as of December 31st, 2006).

Life technical provisions include the shadow accounting provisions, negative for € 34 million, and take into account the share of latent gains and losses on assets in segregated funds ascribable to policyholders.

Life technical provisions and investment policies € millions

18,000

16,000 14.595

14,000 1,969 10.735 12,000

10,000 1,213

8,000

6,000 12,626 9,522 4,000

2,000

0 Life investment policies 31.12.2006Life technical provisions 30.06.2007

Other Other administration expenses amounted to € 76 million, disclosing an increase of 10.14% when administration compared with the same period in 2006. expenses In detail, the ratio of other administration expenses to total insurance premiums came to 3.7%, compared with 3.5% in 2006.

Net profit for The interim period closed with net profit of € 29 million, of which € 7 million attributable to the period non-life business (€ 37 million as of June 30th, 2006), € 23 million attributable to life business (€ 1 million during the same period in 2006) and a loss of € 1 million ascribable to the “other” segment (+ € 12 million as of June 30th, 2006).

Group net profit amounted to € 19 million, as against € 43 million reported as of June 30th, 2006.

Shareholders’ Consolidated shareholders’ equity at the end of the period came to € 1,264 million, compared equity with € 1,376 million at the end of the previous year. Portions of shareholders’ equity relating to minority shareholders amounted to € 122 million, compared with € 142 million in December 2006.

The Group’s shareholders’ equity includes the gains on financial assets available for sale amounting to € 59 million, compared with € 99 million at the end of the previous accounting period, involving a decrease of 40.4%.

Reference should be made to the statements following the Management Report for the reconciliation between the shareholders’ equity of the Parent Company and the consolidated shareholders’ equity

The Group by segments

Business The Group’s activities are divided into three business segments: life, non-life and other. sectors The core business of the Group, headed up by Cattolica Assicurazioni, a company which is

involved in both life and non-life business, is divided up between the non-life segment (ABC Assicura, C.I.R.A., Duomo Uni One Assicurazioni, TUA Assicurazioni) and the life segment (Axa Cattolica Previdenza in Azienda, Duomo Previdenza, Lombarda Vita, Persona Life, Risparmio & Previdenza and San Miniato Previdenza).

Other activities comprise financial services (in particular, real estate property-related - Cattolica Immobiliare and Polo Finanziario and financial with Cattolica Investimenti SIM and Verona Gestioni SGR) and operating services instrumental to the performance of the Group’s core business (Cattolica IT Services, di.CA).

Non-life The non-life business closed the period with a consolidated net result of € 7 million, disclosing a business decrease of 81.08% when compared with the figure as of June 30th, 2006, generating € 718 million in net premiums, compared with € 741 million in the same period last year.

As already mentioned in the introduction, the non-life business result was affected by the increasing selectivity of the contracts, a sign that the Group wishes to concentrate its expertise on more profitable classes or segments.

Positive contributions towards the result came from the decrease in charges relating to claims, from € 603 million to € 561 million, while net income deriving from other financial instruments and real estate property investments fell from € 109 million to € 41 million.

Life business Life business ended the period with a net consolidated result of € 23 million, compared with € 1 million as of June 30th, 2006. The result was affected by the increase in premiums from € 1,084 million to € 1,191 million and financial operations with a result of € 131 million, up when compared with € 47 million as of June 30th, 2006 mainly due to the result deriving from the financial instruments valued at fair value recorded in the income statement, which passed from a negative result of € 21 million to a positive balance of € 39 million, and to net income deriving from other financial instruments totalling € 93 million, compared with 69 million, for fewer value adjustments.

Other business The other activities carried out by the Group which are correlated with, and functional in relation to, the insurance business are included under other business, specifically: financial services (real estate property, savings and stockbroking management) and operating services.

Other business closed with a loss of € 1 million, compared with € 12 million as of June 30th, 2006 (essentially attributable to capital gains on real estate property generated by Cattolica Immobiliare).

Sectors by Premiums written, which are taken in Italy, are mainly concentrated in Central and Northern geographic Italy, an area similar in terms of risk and return and therefore not significant for the purposes of area the secondary segmentation envisaged by IAS 14.

INSURANCE BUSINESS AND OTHER SECTORS OF ACTIVITIES

Summary of The scope of consolidation currently comprises the insurance Parent Company and fifteen the activities subsidiary companies which include ten insurance companies, one real estate company, an asset carried out by management company, a stockbroking company and two service companies; the scope also the Group comprises two jointly-controlled companies, including an insurance company and a real estate companies property company.

Changes within the scope of consolidation with respect to the end of the previous accounting period are indicated in Part A to the notes – General approach and scope of consolidation.

Società Cattolica di Assicurazione – Società Cooperativa, which operates throughout Italy in the life and non-life businesses, ideally targeting the medium/high-end range of the personal segment. It is the Parent Company of the following companies:

Non-life insurance companies

• ABC Assicura s.p.a., primarily active in Central and Northern Italy in non-life business. It is the medium for the new strategic initiative of the non-life bankassurance business under joint venture with Banca Popolare di Vicenza, by means of a structured insurance range studied for the banking channel;

• C.I.R.A. s.p.a., founded in 1995, it operates in the non-life sector and specializes in business risks, primarily using the services of brokers;

• Il Duomo Uni One Assicurazioni s.p.a., a historic Milan-based company founded in 1923, is active in the non-life and personal lines, primarily handling mass and widespread risks, with an agency network which also comprises the Maeci brand (a company merged by incorporation during 2001). During 2006, it absorbed Uni One Assicurazioni;

• TUA Assicurazioni s.p.a., Milan-based insurance company 97% owned by Duomo Assicurazioni, which carries out insurance activities in the non-life sectors.

Life assurance companies

• Duomo Previdenza s.p.a., a Milan-based company specialized in the sector of life risks and savings insurance, distributes its products via its agency network, also using the Maeci Vita brand, and via the branches of Banca di Salerno Credito Cooperativo, Banca di Credito Cooperativo Reggiano and Cassa di Risparmio di Rimini. In 2007, the procedure was launched for its merger within Cattolica with the aim of setting up a Group unit dedicated to the development of the life and pension-welfare business;

• Lombarda Vita s.p.a., carries out bankassurance activities, distributing products via the 794 branches and 559 financial advisors of UBI Banca;

• Persona Life s.p.a., a wholly-owned subsidiary of Cattolica, is a life insurer. In 2007, the procedure was launched for its merger within Cattolica;

• Risparmio & Previdenza s.p.a., is a company founded in 1994 with the specific objective of supporting banking partners via the banking channel for sales of insurance products and services. It operates in the life sector by means of a network of 1,218 branches. During 2006, it absorbed Eurosun Assicurazioni Vita;

• San Miniato Previdenza s.p.a., founded at the end of 2002, carries out life assurance activities. It started placing insurance products in the early months of 2004 via the bank branches of the Cassa di Risparmio di San Miniato Group;

• Axa Cattolica Previdenza in Azienda s.p.a., jointly owned together with Axa Assicurazioni, carries out life assurance activities by means of leading brokerage companies operating in the welfare and pension sector;

• BPV Vita s.p.a., undertakes life assurance via the banking channel. The company’s sales network consists of 812 branches of the Banco Popolare di Verona e Novara Group and 141 financial advisors of Azimut.

Other companies

Real estate • Cattolica Immobiliare s.p.a., founded on December 19th, 2002. Its aims include the turning property to account of the property assets of the Group and reinvestment of proceeds in properties companies featuring positive earning prospects;

• Polo Finanziario s.p.a., formed by Cattolica Polo Finanziario - merged during the first half of 2007 within Cattolica Immobiliare – jointly with the Cassa di Risparmio di Verona Vicenza, Belluno e Ancona Foundation and Banco Popolare di Verona e Novara (now Banca Popolare). Its corporate purpose is to purchase, build, develop, manage, improve and maintain the management premises of the former “Magazzini Generali” area in the southern part of Verona, for the creation of a financial hub understood to be the property venture signalling the logistics merger of the operating and financial activities belonging to the same parties furthering this transaction;

Finance • Cattolica Investimenti SIM s.p.a., acquired in 2003, it performs the role of Group companies stockbroking company for sales. It carries out activities complementary to the insurance core business, supplementing the supply of the agency networks with a co-ordinated range of banking and financial products via the agency network;

• Verona Gestioni SGR s.p.a., acquired during 2002, it provides asset management services to Group companies, institutional investors and those institutions that have commercial and partnership dealings with the Group;

Service • Cattolica IT Services s.r.l., formed in September 2004, it represents the sole point of companies reference for the management of the computerized information systems and processes for all the Group companies, with the aim of contributing towards enhancing the industrial architecture according to the logics of concentration and integration;

• di.CA s.p.a., is the call centre serving all the Group companies. Founded in 1998, it carries out activities relating to the initiation of all claims and the handling of the motor claims and a series of ancillary activities, including CID claims management and the computerized management of the motoring trustees’ fees. As illustrated in the events during the period, during the interim period Cattolica’s and Duomo Uni One’s claims units were transferred to this company.

Insurance business

The premiums are show, with indication of the percentage in relation to total direct business and percentage changes as compared with the same period last year, in the table below, together with investment policies.

Table 8 – Total premiums written

Classes Change % on total % on total (€ millions) 30.06.2007 30.06.2006 (*) Abs. Amount % 30.06.2006 (**)

Other damage to assets 53 2.65 51 2.68 2 3.92 51 Assistance 7 0.35 7 0.37 - 0.00 7 Suretyship 5 0.25 5 0.26 - 0.00 5 Aircraft hulls -n.s.-n.s.- - Railway rolling stock -n.s.-n.s.- - Ships (sea and inland water vessels) 1 0.05 1 0.05 - 0.00 1 Land vehicle hulls 58 2.90 57 2.99 1 1.75 57 Credit -n.s.-n.s.- - Fire & natural forces 40 2.00 39 2.05 1 2.56 39 Accident and injury 57 2.85 53 2.78 4 7.55 53 Health 35 1.75 28 1.47 7 25.00 28 Goods in transit 1 0.05 2 0.10 -1 -50.00 2 Sundry financial losses 9 0.45 6 0.31 3 50.00 6 TPL - Land motor vehicles 460 22.97 491 25.76 -31 -6.31 491 TPL -General 71 3.54 69 3.62 2 2.90 69 TPL - Ships (sea and inland water vessels) 1 0.05 1 0.05 - 0.00 1 Legal protection 5 0.25 5 0.26 - 0.00 5 Total non-life classes 803 40.11 815 42.75 -12 -1.47 815

Class I 372 18.57 484 25.40 -112 -23.14 523 Class III 706 35.24 372 19.52 334 89.78 752 Class IV - 0.00 - 0.00 - - Class V 121 6.03 235 12.33 -114 -48.51 246 Class VI 1 0.05 - 0.00 1 - Total life (1) 1,200 59.89 1,091 57.25 109 9.99 1,521

Total direct business 2,003 100.00 1,906 100.00 97 5.09 2,336

Indirect business 13 16 -3 -18.75 16

Total insurance premiums 2,016 1,922 94 4.89 2,352

Class III 28 22 6 27.27 49 Class V 1-1 Class VI 12 11 1 9.09 11 Total investment policies 41 33 8 24.24 60

TOTAL PREMIUMS WRITTEN 2,057 1,955 102 5.22 2,412 n.s. = not significant (1) Class I = Insurance on the duration of human life Class III = Insurance on the duration of human life linked to investment funds Class IV = Health insurance as per Art. 1, no. 1, letter d) of EEC Directive No. 79/267 dated March 5th, 1979 Class V = Capitalization transactions Class VI = Pension funds (*) Restated net of premiums of BPV Vita, which was reclassified as an assets undergoing disposal as per IFRS 5. (**) Data from the consolidated interim report at June 30th, 2006

Non-life Direct non-life premiums written dropped from € 815 million to € 803 million, disclosing a business - decrease of 1.47%, as already mentioned. Premiums Direct non-life premiums by class groups %

Fire and natural forces 4.98% Other damages to asset 6.60% Other classes 3.61% Land vehicle hulls 7.22%

TPL General 8.84% TPL land and motor vehicles 57.29%

Accident and inquiry 11.46%

The trend in non-life premiums disclosed growth in the non-motoring sector, while the fire and natural forces class amounted to € 40 million (+ 2.56%), accident and injury to € 57 million (+ 7.55%), health to € 35 million (+ 25%) and general TPL € 71 million (+ 2.9%).

Main non-life classes, direct premiums € millions

600

491 500 460

400

300

200

100 69 71 57 58 53 57

0 TPL land motor vehicles Land vehicle hulls TPL General Accident 30.06.2006 30.06.2007 Direct non-life premiums written were generated as follows: the agency channel with € 761 million (- 2.93%), the banking channel with € 10 million, brokers with € 14 million and other channels with € 18 million.

In detail, the balance of € 803 million is attributable to the Parent Company for € 498 million, to Duomo Assicurazioni for € 265 million, to C.I.R.A. for € 13 million, to TUA Assicurazioni for € 21 million, to ABC Assicura for € 2 million, in addition to the premiums of the accident & injury and health classes of the companies Risparmio & Previdenza and Axa Cattolica Previdenza amounting in total to € 4 million.

Non-life As regards the Group and new products in the non-life business, please refer to the matters set business – forth in the 2006 Consolidated Financial Statements of the Cattolica Group. R&D activities: new With reference to the Parent Company, in April – as part of the project to enhance the services products provided to policyholders - two new products were launched, one life and one non-life (“NOIcasa”). Specifically, the product “NOIcasa” is a multi-risk product (fire, theft, civil liability, healthcare and legal protection) developed to respond to the insurance needs linked to the home and the private life of the policyholder.

The restyling of the product “SalutePiùCard” is being developed, which will be called “Più Salute”, along with the product for offices.

C.I.R.A.

During the first half of 2007, an All Risk Property policy and an Assembly policy were established, specifically tailored to the insurance needs of businesses involved in the installation of photovoltaic systems and the companies which use said systems.

Duomo Uni One

During the interim period, the new product “Duomo Programma Salute” was presented to the agency network of the Duomo division, a policy which represents the multi-risk insurance solution for covering individuals for accidents, injury and health. It replaces a series of old generation products and represents a significant step for the evolution of the customer target of our agency network.

Work continued for the standardization of the product catalogue with the marketing of the “Duomo programma Impresa” product for the Uni One division as well.

Life business - Direct life premiums written amounted to € 1,200 million; investment policies came to € 41 Premiums million. Total life premiums amounted to € 1,241 million (+ 10.41% when compared with the same period in 2006).

Direct life premiums by class group %

Classes IV, V, VI 10.81%

Class I 30.00%

Class III 59.19%

With reference to the distribution channels, in detail there was growth in the banking channel which reported a rise of 23.12%, from € 878 million to € 1,081 million when compared with the

first half of 2006. During the same period, a decrease of € 48 million was reported for the agency channel (- 37.21%) as a result of a non-recurring corporate contract stipulated by the Parent Company in the previous period, along with a decrease of € 7 million in premiums taken via financial advisors, from € 31 million to € 24 million and a drop in premiums taken by brokers of 86.67% (from € 30 million to € 4 million). Premiums taken via other channels fell from € 56 million to € 51 million (- 8.93%).

Main life classes, direct premiums (insurance premiums and investment contracts) € millions

1,800

1,600

1,400

1,200

1,000

800 734

600 483 372 394 400 236 200 121

0 Class I Class III Class V 30.06.2006 30.06.2007 Class I disclosed a decrease in premiums of 23.14% when compared with the same period last year.

Class III presents an increase of 86.29% when compared with the first half of 2006.

Class V reported a decrease of € 113 million partly attributable to corporate-type capitalization agreements entered into in 2006.

With reference to class VI, there was an increase of € 2 million (+ 18.18%).

Direct business premiums written, for a total of € 1,241 million, are ascribable to the Parent Company for € 356 million, to Risparmio & Previdenza for € 51 million, to Duomo Previdenza for € 26 million, to Lombarda Vita for € 775 million, to San Miniato Previdenza for € 19 million, to Axa Cattolica Previdenza in Azienda for € 2 million and to Persona Life for € 12 million.

Life business – During the first half of the year, 58 new series of index-linked policies were created within the R&D activities: Group, of which: 39 by Lombarda Vita, 2 by BPV Vita and 10 by the Parent Company, in new products addition to 3 new series for Risparmio & Previdenza, 2 for San Miniato Previdenza and 2 for Duomo Previdenza.

During the first few months of the year, work was concluded for adapting and completing the pension and welfare range on the basis of the matters envisaged by Italian Legislative Decree No. 252 dated December 5th, 2005 (concerning “Regulation of supplementary pension products” and subsequent amendments and additions) as well as the related sector rules.

The Parent Company

The welfare products Guardo Avanti New (placed by the banking network) and PuntAlto (placed by the agency network), have been adapted to the new legislative provisions. The related regulations were approved by the Supervisory Authority during the first half of the year.

The range of products placed by the Parent Company’s Agent network was extended by means of the development of TFR Attivo, a financial capitalization product featuring a single recurring premium and the possibility of additional single premiums, with annual revaluation of the capital. In June, a Class V was also developed, linked for the first year to a specific active form and subsequently to the segregated scheme “RI. SPE. VI.”.

During the period, a product dedicated to policyholders was developed and placed by the Agent channel; this is EssereSoci NoiVita, a mixed insurance policy with a single premium and additional single premiums featuring annual revaluation and additional benefits in the event of demise.

The range of Class I products placed by the banking network was extended with the development of mixed policies with single premiums and recurrent premiums featuring a guaranteed minimum of 2%. The product line of the banking network was enhanced by a multi-class product (Class III and I) with a single premium and the possibility of additional premiums whose benefits are linked to the performance of an internal segregated fund and the value of the units of internal funds.

New index-linked products were created, of which 8 dedicated to the banking networks and 2 specifically dedicated to the Agent channel.

Lombarda Vita, Risparmio & Previdenza, San Miniato Previdenza

The product range mix has not changed much with respect to 2006.

During the first few months of the year, the companies were affected by the updating of the information brochure relating to the range of traditional, capitalization and Class I products marketed at present in accordance with Article 10 of ISVAP Circular 551/D.

Development activities, aimed at extending the product catalogue for customers, saw the issue of Class III index-linked type products featuring a duration of 5 years created using a basket of several indexes as the benchmark so as to exploit the various opportunities offered by the stock markets.

In relation to Lombarda Vita, the development of the Protezione e Valore Serie III 2007 product was innovative for the network; this is a Class III index-linked type product where the insurance in the event the policyholder stays alive over the duration of the policy is linked to the value of the Eurostat Eurozone Harmonized Index on Consumer Prices (HCP) former – tobacco Unrevised Serie NSA inflation index.

Pension and welfare products developed at the end of the previous year have been adapted to the new legislative provisions mentioned above and were approved by the Supervisory

Authority.

The products are as follows: - PreviNext which is placed by the Group banks; this is an individual multi-class pension plan featuring single recurrent premiums and additional single premiums with benefits linked to the performance of an Internal Segregated Fund and/or the value of the units of Internal Funds and with additional benefits in the event of demise and in the event of total permanent disability, with two optional accessory forms of coverage (life annuity assurance which can be revalued for coverage of the risk of non–self-sufficiency with an annual premium which can be revalued, known as long term care, and temporary insurance in the event of demise and total permanent disability deriving from injury or illness featuring decreasing capital and a constant annual premium); - PreviNext Platinum which is placed by the channel of financial advisors; this is an individual multi-class pension plan with single recurrent premiums and additional single premiums featuring benefits linked to the performance of an internal segregated fund and/or the value of the units of Internal Funds and with additional benefits in the event of demise and in the event of total permanent disability.

With regards to Risparmio Previdenza, the Index Linked Select Dividend product envisages - in the event the Policyholder stays alive over the duration of the policy – the payment of a fixed coupon on the first annual recurrence and eventual coupons of a pre-determined amount on subsequent annual recurrences. By contrast, in the event the Policyholder stays alive Index Up 1 – 2007 envisages fixed coupons on the first two annual recurrences of the policy and eventual coupons of a variable amount determined according to the level of correlation between the performance of various share indexes which represent the benchmark.

Alongside the afore-mentioned products, another 3-year index-linked product has been marketed whose benefits on expiry depend on the performance of a benchmark represented by a basket of shares belonging to the utility and foodstuffs sectors. Four Class I products have been repeated for the financial advisor channel of Banca Popolare di Bari, currently marketed by said bank: SalvaEuro RP (deferred capital insurance with annual premium), Mutuo Vantaggio RP (temporary insurance with guaranteed annuity in the event of pre-decease with single premium), Più Domani RP (fixed duration insurance with annual premium) and Elite Plus RP (full life insurance in the event of death with constant annual premium).

With regards to Cassa di Risparmio di Fabriano e Cupramontana, a Class I product was created, entitled Previdenza Vip Plus II, featuring a single premium and additional single premiums with annual revaluation of the capital, minimum guaranteed return of 2.00% linked to the

PRIMAVERAM internal segregated fund and additional benefits in the event of demise whose duration (between 5 and 25 years) is chosen by the Policyholder according to their needs. Again via the same placer, an innovative product has been marketed, Filigrana Capital a premio ricorrente, a capitalization policy with single recurrent premiums and additional single premiums linked to the PRIMAVERAM segregated fund which envisages a minimum guaranteed return of 2% and a duration chosen by the Policyholder (between 5 and 25 years). Furthermore, the company’s sales networks avail themselves of the Group platform developed for supplementary pension and welfare products.

In relation to S. Miniato Previdenza, development activities, aimed at supporting premium underwriting activities by the sales network, saw the issue of the Class III index-linked type

product with a duration of 4 years, created using two share indexes as the benchmark (entitled Carismi Più Certezza 7). This product, marketed via the bank branches of Banco di Lucca and Cassa di Risparmio di San Miniato envisages - in the event the Policyholder stays alive over the duration of the policy – the payment of a fixed coupon on the first annual recurrence and eventual coupons of a pre-determined amount on subsequent annual recurrences thanks to the digital-type derivative financial instruments on which it is built.

During the second half of the year, certain Class I and Class V products, already present in the product catalogue, were overhauled by means of the review of the guaranteed minimum in order to align the range with the rise in market rates.

Other sectors of activities

Real estate Having concluded the sale of its real estate properties during 2006, Cattolica Immobiliare property essentially carried out property management services which the Catullo Fund has entrusted to activities this company.

The more specifically property-oriented activities, focused on investment in real estate properties and/or the turning to account of the same as well as growth in the property field and rentals, will follow the new growth strategies.

Services Financial services

During the period, the plan continued for repositioning and relaunching Cattolica Investimenti SIM, via a series of scheduled activities which mainly concentrated on internal corporate reorganization, with the review of the processes, the improvement of the IT systems and adaptation of the compliance norms.

Verona Gestioni SGR continued along its growth course, with particular reference to the segregated management mandates for institutional customers and the development of control and monitoring systems for the portfolios managed.

Information systems

As already described in the section relating to the Strategic Plan, with regards to information technology during the first six months of the year the investment plan was defined in detail and at the end of the plan period will amount to € 60 million; the managerial structure of the Group IT company was enhanced further by means of the introduction of a new General Manager, and the IT consultant who will represent a factor for accelerating and enabling the programme’s execution was identified.

Call centre

As envisaged in the Strategic Plan, during the period Cattolica and Duomo Uni One transferred the respective business segments comprising the assets and liabilities relating to the claims handling processes belonging to head office and network settlement structures to diCA; this company carries out call centre activities, which are instrumental to the Group’s core business.

By means of this transaction, the handling of the claims will be subject to a number of important initiatives aimed at increasing the focus on customer service and on the integrated

governance of the post-sales process.

EQUITY AND FINANCIAL PERFORMANCE

The table which follows summarizes the most significant asset items which disclose the change in investments during the first half of the year.

Table 9 - Investments - breakdown

Change (€ millions) 30.06.2007 % on total 31.12.2006 % on total Abs. Amount %

Property investments 1 0.01 1 0.01 0 0.00 Property 30 0.21 31 0.17 -1 -3.23 Equity investments in subsidiary and associated companies and joint 81 0.57 80 0.44 1 1.25 ventures Loans and receivables 357 2.53 359 1.98 -2 -0.56 Investments held to maturity 112 0.79 137 0.76 -25 -18.25 Financial assets available for sale 6,186 43.78 6,566 36.23 -380 -5.79 Financial assets valued at fair value stated in the income statement 6,891 48.77 10,361 57.16 -3,470 -33.49 Cash and cash equivalents 472 3.34 590 3.25 -118 -20.00 TOTAL 14,130 100.00 18,125 100.00 -3,995 -22.04

Real estate This item includes the properties owned by Polo Finanziario and the Parent Company whose property value during the first half of the year increased as a result of internal restructuring and investments redevelopment work. and properties

Share Financial operations followed the prudent approach of the Group, with the aim of optimising the investments risk/return profile, in line with the objective set by the commitments undertaken vis-à-vis policyholders.

Activities for the management of assets against life business provisions were aided by the use of ALM (asset liability management) instruments which permit the gauging of the financial risk and a periodic monitoring of the performances offered by the stock investment portfolio.

The results disclosed by financial operations, as already mentioned, were affected by the growth in short-term interest rates in the Euro area, on the basis of the expectations of the operators concerning the continuation of the restrictive monetary policy of the Central European Bank.

The increase in interest rates resulted in valuation losses in the portfolio component represented by fixed-rate bonds; however, these losses were not large, due to the short duration of the portfolios.

The duration of the life portfolio as of June 30th, remained around two years, or rather aligned to the value at the end of 2006.

By contrast, the duration of the non-life classes was less than one year, having undergone contained growth with respect to the start of the year.

The activities of the non-life classes, thanks to benchmarks with shorter financial durations, consistent with the features of the funds, were less penalized by the bond market’s trend.

Having considered the positive performance of the markets, and the favourable macro-economic on a global scale, share investments were favoured during the first half of the year; the share component of the portfolios, net of the strategic component, was increased both in the life class and the non-life classes, favouring the accumulation of securities which present high returns in terms of basics solidity.

As a rule, investments were concentrated within the Euro area, with a contained currency diversification in securities denominated in US dollars.

There were no investments ascribable to developing countries.

Note than Cattolica and the Group do not essentially have any direct or indirect exposure linked to subprime3 mortgage loans.

As in previous periods, there were no losses to report due to the insolvency of issuers or exposure on low-rated securities, nor any transactions of particular significance on derivative instruments.

Share investments € millions

20,000 18.125 18,000 16,000 14,130 14,000 12,000 10,361 10,000 6,891 8,000 6,566 6,186 6,000 4,000 2,000 8035932 590 137 81 357 31 472 112 0 31.12.2006 30.06.2007

Equity investments in subsidiary and associated companies and joint ventures Loans and receivables Property and property investments Cash and cash equivalents Financial assets held to maturity Financial assets held for sale Financial assets valued at fair value recorded in the income statement Total investiments

The result of financial operations came to € 181 million. The overall result, excluding income deriving from the sale of properties and strategic equity investments and the component deriving from financial instruments valued at fair value, rose by 67.5%, to € 134 million (€ 80 million as of June 30th, 2006). Financial instruments valued at fair value recorded in the income statement contributed € 47 million (as of June 30th, 2006 the contribution involved a negative balance of € 11 million).

3 The exposure is less than € 1 million.

Latent capital At period end, the balance – gross of taxation – of latent capital gains and losses on the portfolio gains and valued at amortized cost disclosed a negative balance of € 63 million and was determined as losses follows:

• investments held to maturity: the latent capital gains amounted to € 1 million; • loans and receivables: the latent capital losses amounted to € 62 million.

The overall fair value of the investments held to maturity as of June 30th, amounted to € 111 million; the overall fair value of loans and receivables as of June 30th, amounted to € 295 million.

Gross latent capital gains on the property portfolio (real estate property investments and properties), on the basis of estimates made by appointed external experts, amounted to a total of € 19 million. The overall fair value came to € 50 million.

Performance The result as of June 30th benefited positively from the contribution of the second quarter. The in the second change in consolidated net profit during the second quarter disclosed a positive balance of € 8 quarter million.

The change in investments (item 4 of the balance sheet assets) consolidated during the second quarter presented a negative balance of € 241 million, mainly as a result of the decrease in the value of the financial assets.

Management report

The Group during the first six months of 2007

Business performance

Risk management

Organization and resources

Significant events and other information

Risk management

RISK MANAGEMENT

Within the sphere of the activities started up in pursuance of the provisions contained in ISVAP Circular No. 577/D “Provisions concerning internal auditing and risk management systems”, during the first half of the year activities continued for the implementation of the Enterprise Risk Management (ERM) system which makes it possible to systematically detect and proactively handle the operating, legal and reputation risks and the activities relating to the development of methods and models for assessing the financial risks and the technical-insurance risks so as to provide the Group with an overall management view of the risk context and develop the Economic Capital model within a Solvency II sphere.

The Group operating, legal and reputational risks model was streamlined within the sphere of the ERM project, risk assessment activities were continued and steps were taken to implement the Enterprise Risk Management (ERM) application which when fully on-stream will make it possible to provide clear and systematic reporting on the areas at greatest risk and to identify any action for mitigating the risks in question.

With regards to financial risks and technical-insurance risks, a work group has been set up (comprising the risk management, finance and actuary divisions) which, together with the QIS2 (Second Quantitative Impact Study of Ceiops) has carried out initial analysis and the application of the on-going assessment methods of each category of risk quantifiable and significant in a Solvency II sphere. The work group also profitably took part in the Third Quantitative Impact Study of Ceiops (QIS3), analysing in-depth the risk assessment methods proposed in the model.

INSURANCE AND MARKET RISK

With reference to the insurance risk and the market risk, there were no particular changes or deviations with respect to the matters already described in the 2006 financial statements of the Cattolica Group, to which reference should be made.

Management report

The Group during the first six months of 2007

Business performance

Risk management

Organization and resources

Significant events and other information

Organization and resources

SALES ACTIVITIES

Sales channels Number

3,500

3,049 3,075 3,000

2,500

2,000

1,482 1,454 1,500

1,000 926 906

500 269 282

0 31.12.2006 30.06.2007 Agencies Bank Branches Financial Advisors Brokers

Agency As of June 30th, there were a total of 1,454 agencies (- 1.89% with respect to December 31st, coverage 2006), of which 125 non-exclusive agencies, distributed as follows: 51.79% in Northern Italy, 25.24% in Central Italy and 22.97% in Southern Italy and the Islands.

The Parent Company had 712 agencies (compared with 729 as of December 31st, 2006): 679 under the Cattolica name and 33 under the Cattolica Divisione Verona name.

As regards the companies in the Milan area, at the end of the interim period, 500 were operative with both Duomo Uni One and Duomo Previdenza mandate, in addition to 12 agencies working with just Duomo Previdenza mandate and 7 with just Duomo Uni One mandate, for a total of 519 agencies. TUA Assicurazioni agencies numbered 98.

The corporate integration and subsequent unification of the agency networks will permit the Group to maximize the economies of scale and purpose in the production centres serving one of the largest agency networks on the Italian insurance market with points of sale distributed throughout the whole of Italy but mainly in the northern regions.

Bank branch The number of bank branches which distribute Pension and Welfare products rose during the coverage period from 3,049 to 3,075 (+ 0.85%). The calculation still does not take into account the branches of Banca Popolare di Vicenza, while those belonging to the networks of the Banco Popolare Group which during the period produced the residual premiums, are included.

The Group thus maintained its place among the leading insurance groups on the Italian market in terms of bank sales points.

The life and non-life bankassurance segment is solidly anchored to agreements of varied and growing intensity with thirty or so groups and banking institutes distributed throughout Italy. The Group intends to reconfirm the system of alliances (commercial agreements, focused partnerships and joint ventures), consolidate the life business and develop the non-life business, also maximizing the opportunities offered by the new strategic banking-insurance agreement with Banca Popolare di Vicenza (BPVI).

With regards to life business, the aim is to make the significant growth potential of BPVI in life bank-assurance efficient, and to increase the focus on supplementary pension and welfare products, the selective introduction of innovative elements and targeted sales action.

With regards to non-life business, the objectives concern implementing the product range on all the major partner networks, increasing the penetration with current partnerships, maintaining the focus on the protection of the individual and including insurance solutions for protecting credit to be combined with banking disbursement products.

Financial The number of financial advisors who distribute Group insurance products dropped from 926 advisor to 906. coverage

Broker The brokerage companies with whom the Group does business came to 282, of which 158 non- coverage life brokers, 92 life brokers and 32 life and non-life brokers.

INFORMATION SYSTEMS

Infrastructure area

Within an infrastructural sphere, the creation of the Group Disaster Recovery project is currently undergoing completion; the completion of all the activities of the plan is envisaged by November.

Analysis continued for the creation of a single integrated telecommunications network for the Group agencies.

The creation of the monitoring system on on-line services (Pass Danni) is being completed.

Activities have been developed for the preparation of the infrastructures suitable for the start-up of the new company MCA.

The project for the consolidation of the Group servers was launched, with the aim of rationalizing and simplifying the management.

The technological infrastructure for aiding the Group’s SAP project is currently being created.

The mainframe S.A.N. (Storage Area Network) is being extended, in order to permit an incremental capacity of around 50% compared with the current one.

The phase for checking and updating the IT systems (infrastructural and applications-related) dedicated to the new on-line service “Pass Danni”, continued.

Applications areas

Elementary Classes area

The first activities have been launched relating to the inventory of the products currently handled by Cattolica and Duomo Uni One, requesting the Technical Divisions of the insurance companies concerned for up-to-date information on the volumes and on the first series of classification dimensions so as to identify groups which are similar by macro characteristics. Subsequently, the envisaged gap-analysis phase of the processes currently in use with respect to the Pass operating instrument started, with the aim of identifying the single process to be proposed to the entire Group.

Activities continued for maintaining and developing the non-life platforms, adapting them to the new legal and ISVAP provisions so as to comply with new anti-money laundering legislation and the developments deriving from the new requirements expressed by the business.

Non-life bankassurance area

The launch of the partnership between the Cattolica Group and the Banca Popolare di Vicenza Group involves Cattolica IT Services in the preparation of the front end and back end operating systems of four collective products involving individual compliance: C.P.I. Prestiti, C.P.I. Mutui, and Multirischi Abitazione. Particular efforts were also dedicated to the integration between the systems of the companies involved in the business: the three banks of the Group (Popolare di Vicenza, Cariprato and Banca Nuova), Berica Vita (for Life coverage of the Loans and Mortgages products) and Genworth (the reinsurer for the Loans products).

Claims

The activities which required the significant intervention of the information technology division are all associated with the adaptation of the systems and related applications to the recent legislative provisions concerning insurance.

The most significant measures included those relating to the implementation of the Group claims system for the handling of claims under the Direct Compensation method, according to the CARD agreement between insurers, in compliance with Italian Presidential Decree No. 254 dated July 18th, 2006 implementing the new insurance code.

Pensions & Welfare area

Measures were continued aimed at maintaining the operating efficiency on a consistent basis with the strategies adopted and at fulfilling the new norms which the companies are subject to. Mention should be made of the new CONSOB legislation, which involves the resources and the front-end applications systems of the Pensions & Welfare area to a significant extent.

On a parallel, all the activities of the 2007-2010 IT strategic plan for life business continued in accordance with the timescales agreed during the periodic meeting of the IT Operations Committee of the Life area which the reference business area participates in.

Finance area

The “Domani” project is currently being accomplished and has the aim of endowing the Group with an integrated and advanced insurance finance system, capable of significantly increasing the promptness and the level of information supporting the financial operations and the control of market, liquidity and credit risks.

During the first half of the year, the functional analysis and planning activities concluded, and a test environment was made available. A project has also been launched, with the aim of creating an application for the pricing of the derivatives and the structured securities.

Administration area

As part of the project for the creation of a New Group Administration System, having acknowledged the requirements expressed by the Group’s Administration and Budget Division, activities were completed for assessing the offers presented. As from May 2007, activities were started up which involve numerous resources from the administration area, C.I.T.S. and the appointed supplier.

Numerous encounters were held for analyzing in-depth the various topics and to-date it has already been possible to share the reference accounting model which will be the only one for all the Group companies thanks to the creation of the new system.

COMPLIANCE

Anti-money The compliance division dedicated to anti-money laundering legislation focused its measures, laundering during the first half of the year, on the implementation of the regulatory provisions issued in and financial acknowledgement of the Second EU Anti-money Laundering Directive which came into force on combating of January 1st, 2007. terrorism As described in the section “Significant events during the period”, in June the ISVAP carried out inspection activities on the Parent Company and some of the subsidiaries in relation to the fulfilments envisaged by anti-money laundering legislation.

Privacy and During 2007, the activities of the Data Protection System continued. The Group Information information Privacy and Security Centre is appointed to co-ordinate, direct and oversee all the initiatives on this security subject and to maintain the necessary coherence of the policies implemented both in the corporate sphere and at Group level.

The Data Protection structure is constantly monitored and updated with the related appointments as the staff organization charts of the companies change.

The request for the renewal of Authorization to handle the sensitive data of the Parent Company’s shareholders, necessary in accordance with the Articles of Association for admission to the status of Shareholder, has been promptly forwarded to the Guarantor and issue of the same is awaited.

Activities continued for the administration, control and checking of the security measures adopted by the companies, on the basis of the results of the risk analysis carried out.

The Principal has updated the Programmatic Document on Security (DPS – Documento Programmatico sulla Sicurezza) for 2007 and planned the consequent operating measures. The DPS has been approved by the Board of Directors.

AUDIT

Internal The complexity and numerousness of the fulfilments required by Group growth together with the audit progressive extension of the compulsory areas of intervention, have contributed towards making the internal control system more efficient and have consolidated the Internal Audit organizational structure.

Agency The unification of the Agency Inspectorate structure at Group level is currently underway. During Inspectorate the first half of 2007, the process for standardizing the internal back office operating procedures was completed and the IT control programmes were implemented, also resorting to remote types of assessments.

HUMAN RESOURCES

Human As of June 30th, as illustrated in the following table, the Group headcount included 1,502 staff, resources compared with 1,525 as of December 31st, 2006, divided up as follows: 36 executives (-2), 215 officials (-1), and 1,251 office workers (-20).

Staff Number 2,000

1,800 1.525 1.502 1,600 38 36 1,400 215 216 1,200

1,000 1,271 1,251 800

600

400

200

0 31.12.2006 30.06.2007 Office Workers Officials Executives

Considering the high number of part-time staff, working mainly in the call centre, the total number of Group employees was also calculated, determined by attributing to part-time employees a weight proportioned to the hours worked.

The number of Group employees thus calculated (full time equivalent) came to 1,437 (1,466 as of December 31st, 2006).

Table 10 – Group headcount Registered Group companies(*) 31.12.2006 30.06.2007 offices ABC Assicura Verona 14 13 BPV Vita Verona 14 14 C.I.R.A. Milan 19 17 Cattolica Assicurazioni Verona 639 490 (1) Cattolica Immobiliare Verona 12 11 Cattolica Investimenti SIM Verona 4 3 Cattolica IT Services Verona 123 123 di.CA Verona 148 413 (1) Duomo Previdenza Milan 17 17 Duomo Uni One Assicurazioni Milan 408 275 (1) Lombarda Vita Brescia 14 16 Persona Life Milan 12 9 Risparmio & Previdenza Verona 48 47 San Miniato Previdenza San Miniato (PI) 4 5 TUA Assicurazioni Milan 30 30 Verona Gestioni SGR Verona 10 11 Axa Cattolica Previdenza in Azienda(**) Milan 9 8 Polo Finanziario(**) Verona 0 0 Group total 1,525 1,502 (*) Number of employees in the companies consolidated line-by-line and proportionally (**) Employees of Axa Cattolica Previdenza in Azienda and Polo Finanziario, companies consolidated with the proportional method, have been fully considered (1) 135 employees of Cattolica and 120 employees of Duomo Uni One have been transfered to diCA after the transfer of the claims structure.

TRAINING

Training activities increasingly move towards a logic of integration with the operating model for the management of human capital launched in 2006 by means of the “Integrated management of the resources” project.

Training measures were focused in strengthening and updating the technical-professional know- how and developing the related relational and organizational-management abilities derived from the model of the skills, at the basis of the “integrated management” model.

For the managerial roles, support, technical and method-related training measures were carried out, so as to correctly achieve the gauging of the staff’s skills, a preparatory phase for the launch of the “Resources growth sheet”, a fundamental component of the project for managing the human capital.

On a parallel, specific training programmes are currently being studied for the development of skills, with particular attention paid to key roles and resources for the Group’s growth requirements.

The Group also had access to the financial resources made available by the For.Te. Fund for the achievement of measures adapting the skills of employed workers with a view to on-going training. These funds will be used for creating training measures and professional refresher courses for all Group resources in the two-year period 2007-2008.

Management report

The Group during the first six months of 2007

Business performance

Risk management

Organization and resources

Significant events and other information

SIGNIFICANT EVENTS AND OTHER INFORMATION

The significant events that occurred during the interim period as part of the management of the equity investments in Group companies, the corporate reorganization and the consequent rationalization of activities, in view of the realization of the strategic and operating lines anticipated by the Business Plan are set out below, in addition to the other events during the period.

Group Partnerships companies Banca Popolare di Vicenza

On January 26th, 2007 the Parent Company and Banca Popolare di Vicenza signed a Memorandum of Understanding, subsequently developed within an Outline Agreement entered into on March 15th 2007, the aim of which is to create a strategic partnership in the personal insurance, banking and financial services segment, according to an innovative model of co- operation and development which, in observance of the reciprocal autonomies, permits the two Groups to focus on their strategic business objectives, developing synergies in certain common spheres. The agreements reached envisage an industrial partnership between the two Groups, with an initial duration of five years, automatically renewable for another five. The following is envisaged within this sphere:

• that the Parent Company takes a 50% interest in the life assurance companies of the Banca Popolare di Vicenza Group, Berica Vita s.p.a., an Italian company, and Vicenza Life Ltd., an Irish company, for a price of € 20.9 million and € 23.2 million, respectively. On the basis of the exclusive sales agreement with the Banca Popolare di Vicenza Group with a duration equating to the partnership’s length, the two insurance companies will develop life bankassurance activities via the Banca Popolare di Vicenza Group’s distribution channels. Vicenza Life, opportunely renamed if necessary, will place its own products, for the types not available with the other Cattolica insurance companies, partly via the Cattolica Group agencies and possibly via the networks of the other partner banks of the Cattolica Group interested in the range of the Irish company. With reference to supplementary welfare and pension products, the agreement anticipates the rapid development of important business synergies. Specifically, the open-end pension fund “Cattolica Gestione Previdenza” will be placed on the banking Group’s networks. In relation to the “Individual Welfare Plan” product, Cattolica will make its own instruments available to the Banca Popolare di Vicenza Group with all the operating and commercial support necessary, what is more already defined and created for the institutes forming part of the Group’s bankassurance network; • in relation to the non-life business and for the purpose of providing an insurance company for common benefit serving the networks of the Banca Popolare di Vicenza Group, Cattolica Assicurazioni will transfer 50% of ABC Assicura to the bank. On the basis of the exclusive sales agreement with the Banca Popolare di Vicenza Group with a duration equating to the partnership’s length, ABC Assicura will develop non-life bankassurance activities via the Banca Popolare di Vicenza Group’s distribution channels. The value of this transaction comes to € 5.2 million; • with regards to asset management, it is envisaged that the Parent Company will acquire 50% of the share capital of BPVI Fondi SGR, the Banca Popolare di Vicenza Group asset

management company, together with the transfer to the banking partner of 50% of Verona Gestioni SGR’s share capital, for a value of € 29 million and € 20.5 million, respectively. The possible merger between the two asset management companies (SGR) will be assessed subsequently; • in conclusion, for the purpose of being able to evaluate the potential of the Cattolica Group sales networks, where necessary, the Parent Company and Banca Popolare di Vicenza will form a Newco, jointly (50%) owned, for the placement of banking products (specifically disbursement-related) on the entire Cattolica Group agency network, products developed by the structures of the Banca Popolare di Vicenza Group under the Cattolica brand.

Completing and enhancing the industrial partnership, the Outline Agreement envisages:

• a share capital increase, involving the exclusion of the option rights, reserved for BPVI and its subsidiaries, to be carried out in two tranches, approved by the shareholders’ meeting held on April 28th, 2007. The first tranche, concerning an 8% holding in the share capital of Cattolica post-increase, given the unity of the transactions envisaged by the partnership with Banca Popolare di Vicenza and the intention of the Parties to consequently execute it in a single solution, was subscribed on September 5th, having obtained the necessary authorizations from the competent supervisory authorities, as more fully described further on. The second tranche, for an additional 4% of the share capital, may be subscribed as from July 1st, 2010. The subscription price of the second tranche will be equal to the weighted average of the “official prices” (as revealed by Borsa Italiana) recorded by Cattolica shares in the six months prior to the start date of the subscription period for that tranche; • the appointment, on April 28th, 2007 by Cattolica’s shareholders’ meeting, held in ordinary and extraordinary session, of Mr. Giovanni Zonin (subsequently appointed by the Board as Deputy Chairman) and Mr. Luciano Colombini as directors of the Parent Company, and Mr. Luigi de Anna as statutory auditor.

On September 5th, as indicated further on, the Parent Company and Banca Popolare di Vicenza finalized the process for making the strategic partnership in the personal insurance, banking and financial services segment fully effective .

Mapfre S.A.

On March 14th, as a result of the provisions of the Memorandum of Understanding entered into on December 17th, 2006 Cattolica Assicurazioni and Mapfre S.A. subscribed an Outline Agreement which governs the terms and conditions of the transactions for the execution of the insurance joint venture in the motor sector, and regulates the future relations as joint investors in the share capital of the joint venture. The activities forming the subject matter of the partnership between Cattolica and Mapfre will include the agency motor business of Cattolica Assicurazioni and Duomo Uni One Assicurazioni. This partnership with Mapfre will permit Cattolica to speed up the development of its motor range in accordance with the new strategic guidelines and the changed competitive and legislative context.

The main transactions during the period, aimed at achieving this transaction are listed below.

On March 21st, the entire equity investment held by Mapfre Empresas Compañia de Seguros y Reaseguros S.A. in the subsidiary “Compagnia Italiana Rischi Aziende S.p.A.” was transferred to Cattolica, involving a total of 103,200 shares with a par value of € 5.00 each, corresponding to an interest of 3.57% of the company’s share capital. The transfer was made at a unit price of € 12.9199, thus, for a total of € 1,333,333.68. Following this operation, “Compagnia Italiana Rischi Aziende S.p.A.” is now wholly-owned by Cattolica Assicurazioni, which therefore has achieved the status of sole shareholder.

On June 27th, in accordance with the share capital increase resolution adopted by the subsidiary di.CA on June 21st, on a consistent basis with the appraisals of the expert appointed for this purpose by the competent court, Cattolica and Duomo Uni One subscribed said share capital increase by means of the transfer to di.CA of the respective business segments comprising the assets and liabilities relating to the claims handling processes belonging to the head office and network settlement structures. The transfer, the result of the express intention of the parties, became effective as from 11.59 p.m. on June 30th, the date when Duomo Uni One joined di.CA’s shareholding structure with an interest holding of 7.53%. As a result of the transfer in question, Cattolica’s interest holding in di.CA’s share capital thus fell to 92.47%.

On June 28th,, C.I.R.A.’s extraordinary shareholders’ meeting resolved a share capital increase for a total of € 285.552 million, to be achieved by means of the transfer of the business segments belonging to Cattolica and Duomo Uni One representing the assets and liabilities relating to the performance of insurance activities in the agency motor business segment. The resolution adopted was assisted by the issue, by the court-appointed expert, of the appraisals envisaged by Article 2343 of the Italian Civil Code., and the issue by the appointed independent auditing firm of the opinion pursuant to Article 2446 of the afore-mentioned Civil Code.

Banco Popolare di Verona e Novara

On March 28th, Banco Popolare di Verona e Novara exercised the call option envisaged by the shareholders’ agreements stipulated in January, disciplining the investment relationships in BPV Vita of the Parent Company, Banco Popolare di Verona e Novara and Credito Bergamasco. The purchase price of the equity investment was € 64.18 million, which was determined net of the gross expected dividends (pro rata) of € 12.1 million, and defined based on a joint appraisal carried out by two advisors, with reference to the embedded value of the company as of December 31st, 2006.

On June 21st, 2007 the ISVAP issued instruction No. 2527 by means of which it authorized the transfer of the equity investment in favour of Banco Popolare di Verona e Novara via the Holding Company Finanziarie Popolare di Verona e Novara. The transaction, as described further on, having obtained authorization from the Bank of Italy, took place on August 31st.

Mergers and corporate re-organization transactions

Merger of Duomo Previdenza e Persona Life within Cattolica

On February 13th, Cattolica’s Board of Directors resolved to go ahead with the acquisition of 100% of the share capital of Persona Life belonging to Duomo Uni One Assicurazioni, at a

price of € 45 million, established on the basis of a sworn expert opinion. On March 21st, the operation was authorised by the Supervisory Authorities. The share transfer was completed on May 10th.

On March 21st, Cattolica’s Board of Directors approved the merger by incorporation of Duomo Previdenza and Persona Life. Likewise, the Boards’ of Directors of Duomo Previdenza and Persona Life, respectively on March 29th and April 4th, approved the merger projects. As this merger involves companies which, at the merger date, are wholly-owned by the incorporating company, the transaction will not generate an exchange of shares, and will not lead to an increase in share capital for the incorporating company.

On May 4th, 2007, the Board of Directors of Duomo Previdenza approved the merger by incorporation of the company into Cattolica. On May 10th, 2007, the Board of Directors of Cattolica resolved on the merger by incorporation of the companies Duomo Previdenza and Persona Life. In conclusion, on May 16th, Persona Life’s Board of Directors approved the transaction for the merger by incorporation of the company within Cattolica. The mergers are dependent on obtaining the necessary authorization from the Supervisory Body.

Other events

On March 5th, as per the resolution of the Boards of Directors of the companies involved, the project for the merger through incorporation of Cattolica Polo Finanziario into Cattolica Immobiliare was approved; the former holds 100% of the shares of the latter. On March 22nd, the merger deed was stipulated, with effective date of March 26th, 2007.

On June 26th and 27th, the Boards of Directors of the companies involved approved the project for the merger through incorporation of Duomo Uni One within Cattolica Assicurazioni. The transaction, as described in the subsequent significant events, was suspended on July 31st.

Other transactions

Following the request presented by Cattolica Investimenti SIM, on February 9th, 2007 CONSOB issued the provision authorizing the exercise of trading activities. On June 27th, in light of the new strategic scenario, the decision agreed upon between Cattolica Assicurazioni, Banca Zarattini & co. SA and Anchorage Capital Partners Ltd to terminate the agreements with reference to Cattolica Investimenti Sim, was formalized.

With a value date as of February 8th, the Parent Company transferred the remaining 323,859 shares in Credito Bergamasco held at a unit price of €30.74 each to Banco Popolare di Verona e Novara. As a result of this transaction, the shareholding held in said bank has been disposed of entirely.

As regards the guarantees agreed upon the acquisition of Uni One Assicurazioni, on February 16th, Generali Assicurazioni paid Cattolica € 1.7 million as a reduction of the book value of the equity investment.

On March 5th, Cattolica Immobiliare’s Board of Directors called an extraordinary Shareholders’ Meeting to resolve – in accordance with and for the purposes of Article 2445 of the Italian Civil

Code - the voluntary reduction of the share capital, to be implemented by means of reimbursing sums to the sole shareholder. On March 22nd, the extraordinary Shareholders’ Meeting of Cattolica Immobiliare resolved, in accordance with Article 2445 of the Italian Civil Code, the reduction of its share capital from € 115,753 million to € 35 million, a reduction of 80,753 million, through reimbursement to Cattolica. With a value date as of June 29th, Cattolica Immobiliare reimbursed an initial tranche of the excess capital, for € 20 million.

On March 5th, for the purpose of providing the instruments necessary for supporting the development of the company’s activities aimed at the achievement of its corporate mission, TUA Assicurazioni’s Board of Directors requested the shareholders carry out the payment, into the share capital account, of a total of € 8 million, a fulfilment which the shareholders carried out.

On April 1st, 2007, the merger between Banca Lombarda e Piemontese and Banche Popolari Unite S.C.p.A. took effect. This merger led to the creation of a new legal entity under the name Unione di Banche Italiane Società Cooperativa per azioni (in short, also UBI Banca), with registered office in Bergamo. As a result of the share swap following the aforesaid merger, Cattolica now holds an interest of 1.24% in the share capital of UBI Banca. With regards to the Banca Lombarda e Piemontese pool, so as to maintain the inspiring principles of the same alive within the new entity as well, on May 28th an association was set up, by the members of the Banca Lombarda e Piemontese pool, entitled “Associazione Banca Lombarda e Piemontese” in which Cattolica participates as a result of an interest of 0.5% in UBI Banca’s share capital.

The Extraordinary Shareholders’ Meeting of Verona Servizi, held on April 3rd, 2007, in acknowledging that the strategic developments of the Group resulted in the invalidity of the strategic plan previously developed for the company, resolved pursuant to Article 2484.1.6 of the Italian Civil Code, and pursuant to Article 50 of the Articles of Association, on the early winding up of the company and the appointment of one or more receivers. On May 3rd, 2007, the voluntary receivership was recorded in the Milan Registry of Companies.

On April 27th, 2007, the Ordinary and Extraordinary Shareholders’ Meeting of Cassa di Risparmio di San Miniato was held, in order to approve an increase in share capital from € 126,194,648.00, up to a maximum of € 140,213,248.00 through the issue of a maximum of 1,752,700 ordinary shares with a par value of € 8.00 each. The issue price of the new shares, determined by the Board of Directors of Cassa di Risparmio di San Miniato, is € 23.50 per share.

Share capital On February 23rd, the Board of Directors meeting of Lombarda Vita, on delegation granted by increases the Shareholders’ Meeting, resolved a share capital increase of € 10 million, subscribed and freed up by the shareholders on that date. Thus, Cattolica paid in its share of € 5.01 million.

With a value date of March 20th, Cattolica paid the amount of € 280 thousand to Cattolica Investimenti SIM, towards future share capital. With the same value date, Duomo Uni One paid a total of € 120 thousand.

On June 11th, the shareholders’ meeting of CIS - Compagnia Investimenti e Sviluppo authorized a bonus share capital increase from € 48 million to € 60 million. Therefore 250,000 new shares were assigned to Cattolica.

On June 25th, Vegagest resolved on a share capital increase reserved for Banca Popolare di Bari by means of the issue of 2,540,780 ordinary shares with a par value of € 1.00 each. This increase took place in the following days, before the end of the interim period. As a result of this reserved capital increase, Cattolica, Cassa di Risparmio di Ferrara and Cassa di Risparmio di San Miniato signed an addendum to the Shareholders’ agreement in force signed by the same parties on June 10th 2005, with the purpose of declaring – on conclusion of the resolved capital increase transaction- a total number of shares equating to 51% of Vegagest’s share capital as pooled. As a result of this increase, Cattolica thus holds an interest in Vegagest’s capital of 16.99%.

Other events With reference to the ISVAP inspection of the Parent Company started in February 2006, during the focused on claims management procedures, for several non-life classes and in particular the period report on the inspections and controls carried out on the general TPL business, notification of contention was received from ISVAP on February 6th, which envisaged a minor fine.

On March 26th, the report on the findings of the inspection and controls on the TPL business was signed and collected.

On March 20th, the report on findings was signed on conclusion of the tax assessment carried out on BPV Vita.

In June, ISVAP started inspection activities on the Parent Company and on certain subsidiary companies in relation to the fulfilments envisaged by anti-money laundering legislation. The company concerned provided ample collaboration in relation to the requests of the Inspectors; to-date, the activities carried out at company premises have been concluded.

OTHER INFORMATION

Transactions Transactions with related parties with related parties By means of resolution No. 13616 dated June 12th, 2002, the National Board for Companies and the Stock Exchange (CONSOB) amended regulation No. 11971/99, containing the discipline of the issuers, introducing, under Article 71 bis, disclosure obligations relating to transactions with related parties on the occurrence of certain conditions.

Furthermore, following the adoption of the international accounting standards IAS/IFRS, for the definition of “related parties” one must now make express reference to the parties defined as such by the international accounting standard concerning financial statement disclosure on transactions with related parties, adopted in accordance with the procedure pursuant to Article 6 of EC Regulation No. 1606/2002 (IAS 24).

A party is therefore understood to be related to the Company if:

a) directly or indirectly, via one or more intermediaries, the party: - controls the Company, or is controlled by it, or is subject to joint control (including therein parent, subsidiary and affiliated companies); - holds an equity investment of such an entity that it is able to exercise significant

influence over the latter or - jointly controls the Company; b) the party is an associated company (in accordance with the definition of IAS 28 Equity investments in associated companies) of the Company; c) the party is a joint venture which the Company participates in (in accordance with the definition of IAS 31 Equity investments in joint ventures); d) the party is one of the executives of the Company or its Parent Company with strategic responsibilities; e) the party is a close relative of one of the parties pursuant to points a) or d); f) the party is a subsidiary company, jointly controlled company or subject to significant influence by one of the parties pursuant to points d) or e), or said parties hold, directly or indirectly, a significant portion of the voting rights; g) the party is a pension fund for the Company’s employees or the employees of any other body related to the same.

In consideration of this, the regulations disciplining the performance of the most significant economic, financial and equity transactions, atypical and/or unusual with related parties, have been adapted.

With reference to the above, the following should be noted:

• the Cattolica Group has entered into several extraordinary transactions, not atypical and/or unusual, or launched the procedure for their performance, finalized at rationalizing and reorganizing the corporate structure of the same. These transactions, some of which saw the direct involvement of the Parent Company, are illustrated in another section of the report. The balance sheet and income statement transactions with subsidiary and associated companies are expressed in summary form in the following schedules; • with regards to transactions with other related parties, without prejudice to the resolution procedures described in the 2006 financial statements of the Parent Company, shareholders are hereby informed that, for reporting purposes, a structured procedure has been set up for detecting the outstanding transactions, via the prior acquisition from Group representatives of the necessary information in relation to international accounting standard IAS 24, and subsequent extrapolation of the transactions relating to the same. Overall, these transactions, which it is formally acknowledged took place within the sphere of market values, are not considered to be significant for disclosure purpose.

Atypical The Group companies did not enter into any atypical and/or unusual transactions during the and/or interim period, either with third parties or companies forming part of the Group, or with related unusual parties, as specified above. transactions

Significant With reference to the significant non-recurrent events and operations defined in CONSOB non-recurrent Communication DEM/6064293 dated July 28th, 2006, shareholders are hereby informed that events and the Group has not entered into any transactions extraneous to the ordinary business and which operations are therefore non-recurrent.

Performance During the period January 1st – June 30th, 2007 Cattolica shares disclosed a minimum price of of Cattolica € 41.03 and a maximum price of € 48.07. The capitalization of the stock on the market as of stock on the June 30th came to € 1,986 million. market Cattolica stockmarket capitalization € millions

2.500

2.123 1.986 2.000

1.500

1.000

500

0 31.12.2006 30.06.2007

Cattolica stock performance in the first six months of 2007 was affected by the uncertainty of the financial markets and registered a contained drop (- 4.3%), compared with a – 2.1% drop in the Italian insurance index and 1.3% on the S&P Mib index.

Confirming the growing interest of the financial community, the average of Cattolica volumes traded in the first half of 2007 increased by 16.7% when compared with the same period in 2006.

Ratios per A summary of the main ratios per share is presented below (note that the share capital is divided share up into 47,391,228 ordinary shares with a par value of € 3 each):

Table 11 – Ratios per share

(in €) 30.06.2007 30.06.2006

Premiums taken per share (insurance premiums and investment policies) 43.40 41.25 Group profit per share 0.40 0.91 Group net shareholders' equity per share 24.10 26.33

At the end of the first half of 2007, the Group net profit per share came to € 0.4.

SIGNIFICANT EVENTS SUBSEQUENT TO THE END OF THE SIX MONTH PERIOD

On July 30th, Cattolica and AXA Assicurazioni finalized the agreement for the acquisition of the remaining 50% of AXA Cattolica Previdenza in Azienda’s share capital by the Parent Company at a price of € 7.7 million. As a result of this agreement, Cattolica, which currently holds 50% of AXA Cattolica Previdenza in Azienda, will achieve total control over the insurance company, further consolidating the structures dedicated to supplementary welfare, confirming is heavy focus on this area of business. The transaction is dependent on the issue of the authorizations by ISVAP and other competent bodies.

For the purpose of keeping the corporate medium available for future incremental strategic options, on July 31st, the Parent Company’s Board of Directors resolved the suspension of the procedures for the merger through incorporation of Duomo Uni One Assicurazioni within Cattolica.

On August 31st, Cattolica transferred the equity investment held in the share capital of BPV Vita S.p.A. to the Holding Company Finanziarie Banco Popolare di Verona e Novara SpA. for a total price of € 64.18 million. At present, the Parent Company no longer holds any investment in BPV Vita’s share capital.

On September 5th, 2007, having obtained the prior authorizations, Banca Popolare di Vicenza took steps to subscribe the first portion of the share capital increase resolved during the shareholders’ meeting held on April 28th, reserved for the same, thereby subscribing 4,120,976 ordinary shares, with a unit value of € 44.87. By means of the subscription of the afore-mentioned capital increase, Banca Popolare di Vicenza now holds, together with the shares already present in the portfolio, 12.48% of the Parent Company’s share capital. Banca Popolare di Vicenza then took steps to acquire 50% of ABC Assicura S.p.A.’s share capital as well as to undertake control over Verona Gestioni Sgr S.p.A. and at the same time acquire 50% of the latter’s share capital. Cattolica likewise took steps to acquire 50% of Berica Vita S.p.A. and Vicenza Life S.p.A.’s share capital, thereby undertaking control over the same. Cattolica then took steps to acquire 50% of BPVI Fondi Sgr SpA’s share capital. All the deeds and contracts were therefore signed, aimed at sharing the specialist skills of the Cattolica Group and the Banca Popolare di Vicenza Group with regards to life assurance and welfare business, non-life business, and asset management services for both private and institutional customers. The efficacy of the partnership agreements means that all the shareholders’ terms relating to the jointly-owned companies as well as the related investment of Banca Popolare di Vicenza in the Parent Company’s share capital, become fully effective.

OUTLOOK FOR BUSINESS ACTIVITIES

According to the operational and organizational objectives fully described in the section dedicated to the Strategic Plan, during the second half of the year the majority of the activities concerning the project spheres relating to initiatives envisaged for 2007 will be concluded.

In the non-life classes, continuation of the current market trends is foreseeable, trends which, on a consistent basis with the evolution of the security requirements of households and businesses, on the one hand registers positive growth in the elementary classes and, on the other hand, the persistence of competitive pressure on the motor class.

As regards the life classes, as a result of both the new bankassurance agreements, which will be fully operative by the end of the year, and the important development envisaged for Class VI – activities relating to pension fund management – the growth lines and objectives outlined for 2007 are likely to be achieved.

Within a scenario characterized by high market rates, the financial operations of the Group will proceed according to a management approach supplemented by the combined effect of this rise in returns and in securities’ prices so as to achieve financial results in line with those envisaged by the Business Plan.

Statement of reconciliation between the shareholders’ equity and profit for the year of the Parent Company and the corresponding consolidated balances

CONSOLIDATED FINANCIAL STATEMENTS AS AT JUNE 30TH, 2007

Company: CATTOLICA ASSICURAZIONI GROUP

STATEMENT OF RECONCILIATION BETWEEN THE SHAREHOLDERS’ EQUITY AND PROFIT FOR THE YEAR OF THE PARENT COMPANY AND THE CORRESPONDING CONSOLIDATED SHAREHOLDERS' EQUITY AND PROFIT

Share capital Profit (loss) Shareholders' (€ millions) and reserves for the period equity

Balances of the Parent Company It Gaap 1,041 43 1,084 Adjustment Ias/Ifrs - Parent Company 61 12 73 Balances of the Parent Company IAS/IFRS 1,102 55 1,157 Netting of the book values of the equity investments included in the scope of consolidation: 00 0 - difference between the book value and the pro-quota value of the shareholders' equity -153 0 -153 - pro-rata results of the investees 02424 - capital gains from sale of equity investments recorded in the consolidated fin. stat. 0 0 0 - goodwill 174 0 174 - value of portfolio 17 -1 16 Netting of infra-group transactions: - dividends from consolidated companies 61 -61 0 - write-back of effects of equity investments transfers 0 0 0 - reversal of infra-group real estate transactions 0 0 0 - reversal of effects of mergers among group companies -52 0 -52 - reversal of effects of infragroup branch transfers -39 1 -38 Fiscal effects of abovementioned consolidation adjustments 12 2 14 Effects connected to non-consolidated companies: Effects connected to the valuation of non-consolidated companies -1 1 0 Dividends from associated companies 2 -2 0 Shareholders' equity and net income pertaining to the Group 1,123 19 1,142 Shareholders' equity and net income pertaining to third parties 112 10 122 CONSOLIDATED SHAREHOLDERS' EQUITY AND NET INCOME 1,235 29 1,264

THE BOARD OF DIRECTORS

Verona, Italy, September 12th, 2007

Consolidated balance sheet and income statement

CONSOLIDATED INTERIM REPORT AS AT JUNE 30TH 2007

Company: CATTOLICA ASSICURAZIONI GROUP (€ millions)

BALANCE SHEET - ASSETS 30.06.2007 31.12.2006

1 INTANGIBLE ASSETS 226 222 1.1 Goodwill 174 173 1.2 Other intangible assets 52 49 2 TANGIBLE ASSETS 44 46 2.1 Property 30 31 2.2 Other tangible assets 14 15 3 TECHNICAL PROVISIONS - REINSURANCE AMOUNT 500 500 4 INVESTMENTS 13,628 17,504 4.1 Property investments 11 4.2 Equity investments in subsidiary and associated companies and joint ventures 81 80 4.3 Investments held to maturity 112 137 4.4 Loans and receivables 357 359 4.5 Financial assets available for sale 6,186 6,566 4.6 Financial assets valued at fair value stated in the income statement 6,891 10,361 5 SUNDRY RECEIVABLES 690 736 5.1 Receivables deriving from direct insurance transactions 409 438 5.2 Receivables deriving from reinsurance transactions 85 65 5.3 Other receivables 196 233 6 OTHER ASSET ITEMS 3,555 455 6.1 Non-current assets or of a group subject to disposal held for sale 3,114 0 6.2 Deferred acquisition costs 43 44 6.3 Deferred tax assets 51 18 6.4 Current tax assets 189 243 6.5 Other assets 158 150 7 CASH AND CASH EQUIVALENTS 472 590 TOTAL ASSETS 19,115 20,053

BALANCE SHEET - LIABILITIES AND NET SHAREHOLDERS' EQUITY 30.06.2007 31.12.2006

1 SHAREHOLDERS' EQUITY 1,264 1,376 1.1 pertaining to the Group 1,142 1,234 1.1.1 Share capital 142 142 1.1.2 Other equity instruments 00 1.1.3 Capital reserves 590 590 1.1.4 Net profit reserves and other equity reserves 332 265 1.1.5 (Own shares) 00 1.1.6 Reserve for net exchange differences 0 0 1.1.7 Gains or losses on financial assets available for sale 59 99 1.1.8 Other gains or losses recorded directly under equity 0 -1 1.1.9 Net profit (loss) for the period pertaining to the Group 19 139 1.2 pertaining to third parties 122 142 1.2.1 Capital and reserves pertaining to minority shareholders 127 121 1.2.2 Gains or losses recorded directly under equity -15 0 1.2.3 Profit (loss) for the period pertaining to minority shareholders 10 21 2 PROVISIONS AND ALLOWANCES 16 16 3 TECHNICAL PROVISIONS 12,889 16,013 4 FINANCIAL LIABILITIES 1,346 2,109 4.1 Financial liabilities valued at fair value stated in the income statement 1,199 1,953 4.2 Other financial liabilities 147 156 5 PAYABLES 304 269 5.1 Payables deriving from direct insurance transactions 58 75 5.2 Payables deriving from reinsurance transactions 59 52 5.3 Other payables 187 142 6 OTHER LIABILITY ITEMS 3,296 270 6.1 Liabilities of a group held for sale 3,021 0 6.2 Deferred tax liabilities 140 124 6.3 Current tax liabilities 42 66 6.4 Other liabilities 93 80 TOTAL LIABILITIES AND NET SHAREHOLDERS' EQUITY 19,115 20,053

CONSOLIDATED INTERIM REPORT AS AT JUNE 30TH 2007 CONSOLIDATED INTERIM REPORT AS AT JUNE 30TH 2007 Company: CATTOLICA ASSICURAZIONI GROUP (€ millions)

INCOME STATEMENT 30.06.2007 30.06.2006 1.1 Net premiums 1,909 1,825 1.1.1 Gross premiums written 2,010 1,923 1.1.2 Premiums transferred under reinsurance -101 -98 1.2 Commission income 5 10 Income and charges deriving from financial instruments valued at fair value stated in the income 1.3 47 -11 statement Income deriving from equity investments in subsidiary and associated companies and joint 1.4 11 ventures 1.5 Income deriving from other financial instruments and property investments 146 217 1.5.1 Interest income 101 66 1.5.2 Other income 24 24 1.5.3 Realized gains 21 127 1.5.4 Valuation income 00 1.6 Other revenues 26 28 1 TOTAL REVENUES AND INCOME 2,134 2,070 2.1 Net charges relating to claims 1,784 1,673 2.1.1 Amounts paid and change in technical provisions 1,838 1,744 2.1.2 Reinsurance portion -54 -71 2.2 Commission expense 45 Charges deriving from equity investments in subsidiary and associated companies and joint 2.3 00 ventures 2.4 Charges deriving from other financial instruments and property investments 11 16 2.4.1 Interest expense 55 2.4.2 Other charges 00 2.4.3 Realized losses 610 2.4.4 Valuation loss 01 2.5 Operating expenses 230 228 2.5.1 Commission and other acquisition costs 151 151 2.5.2 Operating expenses relating to investments 3 8 2.5.3 Other administrative expenses 76 69 2.6 Other costs 53 66 2 TOTAL COSTS AND CHARGES 2,082 1,988 PROFIT (LOSS) FOR THE PERIOD BEFORE TAXATION 52 82 3 Taxation 29 43 NET PROFIT (LOSS) FOR THE PERIOD 23 39 4 PROFIT (LOSS) FROM BUSINESS ACTIVITIES SUSPENDED 6 11 CONSOLIDATED PROFIT (LOSS) 29 50 pertaining to the Group 19 43 pertaining to minority shareholders 10 7

Statement of changes in shareholders’ equity and statement of cash flows

921

Statement of changes in shareholders’ equity (ISVAP Instruction No. 2460 dated August 10th, 2006)

CONSOLIDATED INTERIM REPORT AS AT JUNE 30TH 2007 Company: CATTOLICA ASSICURAZIONI GROUP

STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY Transfers to Change in Amounts income (€ millions) 31.12.2005 closing balances booked statement Other transfers 30.06.2006 Share capital 142 0 0 0 142 Other equity instruments 000 00 Capital reserves 590 0 0 0 590 Net profit reserves and other equity reserves 217 0 109 -60 266 (Own shares) 000 00 Reserve for net exchange differences 0000 0 Gains or losses on financial assets available for sale 99 0 -87 -21 73 64 Other gains or losses recorded directly under equity 30-400-1 Gains or losses on instruments hedging a cash flow 000000 Gains or losses on instruments hedging a net investment in 000000 foreign management arrangements Reserve deriving from changes in the net shareholders' equity of 30-400-1 the investee companies Reserve for the revaluation of intangible assets 000000 Reserve for the revaluation of tangible assets 000000 Income and charges relating to non-current assets or to a group 000000 subject to disposal held for sale Other provisions 000000 Profit (loss) for the year 115 0 -72 0 43 Total pertaining to the Group 1,166 0 -54 -21 13 1,104 Capital and reserves pertaining to minority shareholders 100 0 24 0 -10 114 Gains or losses booked directly to equity -1 0 -33 0 29 -5 Profit (loss) for the year 240-17007 Total pertaining to minority shareholders 123 0 -26 0 19 116 TOTAL 1,289 0 -80 -21 32 1,220

Transfers to Change in Amounts income 31.12.2006 closing balances booked statement Other transfers 30.06.2007 Share capital 142 0 0 0 142 Other equity instruments 000 00 Capital reserves 590 0 0 0 590 Net profit reserves and other equity reserves 265 0 139 -72 332 (Own shares) 000 00 Reserve for net exchange differences 0000 0 Gains or losses on financial assets available for sale 99 0 -51 -2 13 59 Other gains or losses recorded directly under equity -101000 Gains or losses on instruments hedging a cash flow 000000 Gains or losses on instruments hedging a net investment in 000000 foreign management arrangements Reserve deriving from changes in the net shareholders' equity of -101000 the investee companies Reserve for the revaluation of intangible assets 000000 Reserve for the revaluation of tangible assets 000000 Income and charges relating to non-current assets or to a group 000000 subject to disposal held for sale Other provisions 000000 Profit (loss) for the year 139 0 -120 0 19 Total pertaining to the Group 1,234 0 -31 -2 -59 1,142 Capital and reserves pertaining to minority shareholders 121 0 16 0 -10 127 Gains or losses booked directly to equity 00-20-27-15 Profit (loss) for the year 21 0 -11 0 10 Total pertaining to minority shareholders 142 0 -15 -2 -3 122 TOTAL 1,376 0 -46 -4 -61 1,264

CONSOLIDATED INTERIM REPORT AS AT JUNE 30TH 2007

Company: CATTOLICA ASSICURAZIONI GROUP (€ millions)

STATEMENT OF CASH FLOWS DRAWN UP ACCORDING TO INDIRECT METHOD

30.06.2007(*) 30.06.2006 Net profit (loss) for the period before taxation 58 96 Changes in non-monetary items -3,242 -77 Change in non-life premiums provision -2 0 Change in provision for outstanding claims and other non-life technical provisions 28 72 Change in actuarial provisions and other life technical provisions -3,150 120 Change in deferred acquisition costs 1 0 Change in provisions and allowances 0 -1 Non-monetary income and charges deriving from financial instruments, property investments and equity -102 -273 investments Other changes -17 5 Change in receivables and payables generated by operations 15 -59 Change in receivables and payables deriving from direct insurance and reinsurance transactions -1 57 Change in other receivables and payables 16 -116 Taxes paid -29 -46 Net liquidity generated/absorbed by monetary items pertaining to investments and financing -764 -473 activities Liabilities from financial policies issued by insurance companies -764 -473 Payables due to banking and interbank customers 0 0 Loans and receivables due from banking and interbank customers 0 0 Other financial instruments valued at fair value stated in the income statement 0 0 TOTAL NET LIQUIDITY DERIVING FROM OPERATIONS -3,963 -559

Net liquidity generated/absorbed by property investments 0 22 Net liquidity generated/absorbed by equity investments in subsidiary and associated companies and joint -2 5 ventures Net liquidity generated/absorbed by loans and receivables 1 42 Net liquidity generated/absorbed by investments held to maturity 26 1 Net liquidity generated/absorbed by financial assets held for sale 379 -979 Net liquidity generated/absorbed by tangible and intangible assets 6 40 Other flows of net liquidity generated/absorbed by investment activities 3,567 1,412 TOTAL NET LIQUIDITY DERIVING FROM INVESTMENT ACTIVITIES 3,978 543 Net liquidity generated/absorbed by capital instruments pertaining to the Group -30 -15 Net liquidity generated/absorbed by own shares 0 0 Distribution of dividends pertaining to the Group -73 -71 Net liquidity generated/absorbed by capital and reserves pertaining to minority shareholders -29 -14 Net liquidity generated/absorbed by subordinated liabilities and by participative financial instruments 0 0 Net liquidity generated/absorbed by sundry financial liabilities 0 0 TOTAL NET LIQUIDITY DERIVING FROM FINANCING ACTIVITIES -133 -100

Effect of the exchange differences on cash and cash equivalents 0 0

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE QUARTER 590 622 INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS -118 -116 CASH AND CASH EQUIVALENTS AT THE END OF THE QUARTER 472 506 (*) The cash flows as at 06.30.2007 take into account the reclassfication of assets and liabilities held for sale

Notes to the accounts

Notes to the accounts Part A – General accounting policies and Consolidation data

Part A General accounting policies and Consolidation data

Applicable The consolidated interim report has been drawn up by the Parent Company Società Cattolica legislation di Assicurazione - Soc. Coop. in compliance with the provisions envisaged by the IAS/IFRS international accounting standards and by the SIC/IFRIC interpretations; it is compliant with the provisions concerning interim reports pursuant to ISVAP Instruction No. 2460 dated August 10th, 2006.

The norms anticipated by Regulation No. 11971 dated May 14th, 1999 and subsequent additions and amendments, and by the Consob recommendations, have also been followed.

Accounting The accounting reference date of this consolidated interim report is June 30th, 2007, a date reference date which coincides with that of the interim reports of all the companies included within the scope of consolidation.

The statements drawn up according to the international accounting standards as approved by the Boards of Directors of the respective companies who are not obliged to adopt the afore- mentioned international accounting standards for the purpose of drawing up the interim report, have been used for the preparation of the consolidated interim report (the only exceptions were Cattolica Investimenti Sim and Verona Gestioni SGR which, as from the accounting period ended December 31st, 2006, were obliged to draw up the interim report in compliance with the international accounting standards, pursuant to Article 4 of Italian Legislative Decree No. 38 dated February 28th, 2005).

CONSOLIDATION METHODS a) Line-by-line The use of the line-by-line consolidation method, in accordance with IAS 27, involves the consolidation consolidation of all the subsidiary companies in which the Parent Company directly or indirectly holds more than half the voting rights, or those in relation to which the Parent Company has the power to determine the financial and operating policies so as to obtain the benefits of their activities, despite not availing of more than half of the voting rights.

When using the line-by-line consolidation method, the book value of the equity investments is eliminated against the related shareholders’ equity and all the assets and liabilities of the subsidiary company, including potential liabilities, are included.

The positive difference which is generated between the purchase cost and the fair value of the net interest holdings acquired, independently identifiable, with reference to the date of acquisition of control over the equity investment, is recorded under the item “Goodwill”. This value is subject to an annual impairment test as disciplined by IAS 36.

In the periods subsequent to the acquisition of control, the difference between the book value of the equity investment and the portion of shareholders’ equity pertaining to the Group is recorded, for the part exceeding the above described allocation referring to the acquisition date, in the item “income reserves and other equity reserves”.

The portions of shareholders’ equity, inclusive of the fair value as of the date of acquisition of the equity investment, and of the net result for the year pertaining to minority shareholders, are recorded in specific balance sheet liability and income statement accounts.

b) Proportional The proportional consolidation method, in accordance with IAS 31, is applied to equity consolidation investments in joint ventures and in jointly-controlled companies. method The proportional consolidation method anticipates, in accordance with IAS 31, the replacement of the book value of the equity investments with the corresponding interest in the assets, liabilities, and with regards to the income statement, costs and revenues of the investee company, adjusted on the basis of the Group consolidation methods and international accounting standards.

The difference between the book value of the consolidated equity investment and the corresponding portion of shareholders’ equity is determined and treated in the same way as that under line-by-line consolidation.

No minority interests in shareholders’ equity or in the net result for the year are assigned to the other shareholders. c) Equity In accordance with IAS 28, the equity method is applied to equity investments in associated method companies.

By means of this method, the book value of the equity investment is adjusted in the consolidated financial statements in order to reflect the book value of the shareholders’ equity pertaining to the Group, which can be taken from the last set of financial statements of the investee company and adjusted by the sum total of the dividends distributed by said company.

If the cost is greater than the pertinent portion of shareholders’ equity, the difference remaining from the charging to the amortizable/depreciable assets is identified as goodwill and subject to an impairment test as disciplined by IAS 36.

The effects on the Group’s shareholders’ equity and consolidated result for the year are identical to those produced by line-by-line consolidation. d) Companies Subsidiary companies which, due to their size, are considered not to be significant (not carried at cost material) and whose exclusion from the scope of consolidation does not prejudice the reliability of the representation of the equity and financial standing, the economic result and the financial flows of the Group, are carried at cost. e) Main The main consolidation adjustments are: consolidation adjustments • the elimination of balances and of infraGroup transactions, including revenues, costs and dividends collected; • the elimination of gains and losses deriving from infraGroup transactions included in the book value of the assets such as the inventories and the fixed assets; • the determination of the deferred taxation, in accordance with the formalities envisaged by IAS 12, on the timing differences deriving from the elimination of gains or losses originating from infraGroup transactions; • the adjustment of the effects recorded in the individual financial statements, generated by extraordinary infraGroup transactions.

The decreases in value emerging subsequent to infraGroup transactions are maintained in the consolidated financial statements.

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SCOPE OF CONSOLIDATION

The scope of consolidation includes the interim report of the Parent Company and those of the subsidiary companies and the companies subject to joint control, in accordance with, respectively, IAS 27 and IAS 31, as amended by IFRS 5.

During the first half of the year, the scope of consolidation changed due to the absorption of Cattolica Polo Finanziario within Cattolica Immobiliare.

As of June 30th, the scope of consolidation comprised twelve insurance companies, two property companies, two service companies, an asset management company and a stockbroking company.

Besides the companies included within the scope of consolidation, the Group comprises a bank, an asset management company, four service companies, and one company destined to carry out insurance activities, which was dormant as of June 30th.

1) The following companies are included in the consolidated financial statements on a line- by-line basis in accordance with IAS 27:

• Società Cattolica di Assicurazione – Soc. Coop. with registered offices in Verona, share capital of € 142.174 million – the Parent Company; • ABC Assicura s.p.a. with registered offices in Verona, share capital of € 8.925 million. the Parent Company’s direct investment amounts to 100%. The subsidiary is a non-life insurer; • C.I.R.A. s.p.a. (formerly Cattolica Aziende) with registered offices in Verona, share capital € 14.448 million. The Parent Company’s direct equity investment amounts to 100%. The subsidiary is a non-life insurer; • Duomo Uni One Assicurazioni s.p.a. with registered offices in Milan, share capital of € 88.784 million. The Parent Company owns a 99.99% direct equity investment in the company. The subsidiary is a non-life insurer. In 2006, it absorbed Uni One Assicurazioni s.p.a.; • TUA Assicurazioni s.p.a. with registered offices in Milan, share capital of € 13.16 million. The company is 97% owned by Duomo Uni One Assicurazioni. The subsidiary is a non-life insurer; • BPV Vita s.p.a. with registered offices in Verona, share capital of € 87.6 million. The Parent Company’s direct equity investment comes to 50%. The subsidiary is a life insurer and is also active in non-life business solely in the accident, injury and health classes; Following the transactions underway as of June 30th, which will lead to the transfer of control of the equity investment in BPV Vita from the Parent Company, this asset was considered to be undergoing disposal, pursuant to IFRS 5; • Duomo Previdenza s.p.a. with registered offices in Milan, share capital of € 67.564 million. The company is directly and wholly owned by the Parent Company. The subsidiary is a life insurer; • Lombarda Vita s.p.a. with registered offices in Brescia, share capital of € 135.3 million. The Parent Company owns a direct equity investment of 50.1%. The subsidiary is a life insurer; • Persona Life s.p.a. with registered offices in Milan, share capital of € 45 million; it is directly and wholly owned by the Parent Company and is a life insurer. • Risparmio & Previdenza s.p.a. with registered offices in Verona, share capital of €

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73.75 million. The Parent Company’s direct equity investment comes to 95.17%. The subsidiary is a life-insurer and, since 1998, has also been active in non-life insurance in the accident, injury and health classes. In 2006, it absorbed Eurosun Assicurazioni Vita; • San Miniato Previdenza s.p.a. with registered offices in San Miniato (PI), share capital of € 5 million. The Parent Company owns a direct equity investment of 66%. The company carries out life insurance activities; • Cattolica Immobiliare s.p.a. with registered offices in Verona, share capital of € 35 million. The company is wholly and directly owned by the Parent Company. It is active in the property sector; With effect as of January 1st, 2007, it absorbed Cattolica Polo Finanziario; • Cattolica IT Services s.r.l. with registered offices in Verona, share capital of € 20.954 million. The Parent Company’s direct investment comes to 90.99%, that of Duomo Uni One Assicurazioni 8.8% and that of Duomo Previdenza 0.21%. This company supplies, to the subsidiary and investee companies of Cattolica, services and products for the planning, creation and management of data processing applications, operating processes and correlated organizational structures, as well as services relating to telecommunications systems; • di.CA s.p.a. with registered offices in Verona, share capital of € 2.975 million. The Parent Company owns a direct equity investment of 92.47%, while that of Duomo Uni One Assicurazioni comes to 7.53%. The company performs call-centre activities for claims’ settlement; • Cattolica Investimenti SIM s.p.a. with registered offices in Verona, share capital of € 1 million. The Parent Company’s direct investment amounts to 70%. Duomo Uni One Assicurazioni owns the remaining 30%. The company places its banking and financial products via Group agency networks; • Verona Gestioni SGR s.p.a. with registered offices in Verona, share capital of € 6 million. The Parent Company holds a direct equity investment of 100%. The company provides investment services exclusively to institutional operators.

2) The following companies are consolidated using the proportional method, as per IAS 31:

• Axa Cattolica Previdenza in Azienda s.p.a. with registered offices in Milan, share capital of € 11.5 million. The company is jointly owned by the Parent Company and Axa Assicurazioni. The company is authorized to carry out life insurance activities and non- life activities in relation to the accident, injury and health classes only; • Polo Finanziario s.p.a. with registered offices in Verona, share capital of € 60 million. This company is jointly and equally owned by Cattolica Polo Finanziario, the CARIVERONA Foundation and Banco Popolare di Verona e Novara. Its corporate purpose now involves the building, development, management, improvement and maintenance of management premises for the creation of the “financial hub”.

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Table 12 – Scope of consolidation (ISVAP Instruction No. 2460 dated August 10th, 2006)

% Availability of % voting rights at Method Activities % total holding ordinary % consolidation Name State (1) (2) direct investment shareholders' (3) meetings

(4) Società Cattolica di Assicurazione - Soc. Coop. 086 G 1 ABC Assicura s.p.a. 086 G 1 100% 100% 100% C.I.R.A. s.p.a. 086 G 1 100% 100% 100% Duomo Uni One Assicurazioni s.p.a. 086 G 1 99.99% 99.99% 100% TUA Assicurazioni s.p.a. 086 G 1 0% 96.99% 100% BPV Vita s.p.a. 086 G 1 50% 50% 100% Duomo Previdenza s.p.a. 086 G 1 100% 100% 100% Lombarda Vita s.p.a. 086 G 1 50.1% 50.1% 100% Persona Life s.p.a. 086 G 1 100% 100% 100% Risparmio & Previdenza s.p.a. 086 G 1 95.17% 95.17% 100% San Miniato Previdenza s.p.a. 086 G 1 66% 66% 100% Cattolica Immobiliare s.p.a. 086 G 10 100% 100% 100% Cattolica IT Services s.r.l. 086 G 11 90.99% 99.99% 100% diCA s.p.a. 086 G 11 92.47% 99.99% 100% Cattolica Investimenti SIM s.p.a. 086 G 11 70% 99.99% 100% Verona Gestioni SGR s.p.a. 086 G 11 100% 100% 100% Axa Cattolica Previdenza in Azienda s.p.a. 086 P 1 50% 50% 50% Polo Finanziario s.p.a. 086 P 10 0 33.33% 33.33% (1) Method of consolidation: Line-by-line =G, Proportional=P, Line-by-line by single HQ=U

(2) 1=Italian insurance; 2=EU insurance; 3=non-EU insurance; 4=insurance holding company; 5=EU reinsurance; 6=non-EU reinsurance; 7=banks; 8=SGR; 9=other holding; 10=property 11=other (3) this is the product of the investment relationships relating to all the companies which, placed along the investment chain, may be interposed between company which draws up the consolidated financial statements and the company in question. If the latter is directly invested in by several subsidiary companies, it is necessary to add together the individual products. (4) overall percentage available of the votes at ordinary shareholders' meeting if different from direct or indirect shareholding

3) The following companies are carried at equity in accordance with IAS 28:

Associated companies

• Cassa di Risparmio di San Miniato s.p.a. with registered offices in San Miniato (PI), share capital of € 126.195 million The Parent Company holds a direct equity investment of 24.72%. The company is a bank; • Prisma s.r.l. with registered offices in Milan, share capital of € 120 thousand. The Parent Company holds a direct equity investment of 20%. The company is an insurance agency; • Vegagest SGR, with registered offices in Ferrara, share capital of € 23.54 million. This is an independent asset management company invested in by banking and insurance partners of considerable trustworthiness and primary standing. The Parent Company holds an interest of 16.99% in the company.

4) The following companies are carried in the consolidated financial statements at cost, since they are not significant (not material) and their exclusion from the scope of consolidation does not prejudice the reliability of the representation of the financial and equity standing, the economic result and the financial flows of the Group:

Subsidiary companies

• Verona Servizi s.r.l. with registered offices in Milan, share capital of € 100 thousand. The

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Parent Company holds a direct equity investment of 65%, Duomo Uni One Assicurazioni 30%, and Duomo Previdenza 5%. In April 2007, the Shareholders’ Meeting resolved to place the company into liquidation, and appointed a receiver; • Lombarda Assicurazioni s.p.a. (formerly Popolare Assicura), with registered offices in Verona, share capital of € 5 million, and wholly owned by the Parent Company. The company is currently dormant, since it was not authorized to carry out insurance activities as of June 30th, 2007; • TUA Retail s.r.l. with registered offices in Milan, share capital of € 50 thousand. It is wholly-owned by TUA Assicurazioni. It carries out the general agency activities of TUA Assicurazioni; • Uni One Servizi s.r.l. with registered offices in Rome, share capital of € 15 thousand. This company is wholly-owned by Duomo Uni One Assicurazioni. It carries out service activities linked to the management of recurrent premiums collection.

A schedule of the Group companies with indication of the consolidation method adopted is shown below.

As of June 30th, 2007

Consolidated on a line-by-line basis

90,99% 92,47% 7,53% 100% 0,21% 100% DuomoDuomo Previdenza Previdenza CattolicaCattolica IT IT Services Services di.CAdi.CA ABCABC Assicura Assicura 8,8%

30% 50,1% 100% 70% CattolicaCattolica Investimenti Investimenti C.I.R.A. 100% Lombarda Vita VeronaVerona Gestioni Gestioni SGR SGR C.I.R.A. Lombarda Vita SIMSIM

100% 100% 99,99% Duomo Uni One Assicurazioni PersonaPersona Life Life CattolicaCattolica Immobiliare Immobiliare Duomo Uni One Assicurazioni

97% 95,17% RisparmioRisparmio & & Previdenza Previdenza 50% TUATUA Assicurazioni Assicurazioni BpvBpv Vita Vita (*) (*)

66% SanSan Miniato Miniato Previdenza Previdenza

Consolidated on a proportional basis

50% AxaAxa Cattolica Cattolica Previdenza Previdenza PoloPolo Finanziario Finanziario InIn Azienda Azienda 33,33%

Carried at equity

24,72% 16,99% CassaCassa di di Risparmio Risparmio 20% VegagestVegagest SGR SGR Prisma didi San San Miniato Miniato Prisma

Carried at cost

100% 5%

65% Verona Servizi Uni One Servizi TUA Retail Lombarda Assicurazioni 100% Verona Servizi Uni One Servizi TUA Retail 5% Lombarda Assicurazioni

30% 100%

Non-life insurance Life insurance Financial services Operating services Property (*) Rappresentata come attività in dismissione al 30 giugno 2007 Banks Dormant, not authorized to carry out activities as of 30th June 2007

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Notes to the accounts Part B – Accounting policies and standards

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Part B Accounting policies and standards

Format The balance sheet, income statement, the statement of changes in shareholders’ equity, the statement of cash flows and these notes to the accounts have been drawn up in accordance with the formats laid down by the indications of ISVAP Instruction No. 2460 dated August 10th, 2006, relating to the “Provisions concerning interim reports”, to the amendments to ISVAP Instruction No. 1207-G dated July 6th, 1999, and to the Supervisory forms to be attached to the consolidated financial statements.

Accounting The accounting standards adopted for the preparation of the consolidated interim report are standards consistent with the matters anticipated by each IAS/IFRS standard and each SIC/IFRIC and the related interpretations adopted according to the procedure pursuant to Article 6 of EU Regulation No. 1606/2002 of the European Parliament and the Council dated July 19th, 2002.

Reporting The reporting currency for the consolidated interim report is the Euro. The report has been currency drawn up in millions of Euro, duly rounded off as per the ISVAP Instruction No. 1008/G dated used in the October 5th, 1998. The amounts have been rounded up or down to the closest unit. The rounded consolidated off amount of totals and subtotals in the balance sheet and income statement is the sum of the interim report rounded off amounts of the individual items.

Foreign In accordance with IAS 21 the monetary assets and liabilities in foreign currency, with the currency items exception of financial instruments, are recorded using the spot exchange rate ruling as of the period end date and the related exchange gains and losses are booked to the income statement.

In accordance with IAS 39, financial assets and liabilities in foreign currency are recorded using the spot exchange rate ruling as of the period end date and the related exchange gains and losses are booked to:

• the income statement for the debt securities included in the categories “financial assets held to maturity” and “loans and receivables”; • the income statement for the differences due to the change in the amortized cost. In a specific equity reserve for the differences deriving from the valuation at fair value, for debt securities classified under “financial assets available for sale”; • the income statement for the equities included in the category “financial assets valued at fair value recorded in the income statement”; • a specific equity reserve for the equities included in the category “financial assets available for sale”.

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Section 1 Illustration of the accounting policies

The accounting policies and standards adopted to draw up the consolidated interim report are the same as those used for the preparation of the IAS/IFRS statements of the Parent Company and the other Group companies who are not obliged to adopt the afore-mentioned international accounting standards for the purpose of drawing up the interim report (with the exception of Cattolica Investimenti Sim and Verona Gestioni SGR which are obliged, as from the accounting period ended December 31st, 2006, to draw up the interim report in compliance with the international accounting standards, pursuant to Article 4 of Italian Legislative Decree No. 38 dated February 28th, 2005.

No significant consolidation adjustments were necessary in order to adapt the consolidated companies’ accounting standards and policies to those of the Parent Company.

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INTANGIBLE ASSETS Goodwill The item comprises the goodwill acquired in the corporate mergers as established by IFRS 3. The goodwill deriving from consolidation represents the additional value of the purchase cost when compared with the value of the assets, liabilities and potential liabilities, valued at fair value, of the subsidiary company or jointly-controlled equity investment as of the acquisition date. The goodwill is stated as an asset and recorded at cost net of the accumulated losses in value. On the basis of the matters laid down by IAS 36, periodically at the end of each accounting period, and in connection with specific events, steps are taken to check whether there is any evidence that the flows of the cash generating unit to which the goodwill is allocated are unable to sustain the entity. If this occurs, the value of the goodwill is subjected to a specific impairment test, based on discounted cash flow techniques. A permanent loss in value is recorded if the book value of the cash generating unit to which the goodwill refers is greater than its recoverable value, or the greater value between the value in use and the fair value net of the sales costs; this loss in value reduces the book value of the goodwill and residually that of the other assets of the cash generating unit in proportion to their book value.

If the purchase cost is lower than the share of the net assets of the company acquired pertaining to the Group, the difference is booked to the income statement.

In the event of the disposal of a subsidiary company or jointly-controlled equity investment, the residual amount of the goodwill ascribable to the same is included in the disposal value and therefore in the determination of the capital gain or loss on the disposal.

Other The item includes the assets established and disciplined by IAS 38. It also includes the value of intangible the insurance portfolio acquired as part of the corporate merger transaction and by contrast assets excludes deferred purchase costs.

An intangible asset is recorded among the assets, and therefore capitalized, only when it is subject to the control of the company, it is identifiable and it is probable that it will generate future economic benefits and when the cost can be reliably determined.

These assets are valued at cost net of accumulated amortization and writedowns against permanent losses in value. There are no intangible assets present in the consolidated interim report with an unspecified useful life as established in IAS 38.

The amortizable value is systematically allocated to the accounting periods which make up the useful life of the asset, starting off from the moment that said asset becomes available for use, or finds itself in the position and under the conditions necessary for being used according to the intentions of the Company.

In general, except in specific cases, the useful life is established as 5 years with an amortization rate of 20% per annum for all the intangible assets with the exclusion of insurance portfolios whose period of amortization ranges from five to eleven years.

Intangible assets are periodically subject to the verification of the recoverability of the book value.

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TANGIBLE ASSETS Property This item includes the property intended to be used for business activities and property under construction.

The valuation is made at historical cost, net of the related accumulated depreciation and any losses in value. Cost comprises the related charges directly ascribable to the purchase and the bringing onto stream of the asset.

For entire premises, the value of the land is separated from the value of the building; the latter is depreciated. For portions of jointly owned property, the division of the two values has not been provided for in that the benefit in disclosure terms is lower with respect to the cost to be incurred for the determination of the data item; therefore, the entire property is depreciated.

The depreciation of the buildings is calculated, on a straight-line basis, in relation to the useful life estimated as thirty-three years, on the basis of the intended use of the property.

Ordinary maintenance costs are charged to the income statement; those which by contrast lead to an increase in value, or the functionality or useful life of the assets, are allocated to the assets and depreciated.

Property intended to be used for business activities is periodically subject to verification of whether the book value is recoverable or not, and is eliminated from the financial statements following disposal or in the event of the depletion of the expected economic benefits.

Property under construction is not depreciated, without prejudice to verification of the inexistence of permanent losses in value.

Other tangible This category includes movable assets, furnishings and office machines. assets These assets are valued at cost net of accumulated depreciation and any losses in value. The depreciation is calculated, on a straight-line basis, in relation to the estimated useful life of the related assets using economic-technical rates.

The book value of the tangible assets is subject to verification so as to reveal any losses in value.

INVESTMENTS Property This item includes the property held for investment purposes (IAS 40), owned by the Company; investments the purpose of the ownership of said property is so that the Company receives rental payments, or so as to increase the value of the investments, or both. This category also includes property intended to be sold, which in any event does not comply with the requisites anticipated by IFRS 5, since these are assets originally held so as to gain profit from the appreciation of the capital.

For entire premises, the value of the land is separated from the value of the building; the latter is depreciated. The valuation is made at historical cost, net of the related accumulated depreciation and any losses in value. The depreciation of the buildings is calculated, on a straight-line basis, in relation to the estimated useful life or over fifty or thirty-three years, on the basis of the intended use of the

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property.

Ordinary maintenance costs are charged to the income statement in the year that they are incurred; those which by contrast lead to an increase in value, or the functionality or useful life of the assets, are allocated to the assets and depreciated.

Property investments are periodically subject to verification of whether the book value is recoverable or not, and are eliminated from the financial statements following disposal or in the event of the depletion of the expected economic benefits.

Equity When determining the investment relationship, the definitions of control, significant influence investments in and joint control anticipated by IAS 27, 28 and 31 have been used. subsidiary and associated This item also includes equity investments in subsidiary companies considered to be of an companies and insignificant entity with respect to the Group (not material). joint ventures Equity investments in subsidiary companies are stated by adopting the line-by-line consolidation method in pursuance of IAS 27.

Equity investments in associated companies are carried in the financial statements at equity. The book value is subject to assessment so as to reveal any losses due to permanent reductions in value.

In accordance with the matters envisaged by IAS 31, jointly-controlled equity investments are recorded by adopting the proportional consolidation method.

Equity investments in subsidiary and associated companies and in joint ventures are eliminated from the financial statements when, following disposal or other events, the requisites envisaged by IAS 27, 28 and 31 for their recording, are lacking.

FINANCIAL The definition of financial assets includes the receivables from financing activities, debt ASSETS securities and equities, units in mutual investment funds, loans on policies, receivable reinsurance deposits and other assets. The main accounting approach for the financial assets is the fair value which is represented by: • the price struck at the end of trading as of the period end date for the assets listed on an active market; • the value determined using valuation techniques commonly utilized, also considering the prices which can be taken from recent market transactions between informed and independent parties.

Financial assets are eliminated from the financial statements when, subsequent to maturity, disposal or another event, the contractual rights on the related financial flows are transferred, in addition to the associated risks and benefits.

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Investments Financial assets considered to be of long-term use, excluding financial derivative instruments, held to with a pre-established maturity and payments which are fixed or can be determined, which the maturity individual Group companies intend to and have the ability to hold until maturity, are classified in this category.

The initial recording takes place at cost inclusive of the charges and income directly attributable thereto. Subsequently, the investments held to maturity are valued at amortized cost, net of any permanent losses in value, using the effective interest rate. The amortization rate thus calculated is recorded in the income statement.

On the closure of each set of financial statements, it is assessed if objective proof exists of any losses in value. In accordance with the matters anticipated by IAS 39, it is possible to make value writebacks, if the reasons for the losses in value have been removed, up to the limit of the previous writedown.

In the event of early disposal or transfer to another category, of a significant amount not justified by particular events, the entire category is reclassified among the assets available for sale.

Loans and The assets, excluding financial derivative instruments, with a pre-established maturity and receivables payments which are fixed or can be determined, not listed on active markets, which are not recorded in any of the other categories, are classified in this category. Specifically, the category includes all the loans and financing, the deposits from re-insurers with transferring companies and bonds not listed on active markets considered to be of long-term use.

The loans and receivables are valued at amortized cost, net of any permanent losses in value, using the effective interest rate. The amortization rate thus calculated is recorded in the income statement.

On the closure of each set of financial statements, it is assessed if objective proof exists of any permanent losses in value.

Financial On a residual basis, this category includes all the equities, debt securities which are not assets available classified as “loans and receivables”, “investments held to maturity”, and “financial assets for sale valued at fair value recorded in the income statement”.

As a rule, equities classified as available for sale are valued at fair value with a matching balance represented by a net equity reserve. In the event that the equities do not have a market price listed on an active market and whose fair value cannot be reliably determined, they are valued at cost, as are any related derivatives. By contrast, the mixed accounting method is used for debt securities, characterized by the joint existence of the amortized cost method and the valuation at fair value (with a matching balance represented by the same net equity reserve anticipated for equities).

The net equity reserve remains recorded until the assets are disposed of or undergo a permanent loss in value. On occurrence of such events, the gains and losses recorded in the reserve are freed up and recorded in the income statement.

On the closure of each period, the individual companies assess if objective proof exists of any

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permanent losses in value for this category as well.

Financial This category comprises the classification of all the financial assets included under trading assets valued activities, including derivatives, and all those which, despite not having been acquired in order at fair value to be sold over the short term, are included therein due to the Group’s decision as from their stated in the initial statement. income Specifically, the designated assets include the financial assets covering insurance or investment statement polices whose investment risk is borne by the policyholders and those relating to the (at fair value management of pension funds. through profit or loss) The initial recording of the financial assets valued at fair value stated in the income statement takes place at cost understood as the fair value of the instrument net of the directly or indirectly attributable costs or income. Valuation gains and losses emerging subsequently from the changes in the fair value, are recorded directly in the income statement.

SUNDRY This category comprises the classification of the amounts receivable for premiums relating to RECEIVABLES policyholders not yet received, amounts receivable from insurance agents and brokers and distributing banks, and co-insurance and reinsurance companies, amounts receivable for excesses and other receivables. The receivables are recorded at face value; since they are short- term, discounting back methods are not resorted to.

On the closure of each period, it is assessed if objective proof exists of any losses in value and possibly, following the implementation of the impairment test, steps are taken to make a writedown.

OTHER ASSET ITEMS Non-current All the non-current assets or those undergoing disposal whose sale is highly probable in assets or of a accordance with the matters established by IFRS 5, are recorded in this item. group subject to disposal The non-current assets or those belonging to a group subject to disposal held for sale are held for sale recorded at their book value or the fair value, whichever is the lower, net of the sales costs (discounted back in the event of sales which will conclude beyond 12 months).

Deferred This category includes the acquisition commission relating to insurance policies. acquisition costs Specifically:

• for the non-life classes: the amortization is provided for a period of no longer than the duration of the policies, with a maximum limit of five accounting periods; • for the life classes: it is divided up, net of the portions pertaining to re-insurers, for a period of no longer than the duration of the policies, with a maximum limit of ten accounting periods, and in any event within the limits of the premium loading present in the tariff.

Deferred tax Deferred tax assets are recorded – except in the cases expressly anticipated by IAS 12 – for all assets the timing differences, to the extent that it is probable that taxable income against which they can be used will be generated.

In the presence of tax losses which can be carried forward or tax credits not utilized, deferred tax assets are recorded to the extent that it is probable that future taxable income will be available against which the afore-mentioned tax losses or unused tax credits can be used.

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The deferred tax assets are calculated on the basis of the tax rates and tax legislation in force or effectively in force as of the balance sheet date, and are subject to verification with regards to the recoverable nature if changes in the applicable tax legislation have occurred.

Current tax Current tax assets include the assets relating to current taxes as established and disciplined by assets IAS 12. These assets are recorded on the basis of the tax rates in force.

Other assets The other assets mainly comprise deferred acquisition costs relating to investment policies and accrued income and prepaid expenses.

The deferred acquisition costs are spread out over the estimated life of said policies according to a constant percentage of the current value of the income generated by the investment policies for the entire period of their permanence in the portfolio. The income margin determined at the time of the issue of policies is checked on a periodic basis and any discrepancies are recorded directly in the income statement as additional amortization of capitalized acquisition costs.

CASH AND CASH EQUIVALENTS Cash and cash equivalents and on-demand deposits recorded at face value are classified in this category.

SHAREHOLDERS' EQUITY Shareholders' This account group includes the instruments representative of the share capital, and the equity components representative of capital included in financial instruments making up the associated pertaining to equity reserves pertaining to the Group, such as convertible bonds and subordinated liabilities. the Group

Share capital The ordinary shares are stated at their nominal value as share capital.

Capital In particular, the item includes the share premium reserve of the Parent Company. reserves

Net profit The item includes: reserves and other equity • the gains and losses deriving from the initial application of the international accounting reserves standards in accordance with the matters envisaged by IFRS 1; • the gains and losses from decisive errors and changes to the accounting standards or accounting estimates; • the disaster reserves and the equalization reserves not permitted among the technical liabilities in accordance with IFRS 4; • the reserves anticipated prior to the adoption of the international accounting standards; • the consolidation reserves.

Own shares In accordance with the matters anticipated by IAS 32, this item includes any instruments representative of the share capital of the company which draws up the consolidated financial statements, held by the company itself and the other consolidated companies.

Reserve for This item includes the exchange differences to be charged against the shareholders’ equity, in net exchange accordance with IAS 21, deriving from foreign currency transactions.

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differences

Gains or losses The item includes the gains and losses deriving from the valuation of financial assets available on financial for sale, as previously described in the corresponding item of the financial investments. assets The amounts are stated net of the corresponding deferred taxation and the portions pertaining to available for the policyholders. sale

Other gains or The item includes the reserve deriving from changes in the shareholders’ equity of the investee losses companies in accordance with IAS 28, income and charges relating to non-current assets or a recorded group subject to disposal held for sale in accordance with IFRS 5 and the other reserves, directly under including the deferred discretional profit-sharing elements to be allocated to policyholders, equity charged to shareholders’ equity.

Shareholders' This account group comprises the instruments and components representative of the share equity capital which make up the shareholders’ equity pertaining to minority shareholders. pertaining to Specifically, the account group includes “gains or losses on financial assets available for sale” minority referable to shareholders’ equity pertaining to minority shareholders. shareholders

PROVISIONS AND ALLOWANCES The provisions are recorded when it is believed that steps will have to be taken to meet an obligation (legal or implied) deriving from a past event or in relation to which deployment of resources is possible whose amount can be reliably calculated.

TECHNICAL The technical provisions are sworn by an appointed actuary. PROVISIONS

LIFE This item includes the technical provisions associated with insurance policies, insurance PROVISIONS policies involving discretionary profit-sharing and investment policies involving discretionary profit-sharing.

On a yearly basis, on closure of the accounting period, the valuation is made of the adequacy of these provisions using the Liability Adequacy Test. This test is carried out by comparing the actuarial provisions, net of the deferred acquisition costs, with the current value of the future cash flows expected by the portfolio. These flows are obtained by projecting the expected flows as of the valuation date on the basis of hypothesis, considered reasonable, relating to the trend in reversals, expenses, redemption and the mortality.

With regards to investment policies not involving discretional profit-sharing, the separation of the component relating to the insurance risk is carried out if present.

The technical provisions, disciplined by the provisions of Italian Legislative Decree No. 174 dated March 17th, 1995, for the exercise of private life assurance, have been valued on the basis of the Actuarial Standards envisaged by Article 25 of Italian Legislative Decree No. 174 dated March 17th, 1995.

They are adequate for covering the commitments vis-à-vis policyholders; the technical calculation bases adopted are consistent with the provisions of Articles 24, 25 and 119 of the afore-mentioned legislative decree.

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The additional provisions provided to cover mortality or other risks, such as guaranteed benefits on maturity or guaranteed redemption values, are included among the actuarial provisions.

The companies have applied the provisions of both ISVAP Instruction No. 1801 dated February, 21st, 2001 concerning the determination of the expected return on the assets representative of the technical provisions and ISVAP Instruction No. 1380 dated December 21st, 1999 concerning the determination of an additional provision for the use of updated demographic bases.

Outlay The outlay provisions, made up of the amounts necessary for covering the payment of capital provisions and accrued returns, redemptions and claims to be settled, are stated in accordance with Article 34 of Italian Legislative Decree No 173 dated May 26th, 1997.

Technical The provisions relating to index-linked and unit-linked polices and pension funds have been provisions calculated taking into account both the contractual commitments and the financial assets linked where the to said policies. investment risk is borne by the They are formed in accordance with Articles 24, 25 and 30 of Italian Legislative Decree No. policyholders 174 dated March 17th, 1995 and Article 38 of Italian Legislative Decree No. 173 dated May and provisions 26th, 1997 and cover the commitments deriving from the insurance of the life classes whose deriving from return is determined in relation to investments for which the policyholder bears the risk or in the relation to an index. management of pension funds

Shadow The application of the IAS/IFRS standards involves misalignments between the methods for accounting valuing the assets and those for the related liabilities, the only exception being in relation to index-linked type contracts. The misalignments can be traced back to the recording in the accounts of both the capital losses and capital gains from the valuation of the assets valued at fair value against liabilities which are not affected by these changes. In relation to life policies linked to separate management arrangements, by means of an accounting technique known as shadow accounting, IFRS 4 makes it possible to limit the effects of these misalignments. This technique makes it possible to allocate part of the fair value changes in the related covering assets to the technical provisions associated with separate management arrangements.

Provision for The IAS/IFRS require the calculation of a provision for default risk which is a provision with default risk the aim of protecting the insurance company and the policyholders from the risk of the insolvency of issuers of securities provided to cover the technical provisions.

The approach adopted for the determination of the default provision is consistent with the records noted by the rating agency Moody's for the European and North American corporate bonds market in terms of cumulative default rates over the following time span: 1985-2006. The use of the data relating to the corporate bonds market represents an additional prudent element in the verification of the consistency of the default reserves determined by the Group.

NON-LIFE This item includes the technical provisions associated with insurance policies. PROVISIONS

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Provision for In accordance with Article 32 of Italian Legislative Decree No. 173 dated May, 26th 1997, the unearned provision for non-life insurance premiums comprises both the provision for premium fractions premiums and the provision for current risks.

The provision for premium fractions is calculated analytically using the pro-rata accruals method on the basis of the gross premiums recorded, as established by Article 45 of Italian Legislative Decree No. 173 dated May 26th, 1997, having deducted just the acquisition commission and the other acquisition costs, limited to the directly chargeable costs, including commission being amortized, for the portion ascribable to the accounting period. The book value obtained has been supplemented by the provisions for security, hail, other natural disasters and damages deriving from nuclear energy, calculated according to the approach envisaged by specific ministerial provisions and decrees.

The provision for current risks is calculated by class and represents the value to make provision for, covering the risks threatening the company after the end of the accounting period, so as to cover all the compensation and costs deriving from insurance policies stipulated by the end of the accounting period, if their amount exceeds that of the provision for premium fractions and the premiums which will be collectable by virtue of these policies.

The premiums’ provisions relating to transfers to re-insurers have been determined, in accordance with Article 25 of Italian Legislative Decree No. 173 dated May, 26th 1997, on the basis of methods consistent with those for direct business and, in any event, in accordance with reinsurance contractual agreements.

Provision for In accordance with Article 33 of Italian Legislative Decree No. 173 dated May 26th, 1997, the outstanding provision for outstanding claims is determined on the basis of a prudent evaluation of the claims claims which occurred during that accounting period or in previous ones which have not yet been settled, based on objective elements, as well as of the related settlement costs.

Reference has been made, when defining the claims provisions, to the concept of last estimated cost, identifying this value in accordance with the provisions laid down by the ISVAP under circular No. 360/D, using a mixed valuation system. Specifically, when determining the charge relating to the claims, the Company adopted a two- stage procedure: during the first stage, which is applied for all the business classes, steps are taken to separately evaluate each claim (inventory method), based on the analysis of the documentation relating to each individual damage case, carried out by the staff tasked with settling the claims. During the second stage, adopted where the requisites for significance and consistency from a methodology point of view are present, in compliance with the provisions of the ISVAP circular, an additional check is made of the estimates carried out via statistical- actuarial procedures.

With reference to the credit and security classes, the provision for claims is established on the basis of the matters laid down by Articles 4 and 5 of ISVAP Instruction No. 1978 dated December 4th, 2001.

The reserve includes the evaluation of the claims which have occurred but have not been reported as of the year end date, determined on the basis of the provisions laid down by ISVAP under the instruction issued in pursuance of Article 26 of Italian Legislative Decree No. 175 dated March 17th, 1995.

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The portions of the claims’ provisions pertaining to re-insurers are determined in accordance with Article 25 of Italian Legislative Decree No. 173 dated May, 26th 1997, adopting the same criteria used for the direct business provisions and taking into account the contractual clauses of the agreements.

Other technical They include the senescence provision of the health class determined in accordance with provisions Article 25 of Italian Legislative Decree No. 175 dated March 17th, 1995, for the rise in the age of the policyholders.

FINANCIAL LIABILITIES This account group includes the financial liabilities valued at fair value with effects on the income statement and the financial liabilities valued at amortized cost. In detail, the account group comprises liabilities for investment policies, the financial elements of the subordinated liabilities and other compound financial instruments and the participative financial instruments which are not instruments representative of capital.

Financial This item includes the financial liabilities falling within the sphere of trading activities, and the liabilities liabilities relating to index and unit-linked investment policies, where the risk of the investments valued at fair is borne by the policyholders. value recorded The valuation is made at fair value and the gains or losses which emerge are booked to the in the income income statement. statement

Other financial This category includes the financial liabilities valued at amortized cost and in particular the liabilities reserves associated with policies with specific asset provision.

PAYABLES The item includes the payables deriving from insurance and trade transactions. In particular, the account group includes the payables from direct and indirect insurance transactions.

The account group also includes the liabilities associated with plans with set benefits in favour of the employees, which involve disbursements subsequent to the termination of the employment relationship and the others with long-term benefits (including therein the employee severance indemnity in force in Italy) which, in compliance with IAS 19, are subject to an actuarial assessment by means of use of the so-called “Project Unit Credit Method”. According to this method, the liability is determined taking into account a series of variables (such as the mortality rate, the forecast of future salary changes, the estimated rate of inflation, the foreseeable return on the investments, etc.). The liability recorded in the financial statements represents the effective value of the obligation foreseeable, net of any assets serving the plans, adjusted to reflect any actuarial losses or gains not amortized. The discounting back of the future cash flows is carried out on the basis of the interest rate of high quality corporate securities. The actuarial hypotheses used for the purposes of the calculation are periodically reviewed so as to confirm their validity.

The other long-term benefits concern the length-of-service premiums which mature in the 25th and 35th year of service with some companies as anticipated by the related CCNL (National Collective Labour Agreement). The frequency of the evaluations and the method of accounting are similar to those used for the pension plans featuring fixed benefits.

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OTHER LIABILITY ITEMS Liabilities of a This item contains all the non-current liabilities or those belonging to a group subject to disposal group subject whose sale is highly probable. to disposal held for sale The non-current liabilities or those belonging to a group subject to disposal held for sale are stated at their book value or the fair value, whichever is lower, net of the sales costs (discounted back in the event of sales which will be finalized beyond 12 months).

Current and Current taxes are calculated on the basis of the taxable income for the period. The liabilities for deferred tax current taxes are stated at the value which is expected to be paid, applying the rates and tax liabilities legislation in force. Deferred taxes are included which have arisen from taxable timing differences due to the deferral in the taxability of positive income elements realized and recorded in the income statement, which will be settled in subsequent accounting periods when the afore-mentioned revenues will be taxed.

When the results of the transactions are booked directly to the shareholders’ equity, the current taxes and liabilities for deferred taxes are also booked to shareholders’ equity.

Other The other liabilities mainly include deferred revenues (DIR – deferred income reserve) relating liabilities to investment policies.

The IAS/IFRS standards envisage a different method of determination and representation of the provision for management costs; specifically, the component referring to policies no longer classified as insurance but as “investment” (DIR – deferred income reserve) is classified among the other liabilities and is assigned to the income statement on the basis of the timing of the costs incurred for the management of the policies.

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INCOME STATEMENT

REVENUES Net premiums This item includes the net premiums relating to insurance policies and financial instruments featuring discretional profit-sharing, net of transfers under reinsurance.

Income and This item comprises realized gains and losses, interest, dividends and positive and negative charges changes in the value of the financial assets and liabilities at fair value booked in the income deriving from statement. financial instruments The item also includes the charges on the financial liabilities linked to investment policies. valued at fair value stated in the income statement

Income This account group includes the income generated by equity investments in subsidiary and deriving from associated companies and joint ventures recorded in the corresponding asset item. equity investments in subsidiary and associated companies and joint ventures

Income The income from financial instruments and other investments includes the income deriving deriving from from financial instruments not valued at fair value recorded in the income statement and from other financial property investments. instruments and property In particular, the item includes interest income on financial instruments valued using the investments effective interest method, other income from investments, including dividends and revenues which derive from the use, by third parties, of the properties intended for investment purposes; the gains realized following the sale of a financial asset or liability or property investment, and the positive changes deriving from the writeback of a permanent loss in value (reversal of impairment).

Other Other revenues include the commission income for financial services provided, revenues revenues deriving from the sale of assets, from the provision of services other than those of a financial nature and from the use by third parties of the tangible assets and the other assets of the Company. Also included are realized gains and value writebacks relating to intangible assets and other assets, the exchange differences to be charged to the income statement in accordance with IAS 21 and other net technical income associated with insurance policies. Specifically, the account group includes commission income associated with investment policies.

COSTS Net charges The charges relating to claims include the amounts paid out during the period for claims, relating to maturities and redemptions as well as the amount relating to the changes in the technical claims provisions, net of the recoveries and the transfers under reinsurance. This account also includes the component to be booked to the income statement concerning the change in the deferred liabilities due to policyholders and the change in the provision for default risk.

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Charges This item includes the charges deriving from equity investments in subsidiary and associated deriving from companies and joint ventures recorded in the corresponding asset item. equity investments in subsidiary and associated companies and joint ventures

Charges The item includes the charges deriving from financial instruments not valued at fair value with deriving from effects on the income statement and charges deriving from property investments. other financial Specifically, the costs relating to property investments include jointly-owned property costs and instruments maintenance and repair expenses not increasing the value of the property investment, the losses and property realized following the elimination of a property investment, amortization and depreciation and investments value reductions (impairment). Charges deriving from financial instruments include interest expense stated using the criteria of the effective interest rate, the losses realized following the elimination of a financial asset or liability and value reductions (impairment). This account also includes administrative costs, comprising general expenses and payroll & related costs, relating to the management of financial instruments, property investments and equity investments.

Operating For the insurance companies, operating expenses mainly include commission, other acquisition expenses costs and the administrative costs relating to policies falling within the sphere of IFRS 4 and to financial instruments without discretional profit-sharing. The account also includes the administrative costs of the companies who do not carry out insurance activities.

Other costs The item includes commission expense for financial services received, the other net technical charges associated with insurance policies, the exchange differences to be charged to the income statement in accordance with IAS 21, the portions of provisions for the year, the losses generated, the permanent losses in value and the amortization/depreciation relating to both the tangible assets which do not represent property investments, and intangible assets.

Current taxes The income taxes calculated in accordance with current legislation are recorded in this item.

Deferred taxes The item includes income taxes due in future accounting periods, relating to taxable or deductible timing differences.

Profit (loss) This item contains the non-current profits (losses) or those belonging to a group subject to from disposal whose sale is highly probable. discontinued operations

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Notes to the accounts Part C – Information on the consolidated balance sheet and income statement

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Parte C Introduction

As previously mentioned, the Consolidated report of the Cattolica Group for the first half of 2007 has been drafted on the basis of Article 82 of Consob resolution No. 11971 dated May 14th, 1999, and subsequent amendments, as well as Consob Recommendations.

The consolidated interim report has been prepared by the Parent Company Società Cattolica di Assicurazione – Soc. Coop., taking into account the provisions set forth in the international accounting standards, ISVAP Instruction No. 2404 dated December 22nd, 2005 and ISVAP Instruction No. 2460 dated August 10th, 2006.

As a result of the ongoing transactions as of June 30th, 2007, which will lead to the transfer of control of the equity investment in BPV Vita from the Parent Company, this investment was considered as an asset subject to disposal, pursuant to IFRS 5. Therefore, the figures previously included in the balance sheet and income statement have been reclassified and summarised under the items: “6.1 Non-current assets or of a group subject to disposal held for sale”, “6.1 Liabilities of a group subject to disposal held for sale” and “4 Profit (Loss) from business activities suspended”. Due to this reallocation, it was necessary to recalculate the corresponding comparative figures in the income statement.

For the breakdown of the balance sheet and income statement items relating to assets subject to disposal, refer to the section “Acquisitions and transfers” in the Notes to the Accounts.

***

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Contents of the disclosure provided in the notes to the accounts – Balance sheet

Balance sheet Assets

1 Intangible assets pag. 128 2 Tangible assets pag. 131 3 Technical provisions - reinsurance amount pag. 133 4 Investments pag. 133 5 Sundry receivables pag. 140 6 Other asset items pag. 140 7 Cash and cash equivalents pag. 142

Liabilities

1 Shareholders' equity pag. 143 2 Provisions and allowances pag. 144 3 Technical provisions pag. 144 4 Financial liabilities pag. 145 5 Payables pag. 147 6 Other liability items pag. 149

Contents of the disclosure provided in the notes to the accounts – Income statement

Income Statement

1.1 Net premiums pag. 153,154 1.2 Commission income pag. 157 1.3 Net income deriving from financial instruments at fair value recorded in the income statement pag. 155 1.4 Income deriving from equity investments in subsidiary and associated companies and joint ventures pag. 156 1.5 Income deriving from other financial instruments and property investments pag. 156 1.6 Other revenues pag. 157

2.1 Net charges relating to claims pag. 153,154 2.2 Commission expense pag. 157 2.3 Charges deriving from equity investments in subsidiary and associated companies and joint ventures pag. 156 2.4 Charges deriving from other financial instruments and property investments pag. 156 2.5 Operating expenses pag. 153,154 2.6 Other costs pag. 157 3 Income taxes pag. 157

126 Parte C Balance Sheet – Assets

ASSETS In accordance with ISVAP Instruction No. 2460 dated August 10th, 2006, the balance sheet by sector of activities is presented below.

Table 13 – Balance sheet by sector of activities (ISVAP Instruction No. 2460 dated August 10th, 2006)

Non-life Business Life Business Other Eliminations between sectors Total (€ millions) 30.06.2007 31.12.2006 30.06.2007 31.12.2006 30.06.2007 31.12.2006 30.06.2007 31.12.2006 30.06.2007 31.12.2006

1 INTANGIBLE ASSETS 20 21 71 71 35 31 100 99 226 222 2 TANGIBLE ASSETS 26 28 1 1 17 17 0 0 44 46 3 TECHNICAL PROVISIONS - REINSURANCE AMOUNT 416 413 88 90 0 0 -4 -3 500 500 4 INVESTMENTS 3,235 3,207 11,147 15,081 62 118 -816 -902 13,628 17,504 4.1 Property investments 1 1 0 0 0 0 0 0 1 1 4.2 Equity investments in subsidiary and associated companies and joint 545 655 320 275 20 40 -804 -890 81 80 4.3 Investments held to maturity 0 25 112 112 0 0 0 0 112 137 4.4 Loans and receivables 18 19 348 348 3 4 -12 -12 357 359 4.5 Financial assets available for sale 2,344 1,956 3,805 4,543 37 67 0 0 6,186 6,566 4.6 Financial assets valued at fair value stated in the income statement 327 551 6,562 9,803 2 7 0 0 6,891 10,361 5 SUNDRY RECEIVABLES 612 555 148 177 83 112 -153 -108 690 736 6 OTHER ASSET ITEMS 198 186 3,343 254 4 4 10 11 3,555 455 6.1 Deferred acquisition costs 30 30 13 14 0 0 0 0 43 44 6.2 Other assets 168 156 3,330 240 4 4 10 11 3,512 411 7 CASH AND CASH EQUIVALENTS 154 236 292 324 26 30 0 0 472 590 TOTAL ASSETS 4,661 4,646 15,090 15,998 227 312 -863 -903 19,115 20,053

1 SHAREHOLDERS' EQUITY 1,079 1,090 757 815 112 244 -684 -773 1,264 1,376 2 PROVISIONS AND ALLOWANCES 10 8 5 6 1 2 0 0 16 16 3 TECHNICAL PROVISIONS 3,194 3,165 9,699 12,851 0 0 -4 -3 12,889 16,013 4 FINANCIAL LIABILITIES 47 55 1,299 2,054 0 0 0 0 1,346 2,109 4.1 Financial liabilities valued at fair value stated in the income 0 0 1,199 1,953 0 0 0 0 1,199 1,953 statement 4.2 Other financial liabilities 47 55 100 101 0 0 0 0 147 156 5 PAYABLES 240 226 122 112 109 54 -167 -123 304 269 6 OTHER LIABILITY ITEMS 91 102 3,208 160 5 12 -8 -4 3,296 270 TOTAL LIABILITIES AND NET SHAREHOLDERS' EQUITY 4,661 4,646 15,090 15,998 227 312 -863 -903 19,115 20,053

Non-life business The assets pertaining to the non-life business, gross of cancellations between sectors, increased from € 4,468 million to € 4,661 million. In particular, investments rose from € 3,207 million to € 3,235 million and technical provisions rose from € 3,165 to € 3,194 million.

Life business The assets pertaining to the life business, gross of cancellations between sectors, dropped from €15,998 million to € 15,090 million. In particular, investments decreased from € 15,081 million to € 11,147 million and technical provisions fell from € 12,851 to € 9,699 million.

Other business The assets relating to this business, gross of cancellations between sectors, dropped from € 312 million to € 227 million. In particular, investments decreased from € 118 million to € 62 million.

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INTANGIBLE ASSETS

“Intangible assets” disclose the following changes:

Table 14 – Intangible assets Change (€ millions) 30.06.2007 31.12.2006 Abs. Amount %

Goodwill 174 173 1 0.58 Other intangible assets: 52 49 3 6.12 insurance portfolios 16 17 -1 -5.88 software 28 24 4 16.67 models and projects 0 1 -1 -100.00 patent rights, trademarks and similar rights 0 0 0 assets in process of formation 7 7 0 0.00 Total 226 222 4 1.80

Goodwill The item “goodwill”, which amounts to € 174 million (the increase is due to the acquisition of an additional 3.57% in C.I.R.A.), includes the amount ascribable to the positive difference emerging at the time of elimination of the equity investments in companies included within the scope of consolidation, after charging the portion of fair value pertaining to the assets, the liabilities and the potential liabilities of the companies, in accordance with section 36 of IFRS 3. This difference, as illustrated in the accounting policies is recorded at the related cost, net of any losses in value in accordance with the matters envisaged in section 54 of IFRS 3.

The amounts relating to the item “Goodwill” have been affected by the adjustment made to the purchase price of Duomo Uni One Assicurazioni.

Table 15 - Goodwill – changes during the period

(€ millions) Goodwill

2006

Gross balance 196 Accumulated amortization 23 Cumulative permanent losses 0 Net balance as of Dec. 31st, 2006 173

2007

Increases due to: 1 business combinations 1 exchange gains 0 other 0 Decreases due to: 0 business combinations 0 exchange losses 0 other 0 Gross balance 197 Accumulated amortization 23 permanent losses in value 0 Cumulative permanent losses 0 Net balance as of June 30th, 2007 174

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The impairment test on the goodwill has been carried out on the basis of the provisions of international accounting standard IAS 36 (Reduction in value of the assets) following the same approach already adopted last year.

In relation to the insurance companies, the recoverable value has been estimated on the basis of a three-stage accounting approach of the “Economic capital”. The first stage is represented by the discounting back of the economic profit (respectively calculated on the basis of the RoEV - return on Embedded Value – for life assurance companies, or on the basis of the profitability of the Embedded Value and on the basis of the RoNAV - return on Net Asset Value – for the non-life insurance companies, or on the profitability of the adjusted shareholders’ equity, net of the intangibles) taken from the projections of the 2007-2010 strategic plan; the second stage is gained by hypothesising the linear convergence of the economic profit of the last plan year towards a perpetually sustainable level; the third stage derives from the terminal value of the business unit, obtained by capitalizing the perpetually sustainable economic profit by means of an appropriate capitalization rate.

The 2007-2010 strategic plan envisages the adoption of a business model focused by activity sectors (motor, non- motor non-life and life business) less scattered among legal entities. During the second half of 2007, intense corporate reorganization is envisaged, aimed at aggregating common business areas currently scattered among several legal entities under a single CGU, destined to become the reference unit for the management of all the business of the specific area. The business units (CGU) involved in the reorganization, emerged as of June 30th as still managed in separate form, albeit co-ordinated, since they are autonomous legal entities. The reorganization process will commence during the second half of 2007 and will lead to the creation of three new CGU. This leads to the need to carry out the impairment test on the goodwill allocated to the legal entities still separate as of June 30th, 2007 on the basis of the flows of their own strategic plan. Since the plan projects the flows relating to the new CGU, it was necessary to obtain the pertinent flows by means of the identification of suitable drivers, representative of the contribution of the current transferee CGU or subject to merger in relation to the realization of the plan results.

The operating structure post-reorganization reflected in the strategic plan figures will give rise from as early as 2008 to three CGU respectively dedicated to the management: • of the motor business. The pertinent CGU will be Mapfre Cattolica Auto (MCA), currently known as CIRA, which will also represent an autonomous legal entity 50% owned by the industrial partner Mapfre. The CGU will manage the motor business segments transferred by Cattolica Assicurazioni and Duomo Uni One on new bases ; • of the non-motor non-life business which will be fully concentrated within Cattolica Assicurazioni by means of the transfer of the corporate/broker business segment by CIRA and the merger of Duomo Uni One (post transfer of the motor business segment) within Cattolica Assicurazioni. The non-motor non-life business will therefore be handled solely by a single CGU, Cattolica Danni, which will represent a business segment and not an autonomous legal entity; • of the life business which will also be concentrated within Cattolica Assicurazioni via the merger of Duomo Previdenza and Persona Life within Cattolica Assicurazioni. The life business will therefore be managed solely by a single CGU, Cattolica Vita, which will represent a business segment and not an autonomous legal entity. The new business model also provides for the unification and turning to account of the group agency networks.

The other subsidiary insurance companies not involved in the reorganization plan (Lombarda Vita, Risparmio Previdenza, San Miniato Previdenza, Axa Cattolica Previdenza, CIRA) have been valued on the basis of strategic plan flows pertaining to them. With regards to the insurance companies undergoing the start-up phase (Tua Assicurazioni and ABC Assicura), use has been made of a P/NAV multiple used by market analysts for the evaluation of non-life insurance companies in Italy, prudently reduced by 25%, so as to take account of the risk which affects businesses in the start- up phase.

The other subsidiary companies have been valued briefly using the warranted multiples method, with the exception of Cattolica Immobiliare, Cattolica Investimenti SIM and Verona Gestioni SGR, for whom the overall equity method was applied: The valuations did not reveal any permanent losses in value.

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The hypotheses on the basis of which the value in use of each CGU emerged as less sensitive were: • the combined ratio for the cash generating units falling within the non-life segment and the new business value for the cash generating units falling within the life segment; • the cost of the capital (Rs); • the long-term RoEC (the RoEC is the ratio between the Economic Profit and the Economic Capital); • the long-term growth rate (g). The cost of the capital has been estimated using the CAPM - Capital Asset Pricing Model. The parameters used for the purposes of the estimate of the value in use are: the beta ratio by activity class, formulated on the basis of the long-terms betas estimated by the analysts, the equity risk premium, in line with the consensus value indicated in the reports of the market analysts; risk free rate (average of the risk free rate on ten-year Italian government securities during the first half of 2007). The cost of own capital (Rs) for each business unit has been estimated on the basis of these elements. These basic assumptions, besides being in line with the long-term nominal growth rate of Italian GDP, are also consistent with the values used by the financial analysts.

Other intangible assets As per IAS 38, the item “other intangible assets” includes assets which can be autonomously identified and which will generate future economic benefits in terms of cost savings or future income. The item amounts to € 52 million, compared with € 49 million reported in the previous year.

The analytical accounting reconciliation of the other intangible assets held by the Group between the start and the end of the year, is represented as follows:

Table 16 – Other intangible assets – changes during the period

Patent rights, Insurance Models and trademarks and Assets in process of (€ millions) portfolios Software projects similar rights formation Total

Gross balance as of Dec. 31st, 2006 20 86 2 2 7 117 Accumulated amortisation as of Dec. 31st, 2006 3611 2 -67 Cumulative permanent losses -1 - - -1 Net balance as of Dec. 31st, 2006 17 24 1 - 7 49 Increases due to: -8 - - -8 purchase -7 - - -7 business combinations ------internal development ------exchange gains ------other -1 - - -1 Decreases due to: ------sale ------business combinations ------exchange losses ------other ------Gross balance as of June 30th, 2007 20 94 2 2 7 125 Amortisation 14 - - -5 Other changes in acc. amortisation ------Accumulated amortisation as of June 30th, 2007 4651 2 -72 value writebacks - permanent losses in value ------Cumulative permanent losses -1 - - -1 Net balance as of June 30th, 2007 16 28 1 - 7 52

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Other intangible assets also include the software, held by the Group for a total of € 28 million. The latter, which in particular refers to Cattolica IT Services, comprises the assets conferred to the same by the Parent Company, Duomo Uni One Assicurazioni and Duomo Previdenza, relating to systems already operative, as well as certain systems which came onto stream concerning: the life assurance area, the liability cycle, the activation of the claims’ handling system within Duomo Uni One Assicurazioni and a series of implementations on systems already in use. € 7 million relating to software acquired during the period and not amortized since it is not yet in use should also be considered an integral part of this item.

Following the implementation of the impairment test on other intangible assets, as disciplined by IAS 36, no losses in value (impairment losses) were reported during the period.

At the end of the period, certain software was still in use, mainly relating to Cattolica IT Services, whose book values have been fully amortized in the accounting periods prior to the conferral of the business segments relating to Information Technology activities.

The main software items generally have a residual amortization period of between three and four years.

TANGIBLE ASSETS

Tangible assets, disciplined by IAS 16, disclosed the following changes during the year:

Table 17 – Tangible assets Change (€ millions) 30.06.2007 31.12.2006 Abs. Amount %

Property 30 31 -1 -3.23 Other tangible assets 14 15 -1 -6.67 furniture, office machines and internal means of transport 13 15 -2 -13.33 movable assets recorded in public registers 000 plant and equipment 1 0 1 100.00 inventory and miscellaneous assets 000 Total 44 46 -2 -4.35

Property The item includes property used for the performance of the Group’s activities; in particular it includes the property belonging to the Parent Company and Polo Finanziario for a sum total of € 30 million, compared with € 31 million in the previous period.

Other tangible assets The item comprises the assets disciplined by IAS 16, not included under the property category.

In detail, the item, which presents a balance of € 14 million, down by € 1 million compared with the end of the previous period, comprises furniture, office machines and internal means of transport totalling € 13 million, assets recorded in public registers for € 110 thousand, plant and equipment used for carrying out the Group’s business amounting to € 1 million and inventories and other miscellaneous assets totalling € 337 thousand.

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In detail, changes during the year recorded in the item “tangible assets” were as follows:

Table 18 – Real Estate Property and other tangible assets – changes during the period

Property Other tangible assets Property under Furniture, office construction and machines and Movable assets Inventories and advance internal means recorded in Plant and miscellaneous (€ millions) Property payments of transport public registers equipment assets TOTAL

Gross balance as of Dec. 31st, 2006 35 - 68 1 2 - 106 Accumulated depreciation as of Dec. 31st, 2006 4 -5411-60 Cumulative permanent losses ------Net balance as of Dec. 31st, 2006 31 - 14 - 1 - 46 Increases due to: --1---1 purchase --1---1 business combinations ------change of use ------internal development ------exchange gains ------other ------Decreases due to: ------sale ------business combinations ------change of use ------exchange losses ------other ------Gross balance as of June 30th, 2007 35 - 69 1 2 - 107 Depreciation 1-2---3 Other changes in acc. depreciation ------Accumulated depreciation as of June 30th, 2007 5 -5611-63 value writebacks ------permanent losses in value ------Cumulative permanent losses as of June 30th, 2007 ------Net balance as of June 30th, 2007 30 - 13 - 1 - 44

The increases in the item “property” mainly concern expenses for internal restructuring work and legislative adaptations of the headquarters of the Parent Company, located in Via Lugadige Cangrande 16, Verona, for € 473 thousand.

The fair value of the properties held by the Group, at the end of the year, came to € 46 million.

As indicated in the accounting polices, total property and other tangible assets held by the Group are subject to a systematic depreciation process using a rate of 3% for properties used for the Group’s business activities and, except in specific cases, using a rate:

• of 12% for furniture, office machines and internal means of transport; • of 25% for movable assets recorded in public registers; • of 15% for plant and equipment; • between 20% and 40% for inventories and miscellaneous assets.

No significant changes took place during the period, either in the accounting estimates or the depreciation methods used.

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TECHNICAL PROVISIONS - REINSURANCE AMOUNT

Table 19 – Analysis of the technical provisions – reinsurance amount (ISVAP Instruction No. 2460 dated August 10th, 2006)

Total book value

(€ millions) 30.06.2007 31.12.2006

Non-life provisions 413 410

Life provisions 87 90 Actuarial provisions and other provisions 87 90 Technical provisions where the investment risk is borne by the policyholders and provisions deriving from the management of pension funds - - Total technical provisions - reinsurance amount 500 500

The premiums’ provisions – reinsurance amount are calculated using the method adopted for those pertaining to direct business. As of June 30th, 2007 they amounted to € 500 million, unchanged with respect to the end of the previous period.

INVESTMENTS

“Investments” comprise the following items:

Table 20 - Investments

Change (€ millions) 30.06.2007 31.12.2006 Abs. Amount %

Property investments 1 1 0 0.00 Equity investments in subsidiary and associated companies and joint ventures 81 80 1 1.25 Investments held to maturity 112 137 -25 -18.25 Loans and receivables 357 359 -2 -0.56 Financial assets available for sale 6,186 6,566 -380 -5.79 Financial assets valued at fair value stated in the income statement 6,891 10,361 -3,470 -33.49 Total 13,628 17,504 -3,876 -22.14

Real estate property investments The property investments are represented by the Group’s property for office or residential use, not occupied by Group companies.

The item includes the properties belonging to the Parent Company for a total of € 1 million, unchanged with respect to December 31st, 2006.

The fair value of the property investments held by the Group, at the end of the period, amounted to € 4 million.

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The analytical accounting reconciliation of the property and other assets held by the Group between the start and the end of the year, is represented as follows:

Table 21 – Real estate property investments– changes during the period

(€ millions) Property investments

Gross balance as of Dec. 31st, 2006 1 Accumulated depreciation as of Dec. 31st, 2006 - Cumulative permanent losses - Net balance as of Dec. 31st, 2006 1 Increases due to: - purchase - business combinations - change of use - internal development - exchange gains - other - Decreases due to: - sale - business combinations - change of use - exchange losses - other - Gross balance as of June 30th, 2007 1 Depreciation - Other changes in acc. depreciation - Accumulated depreciation as of June 30th, 2007 - value writebacks - permanent losses in value - Cumulative permanent losses - Net balance as of June 30th, 2007 1

The item is more or less unchanged with respect to the end of the previous period.

Following the implementation of the impairment test, as disciplined by IAS 36, no losses in value were reported (impairment losses). Revenues for rentals realized during the period amounted to € 171 thousand and the operating expenses incurred, associated with the property investments, came to € 1 million by way of repairs and maintenance which did not lead to an increase in the revenues with respect to the previous year.

As indicated in the accounting policies, property investments held by the Parent Company are subject to a systematic depreciation process using a depreciation rate equating to 2%.

No significant changes took place during the period, either in the accounting estimates or the depreciation methods used.

As of June 30th, there were no restrictions on the ownership of the properties.

As explained in the accounting policies and in the table presented below, the Group has applied the criteria of depreciated cost net of any permanent losses in value to total assets disciplined by IAS 40, IAS 16 and IAS 38.

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Table 22 – Analysis of tangible and intangible assets (ISVAP Instruction No. 2460 dated August 10th, 2006)

At re-determined value or at (€ millions) At cost fair value Total value for the period

Property investments 1 115 1 Other property 30 94 30 Other tangible assets 14 14 14 Other intangible assets 52 52 52

Equity investments in subsidiary and associated companies and joint ventures The item includes equity investments in subsidiary companies excluded from the scope of consolidation and in associated companies over which the Group exercises a significant influence, which are carried at equity.

During the period, the item underwent the following changes:

Table 23 - Equity investments in subsidiary and associated companies and joint ventures

Change (€ millions) 30.06.2007 31.12.2006 Abs. Amount %

Subsidiary companies 5 5 0 0.00 Associated companies 76 75 1 1.33 Joint ventures 0 0 0 Total 81 80 1 1.25

Equity investments in subsidiary companies The item mainly comprises the costs of the equity investments in companies which are not significant (not material) for consolidation purposes: Verona Servizi, Lombarda Assicurazioni, TUA Retail and Uni One Servizi. Equity investments in subsidiary companies amount to € 5 million and were unchanged with respect to the end of the previous period.

Following the performance of the impairment test, no permanent losses in value emerged.

Equity investments in associated companies The item, amounting to € 76 million, includes the equity investments carried at equity, over which the Group exercises a significant influence. The increase of € 1 million (+ 1.33%) is mainly attributable to the results of the associated companies.

Following the implementation of the impairment test, as disciplined by IAS 36, no permanent losses in value were reported (impairment losses).

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Table 24 – Analysis of non-consolidated equity investments (ISVAP Instruction No. 2460 dated August 10th, 2006)

Availability of voting rights at ordinary shareholders' Activities Type % % total holding meetings Name State (1) (2) direct investment (3) Book value

Lombarda Assicurazioni s.p.a. 86 1 a 100% 100% 5 TUA Retail s.r.l. 86 11 a 0 96.99% - Uni One Servizi s.r.l. 86 11 a 0 99.99% - Verona Servizi s.r.l. 86 11 a 65% 99.99% - Cassa di Risparmio di San Miniato s.p.a. 86 7 b 24.72% 24.72% 70 Prisma s.r.l. 86 11 b 20% 20% - Vegagest SGR s.p.a 86 8 b 16.99% 16.99% 6 (1) 1=Italian insurance; 2=EU insurance; 3=non-EU insurance; 4=insurance holding company; 5=EU reinsurance; 6=non-EU reinsurance; 7=banks; 8=SGR; 9=other holding; (2) a=subsidiary company (IAS27) ; b=associated company (IAS28); c=joint venture (IAS 31) (3) this is the product of the investment relationships relating to all the companies which, placed along the investment chain, may be interposed between company which draws up the consolidated financial statements and the company in question. (4) overall percentage available of the votes at ordinary shareholders' meeting if different from direct or indirect shareholding

Financial investments

As can be seen in the following table, financial investments include the financial instruments disciplined by IAS 39: investments held to maturity, loans and receivables, financial assets available for sale and financial assets valued at fair value recorded in the income statement. The classification of the financial assets as of June 30th, reflects the matters established as of April 1st, 2006 by the IAS Outline Resolution adopted by the Group concerning financial investments.

Table 25 –Classification of financial investments

(€ millions) 30.06.2007 31.12.2006 Abs. Amount %

Investments held to maturity 112 137 -25 -18.25 Shares 000 Bonds 112 137 -25 -18.25 UCI units 000 Loans and receivables 327 327 0 0.00 Shares 000 Bonds 327 327 0 0.00 UCI units 000 Financial assets available for sale 6,186 6,566 -380 -5.79 Shares 572 495 77 15.56 Bonds 4,770 5,242 -472 -9.00 UCI units 844 829 15 1.81 Financial assets valued at fair value stated in the income statement (*) 1,652 2,521 -869 -34.47 Shares 10 15 -5 -33.33 Bonds 1,545 2,386 -841 -35.25 UCI units 92 116 -24 -20.69 Derivatives 54125.00 (*) Reference is made exclusively to financial assets held for trading purposes

By contrast, the following table presents all the financial investments.

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Table 26 - Financial investments

(€ millions) 30.06.2007 31.12.2006 Abs. Amount %

Investments held to maturity 112 137 -25 -18.25 Loans and receivables 357 359 -2 -0.56 Financial assets available for sale 6,186 6,566 -380 -5.79 Financial assets valued at fair value stated in the income statement 6,891 10,361 -3,470 -33.49 Total 13,546 17,423 -3,877 -22.25

Table 27 – Analysis of financial assets (ISVAP Instruction No. 2460 dated August 10th, 2006)

Financial assets valued at fair value stated in the income statement Total Financial investments Investments held to Financial assets Loans and receivables value for the period (disciplined by IAS 39) maturity available for sale Financial assets Financial assets held designated at fair value for trading purposes stated in the income statement (€ millions) 30.06.2007 31.12.2006 30.06.2007 31.12.2006 30.06.2007 31.12.2006 30.06.2007 31.12.2006 30.06.2007 31.12.2006 30.06.2007 31.12.2006

Equities and derivatives valued at 00001701700000170 170 cost

Equities at fair value 0 0 0 0 402 325 10 15 8 7 420 347

of which: listed securities 0 0 0 0 310 244 10 15 8 7 328 266

Debt securities 112 137 327 327 4,770 5,242 1,545 2,386 4,176 5,765 10,930 13,857

of which: listed securities 112 137 0 0 4,767 5,240 1,489 2,298 242 1,758 6,610 9,433

UCI units 0 0 0 0 844 829 92 116 680 1,601 1,616 2,546

Loans and receivables due from 000000000000 banking customers

Interbank loans and receivables000000000000

Deposits with transferors00111200000011 12

Receivable financial components 000000000000 of insurance policies

Other loans and receivables00192000000019 20

Non-hedging derivatives000000540054

Hedging derivatives 000000000000

Other financial investments 0 0 0 0 0 0 0 0 375 467 375 467 Total 112 137 357 359 6,186 6,566 1,652 2,521 5,239 7,840 13,546 17,423

Reference should be made to the related table in the information concerning the income statement for an analysis of the financial income and charges from investments.

Investments held to maturity All the financial assets, excluding derivatives, with a pre-established maturity and payments which are fixed or can be determined, which the Group intends to or has the ability to hold until maturity, are classified in this category. As of the end of the interim period, the investments held to maturity amounted to € 112 million (- 18.25%) and represented 0.83% of total financial instruments disciplined by IAS 39 included under investments.

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The only changes during the period relating to the item refer to the expiry of securities.

Loans and receivables The assets with a pre-established maturity and payments which are fixed or can be determined, not listed on active markets, which are not recorded in any of the other categories, are classified in this category. Specifically, the category includes all the loans and financing, the deposits from re-insurers with transferring companies and bonds not listed on active markets. As of the end of the period, loans and receivables amounted to € 357 million, down with respect to the € 359 million at the end of the previous period, and represented 2.63% of total financial instruments disciplined by IAS 39 included under investments.

Financial assets available for sale This category includes all the financial assets, valued at fair value, other than derivative instruments, both debt instruments and equities, which are not classified in the other categories and are disciplined by IAS 39. Specifically, this category comprises the equity investments deemed to be strategic in companies which are not subsidiary or associated companies, whose fair value derives from prices taken from active markets, or, in the case of securities not listed on active markets, commonly applied valuation methods. Specifically, the valuation methods adopted were chosen taking into account the pertinent sector. This category includes the equity investment in Banca Regionale Europea in relation to which the estimate of the fair value - since it is linked exclusively to the payout of the equity investment - presents variability which is too high and which, therefore, in accordance with IAS 39, must be carried at cost. As of June 30th, the valuation at cost of this equity investment came to € 170 million, unchanged with respect to the end of the previous year.

As of the end of the interim period, financial assets available for sale amounted to € 6,186 million (-5.79%) and represented 45.67% of total financial instruments disciplined by IAS 39 included under investments. The decrease recorded during the period is mainly ascribable to the fact that the amount regarding BPV Vita, as it is considered an asset subject to disposal, was reclassified in the summary item "Non-current assets or a group subject to disposal held for sale".

As of June 30th, the balance of capital gains and losses from valuation of financial assets available for sale recorded under shareholders’ equity, net of the related deferred taxes and the shadow accounting reserve recorded under shareholders’ equity, amounted to € 59 million (-€ 39 million compared with the end of the previous period).

Following the performance of the impairment test on all the financial instruments included in the “loans and receivables”, “investments held to maturity”, and “financial assets available for sale” categories, as disciplined by IAS 39, no permanent losses in value were revealed (impairment losses).

Financial assets valued at fair value stated in the income statement This category comprises the classification of financial assets, including derivatives, held for trading and those designated by the Group as valued at fair value, with a balancing entry in the income statement.

Specifically, besides assets held for trading purposes, the item also includes the financial assets designated at fair value recorded in the income statement relating to :

• insurance or investment policies issued by the Group whose investment risk is borne by the policyholders; • the management of pension funds.

As of the end of the interim period, financial assets valued at fair value recorded in the income statement amounted to € 6,891 million (- 33.49%) and represented 50.87% of total financial instruments disciplined by IAS 39 included under investments. Also for this item, the decrease recorded during the period is mainly ascribable to the fact that

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the amount regarding BPV Vita, as it is considered an asset subject to disposal, was reclassified in the summary item "Non-current assets or of a group subject to disposal held for sale".

Table 28 - Financial assets valued at fair value recorded in the income statement

(€ millions) 30.06.2007 31.12.2006 Abs. Amount %

Trading assets 1,652 2,521 -869 -34.47 Shares 10 15 -5 -33.33 Bonds 1,545 2,386 -841 -35.25 Derivatives 541 25.00 Investment funds 92 116 -24 -20.69 Other 0 00

Assets indicated by the Group 5,239 7,840 -2,601 -33.18 Shares 871 14.29 Bonds 4,176 5,765 -1,589 -27.56 Investment funds 680 1,601 -921 -57.53 Other 375 467 -92 -19.70 Total 6,891 10,361 -3,470 -33.49

Derivatives The derivatives held by the Group for trading purposes amounted to € 5 million (+ 25%), represented entirely by options. Furthermore, the Group possesses financial instruments characterized by implicit derivatives; these instruments, in the event the characteristics of the compound element impose the separation of the derivative, are classified in the category “financial assets valued at fair value in the income statement” and valued at fair value, therefore not taking steps to separate the implicit derivative, as permitted by IAS 39.

The table below contains a summary of the assets and liabilities relating to policies issued by the Group’s insurance companies where the investment risk is borne by the policyholder and deriving from the management of pension funds, as envisaged by ISVAP Instruction No. 2460 dated August 10th, 2006.

Table 29 - Analysis of assets and liabilities relating to policies issued by insurance companies where the investment risk is borne by the policyholder and deriving from pension fund management (ISVAP Instruction No. 2460 dated August 10th, 2006)

Benefits associated with investment funds Benefits associated with the TOTAL and stockmarket indices management of pension funds (€ millions) 30.06.2007 31.12.2006 30.06.2007 31.12.2006 30.06.2007 31.12.2006

Assets in financial statements 5,121 7,734 136 131 5,257 7,865 InfraGroup assets* 0 0 0 0 0 0 Total assets 5,121 7,734 136 131 5,257 7,865

Financial liabilities in financial stat 988 1,764 130 125 1,118 1,889 Technical provisions in financial st 4,133 5,970 6 6 4,139 5,976 InfraGroup liabilities * 0 0 0 0 0 0 Total liabilities 5,121 7,734 136 131 5,257 7,865 * Assets and liabilities eliminated during the consolidation process

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SUNDRY RECEIVABLES

“Sundry receivables” comprise the following items:

Table 30 - Sundry receivables

Change (€ millions) 30.06.2007 31.12.2006 Abs. Amount %

Receivables deriving from direct insurance transactions 409 438 -29 -6.62 Policyholders 189 212 -23 -10.85 Insurance brokers 147 172 -25 -14.53 Insurance companies - current accounts 59 41 18 43.90 Policyholders and third parties for claims to be settled 14 13 1 7.69 Receivables deriving from reinsurance transactions 85 65 20 30.77 Insurance and reinsurance companies 72 58 14 24.14 Reinsurance brokers 13 7 6 85.71 Other receivables 196 233 -37 -16.02 Total 690 736 -46 -6.30

The item “Receivables deriving from direct insurance transactions” amounts to € 409 million, down by € 29 million with respect to December 31st, 2006. On the basis of prudent evaluations and specific analysis, which take into account the experience of previous accounting periods concerning the stripping of receivables, the financial statement item is adjusted by the allowance for the writedown of doubtful receivables.

The item “Receivables deriving from reinsurance transactions” amounts to € 85 million (+ 30.77%).

The item “Other receivables” fell from € 233 million to € 196 million, and mainly comprises amounts due for management fees deriving from the management of the internal and external funds of unit-linked products, as well as amounts receivable for excesses, loans to employees and guarantee deposits.

OTHER ASSET ITEMS

“Other assets items ” are made up as follows:

Table 31 – Other asset items

Change (€ millions) 30.06.2007 31.12.2006 Abs. Amount %

Non current assets or of a group held for sale 3,114 0 3,114 100.00 Deferred acquisition costs 43 44 -1 -2.27 Deferred tax assets 51 18 33 183.33 Current tax assets 189 243 -54 -22.22 Other assets 158 150 8 5.33 Total 3,555 455 3,100 681.32

Non current assets or of a group subject to disposal held for sale This item includes all the assets regarding BPV which are considered subject to disposal, according to IFRS 5. The item amounted to € 3,114 million.

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Deferred acquisition costs The deferred acquisition costs relating to insurance policies, as agreed upon by IFRS 4, amounted as of June 30th to € 43 million (- 2.27%).

Deferred and current tax assets Deferred and current tax assets at the end of the period amounted to € 240 million (- 8.04%).

Deferred tax assets Deferred tax assets at the end of the period amounted to € 51 million (€ 18 million at the end of the previous period). In accordance with the definition contained in IAS 12, these comprise the amounts of the income taxes recoverable in future accounting periods. The change is mainly attributable to the stripping of the deferred tax assets provided for at the time of initial application of the international accounting standards for the recalculation of the depreciation on properties and for the calculation of the shadow accounting provision.

Amounts receivable for deferred taxation receivable, recorded under “deferred tax assets” derive from the deductible timing differences, such as the writedown of receivables, the deductible portion of the change in the provision for outstanding non-life business claims, the amortization of the insurance portfolio, the long-term commission of the non-life classes, the allowances to provisions for risks and charges and entertaining expenses, as well as from the carrying forward of tax losses not used. They also comprise the deferred tax assets which have arisen from the temporary misalignment between the beginning of the economic competence laid down by the international accounting standards and Italian tax legislation. This misalignment is mainly due to the re- determination of the employee severance indemnity in accordance with IAS 19, the determination of the deferred commission income (DIR) associated with the investment policies held by the Group, the re-determination of the depreciation plans for property investments and properties in accordance with IAS 16 and 40 and the recording of the shadow accounting provision.

Current tax assets These amount to € 189 million and are represented by the amounts due to the tax authorities and derive from withholdings made on bank interest, tax credits on income deriving from the equity investment in mutual investment funds, from the advance tax on severance indemnities as per Article 3.213 of Italian Law No. 662 dated December 23rd, 1996 and from amounts due from the tax authorities transferred to the Parent Company by the subsidiary and associated companies who have complied with the tax consolidation system and tax transparency. The amounts due to the tax authorities also comprise the prepaid taxes pursuant to Italian Law No. 265 dated November 22nd, 2002, concerning the taxation of the life provisions, and the advances paid over during the year by way of income taxes (IRES – company earnings’ tax and IRAP – regional business tax). The amounts due from Group companies derive from the transfers of tax positions mainly comprising current IRES of the companies who have opted for the tax consolidation system.

Other assets This item, which amounts to € 158 million (+ +5.33%), includes the transitory reinsurance accounts, deferred commission expense (DAC - deferred acquisition cost) relating to policies not falling within the sphere of application of IFRS 4, accrued income and prepaid expenses and other assets.

The breakdown of the item “other assets” is as follows:

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Table 32 - Other assets

Change (€ millions) 30.06.2007 31.12.2006 Abs. Amount %

Transitory reinsurance accounts 0 19 -19 -100.00 Deferred commission expense associated with investment policies 5 10 -5 -50.00 Accrued income and prepaid expenses 80 95 -15 -15.79 of which for interest 77 93 -16 -17.20 of which for rental fees 321 50.00 Sundry assets 73 26 47 180.77 Total 158 150 8 5.33

The item “transitory reinsurance accounts” presented a zero balance as of June 30th.

The item “deferred commission expense relating to investment policies”, which amounts to € 5 million, refers to the deferred acquisition costs associated with investment policies or contracts not complying with the definition of insurance policy as per IFRS 4.

The item “accrued income and prepaid expenses” almost entirely comprises accruals relating to interest income on securities, pertaining to the period, whose coupon matures in the following interim period. During the period, it amounted to € 80 million (-15.79%).

There is no accrued income or prepaid expenses due beyond 12 months.

The item “sundry assets” comprises the balance of the liaison account between the life and non-life sectors of the Group insurance companies. The amount is matched by an equal balance under “other liabilities”.

CASH AND CASH EQUIVALENTS

The item “cash and cash equivalents” represents the balances as of the end of the accounting period of the current accounts held with various banks. Cash and cash equivalents amounted to € 472 million and during the period registered a decrease,, partially due to the fact that the amount regarding BPV Vita, considered an asset subject to disposal, was reclassified under the item “Non-current assets or of a group subject to disposal held for sale”.

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SHAREHOLDERS' EQUITY

As of June 30th, this item amounted to € 1,264 million and was made up as follows:

Table 33 – Shareholders’ equity

Change (€ millions) 30.06.2007 31.12.2006 Abs. Amount %

Shareholders' equity 1,264 1,376 -112 -8.14 pertaining to the Group 1,142 1,234 -92 -7.46 Share capital 142 142 0 0.00 Other equity instruments 000 Capital reserves 590 590 0 0.00 Net profit reserves and other equity reserves 332 265 67 25.28 Own shares 000 Reserve for net exchange differences 000 Gains or losses on financial assets available for sale 59 99 -40 -40.40 Other gains or losses recorded directly under equity 0 -1 1 100.00 Profit (loss) for the period pertaining to the Group 19 139 -120 -86.33 pertaining to third parties 122 142 -20 -14.08 Capital and reserves pertaining to minority shareholders 127 121 6 4.96 Gains and losses recorded directly under equity -15 0 -15 Profit (loss) for the period pertaining to minority shareholders 10 21 -11 -52.38 Total 1,264 1,376 -112 -8.14

Shareholders' equity pertaining to the Group This item totals € 1,142 million and comprises the following items:

Share capital The fully subscribed share capital amounts to € 142 million and is represented by 47,391,228 ordinary shares with a par value of € 3 each.

Capital reserves This item amounted to € 590 million and includes the share premium reserves of the Parent Company.

Net profit reserves and other equity reserves This item, which comprises the gains and losses deriving from the initial application of the international accounting standards (IFRS 1), the reserves anticipated by the Italian Civil Code (consolidation reserve and reserve for valuation differences on unconsolidated equity investments) and by special laws prior to the adoption of the international accounting standards, amounts in total to € 332 million, compared with € 265 million at the end of the previous period. The change is attributable to the booking of the profit for the previous year and the distribution of the dividends.

Own shares As of June 30th, the Parent Company and the subsidiaries did not hold any Cattolica shares.

Gains or losses on financial assets available for sale At the end of the interim period, this item amounted to € 59 million (- 40.4%) and reported the changes registered during the period, deriving from the valuation at fair value of the financial instruments included in the corresponding asset item, net of the related deferred taxation, as well as the net effect deriving from shadow accounting.

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Shareholders' equity pertaining to minority shareholders With reference to the companies included within the scope of consolidation, this item comprises the balances pertaining to the minority shareholders. As of June 30th, the item amounted to € 122 million.

PROVISIONS AND ALLOWANCES

As of June 30th, the item “other provisions and allowances”, which totalled € 16 million, unchanged with respect to the end of the previous period, included the liability relating to legal disputes, including therein the possible future charge deriving from notification documents or records of proceedings which will be served by the ISVAP for the violations of Italian Law No. 57/01 and for other findings, and the estimated liability relating to disputes concerning employment contracts.

TECHNICAL PROVISIONS

As referred to in the accounting policies, the item includes the commitments which derive from insurance policies and those which derive from investment policies involving discretional profit-sharing (DPF), net of amounts transferred to re-insurers.

At the end of the first half of the year, total technical provisions amounted to € 12,889 million (-19.5%). The decrease recorded during the period is mainly ascribable to the fact that the amount regarding BPV Vita, as it is considered an asset subject to disposal, was reclassified in the summary item "Non-current assets or of a group subject to disposal held for sale".

“Technical provisions” are analyzed as follows:

Table 34 – Analysis of technical provisions (ISVAP Instruction No. 2460 dated August 10th, 2006) Total value for the period (€ millions) 30.06.2007 31.12.2006

Non-life provisions 3,191 3,162 Provision for unearned premiums 578 572 Provision for outstanding claims 2,612 2,589 Other provisions 11 of which provisions provided following the assessment of fairness of the liabilities 0 0 Life provisions 9,698 12,851 Outlay provisions 106 140 Actuarial provisions 5,417 6,656 Technical provisions where the investment risk is borne by the policyholders and provisions deriving from the management of pension funds 4,139 5,976 Other provisions 36 79 of which provisions provided following the assessment of fairness of the liabilities 0 0 of which deferred liabilities due from policyholders -34 -6 Total Technical Provisions 12,889 16,013

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NON-LIFE BUSINESS

Provision for unearned premiums In accordance with Italian legislation, the item comprises both the provision for premium fractions, supplemented by the premium provision calculated for certain classes as per specific ministerial requirements, and the provision for unexpired risks.

At the end of the interim period, the provision amounted to € 578 million, up compared to the € 572 million as of December 31st, 2006.

Provision for outstanding claims As of the end of the period, the provision amounted to € 2,612 million (+ 0.89%).

Other provisions Other provisions at the end of the interim period came to € 1 million, more or less unchanged with respect to the previous period.

LIFE BUSINESS

Actuarial provisions At the end of the interim period, the actuarial provisions totalled € 5,417 million, down by € 1,239 million when compared with December 31st, 2006. They include the provision for pure premiums, the premium carry over relating to annual-premium payment policies, the population-change provision and the mortality-risk provision for index and unit-linked policies.

Outlay provisions These amount to € 106 million (- 24.29%).

Technical provisions where the investment risk is borne by the policyholders and provisions deriving from the management of pension funds This item exclusively comprises the provisions relating to index-linked and unit-linked polices and the provisions relating to pension funds.

In detail, technical provisions where the investment risk is borne by the policyholders amounted to € 4,139 million, down when compared with the € 5,976 million reported at the end of the previous period.

Other technical provisions Other technical provisions, amounting to € 36 million (- 54.43%), mainly comprise provisions for future costs associated with insurance policies for € 63 million and the negative shadow accounting provision totalling € 34 million. During the interim period, the shadow accounting provisions varied by a total of € 27 million. The gross change recorded in the income statement, since it is attributable to securities valued at fair value with effects on the income statement, amounts to € 4 million; the gross change recorded under shareholders’ equity because it is associated with securities classified as available for sale amounts to € 23 million.

FINANCIAL LIABILITIES

The breakdown of “financial liabilities” is as follows:

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Table 35 – Financial liabilities Change (€ millions) 30.06.2007 31.12.2006 Abs. Amount %

Financial liabilities valued at fair value stated in the income statem 1,199 1,953 -754 -38.61 Other financial liabilities 147 156 -9 -5.77 Total 1,346 2,109 -763 -36.18

Financial liabilities valued at fair value recorded in the income statement The item includes the financial liabilities valued at fair value recorded in the income statement, defined and disciplined by IAS 39, relating to: • the investment policies, not falling within the sphere of application of IFRS 4, issued by Group insurance companies, where the risk of the investment is borne by the policyholders; • the management of pension funds. At the end of the period, the item amounted to € 1,199 million (- € 754 million with respect to December 31st, 2006) and represented 89.08% of total financial liabilities. The decrease is mainly ascribable to the fact that the amount regarding BPV Vita, as it is considered an asset subject to disposal, was reclassified in the summary item "Non-current liabilities or of a group subject to disposal held for sale".

Other financial liabilities The item includes the financial liabilities defined and disciplined by IAS 39 not included in the category “Financial liabilities valued at fair value recorded in the income statement”. In detail, the item includes deposits received from re-insurers which total € 133 million, and technical provisions associated with investment policies valued at amortized cost for a total of € 14 million.

As of the end of the interim period, the item amounted in total to € 147 million (- € 9 million compared to the end of the previous period) and represented 10.92% of total financial liabilities.

The table below provides an analysis of the financial liabilities undertaken by the Group, expressed according to nature and in accordance with the IAS classification criteria.

Table 36 – Analysis of financial liabilities (ISVAP Instruction No. 2460 dated August 10th, 2006) Financial liabilities valued at fair value recorded in the income statement Financial liabilities designated at Other financial liabilities Total value for the period Financial liabilities held for fair value stated in the income trading purposes statement (€ millions) 30.06.2007 31.12.2006 30.06.2007 31.12.2006 30.06.2007 31.12.2006 30.06.2007 31.12.2006

Participative financial instruments 0 0 0 0 0 0 0 0 Subordinated liabilities 0 0 0 0 0 0 0 0 Liabilities from financial policies issued by insurance 0 0 1,199 1,953 14 17 1,213 1,970 companies deriving: from contracts where the investment risk is borne by the 0 0 988 1,764 0 0 988 1,764 policyholders from the management of pension funds 0 0 130 125 0 0 130 125 from other policies 0 0 81 64 14 17 95 81 Deposits received from re-insurers 0 0 0 0 133 132 133 132 Financial liability components of insurance policies 0 0 0 0 0 0 0 0 Debt securities issued 0 0 0 0 0 0 0 0 Payables due to banking customers 0 0 0 0 0 0 0 0 Interbanking payables 0 0 0 0 0 0 0 0 Other loans received 0 0 0 0 0 0 0 0 Non-hedging derivatives 0 0 0 0 0 0 0 0 Hedging derivatives 0 0 0 0 0 0 0 0 Sundry financial liabilities 0 0 0 0 0 7 0 7 Total 0 0 1,199 1,953 147 156 1,346 2,109

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PAYABLES

The account group comprises trade payables disciplined by IAS 39, mainly represented by payables deriving from direct insurance transactions, reinsurance payables and other payables.

“Payables” are analyzed as follows:

Table 37 - Payables Change (€ millions) 30.06.2007 31.12.2006 Abs. Amount %

Payables deriving from direct insurance transactions 58 75 -17 -22.67 Insurance brokers 48 67 -19 -28.36 Insurance companies - current accounts 8 7114.29 Policyholders for guarantee deposits and premiums 2 11100.00 Guarantee funds in favour of policyholders 0 00

Payables deriving from reinsurance transactions 59 52 7 13.46 Insurance and reinsurance companies 58 51 7 13.73 Insurance brokers 1 100.00

Other payables 187 142 45 31.69 For taxes payable by policyholders 38 19 19 100.00 Amounts due to social security and welfare institutions 5 3266.67 Sundry payables 144 120 24 20.00 Total 304 269 35 13.01

Payables deriving from direct insurance transactions “Payables deriving from direct insurance transactions” mainly comprise the amounts due to insurance brokers, which totalled € 48 million (- 28.36%).

In detail, amounts due to insurance brokers take into account the supplementary period-end registrations pertaining to the assessment of the production premiums and the timing mismatch registered in the settlement of the commission with the bankassurance channel. The decrease recorded during the period is mainly ascribable to the fact that the amount regarding BPV Vita, as it is considered an asset subject to disposal, was reclassified in the summary item "Non-current liabilities or of a group subject to disposal held for sale".

Payables deriving from reinsurance transactions “Payables deriving from reinsurance transactions”, which include the items with debt balances associated with reinsurance, amount to € 59 million (+ 13.46%).

Other payables These include payables for taxes payable by re-insurers, amounts due to welfare and social security institutes and other sundry payables; at the end of the interim period, the balance came to € 187 million (+ 31.69%).

In detail, the item sundry payables, which presented a balance of € 144 million (+ 20%), included amounts due to suppliers, due to employees, payables for premiums being collected and for the allowance for employee severance indemnities (defined benefit plan which totals € 23 million). The employee severance indemnity is subject to actuarial calculation which takes into account the future developments of the employment relationship. The future flows of the employee severance indemnity have been

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discounted back as of the reference date on the basis of the method expressly requested by section 64 of IAS 19, the so-called Project Unit Credit Method, as explained in the notes to the accounts.

Following the reform of the employee severance indemnity, culminating in the implementing decrees of the 2007 Finance Bill concerning the transfer of severance indemnities and Supplementary welfare (Italian Official Gazette No. 26 dated February 1st, 2007), the application of the afore-mentioned method differs according to whether the company being assessed has a number of employees less than or at least equal to 50.

On the basis of Italian Law No. 296/06, for the companies with at least 50 employees, the transfer of the portions of severance indemnities (TFR) to a specific Treasury Fund set up with INPS (national social security institute) is envisaged. In line with the matters indicated by the OIC (Italian Accounting organization) in the attachment to Operating Guide No. 1, section 13, for the changeover to the international accounting standards, steps were not taken to make the actuarial calculation relating to the severance indemnity accruing as from January 1st, 2007 for companies with at least 50 employees. This is equivalent to considering the severance indemnity accrued up until December 31st, 2006 to be a fixed benefit plan (and therefore subject to actuarial calculation) and the severance indemnity as from January 1st, 2007 to the Treasury Fund set up with INPS to be a fixed contribution plan (and therefore not subject to actuarial calculation). With reference to the severance indemnity accrued up until December 31st, 2006, since the contribution period has fully matured, the afore-mentioned weighting of the outlays no longer applies.

The differences emerging as the effect of the new calculation have been treated as a curtailment in accordance with the matters established by section 109 of IAS 19 and as a consequence recorded in the income statement during the first half of the year, including actuarial gains and losses previously not recorded in accordance with the corridor method.

With regards to companies with less than 50 employees, in the absence of transfer of the contributions subsequent to December 31st, 2006 to the Transfer Fund set up with INPS, the entire liability has been considered to be a defined benefit plan. With respect to previous valuations, actuarial gains and losses have however been revealed, on a consistent basis with what took place for other Group companies.

The discounting back of the future cash flows is carried out on the basis of the interest rate of high quality corporate securities: discount rate of 4.946%, inflation rate of 2%, revaluation rate of 2.67% (already net of 11% taxation), salary increase of 3%, mortality according to the IPS55 table with rejuvenation of 5 years for women, invalidity equating to 100% of the mortality, retirement age of 65 years for men and 60 years for women. In relation to the resignation frequency, a table has been used in line with the expected value of the resignation rate over the long-term for the Parent Company.

The analytical accounting reconciliation of employee severance indemnities provided for by the Group is as follows:

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Table 38 – Employee severance indemnity and length of service bonus Employee severance (€ millions) indemnities

Balance as of December 31st, 2006 23 Provision made 9 Used for indemnities paid out/advances 9 Other - Balance as of June 30th, 2007 23

OTHER LIABILITY ITEMS

Table 39 – Other liability items

Change (€ millions) 30.06.2007 31.12.2006 Abs. Amount %

Liabilities of a group held for sale 3,021 0 0 n.s. Deferred tax liabilities 140 124 16 12.90 Current tax liabilities 42 66 -24 -36.36 Other liabilities 93 80 13 16.25 Total 3,296 270 3,026 n.s.

Current and deferred tax liabilities

Current and deferred tax liabilities at the end of the period amounted to € 182 million (- 4.21%).

Deferred tax liabilities This item comprises the deferred tax liabilities defined and disciplined by IAS 12.

As of June 30th, “deferred tax liabilities” included:

• the deferred taxes which have arisen from taxable timing differences due to the deferral of the taxability of positive income elements realized and recorded in the income statement, which will be settled when the afore-mentioned revenues will be taxed; • the deferred taxes which have arisen from the temporary misalignment between the beginning of the economic competence laid down by the international accounting standards and tax legislation, due mainly to the statement in the income statement and under shareholders’ equity of the capital gains on valuations recorded respectively on the “financial assets valued at fair value recorded in the income statement” and on the “financial assets available for sale”.

As of June 30th, deferred tax liabilities amounted to € 140 million (- 12.9%).

Current tax liabilities This item comprises the current tax liabilities defined and disciplined under IAS 12. In detail, the class comprises the other tax liabilities for current taxes.

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During the accounting period, this item disclosed a decrease of € 24 million, dropping from € 66 million to € 42 million and comprises the current residual liability for income taxes for the period, the liability deriving from the assessment of taxation on the life business actuarial provisions pertaining to the period, in addition to liabilities for withholding taxes made, and VAT to be paid over.

Other liabilities The item “other liabilities”, which as of June 30th, amounted to € 93 million, up with respect to the balance of € 80 million at the end of the previous period, comprises transitory reinsurance accounts, the deferred commission income associated with policies not falling with the sphere of application of IFRS 4, accrued expenses and deferred income and sundry liabilities.

Other liabilities as of June 30th, were made up as follows:

Table 40 - Other liabilities

Change (€ millions) 30.06.2007 31.12.2006 Abs. Amount %

Deferred commission income (DIR) 7 13 -6 -46.15 Transitory reinsurance accounts 0 19 -19 -100.00 Liaison account 60 21 39 185.71 Accrued expenses and deferred income, of which: 26 27 -1 -3.70 for interest 25 26 -1 -3.85 for rental fees 0 0 0 other accruals and deferrals 1 1 0 0.00 Total 93 80 13 16.25

The “deferred commission income” amounted to € 7 million and was mainly chargeable to index and unit-linked type investment policies, where the risk of the investments is borne by the policyholders.

The item “transitory reinsurance accounts” comprises the positive components of income from receivable reinsurance which will be recorded as revenues when all the cost and revenue components are known.

Other liabilities also include the balance of the liaison account between the life and non-life sectors of the Group insurance companies. The amount is matched by an equal balance under “other assets”.

Deferred income includes the Parent Company’s and Duomo Previdenza portion of the extraordinary coupon relating to the bonds acquired with reference to the restructuring transactions of the main separate management schemes entered into last year and deferred to subsequent years on the basis of the residual duration of the securities.

150 Part C Income Statement

INCOME STATEMENT

INSURANCE BUSINESS

With reference to insurance business, in addition to the matters illustrated below, reference should be made to table 6 in the management report “Reclassified consolidated income statement by segment of activities”.

The table which follows shows the breakdown of gross insurance premiums written relating to direct and indirect business.

Table 41 - Breakdown of direct and indirect gross premiums written by insurance class group

Classes Direct business Indirect business Total business % (€ millions) Italy Italy Abroad of total Other damage to assets 53 - 1 54 2.63 Assistance 7 - - 7 0.34 Suretyship 5 - - 5 0.24 Aircraft hulls - - - - - Railway rolling stock - - - - - Ships (sea and inland water vessels) 1 - - 1 0.05 Land vehicle hulls 58 - - 58 2.82 Credit - - - - - Fire & natural forces 40 - 11 51 2.48 Accident and injury 57 - - 57 2.77 Health 35 - - 35 1.70 Goods in transit 1 - 1 2 0.10 Sundry financial losses 9 - - 9 0.44 TPL - Aircraft - - - - 0.00 TPL - Land motor vehicles 460 - - 460 22.36 TPL -General 71 - - 71 3.45 TPL - Ships (sea and inland water vessels) 1 - - 1 0.05 Legal protection 5 - - 5 0.24 Total non-life classes 803 - 13 816 39.67 Class I 372 - - 372 18.08 Class II - - - - - Class III 706 - - 706 34.32 Class IV - - - - - Class V 121 - - 121 5.88 Class VI 1 - - 1 0.05 Total life classes 1,200 - - 1,200 58.34 Total insurance premiums 2,003 - 13 2,016 98.01 Class I - - - - - Class II - - - - - Class III 28 - - 28 1.36 Class IV - - - - - Class V 1 - - 1 0.05 Class VI 12 - - 12 0.58 Total investment policies 41 - - 41 1.99 TOTAL PREMIUMS WRITTEN 2,044 - 13 2,057 100.00

The table below shows the breakdown of the gross premiums recorded by geographic area.

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Table 42 - Breakdown of premiums written by geographic area

Indirect Classes Direct business business Total business (€ millions) Italy Italy Abroad

Non-life business 803 - 13 816 Life business 1,241 - - 1,241 TOTAL 2,044 - 13 2,057

Analysis is presented below relating to the technical insurance items and the insurance operating expenses net of the eliminations between sectors.

Table 43 – Insurance business

30.06.2007 30.06.2006 Reinsurance Gross Reinsurance (€ millions) Gross balance portion Net balance balance portion Net balance

Non-life business NET PREMIUMS 810 -92 718 832 -91 741 a Premiums written 816 -102 714 831 -89 742 b Change in provision for unearned premiums -6 10 4 1 -2 -1 NET CHARGES RELATING TO CLAIMS 610 -49 561 669 -66 603 a Amounts settled 598 -53 545 592 -48 544 b Change in provision for outstanding claims 24 4 28 91 -18 73 c Change in recoveries -12 0 -12 -14 0 -14 d Change in other technical provisions 0 0 0 0 0 0

Life business NET PREMIUMS 1,200 -9 1,191 1,091 -7 1,084 NET CHARGES RELATING TO CLAIMS 1,229 -6 1,223 1,075 -5 1,070 a Amounts settled 1,207 -8 1,199 919 -8 911 b Change in outlay provision -15 1 -14 -52 1 -51 c Change in actuarial provisions -271 1 -270 280 2 282 Change in technical provisions where the investment risk is borne by the d policyholders and deriving from the management of pension funds 312 0 312 -57 0 -57 e Change in other technical provisions -4 0 -4 -15 0 -15

Table 44 – Analysis of insurance operating expense

Non-life business Life business (€ millions) 30.06.2007 30.06.2006 30.06.2007 30.06.2006

Gross commission and other acquisition costs, net of commission and profit-sharing received from re-insurers 133 130 52 45 Acquisition commission 72 85 40 31 Other acquisition costs 171566 Change in deferred acquisition costs 0-212 Collection commission 443256 Commission and profit-sharing received from re-insurers -33 -24 -1 0 Operating expenses relating to investments 1 2 1 4 Other administrative expenses 61 54 13 13 Total 162 1626562

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NON-LIFE BUSINESS

The non-life business closed with a positive result of € 7 million, net of taxation totalling € 8 million, which was affected by the decrease in net premiums, from € 741 million to € 718 million, the decrease in charges relating to claims, from € 603 million to € 561 million, and the increase in the incidence of operating expenses on net premiums, from 21.59% to 22.42%.

Net premiums Gross premiums relating to direct and indirect non-life business amounted to € 816 million, a decrease of € 15 million when compared with June 30th, 2006. Indication of the sum total of the premiums by class group is shown in table 41 and by geographic area in table 42.

The gross change in the premiums provisions came to € 6 million; the reinsurance portion amounted to € 10 million. The net change was € 4 million.

Net charges relating to claims The net charges relating to claims amount in total to € 561 million, disclosing a decrease of 6.97% when compared with the same period last year. The amounts paid, net of reinsurance, came to € 545 million.

The change in the provision for outstanding claims came to € 28 million; that concerning recoveries amounted to € -12 million.

Operating expenses Gross commission and other acquisition costs present a balance of € 100 million, down with respect to € 106 million in the first half of 2006. In detail, the item comprises acquisition commission for € 72 million, other acquisition costs totalling €17 million and collection commission for € 44 million, in addition to commission and profit-sharing received from re-insurers for a total of € 33 million.

Operating expenses concerning investments, recorded during the interim period, which comprise general expenses and costs for employees relating to the management of property investments and equity investments, amounted to € 1million, disclosing a decrease of € 1 million when compared with June 30th, 2006.

Other administrative expenses at the end of the interim period amounted to € 61 million (+ 12.96%).

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LIFE BUSINESS

The life segment closed with a positive consolidated net result of € 17 million, net of taxation for a total of € 20 million, disclosing an increase of € 27 million when compared with June 30th, 2006. This result was influenced by the increase in net premiums written, from € 1,084 million to € 1,191 million and the result from financial operations, which rose from € 47 million to € 131 million.

Net premiums Gross premiums relating to direct and indirect business amount to € 1,200 million, up with respect to the € 1,091 million reported as of June 30th, 2006. Table 41 indicates the sum total of the premiums by class groups and table 42 by geographic area.

Net charges relating to claims Charges paid rose in total from € 1,070 million in the same period last year to € 1,223 million, disclosing an increase of 14.3%.

The change in the outlay provision amounts to € -14 million. The change in the actuarial provisions totals € -270 million, that concerning the technical provisions where the investment risk is borne by the policyholders and deriving from pension fund management amounts to € 312 million. The change in other technical provisions recorded during the period, net of the portion pertaining to re-insurers, amounted to € -4 million, of which almost all the balance is represented by the sole change in the shadow accounting provision.

Operating expense Gross commission and other acquisition costs, which present a balance of € 51 million, up by € 6 million when compared with June 30th, 2006, comprise acquisition costs relating to insurance policies and investment policies with discretionary profit-sharing. In detail, the item includes acquisition commission for € 40 million, other acquisition costs totalling € 6 million, the change in deferred acquisition costs amounting to € 1 million and collection commission of € 5 million, in addition to commission and profit-sharing received from reinsurers for € -1 million.

The operating expenses relating to the investments, recorded during the interim period, which comprise general expenses and expenses for employees relating to the management of property investments and equity investments, amount to € 1 million, down by € 3 million when compared with June 30th, 2006.

The item “other administrative expenses” amounted to € 13 million, unchanged with respect to June 30th, 2006.

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FINANCIAL OPERATIONS

The table which follows discloses the income and charges deriving from financial operations as presented in the income statement for the period.

Table 45 – Financial operations

Change (€ millions) 30.06.2007 30.06.2006 Abs. Amount %

Net income deriving from financial instruments valued at fair value stated in the income statement 47 -11 58 527.27

Income deriving from equity investments in subsidiary and associated companies and joint ventures 1 100.00 Charges deriving from equity investments in subsidiary and associated companies and joint ventures 0 00 Result deriving from equity investment in subsidiary and associated companies and joint ventures 1 100.00

Income deriving from other financial instruments and property investments 146 217 -71 -32.72 Charges deriving from other financial instruments and property investments 11 16 -5 -31.25 Result deriving from other financial instruments and property investments 135 201 -66 -32.84

The financial income and charges indicated above are analyzed in the following table.

Table 46 – Financial and investment income and charges (ISVAP Instruction No. 2460 dated August 10th, 2006)

Valuation income Valuation loss Total realized Total income and unrealized Total income Total income Other Other Realized charges Valuation Value Valuation Value income and and charges and charges (€ millions) Interest income charges Realized gains losses capital gains writeback capital losses reduction charges 30.06.2007 30.06.2006

Result of investments 258 28 24 38 13 287 39 0 135 0 -96 191 172 a Deriving from property investments 0 0 0 0 0 0 0 0 0 0 0 0 110 Deriving from equity investment in subsidiary b 010001 00 000 1 1 and associated companies and joint ventures

c Deriving from investments held to maturity 2 0 0 0 0 2 0 0 0 0 0 2 3

d Deriving from loans and receivables 4 1 0 0 0 5 0 0 0 0 0 5 5

e Deriving from financial assets held for sale 90 23 0 21 6 128 0 0 0 0 0 128 82

Deriving from financial assets held for trading f 38 2 7 8 6 35 8 0 26 0 -18 17 1 purposes

Deriving from financial assets designated at fair g 124 1 17 9 1 116 31 0 109 0 -78 38 -30 value stated in the income statement

Result of sundry receivables 100001 00 000 1 1

700007 00 000 7 5 Result of cash and cash equivalents 0 Result of financial liabilities 0 0 0 0 0 0 0 0 8 0 -8 -8 -18 Deriving from financial liabilities held for trading a 000000 00 000 0 0 purposes

Deriving from financial liabilities designated at b 0 0 0 0 0 0 0 0 8 0 -8 -8 -18 fair value stated in the income statement

c Deriving from other financial liabilities 0 0 0 0 0 0 0 0 0 0 0 0 0 Result of payables -1 00 00 -1 00 000-1-1 Total 265 28 24 38 13 294 39 0 143 0 -104 190 159

Net income deriving from financial instruments at fair value recorded in the income statement Net income deriving from financial instruments at fair value stated in the income statement rose from € -11 million to € 47 million, and derives from financial assets held for trading purpose for € 17 million, financial assets valued at fair value stated in the income statement for € 38 million (+ 226.67%) and financial liabilities valued at fair value stated in the income statement for € -8 million (+ 55.56%). The income statement components are described in detail below.

155

Financial assets held for trading purposes. Interest as of June 30th, 2007 amounted to € 38 million (- 38.71%), other income amounted to € 2 million, other charges totalled € 7 million (- 41.67%), gains realized amounted to € 8 million (- 55.56%), while losses generated fell from € 12 million to € 6 million. Valuation capital gains and losses rose from € - 58 to - 18 million.

Financial assets and liabilities indicated at fair value recorded in the income statement. Interest as of June 30th, 2007 amounted to € 124 million (+ 9.73%), other income amounted to € 1 million, other charges totalled € 17 million (- € 1 million compared with June 30th, 2006), gains realized amounted to € 9 million (+ 50%), while losses generated came to € 1 million; valuation capital gains and losses rose from - € 132 million to - € 78 million. The change in financial liabilities during the period came to - € 8 million (- € 10 million).

Income and charges deriving from equity investments in subsidiary and associated companies and joint ventures Net income deriving from equity investments in subsidiary and associated companies and joint ventures amounted to € 1 million, unchanged with respect to the previous interim period, comprising the portion of the result of the equity investments in associated companies.

Income and charges deriving from other financial instruments and property investments Net income deriving from other instruments and property investments amounted to € 135 million (- 32.5%). The result derives as follows: € 2 million from investments held to maturity (- € 1 million), € 5 million from loans and receivables and € 128 million (+ 56.1%) from financial assets available for sale. The income statement components are analytically described below.

Investments held to maturity. Interest as of June 30th, amounted to € 2 million, down by € 1 million when compared with the same period last year.

Loans and receivables. Interest amounted to € 4 million, other income totalled € 1 million (- 75%) and other charges came to € 119 thousand.

Financial assets held for sale. Interest as of June 30th, amounted to € 90 million (+ 66.67%), other income rose from € 16 million to € 23 million, other charges came to € 39 thousand, gains realized rose from € 19 million to € 21 million and losses realized totalled € 6 million (- 50%).

156

Commission income Commission income mainly comprises the commission relating to investment policies issued by Group insurance companies (DIR); specifically, the item includes the explicit and implicit premium loading encumbering the investment policies issued. Commission income pertaining to the period amounted to € 5 million (- 50% when compared with June 30th, 2006). The item includes the commission income of Cattolica Investimenti Sim, for a total of € 451 thousand, and the commission income of Verona Gestioni Sgr for € 2 million.

Commission expense This item, which is made up of acquisition costs associated with investment policies (DAC) recorded during the period, amounts to € 4 million, compared with € 5 million at the end of the first half of the previous year.

Operating expenses relating to investments Operating expenses relating to investments fell from € 8 million to € 3 million, down by 62.5%.

OTHER REVENUES AND OTHER COSTS

Other revenues This item presents a balance of € 26 million, disclosing a decrease with respect to the balance of € 28 million in the same period in 2006; it comprises net other technical income associated with insurance policies for € 13 million and other revenues for € 13 million.

Other costs This item presents a balance of € 53 million, disclosing a decrease of € 13 million when compared with June 30th, 2006; it comprises net other technical charges associated with insurance policies for € 37 million, amortization totalling € 7 million and other charges amounting to € 2 million.

INCOME TAXES FOR THE PERIOD

The item “taxation” includes current taxes (IRES – company earnings’ tax and IRAP – regional business tax), the deferred taxes of the individual Group companies recorded in observance of Accounting Standard No. 25 on income taxes, and deferred taxes which have arisen from the temporary misalignment between the beginning of the economic period laid down by the international accounting standards and that provided by tax legislation.

The item amounts to € 29 million. The change in the balance of deferred taxation is essentially ascribable to the valuation of the provisions associated with investment policies and the valuation at fair value of the financial instruments net of shadow accounting.

157

Pursuant to ISVAP Instruction No. 2404 dated August 10th, 2006, the income statement by sector of activities, the analysis of the technical insurance items and the analysis of the insurance operating expenses, gross of elimination within sectors, are presented as follows.

Table 47 – Income statement by sector of activities (ISVAP Instruction No. 2460 dated August 10th, 2006)

Non-life Business Life Business Other Eliminations between sectors Total (€ millions) 30.06.2007 30.06.2006 30.06.2007 30.06.2006 30.06.2007 30.06.2006 30.06.2007 30.06.2006 30.06.2007 30.06.2006 P 30.06.2006

1.1 Net premiums 718 741 1,191 1,084 0 0 0 0 1,909 01,825 1.1.1 Gross premiums written 811 833 1,200 1,091 0 0 -1 -1 2,010 1 1,923 1.1.2 Premiums transferred under reinsurance 93 92 9 7 0 0 -1 -1 101 1 98 1.2 Commission income 00 37 23 00 5010 Income and charges deriving from financial instruments valued at fair value stated in the 1.3 81139-2200 00 470-11 income statement Income deriving from equity investments in subsidiary and associated companies and joint 1.4 49 62 15 20 0 0 -63 -81 1 -1 1 ventures 1.5 Income deriving from other financial instruments and property investments 44 94 101 77 1 24 0 22 146 0 217 1.6 Other revenues 39 43 20 19 3 1 -36 -35 26 0 28 1 TOTAL REVENUES AND INCOME 858 951 1,369 1,185 6 28 -99 -94 2,134 -1 2,070

2.1 Net charges relating to claims 565 607 1,222 1,070 0 0 -3 -4 1,784 -1 1,673 2.1.2 Amounts paid and change in technical provisions 613 673 1,228 1,075 0 0 -3 -4 1,838 -1 1,744 2.1.3 Reinsurance portion -48-66-6-500 00-540-71 2.2 Commission expense 00 45 00 00 40 5 Charges deriving from equity investments in subsidiary and associated companies and joint 2.3 01700000-17000 ventures 2.4 Charges deriving from other financial instruments and property investments 3 6 8 9 0 1 0 0 11 1 16 2.5 Operating expenses 178 177 73 66 4 5 -25 -20 230 -1 228 2.6 Other costs 48 49 14 25 0 1 -9 -9 53 -1 66 2 TOTAL COSTS AND CHARGES 794 856 1,321 1,175 4 7 -37 -50 2,082 -2 1,988 PROFIT (LOSS) FOR THE PERIOD BEFORE TAXATION 64 95 48 10 2 21 -62 -44 52 1 82

Table 48 – Analysis of the technical insurance items (ISVAP Instruction No. 2460 dated August 10th, 2006)

(€ millions) 30.06.2007 30.06.2006

Non-life business NET PREMIUMS 718 741 a Premiums written 714 742 b Change in provision for unearned premiums 4-1 NET CHARGES RELATING TO CLAIMS 565 607 a Amounts settled 549 548 b Change in provision for outstanding claims 28 73 c Change in recoveries -12 -14 d Change in other technical provisions 00

Life business NET PREMIUMS 1,191 1,084 NET CHARGES RELATING TO CLAIMS 1,222 1,070 a Amounts settled 1,198 911 b Change in outlay provision -14 -51 c Change in actuarial provisions -270 282 Change in technical provisions where the investment risk is borne by the policyholders and deriving from the d management of pension funds 312 -57 e Change in other technical provisions -4 -15

Table 49 – Analysis of the insurance operating expenses (ISVAP Instruction No. 2460 dated August 10th, 2006)

Non-life business Life business (€ millions) 30.06.2007 30.06.2006 30.06.2007 30.06.2006

Gross commission and other acquisition costs, net of commission and profit-sharing received from re-insurers 99 105 52 46 Operating expenses relating to investments 2 3 2 3 Other administrative expenses 77 69 19 17 Total 178 177 73 66

158

Notes to the accounts Part D – Other information

159

Part D Other information

Solvency For the Parent Company, the elements making up the solvency margin of the non-life business, margin pursuant to Article 33 of Italian Legislative Decree No. 175 dated March 17th 1995, have been estimated as possibly amounting to € 732.563 million, at the end of the period, while those relating to life business, pursuant to Article 33 of Italian Legislative Decree No. 174 dated March 17th 1995, may total € 290.809 million.

The sum total to be established is estimated as around € 201.233 million for non-life and € 98.736 million for life. Therefore the estimable solvency margin is 3.64 times that required by law for non-life, and 2.95 times for life.

Assets destined With regards to the Parent Company, the technical provisions of the direct Italian non-life to cover the portfolio, gross of the portions pertaining to re-insurers, against the increase in the Italian direct technical business technical provisions with respect to those recorded in the same register as of provisions of December 31st 2006, are fully covered by assets accepted in accordance with Article 27 of the Parent Italian Legislative Decree No. 175 dated March 17th 1995 and subsequent ISVAP Instructions Company dated January 30th 1996, No. 148, March 31st, 1999, No. 1153-G, September 16th, 2005, No. 2372 and Italian Legislative Decree No. 209 dated September 7th 2005.

The technical provisions of the direct Italian life portfolio, gross of the portions pertaining to re- insurers, against the increase in the Italian direct business technical provisions with respect to those recorded in the same register as of December 31st, 2006, are fully covered by assets accepted in accordance with Article 26 of Italian Legislative Decree No. 174 dated March 17th 1995 and the subsequent ISVAP Instructions No. 147 dated January 30th 1996 and Italian Legislative Decree No. 209 dated September 7th 2005.

Table 50 – Technical provisions to be covered

(€ thousands) 30.06.2007

Life business 2,692,200 Non-life business 2,017,243

161

Table 51 – Assets allocated for coverage

(€ thousands) Life business Non-life business

Land and buildings 19,082 Receivables from reinsurers 210,002 Acquisition commission to be amortized 4,589 14,409 Receivables from brokers 18,693 Receivables from policyholders 47,292 Securities issued or secured by Governments 785,377 706,850 Bonds or other similar securities negotiable on a regulated market 525,707 317,271 Bonds or other similar securities non-negotiable on a regulated market 11,098 0 Accrued income 7,237 6,728 Units in UCITS with a significant bond component 105,516 227,870 Repos 00 Equity securities traded on a regulated market 61,145 77,049 Equity securities traded on a non-regulated market 95,521 198,490 Equity securities of real estate companies traded on a non-regulated market 0 0 Units in UCITS with a significant equity component 19,356 74,012 Bank deposits 249 99,495 Total hedging assets pursuant to art. 31, para. 6, of Leg. Decree 174/95 and Leg. Decree 175/95 1,615,795 2,017,243 Hedging assets pursuant to art. 30 of leg. decree 17 March 1995 no. 174 and 7 September 2005 no. 209 1,076,405 Total hedging assets 2,692,200 2,017,243

Assets destined As of June 30th, for the insurance companies included within the scope of consolidation: to cover the technical • the technical provisions of the direct Italian non-life portfolio, gross of the portions provisions of pertaining to re-insurers, against the increase in the Italian direct business technical the insurance provisions with respect to those recorded in the same register as of December 31st 2006, are companies fully covered by assets accepted in accordance with Article 27 of Italian Legislative Decree included within No. 175 dated March 17th 1995 and subsequent ISVAP Instructions dated January 30th 1996, the scope of No. 147 and 148, March 31st, 1999, No. 1153-G, July 6th, 1999, No. 1207 and September consolidation 16th, 2005, No. 2372 and Italian Legislative Decree No. 209 dated September 7th 2005;

• the technical provisions of the direct Italian life portfolio, gross of the portions pertaining to re-insurers, against the increase in the Italian direct business technical provisions with respect to those recorded in the same register as of December 31st 2006, are fully covered by assets accepted in accordance with Article 26 of Italian Legislative Decree No. 174 dated March 17th 1995 and the subsequent ISVAP Instructions dated January 30th 1996 and September 16th 1998 and Italian Legislative Decree No. 209 dated September 7th 2005.

At the end of the period, each company had sufficient assets – in addition to those recorded in the register of the assets covering technical provisions as of June 30th – against the increase in the Italian direct business technical provisions.

162

Speed of The table below is presented for the analysis of the speed of settlement of the claims pertaining settlement of to the Parent Company: claims

Table 52 – Claims handling speed Claims related Claims related to to the current period previous periods Classes: Suretiship 54.3 21.6 Land vehicle hulls 74.5 49.7 Fire & natural forces 50.7 35.2 Accident and injury 22.9 38.2 Health 72.3 44.9 TPL - Land motor vehicles 42.0 CARD Manager 57.6 CARD Debtor 41.8 NO CARD 50.9 TPL -General 30.2 18.6

Headcount As of June 30th, the average number of Group employees stood at 1,514.

* * *

As of June 30th, there were no significant legal proceedings outstanding.

With reference to the transactions with related parties, atypical and/or unusual transactions, significant and non-current events and operations, and the ratios per share, reference should be made to the related paragraphs in the section “other information” in the management report.

The Parent Company’s balance sheet and income statement transactions with subsidiary and associated companies are expressed in summary form in the following table.

Table 53 – Balance sheet and income statement transactions

Balance sheet transactions Subsidiary companies Associated companies Total Total (€ thousands) 30.06.2007 31.12.2006 Reinsurance receivables 6,900 0 6,900 2,508 Loans 12,313 0 12,313 12,068 Other receivables 82,294 6 82,300 47,487 Reinsurance technical provisions 14 0 14 14 Total 101,521 6 101,527 62,077 Reinsurance payables 3,385 0 3,385 787 Other payables 67,284 18 67,302 51,533 Reinsurance technical provisions 3,596 0 3,596 3,358 Total 74,265 18 74,283 55,678

Income statement transactions Subsidiary companies Associated companies Total Total (€ thousands) 30.06.07 30.06.06 Gross premiums written 926 0 926 889 Revenues from reinsurance transactions 3,392 0 3,392 1,127 Financial and equity revenues 372 0 372 301 Dividends 60,951 1,638 62,589 81,667 Other revenues 3,414 6 3,420 3,609 Total profits and revenues 69,055 1,644 70,699 87,593 Costs for reinsurance transactions 4,366 0 4,366 1,892 Other costs 17,228 0 17,228 17,181 Total losses and expenses 21,594 0 21,594 19,073

163

Notes to the accounts Part E – Acquisitions and transfers

165

Part E Acquisitions and transfers

SUPPLEMENTARY INFORMATION ON BUSINESS COMBINATIONS AND TRANSFERS

Business This section of the Notes to the Accounts includes the information required by IFRS 3 and IFRS combinations 5, in relation to the most significant acquisitions and transfers carried out during the period.

As regards business combinations, it is noted that, in compliance with IFRS 3, these are recorded using the purchase method, which requires the recording of the assets acquired and the liabilities, including potential liabilities, in addition to those not recorded prior to the acquisition. Gauging of the assets and liabilities of the Group not forming the subject matter of the transaction are not affected by said transaction. Specifically, the initial phases of the application of this method involve the calculation of the cost of the business combination, and the allocation, at the date of acquisition, of the cost of the business combination to the assets acquired and to the liabilities, including potential liabilities, undertaken. The date of acquisition is the date on which control is effectively acquired, as defined by IAS 27 and the cost of the business combination is determined as the total sum of the fair value, at the date of transfer, of the assets transferred, liabilities accrued or undertaken in exchange for control and any cost directly attributable to the business combination. In general, it is noted that: • all assets and liabilities, including potential liabilities, are recorded at fair value at the moment of acquisition of control; • the excess between the price paid and the total net assets, including the value of the portfolio of intangible assets, is recorded as goodwill and systematically subjected to impairment tests; • the net assets acquired are definitively valued within one year from the date of acquisition; • all revenues and costs of the purchase are recorded on the basis of the fair value of the assets and liabilities at the acquisition date.

Transfers As required by IFRS 5, a non-current asset or group subject to disposal is classified as held for sale if its book value will be recovered mainly through a sales transaction, instead of through its continued use, within the time frame of one year, except for specific cases. These assets are thus classified at the moment in which the sales transaction becomes highly probable. Assets or a group subject to disposal which meet the above criteria are valued, with the exclusion of those specifically indicated by IFRS 5, at the lesser of their book value or fair value, net of sales costs. The amortisation and depreciation of these assets is interrupted from the moment in which the assets meet the criteria for reclassification.

167

BUSINESS COMBINATIONS

No business combination transactions took place during the year, with the exclusion of the acquisition of a further 3.57% in the equity investment held in the subsidiary company C.I.R.A. which took place during the first quarter of the year and is commented on in the section relating to intangible assets within the notes to the balance sheet.

TRANSFERS

As pointed out in the Management Report, on March 28th, 2007, Banco Popolare di Verona e Novara exercised a call option on the equity investment in BVP Vita held by the Cattolica Group.

The main effects of this event on the Group’s half year results are as follows:

• all assets and liabilities regarding BPV Vita as of June 30th, 2007 are classified as held for sale; • all costs and revenues, both as of 30th June, 2007, and as of 30th June, 2006, are classified as related to assets held for sale; • all assets and liabilities of BPV Vita, excluding the deferred assets and liabilities, assets and liabilities regarding employee benefits, financial instruments and contractual rights deriving from insurance contracts, are generally valued at book value since it is less than their fair value net of sales costs. .

168

INFORMATION ON THE BALANCE SHEET The table below breaks down the assets and liabilities of BPV Vita, reclassified in the consolidated balance sheet, under the items “6.1 Non-current assets or of a group subject to disposal held for sale” and “6.1 Liabilities of a group subject to disposal held for sale”.

Table 54 – Balance sheet of the group subject to disposal held for sale

BALANCE SHEET - ASSETS SUBJECT TO DISPOSAL 30.06.2007 31.12.2006 TOTAL Breakdown of assets TOTAL (€ millions) CONSOLIDATED subject to disposal CONSOLIDATED 1 INTANGIBLE ASSETS 226 0 222 1.1 Goodwill 174 0 173 1.2 Other intangible assets 52 0 49 2 TANGIBLE ASSETS 44 0 46 2.1 Property 30 0 31 2.2 Other tangible assets 14 0 15 3 TECHNICAL PROVISIONS - REINSURANCE AMOUNT 500 0 500 4 INVESTMENTS 13,628 2,977 17,504 4.1 Property investments 101 4.2 Equity investments in subsidiary and associated companies and joint ventures 81 0 80 4.3 Investments held to maturity 112 0 137 4.4 Loans and receivables 357 0 359 4.5 Financial assets available for sale 6,186 690 6,566 4.6 Financial assets valued at fair value stated in the income statement 6,891 2,287 10,361 5 SUNDRY RECEIVABLES 690 16 736 5.1 Receivables deriving from direct insurance transactions 409 0 438 5.2 Receivables deriving from reinsurance transactions 85 0 65 5.3 Other receivables 196 16 233 6 OTHER ASSET ITEMS 3,555 59 455 6.1 Non-current assets or of a group held for sale 3,114 0 0 6.2 Deferred acquisition costs 43 0 44 6.3 Deferred tax assets 51 6 18 6.4 Current tax assets 189 38 243 6.5 Other assets 158 15 150 7 CASH AND CASH EQUIVALENTS 472 62 590 TOTAL ASSETS SUBJECT TO DISPOSAL 19,115 3,114 20,053

BALANCE SHEET - NET SHAREHOLDERS' EQUITY AND LIABILITIES SUBJECT 30.06.2007 31.12.2006 TO DISPOSAL

TOTAL Breakdown of liabilities TOTAL CONSOLIDATED subject to disposal CONSOLIDATED (€ millions) 1 SHAREHOLDERS' EQUITY 1,264 1,376 1.1 pertaining to the Group 1,142 1,234 1.1.1 Share capital 142 142 1.1.2 Other equity instruments 00 1.1.3 Capital reserves 590 590 1.1.4 Net profit reserves and other equity reserves 332 265 1.1.5 (Own shares) 00 1.1.6 Reserve for net exchange differences 0 0 1.1.7 Gains or losses on financial assets available for sale 59 99 1.1.8 Other gains or losses recorded directly under equity 0 -1 1.1.9 Net profit (loss) for the period pertaining to the Group 19 139 1.2 pertaining to third parties 122 142 1.2.1 Capital and reserves pertaining to minority shareholders 127 121 1.2.2 Gains or losses recorded directly under equity -15 0 1.2.3 Profit (loss) for the period pertaining to minority shareholders 10 21 2 PROVISIONS AND ALLOWANCES 16 - 16 3 TECHNICAL PROVISIONS 12,889 2,648 16,013 4 FINANCIAL LIABILITIES 1,346 342 2,109 4.1 Financial liabilities valued at fair value stated in the income statement 1,199 339 1,953 4.2 Other financial liabilities 147 3 156 5 PAYABLES 304 13 269 5.1 Payables deriving from direct insurance transactions 58 7 75 5.2 Payables deriving from reinsurance transactions 59 0 52 5.3 Other payables 187 6 142 6 OTHER LIABILITY ITEMS 3,296 18 270 6.1 Liabilities of a group held for sale 3,021 0 0 6.2 Deferred tax liabilities 140 2 124 6.3 Current tax liabilities 42 13 66 6.4 Other liabilities 93 3 80 TOTAL NET SHAREHOLDERS' EQUITY AND LIABILITIES SUBJECT TO DIS 19,115 3,021 20,053

169

Total balance sheet assets reclassified in the consolidated financial statement item 6.1 amounted to € 3,114 million and mainly comprise the investments of the company soon to be disposed of, BPV Vita, since they are included in aggregates undergoing disposal.

Investments The investments relating to the group undergoing disposal therefore reclassified under the consolidated balance sheet item “non-current assets or of a group subject to disposal held for sale” amount to € 2,977 million. The percentage of the consolidated item “investments” (which amounts to € 13,628 million) comes to 21.84%.

Financial assets held for sale As of June 30th, the balance of this item for the group undergoing disposal comes to € 690 million and the weight of the reclassification on the consolidated value of the item, totalling € 6.186 million, is 11.15%.

Financial assets at fair value recorded in the income statement These total € 2,287 million for the group undergoing disposal. Following reclassification in item 6.1 of the balance sheet assets, the percentage of the group item (€ 6,891 million) comes to 33.19%.

A breakdown of the financial investments included in the balance sheet asset item which will receive the values of the assets undergoing disposal, is presented in the following table.

Table 55 – Analysis of the financial investments of the group subject to disposal held for sale 30.06.2007 31.12.2006 TOTAL Breakdown of assets TOTAL (€ millions) CONSOLIDATED subject to disposal CONSOLIDATED

Investments held to maturity 112 - 137 Shares - - - Bonds 112 - 137 UCI units - - - Loans and receivables 327 - 327 Shares - - - Bonds 327 - 327 UCI units - - - Financial assets available for sale 6,186 690 6,566 Shares 572 7 495 Bonds 4,770 681 5,242 UCI units 844 2 829 Financial assets valued at fair value stated in the income statement 6,891 2,287 10,361 Shares 18 - 22 Bonds 5,721 1,418 8,151 UCI units 772 787 1,717 Derivatives 5 1 4 Other 375 81 467

Cash and cash equivalents The balance sheet value as of the end of the interim period amounts to € 472 million. This balance has been affected by the reclassification of the values pertaining to aggregates undergoing disposal, for € 62 million, in the consolidated item 6.1. The incidence of this separate classification comes to 13.14%.

170

Total balance sheet liabilities reclassified in consolidated financial statement item 6.1 amount to € 3,021 million and mainly comprise technical provisions and financial liabilities of the company soon to be disposed of, BPV Vita.

Technical provisions The technical provisions relating to the group subject to disposal amount to € 2,648 million, involving an incidence of 20.54% on the consolidated item.

Table 56 – Analysis of technical reserves of the group subject to disposal held for sale

30.06.2007 31.12.2006

TOTAL Breakdown of liabilities TOTAL CONSOLIDATED subject to disposal CONSOLIDATED (€ millions)

Non-life provisions 3,191 0 3,162 Provision for unearned premiums 578 0 572 Provision for outstanding claims 2,612 0 2,589 Other provisions 101 of which provisions provided following the assessment of fairness of the liabilities 000

Life provisions 9,698 2,648 12,851 Outlay provisions 106 37 140 Actuarial provisions 5,417 705 6,656 Technical provisions where the investment risk is borne by the policyholders and 5,976 provisions deriving from the management of pension funds 4,139 1,903 Other provisions 36 3 79 of which provisions provided following the assessment of fairness of the liabilities 00 0 of which deferred liabilities due from policyholders -34 -9 -6 Total technical provisions 12,889 2,648 16,013

Financial liabilities The value relating to the group subject to disposal comes to € 342 million, of which € 339 million in financial liabilities at fair value recorded in the income statement. As a percentage of the liability item in the consolidated balance sheet, “financial liabilities”, this balance represents 25.39%.

171

INFORMATION ON THE INCOME STATEMENT

The following table breaks down the costs and revenues of BPV Vita, reclassified in the consolidated income statement under the item “Profit (loss) from business activities suspended”.

Table 57 – Income statement of the group subject to disposal held for sale

INCOME STATEMENT - ASSETS AND LIABILITIES SUBJECT TO DISPOSAL 30.06.2007 30.06.2006 TOTAL Breakdown of assets TOTAL Breakdown of assets (€ millions) CONSOLIDATED subject to disposal CONSOLIDATED subject to disposal 1.1 Net premiums 1,909 57 1,825 430 1.1.1 Gross premiums written 2,010 57 1,923 430 1.1.2 Premiums transferred under reinsurance -101 0 98 0 1.2 Commission income 5 1 10 1 Income and charges deriving from financial instruments valued at fair value stated in 1.3 47 11 -11 -9 the income statement Income deriving from equity investments in subsidiary and associated companies and 1.4 101 0 joint ventures 1.5 Income deriving from other financial instruments and property investments 146 18 217 17 1.5.1 Interest income 1011666 14 1.5.2 Other income 24 0 24 1 1.5.3 Realized gains 21 2 127 2 1.5.4 Valuation income 000 0 1.6 Other revenues 26 1 28 2 1 TOTAL REVENUES AND INCOME 2,134 88 2,070 441 2.1 Net charges relating to claims 1,784 67 1,673 401 2.1.2 Amounts paid and change in technical provisions 1,838 67 1,744 401 2.1.3 Reinsurance portion -54 0 71 0 2.2 Commission expense 415 1 Charges deriving from equity investments in subsidiary and associated companies and 2.3 000 0 joint ventures 2.4 Charges deriving from other financial instruments and property investments 11 1 16 2 2.4.1 Interest expense 505 0 2.4.2 Other charges 000 0 2.4.3 Realized losses 6 1 10 2 2.4.4 Valuation loss 001 0 2.5 Operating expenses 230 11 228 23 2.5.1 Commission and other acquisition costs 151 7 151 19 2.5.2 Operating expenses relating to investments 3 1 8 1 2.5.3 Other administrative expenses 76 3 69 3 2.6 Other costs 53 0 66 1 2 TOTAL COSTS AND CHARGES 2,082 80 1,988 428 PROFIT (LOSS) FOR THE PERIOD BEFORE TAXATION 52 8 82 13 3 Taxation 29 2 43 2 NET PROFIT (LOSS) FOR THE PERIOD 23 6 39 11 4PROFIT (LOSS) FROM BUSINESS ACTIVITIES SUSPENDED 6 0 11 CONSOLIDATED PROFIT (LOSS) 29 6 50 11 pertaining to the Group 19 3 43 5 pertaining to minority shareholders 10 3 7 5

The consolidated result for the year attributable to the assets subject to disposal and consequently classified under the item “Profit (loss) from business activities suspended” without distinction, amounts to € 6 million, of which € 3 million attributable to the Parent Company and € 3 million pertaining to minority shareholders.

172

INSURANCE BUSINESS

Premiums Direct and indirect life business premiums amounted to € 1,241 million. 5.07% of this balance is represented by the effect of the reclassification of the liabilities pertaining to aggregates subject to disposal, in pursuance of IFRS 5. With respect to the balance reported in the same period last year, the consolidated item increased by € 117 million, demonstrating essential stability in the performance of the premium for Group companies other than BPV Vita, which in contrast ended the interim period with a decrease in the item of € 393 million. A breakdown of the premiums of the group subject to disposal held for sale is presented in the following table.

Table 58 – Premiums of the group subject to disposal held for sale

30.06.2007 30.06.2006

TOTAL Breakdown of assets TOTAL Breakdown of assets CONSOLIDATED subject to disposal CONSOLIDATED subject to disposal (€ millions)

Other damage to assets 53 - 51 - Assistance 7-7- Suretyship 5-5- Aircraft hulls ---- Railway rolling stock ---- Ships (sea and inland water vessels) 1 - 1 - Land vehicle hulls 58 - 57 - Credit ---- Fire & natural forces 40 - 39 - Accident and injury 57 - 53 - Health 35 - 28 - Goods in transit 1 - 2 - Sundry financial losses 9 - 6 - TPL - Aircraft ---- TPL - Land motor vehicles 460 - 491 - TPL -General 71 - 69 - TPL - Ships (sea and inland water vessels) 1 - 1 - Legal protection 5 - 5 - Total non-life classes 803 - 815 -

Class I 372 10 484 40 Class III 706 45 372 380 Class IV ---- Class V 121 2 235 10 Class VI 1--- Total life (1) 1,200 57 1,091 430

Total direct business 2,003 57 1,906 430

Indirect business 13 - 16 -

Total insurance premiums 2,016 57 1,922 430

Class I ---- Class III 28 - 23 26 Class IV -5 -- Class V 1--- Class VI 12 - 10 - Total investment policies 41 5 33 26

TOTAL PREMIUMS WRITTEN 2,057 63 1,955 456

n.s. = not significant (1) Class I = Insurance on the duration of human life Class III = Insurance on the duration of human life linked to investment funds Class IV = Health insurance as per Art. 1, no. 1, letter d) of EEC Directive No. 79/267 dated March 5th, 1979 Class V = Capitalization transactions Class VI = Pension funds

173

Analysis is presented below relating to the technical insurance items and the insurance operating expenses net of the eliminations between sectors:

Table 59 – Insurance business

30.06.2007 30.06.2006 TOTAL CONSOLIDATED Breakdown of assets subject to disposal TOTAL CONSOLIDATED Breakdown of assets subject to disposal

Gross Reinsurance Gross Reinsurance Gross Reinsurance Reinsurance (€ millions) balance portion Net balance balance portion Net balance balance portion Net balance Gross balance portion Net balance

Non-life business NET PREMIUMS 810 -92 718 0 0 0 832 -91 741 0 0 0 a Premiums written 816 -102 714 0 0 0 831 -89 742 0 0 0 b Change in provision for unearned premiums -6 10 4 0 0 0 1 -2 -1 0 0 0 NET CHARGES RELATING TO CLAIMS 610 -49 561 0 0 0 669 -66 603 0 0 0 a Amounts settled 598 -53 545 0 0 0 592 -48 544 0 0 0 b Change in provision for outstanding claims 24 4 28 0 0 0 91 -18 73 0 0 0 c Change in recoveries -12 0 -12 0 0 0 -14 0 -14 0 0 0 d Change in other technical provisions 0 0 0 0 0 0 0 0 0 0 0 0

Life business NET PREMIUMS 1,200 -9 1,191 57 0 57 1,091 -7 1,084 430 0 430 NET CHARGES RELATING TO CLAIMS 1,229 -6 1,223 67 0 67 1,075 -5 1,070 401 0 401 a Amounts settled 1,206 -8 1,198 560 0 560 919 -8 911 326 0 326 b Change in outlay provision -15 1 -14 18 0 18 -52 1 -51 13 0 13 c Change in actuarial provisions -271 1 -270 -262 0 -262 280 2 282 -79 0 -79 Change in technical provisions where the investment risk is borne by the d policyholders and deriving from the management of pension funds 312 0 312 -246 0 -246 -57 0 -57 146 0 146 e Change in other technical provisions -3 0 -3 -3 0 -3 -15 0 -15 -5 0 -5

Net charges relating to claims The consolidated item amounts to € 1,223 million, following the reclassification of the economic results pertaining to aggregates subject to disposal without distinction in the item “profit (loss) from business activities suspended”. The incidence of the reclassification on the item in question comes to 5.48%.

Table 60 – Analysis of insurance operating expenses

30.06.2007 30.06.2006 TOTAL CONSOLIDATED Breakdown of assets subject to disposal TOTAL CONSOLIDATED Breakdown of assets subject to disposal (€ millions) Non-life business Life business Non-life business Life business Non-life business Life business Non-life business Life business

Gross commission and other acquisition costs, net of commission and profit-sharing received from re-insurers 133 52 0 7 130 45 0 19 Acquisition commission 72 40 0 1 85 31 0 12 Other acquisition costs 17 6 0 6 15 6 0 7 Change in deferred acquisition costs 01 0 0 -22 0 0 Collection commission 44 5 0 0 32 6 0 0

Commission and profit-sharing received from re-insurers -33 -1 0 0 -24 0 0 0 Operating expenses relating to investments 11 0 1 24 0 1 Other administrative expenses 61 13 0 3 54 13 0 3 Total 162 65 0 11 162 62 0 23

Operating expenses Gross commission, other acquisition costs and other administrative expenses, which present a total balance of € 151, remained more or less unchanged with respect to June 30th, 2006 and comprise acquisition costs relating to insurance and investment policies with discretionary profit-sharing. In detail, the item includes acquisition commission totalling € 112 million (- 3.53%) and other acquisition costs amounting to € 23 million (9.52%). The reclassification of these BPV Vita balances as a percentage of this value comes to 3.78%.

Operating expenses concerning investments recorded during the period, which comprise general expenses and costs for employees relating to the management of property investments and equity investments, amount to € 2 million, down by € 4 million when compared with June 30th, 2006, involving an incidence on the item of the reclassification of the values pertaining to the group subject to disposal of 50%.

174

The item “other administrative expenses” totals € 74 million (+ 10.45%), involving an incidence on the item of the reclassification of the values pertaining to the group subject to disposal of 4.05%.

FINANCIAL OPERATIONS

Income and charges deriving from other financial instruments and property investments Net income deriving from other instruments and property investments amounts to € 17 million, involving an incidence on the item of the reclassification of the values pertaining to the group subject to disposal of 12.59%.

The table below shows income and charges deriving from BPV Vita’s financial operations.

Table 61 – Financial operations

30.06.2007 30.06.2006 TOTAL Breakdown of assets TOTAL Breakdown of assets (€ millions) CONSOLIDATED subject to disposal CONSOLIDATED subject to disposal Net income deriving from financial instruments valued at fair value stated in the income statement 47 11 -11 -9 Interest 163 46 175 51 Other income 213 - Realized gains 1782417 Other charges -24 -6 -30 -14 Realized losses -6 - -12 - Unrealized gains 39 27 20 9 Unrealized losses -136 -60 -209 -75 Changes in fair value of financial liabilities -8 -5 18 3 Result deriving from equity investment in subsidiary and associated companies and joint ventures 1-1- Sundry revenues 1-1- Realized gains ---- Sundry charges ---- Realized losses ---- Unrealized gains ---- Unrealized losses ---- Result deriving from other financial instruments and property investments 135 17 201 15 Interest 96 17 61 14 Other income 24 - 24 1 Realized gains 21 1 127 2 Valuation income ---- Other charges ---- Realized losses -6 -1 -10 -2 Unrealized losses ---1-

175

ACCOUNTING SCHEDULES OF THE PARENT COMPANY AS OF June 30th, 2007

Accounting The accounting standards adopted by the Parent Company are those in force in Italy, as decreed standards by the provisions of the law.

In accordance with ISVAP Instruction No. 1207/G dated July 6th, 1999, it is hereby stated that the accounting standards used for the valuation of the balances of the interim report coincide with those adopted for the preparation of the financial statements for the year ended December 31st, 2006.

Chart 1 - Accounting schedules of the Parent Company as of June 30th, 2007

177 COMPANY: Cattolica Assicurazioni Soc. Coop.

BALANCE

As of June 30th As of June 30th As of December 31st ASSETS of the of the of the current year previous year previous year A. Unpaid subscribed share capital 1 0 75 0 149 0

B. Intangible assets 1. Acquisition commission to be amortized 2 26,320 76 29,383 150 26,994 2. Other intangible assets 3 9,844 77 12,290 151 11,068

Total 4 36,164 78 41,673 152 38,062

C. Investments I - Land and buildings 5 19,082 79 30,511 153 18,969 II - Investments in Group companies and other shareholdings 1. Shares and holdings 6 1,149,028 80 1,275,514 154 1,179,597 2. Bonds 7 6,162 81 31,575 155 9,841 3. Loans 8 12,313 82 4,650 156 12,068 Total investments in Group companies and other shareholdings 9 1,167,503 83 1,311,739 157 1,201,506

III - Other financial investments 1. Shares and holdings 10 69,939 84 47,869 158 36,876 2. Quotas in mutual investment funds 11 449,725 85 426,590 159 466,243 3. Bonds and other fixed-income securities 12 2,386,417 86 2,530,050 160 2,436,772 4. Loans 13 6,513 87 6,796 161 6,657 5. Other financial investments 14 1,070 88 535 162 647 Total other financial investments 15 2,913,664 89 3,011,840 163 2,947,195

IV - Deposits with reinsuring companies 16 10,912 90 12,657 164 11,622

Total 17 4,111,161 91 4,366,747 165 4,179,292

D. Investments for the benefit of life-assurance policyholders who bear the investment risk and relating to the management of pension funds I - Investments relating to benefits associated with investment funds and stockmarket indices 18 940,909 92 993,784 166 857,248 II - Investments deriving from the management of pension funds 19 135,496 93 113,981 167 130,152

Total 20 1,076,405 94 1,107,765 168 987,400

D.bis Technical provisions - reinsurance amount I - Non-life business technical provisions 21 264,034 95 255,877 169 265,963 II - Life business technical provisions (excluding the technical provisions pursuant to po22 39 96 640 170 534 III - Life business technical provisions where the investment risk is borne by the policyholders and provisions deriving from the management of pension funds 23 0 97 0 171 0

Total 24 264,073 98 256,517 172 266,497

E. Receivables I - Receivables deriving from direct insurance transactions 25 286,541 99 283,402 173 304,517 II - Receivables deriving from reinsurance transactions 26 53,161 100 38,675 174 38,404 III - Other receivables 27 204,734 101 161,386 175 207,490

Total 28 544,436 102 483,463 176 550,411

F. Other assets I - Tangible assets and stock 29 3,998 103 4,861 177 4,203 II - Cash at banks and in hand 30 107,724 104 109,971 178 223,884 III - Own shares and holdings 31 0 105 0 179 0 IV - Other assets 32 54,978 106 42,889 180 35,348

Total 33 166,700 107 157,721 181 263,435

G. Accrued income and prepayments 34 25,955 108 21,702 182 22,459

TOTAL ASSETS 35 6,224,894 109 6,435,588 183 6,307,556

Attachment I Company code 113

SHEET (€ thousands) As of June 30th As of June 30th As of December 31st LIABILITIES AND SHAREHOLDERS' EQUITY of the of the of the current year previous year previous year A. Shareholders' equity I - Subscribed share capital or equivalent fund 36 142,174 110 142,174 184 142,174 II - Share premium reserve 37 590,151 111 590,125 185 590,136 III - Legal reserve 38 158,749 112 143,377 186 143,377 IV - Other equity reserves 39 150,376 113 162,316 187 162,344 V - Retained earnings (accumulated losses) 40 0 114 0 188 0 VI - Profit (loss) for the period 41 42,565 115 70,776 189 76,860

Total 42 1,084,015 116 1,108,768 190 1,114,891

B. Subordinated liabilities 43 0 117 0 191 0

C. Technical provisions I - Non-life business 1. Provisions for unearned premiums 44 369,976 118 378,173 192 367,524 2. Provision for claims outstanding 45 1,673,051 119 1,556,927 193 1,658,109 3. Other technical provisions 46 371 120 442 194 371 4. Equalisation provisions 47 4,736 121 4,237 195 4,485 Total non-life business technical provisions 48 2,048,134 122 1,939,779 196 2,030,489 II - Life business 1. Actuarial provisions 49 1,574,174 123 1,888,137 197 1,756,140 2. Provision for claims outstanding 50 23,179 124 21,520 198 58,345 3. Other technical provisions 51 24,171 125 19,042 199 23,610 Total life business technical provisions 52 1,621,524 126 1,928,699 200 1,838,095

Total 53 3,669,658 127 3,868,478 201 3,868,584

D. Technical provisions where the investment risk is borne by the policyholders and provisions relating to the management of pension funds I - Reserves relating to contracts whose benefits are associated with investment funds and stockmarket indices 54 940,909 128 993,546 202 857,248 II - Reserves deriving from the management of pension funds 55 135,496 129 113,981 203 130,152

Total 56 1,076,405 130 1,107,527 204 987,400

E. Provisions for risks and charges 57 51,332 131 56,865 205 56,344

F. Deposits received from reinsurers 58 24,180 132 19,417 206 21,980

G. Payables and other liabilities I - Payables deriving from direct insurance transactions 59 27,338 133 43,032 207 32,685 II - Payables deriving from reinsurance transactions 60 29,125 134 34,816 208 30,811 III - Debenture loans 61 0 135 0 209 0 IV - Amounts payable to banks and financial institutions 62 0 136 0 210 0 V - Sundry loans and payables 63 168,178 137 104,904 211 110,305 VI - Employee severance indemnities 64 7,520 138 10,580 212 10,591 VII - Other liabilities 65 67,591 139 59,424 213 53,338

Total 66 299,752 140 252,756 214 237,730

H. Accrued liabilities and deferred income 67 19,552 141 21,777 215 20,627

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 68 6,224,894 142 6,435,588 216 6,307,556

GUARANTEES, COMMITMENTS AND OTHER MEMORANDUM ACCOUNTS

I. Guarantees issued 69 22,512 143 9,713 217 10,268 II. Guarantees received or issued by third parties in the Company's interests 70 43,371 144 50,111 218 54,493 III. Commitments 71 1,000 145 500 219 1,000 IV. Pension-fund assets managed in the name and on behalf of third parties 72 0 146 0 220 0 V. Other memorandum accounts 73 5,149,741 147 5,453,012 221 5,130,151

TOTAL MEMORANDUM ACCOUNTS 74 5,216,624 148 5,513,336 222 5,195,912

COMPANY: Cattolica Assicurazioni Soc. Coop.

INCOME

As of June 30th As of June 30th As of December 31st of the of the of the current year previous year previous year I. TECHNICAL ACCOUNT - NON-LIFE INSURANCE BUSINESS

1. Earned premiums, net of reinsurance 451,041 57 473,888 113 919,379

2. (+) Portion of investment income transferred from non-technical account (item III. 6) 47,442 58 41,153 114 59,705

3. Other technical income, net of reinsurance 5,192 59 4,875 115 8,556

4. Claims incurred net of recoveries and reinsurance 366,860 60 405,532 116 820,071

5. Change in other technical provisions, net of reinsurance 0 61 0 117 -71

6. Profit-sharing and reversals, net of reinsurance 183 62 0 118 710

7. Operating expenses: a) Acquisition expenses net of commission and profit-sharing received from reinsurers 60,636 63 66,558 119 124,271 b) Administration expenses 45,959 64 36,608 120 69,327 106,595 65 103,166 121 193,598

8. Other technical charges, net of reinsurance 17,266 66 16,368 122 32,552

9. Change in equalisation provisions 251 67 254 123 502

10. Technical account result - non-life insurance business 12,520 68 -5,404 124 -59,722

II. TECHNICAL ACCOUNT - LIFE INSURANCE BUSINESS

1. Earned premiums, net of reinsurance 352,788 69 157,768 125 426,417

2. Investment income a) Income deriving from investments 52,058 70 59,147 126 91,868 b) Writebacks of value adjustments on investments 1,092 71 486 127 1,727 c) Profits on the disposal of investments 7,998 72 4,315 128 11,009 61,148 73 63,948 129 104,604

3. Income and unrealized capital gains on investments for the benefit of policyholders who bear the investment risk and on investments relating to pension funds 30,771 74 27,763 130 62,287

4. Other technical income, net of reinsurance 875 75 805 131 2,061

5. Claims incurred, net of reinsurance 447,125 76 347,267 132 905,506

6. Change in actuarial provisions and other technical provisions, net of reinsurance a) Actuarial provisions, premium provision for complementary insurance and other technical provisions -180,740 77 -19,726 133 -147,876 b) Technical provisions where the investment risk is borne by the policyholders and those relating to the management of pension funds 89,004 78 -156,912 134 -277,038

-91,736 79 -176,638 135 -424,914

7. Profit-sharing and reversals, net of reinsurance -671 80 -227 136 493

8. Operating expenses: a) Acquisition expenses net of commission and profit-sharing received from reinsurers 16,533 81 7,658 137 23,582 b) Administration expenses 4,455 82 4,845 138 9,777 20,988 83 12,503 139 33,359 Attachment II Codice impresa 113

STATEMENT (€ thousands) As of June 30th As of June 30th As of December 31st of the of the of the current year previous year previous year

9. Equity and financial charges a) Investment management charges and interest expense 28 2,379 84 3,611 140 6,495 b) Value adjustments on investments 29 16,941 85 18,979 141 10,284 c) Losses on disposal of investments 30 1,285 86 4,463 142 11,858 Total 31 20,605 87 27,053 143 28,637

10. Equity and financial charges and unrealized losses on investments for the benefit of policyholders who bear the investment risk and on investments relating to pension funds 32 30,675 88 28,511 144 34,035

11. Other technical charges, net of reinsurance 33 3,650 89 770 145 1,769

12. (-) Portion of investment income transferred to non-technical account 34 6,131 90 4,902 146 10,517 (item III.4)

13. Technical account result - life insurance business 35 8,815 91 6,143 147 5,967

III. NON-TECHNICAL ACCOUNT

1. Technical account result - non-life insurance business (item I. 10) 36 12,520 92 -5,404 148 -59,722

2. Technical account result - life insurance business (item II. 13) 37 8,815 93 6,143 149 5,967

3. Investment income - non-life business a) Investment income 38 77,821 94 86,253 150 104,688 b) Writebacks of value adjustments on investments 39 677 95 501 151 261 c) Profits on disposal of investments 40 4,087 96 5,789 152 14,938 Total 41 82,585 97 92,543 153 119,887

4. (+) Portion of investment income transferred from the life business technical account (item II. 12) 42 6,131 98 4,902 154 10,517

5. Equity and financial charges - non-life business a) Investment management charges and interest expense 43 1,155 99 2,476 155 4,725 b) Value adjustments on investments 44 11,380 100 26,103 156 21,181 c) Losses on disposal of assets 45 1,396 101 2,698 157 5,940 Total 46 13,931 102 31,277 158 31,846

6. (-) Portion of investment income transferred to non-life technical account (item I. 2) 47 47,442 103 41,153 159 59,705

7. Other income 48 6,605 104 9,459 160 30,093

8. Other charges 49 7,200 105 17,584 161 36,745

9. Result from ordinary activities 50 48,083 106 17,629 162 -21,554

10. Extraordinary income 51 370 107 77,371 163 109,717

11. Extraordinary expense 52 1,344 108 2,546 164 2,962

12. Result from extraordinary activities 53 -974 109 74,825 165 106,755

13. Pre-tax result 54 47,109 110 92,454 166 85,201

14. Income taxes for the period 55 4,544 111 21,678 167 8,341

15. Profit (loss) for the period 56 42,565 112 70,776 168 76,860