Annual Report and Financial Statements Financial Year 2016

Annual report and Financial Statements Financial Year 2016

SHAREHOLDERS’ MEETING ON APRIL 22ND, 2017

121st FINANCIAL YEAR

Please note that the original Report is in Italian. In case of doubt the Italian version prevails.

Contents

Group Structure 9 Calling of the ordinary and extraordinary shareholders’ meeting 15 Corporate Bodies 21 Reference Scenario 23 Management Report 41 The Company in 2016 43 Highlights 45 2014-2017 Business Plan 53 Ways in which the Group image and information are disclosed 58 Significant events during the year 59 Insurance business 67 Premiums by sector of acquisition 69 Non-life business 70 Claims settlement 77 Life business 79 Claims paid 82 Research and development activities - new products 83 Reinsurance 85 Financial and asset management 91 Investment property 93 Securities investments 94 Solvency II ratio 97 Analysis of the financial risks 97 Headcount and sales network 101 Human resources 103 Sales network 106 Other information 111 Corporate governance and internal control system 113 Prevention and countering fraud 113 Complaints management 114 Disclosure on Solvency II fulfilments 114 Information systems 115 Appointments of senior management of the Company 116 Significant events during the first few months of 2017 117

Atypical or unusual transactions and non-recurrent significant operations and events 118 Transactions with related parties 118 Management and co-ordination activities according to Article 2497 et seq. of the Italian Civil Code 118 Tax consolidation 119 Shareholders 119 Own shares 120 Newly issued shares 120 Outlook for business activities 120 Information on the investee companies 123 Investments in subsidiaries 125 Investments in associated companies 128 Other significant investments 129 Indirect investments in subsidiaries 131 Proposal for the allocation of the result for the year 133 Statement of financial position and Income Statement 139 Notes to the Accounts 167 Foreword 169 Part A - Accounting principles 173 Part B - Information on the Statement of financial position and Income statement 189 Statement of financial position - Assets 191 Statement of financial position - Liabilities and Shareholders’ equity 216 Income statement 237 Part C - Other Information 253 Cash flow statement 263 Attachments to the Note to the Accounts 269 Certification of the Executive appointed to draw up the corporate accounting 339 Board of Statutory Auditors’ Report 341 Independent Auditors’ Report 355

ATTACHMENTS Real Estate Property Attachments to the Notes to the Accounts Statements disclosing the solvency margin companies (s.r.l.

Summary index of tables and charts

TABLES

Table 1 - Summary of the premiums for the year 47 Table 2 - Reclassified income statement 48 Table 3 - Key life and non-life indicators 49 Table 4 - Reclassified statement of financial position 50 Table 5 - Headcount and sales network 51 Table 6 - Premiums for the year 69 Table 7 - Accident and injury class - direct business 71 Table 8 - Health class - direct business 72 Table 9 - Land vehicle hulls class - direct business 72 Table 10 - Goods in transit class - direct business 73 Table 11 - Fire & natural forces class - direct business 73 Table 12 - Other damage to assets class - direct business 74 Table 13 - TPL - Land motor vehicles class- direct business 74 Table 14 – TPL - General class- direct business 75 Table 15 - Suretyship class - direct business 75 Table 16 - Sundry financial losses class - direct business 75 Table 17 - Legal protection class - direct business 76 Table 18 - Assistance class - direct business 76 Table 19 - Claims’ settlement velocity 79 Table 20- Breakdown of claims paid by class and type 82 Table 21 - Investments - breakdown 93 Table 22 - Net financial income and expenses 96 Table 23 - Solvency II ratio 97 Table 24 - Pro-forma statement of financial position - Assets 191 Table 25 - Intangible assets 192 Table 26 - Intangible assets - gross amortisation amounts 192 Table 27 - Intangible assets - accumulated amortisation 192 Table 28 - Land and buildings 195 Table 29 - Land and buildings - gross depreciation amounts 195 Table 30- Land and buildings - accumulated depreciation 195 Table 31 - Investments - summary of values 196 Table 32 - Summary data of subsidiaries 198

Table 33 - Summary data of associated companies 200 Table 34 - Summary data of the other investments 201 Table 35 - Other financial investments - breakdown 202 Table 36 - Exposure in government debt securities issued or guaranteed by PIGS countries (Portugal, Ireland, Greece and Spain) 204 Table 37 - C.III.3 class bonds - main issuer Groups 204 Table 38 - Investments for benefits of life assurance policyholders who bear the investment risk and deriving from the management of pension funds - breakdown 206 Table 39 - Reinsurance amounts of technical provisions 207 Table 40 - Receivables 208 Table 41 - Other receivables - breakdown 209 Table 42 - Tangible assets and inventories 210 Table 43 - Tangible assets and inventories - gross depreciation amounts 210 Table 44 - Tangible assets and inventories - accumulated depreciation 211 Table 45 - Accruals and deferrals 212 Table 46 - Pro-forma statement of financial position - Liabilities and shareholders’ equity 216 Table 47 - Shareholders' equity 217 Table 48 - Shareholders’ equity - origin, possibility of use and distribution, as well as use in previous years 219 Table 49 - Shareholders' equity - changes during the year 220 Table 50 - Breakdown of technical provisions 221 Table 51 - Provisions for unearned premium - direct business 222 Table 52 - Provisions for unearned premium - indirect business 223 Table 53 - Cattolica Gestione Previdenza open-end pension fund - net asset value by segment 226 Table 54 - Risparmio & Previdenza open-end pension fund - net asset value by segment 226 Table 55 - Open-end pension funds of the Company- Investments, provisions and gross premiums written 227 Table 56 - Other pension funds - Investments, provisions and gross premiums written 227 Table 57 - Other Pension Funds - Type and extent of the guarantee provided 228 Table 58 - Provisions for risks and charges 228 Table 59 - Payables deriving from insurance and reinsurance transactions 230 Table 60 - Employee severance indemnities 232 Table 61 - Other payables - breakdown 232

Table 62 - Other liabilities - breakdown 233 Table 63 - Guarantees, commitments and other memorandum accounts 235 Table 64 - Pro-forma Income Statement 237 Table 65 - Reclassified non-life technical account - Italy and foreign portfolio 239 Table 66 - Claims settled - direct and indirect business 240 Table 67 - Other income - breakdown 245 Table 68 - Other charges - breakdown 245 Table 69 - Income taxes for the year 247 Table 70 - Recognition of prepaid taxes and consequent effects 247 Table 71 - Recognition of deferred taxes and consequent effects 248 Table 72 - Income taxes for the year - reconciliation between the ordinary rate and the effective rate 248 Table 73 - Change in shareholders’ equity after the end of the year 255 Table 74 - Independent Auditors’ fees 256 Table 75 - Equity position and economic transactions with companies subject to management and co-ordination, associated companies and other related parties 259

CHARTS

Statement 1 - Subordinated assets 213 Statement 2 - Operations on derivatives - C and D class 250 Statement 3 - Derivatives valued at fair value - C and D class 250

Group

Structure

Calling of the Shareholders’ meeting and Corporate Bodies

Calling of the ordinary and extraordinary shareholders’ meeting

The Shareholders are called to the Ordinary and Extraordinary meeting at the registered offices in Lungadige Cangrande 16, Verona, at 8.30 a.m. on Friday, April 21st, 2017 or, in second calling, if the quorum has not been reached on that day, in Via Germania 33, Verona, at 9.00 a.m. on Saturday, April 22nd, 2017, to discuss and resolve on the following agenda;

AGENDA

Ordinary session 1. Approval of the 2016 annual financial statements and the accompanying reports, with consequent and correlated resolutions. 2. Decisions relating to the remuneration policies, in compliance with the current legislative and Articles of Association provisions. 3. Authorisation to purchase and sell own shares in accordance with the law. Inherent and consequent resolutions. 4. Appointment, pursuant to Article 2386 of the Italian Civil Code and Article 33.5 of the Articles of Association, of 2 members of the Board of Directors.

Extraordinary session 1. Articles of Association: amendments to Articles 2, 24, 32, 33, 35, 39, 41, 44, 54 and suppression of Article 55. Inherent and consequent resolutions.

Without prejudice to the matters envisaged in the General Meeting Regulations with regard to the discussion of the business on the agenda, the reader is informed that the effectiveness of the resolution relating to the appointment of 2 members of the Board of Directors will be subject to the condition precedent in terms of the efficacy, in accordance with the law, of the article of association amendments subject to the resolution of the shareholders during said Meeting, in extraordinary session. In compliance with Article 30 of the Articles of Association, for the second meeting the Board of Directors has established the arrangement of a remote link from the structure indicated below, which will be endowed with the necessary safeguards and ensure the identification of the Shareholders and the exercise of the regulatory and controlling power of the Chairman of the Meeting:

 Palazzo Rospigliosi Congress Centre - Via XXIV Maggio 43 - ROME, Italy.

This link, as per the afore-mentioned Articles of Association provision, will let the shareholders who - permitted to take part in the Meeting in accordance with the law and the Articles of Association and holding an entrance ticket - do not intend to go to Via Germania 33, Verona, to take part in the discussion, directly follow the business of the meeting and express their vote at the time of voting.

***

In accordance with current legislation, the documentation relating to the Shareholders’ meeting, including therein the explanatory reports of the Board of Directors on the business placed in the agenda, shall be made available to the general public care of the registered

offices, Borsa Italiana S.p.a., on the storage mechanism authorised by Consob known as “eMarket STORAGE”, managed by Spafid Connect S.p.a. and accessible on the website http://www.emarketstorage.com and on the company website http://www.cattolica.it in the “Governance” section, and in detail:

 at least thirty days before the date fixed for the first Meeting in call, and therefore by March 22nd, 2017, the Directors’ reports on the subjects placed on the agenda and the other documentation whose publication is envisaged before the Meeting other than that listed above;  at least twenty-one days before the date fixed for the Meeting in first calling and therefore by March 31st, 2017, the Financial report and the other documents as per Article 154 ter of Italian Legislative Decree No. 58/1998, the Report on remuneration and the Report on the proposals for authorisation to purchase and dispose of own shares. By the same deadlines, the Report on corporate governance and the ownership structures will also be made available, containing the information as per Article 123 bis of Italian Legislative Decree No. 58/1998.

The shareholders have the rights to examine the afore-mentioned documentation filed by the head offices and obtain a copy of the same. You are hereby reminded that, in accordance with the law and the Articles of Association, shareholders can attend and vote during the meeting if they have been enrolled in the Shareholders’ Register for at least ninety days and if the authorised intermediary, by whom the shares are deposited, has provided the Company with the specific communication envisaged by current legislation bearing witness to the ownership of the shares for at least two days before the date fixed for the first calling; a copy of the same, which the intermediary is obliged to make available to those who request it, may be used to grant representation for taking part in the Meeting, that means to sign the power of attorney possibly included at the end. A form which can be used for granting power of attorney to take part in the Meeting is however forwarded to all the Shareholders entitled together with the notice of calling; it is also available on the Company website http://www.cattolica.it in the “Governance” section. Pursuant to the Articles of Association, the Shareholders enrolled in the register as from April 21st, 2001 may take part in the Meeting provided that the afore-mentioned communication bears witness to the ownership of at least one hundred shares. The Shareholders enrolled after June 8th, 2015 may take part in the Meeting provided that the afore-mentioned communication bears witness to the ownership of at least three hundred shares. The Shareholders may, by means of power of attorney, represent another Shareholder; no representative may however represent more than five Shareholders. Representation cannot be granted to the members of the Board of Directors or the Board of Statutory Auditors of the Company, or to the subsidiaries or the members of the management or audit body or to such employees. Please remember that, as per Article 3 of the current General Meeting Regulations, the powers of attorney shall have to be shown in original form and accompanied by a photocopy of a valid identification document of the delegating party. Each Shareholder has the right to just one vote, whatever the number of shares held. The number of Shareholders enrolled in the Shareholders’ Register for at least ninety days as from the date of first meeting equals to 24,160.

The Shareholders in possession of shares not yet in certificate form in accordance with current legislation shall have to promptly take steps to deliver the same to the qualified intermediary for the purpose of accomplishment of the certificate procedure envisaged and the forwarding communication envisaged by current legislation indicated above.

You are hereby reminded that the subscribed and fully paid-in share capital, as of March 16th, 2017 amounts to € 522,881,778.00, and is represented by 174,293,926 shares. As at the date of this notice of calling, the Company holds 5,848,607 own shares.

*** The reader is hereby reminded, for the purposes of election, pursuant to Articles 2386 of the Italian Civil Code and 33.5 of the Articles of Association, of 2 members of the Board of Directors, steps will be taken by means of candidature, on the basis of lists presented in compliance with the new version of Article 33 of the Articles of Association which will be submitted for the resolution of said meeting of the Company held on April 21st/22nd, 2017, therefore with the indication of the two candidates not resident in the province of Verona. Furthermore, one or both candidates will have to be female, having taken into account the observance of the gender quotas, as per Italian Law No. 120/2011, in relation to the current composition of the Board of Directors. The election of a minority Director as per Article 33.4 of the Articles of Association is not envisaged, since the Meeting held on April 16th, 2016 took steps to do so.

With regard to the presentation of the candidatures, on the basis of lists, by the shareholders, you are hereby reminded that, pursuant to Article 33 of the Articles of Association, they can be presented by a number of shareholders who, alone or together with other shareholders, are the holders of shares representing at least 0.50% of the share capital in total. The candidatures proposed by the shareholders can also be presented by at least 500 shareholders, irrespective of the percentage of share capital held in total. Without prejudice to the obligation to produce the certification relating to the ownership of the investment held in accordance with the legal and regulatory provisions in force, the presenting shareholders must at the same time as filing sign the list and each signature is accompanied by the photocopy of a valid identification documentation. Declarations shall have to be filed care of the registered offices, together with each list, by the deadline for the filing of the same; declarations by means of which the individual candidates accept their candidature and certify, under their own responsibility, the inexistence of causes of ineligibility and incompatibility, as well as the possession of the requirements laid down by current legislation or the Articles of Association for covering the office of Director of the Company. The candidatures shall have to be accompanied by in-depth disclosure on the personal and professional characteristics of the candidates, including the possible existence of the independence requirements envisaged by the combined provisions of Articles 147-ter, paragraph 4 and 148, paragraph 3, of Italian Legislative Decree No. 58/1998, and by the Borsa Italiana Code of Conduct.

In compliance with the Articles of Association provisions in the new version which is submitted for the resolution of said Meeting of the Company held on April 21st/22nd, 2017, the Board of Directors shall take steps to present its own list which shall be filed care of the Company’s headquarters by the twenty-fifth day prior to the date fixed for the meeting in first

calling, and therefore by March 27th, 2017. *** The filing of the lists for the appointment of 2 Directors and the other documentation necessary for the same can also be carried out, by the deadlines indicated previously, via certified e-mail as well using the e-mail address [email protected].

You are hereby informed that, for the sake of greater clarity and standardised management and so as to facilitate the exercise of the right to present lists, the Board of Directors has clarified the operating formalities for the performance of the related activities, which will be filed care of the registered offices and made available on the Company website http://www.cattolica.it, in the “Governance” section, by the deadline envisaged for the publication of the notice of calling for the Meeting. The shareholders are invited to consult the Company’s Articles of Association, also the related new version which will be submitted for the resolution of the same Shareholders’ meeting to be held on April 21st/22nd, 2017, and the afore-mentioned operating formalities for more complete disclosure.

Shareholders are recommended to pay the utmost attention to the formalities and the documentation requested for the presentation of the lists, both according to the legal and regulatory provisions and as per the norms acknowledged by the Company, also in the related new version which will be submitted for the resolution of said Shareholders’ meeting to be held on April 21st/22nd, 2017.

***

In accordance with the formalities and within the limits established by law, a number of Shareholders no less than one fortieth of the total number, and who document, as per current legislation, they hold the minimum number of shares requested, as per articles 9 bis and 54 of the Articles of Association, for exercising the rights other than dividend rights, may request the integration of the list of subjects to be discussed during the Meeting as emerging from this notice of calling, indicating the additional matters proposed in the request, or present resolution proposals on subjects already on the agenda. The signing by each Shareholder of the request should be accompanied by a photocopy of a valid ID document. The request shall have to reach the registered offices of the Company within 10 days of the publication of this notice, by means of registered letter or certified e-mail sent to the following address [email protected]. By said deadline, the Shareholder who requests the integration of the agenda must also draw up a report which discloses the reason for the resolution proposals on the new business whose discussion they propose or the reason relating to the additional resolution proposals presented on the business already on the agenda.

Verona, Italy, March 16th, 2017

The Chairman (Paolo Bedoni)

Corporate Bodies

BOARD OF DIRECTORS Chairman Paolo Bedoni (*)

Vice Deputy Chairman Aldo Poli (*)

Deputy Chairman Manfredo Turchetti (*)

Secretary Alessandro Lai (*)

Managing Director Giovan Battista Mazzucchelli (*)

Directors Barbara Blasevich (*) Bettina Campedelli Nerino Chemello Lisa Ferrarini Paola Ferroli Paola Grossi Giovanni Maccagnani Luigi Mion Carlo Napoleoni Angelo Nardi Pilade Riello (*) Chiara de Stefani Eugenio Vanda

BOARD OF STATUTORY AUDITORS

Chairman Giovanni Glisenti Statutory Auditors Luigi de Anna Federica Bonato Cesare Brena Andrea Rossi

Substitute Auditors Massimo Babbi Carlo Alberto Murari

GENERAL MANAGEMENT

General Managers Marco Cardinaletti Flavio Piva Deputy General Managers Carlo Barbera Carlo Ferraresi

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

Reference Scenario

Macro-economic 2016 confirmed the global economic growth trend that was seen in 2015, albeit at a lower scenario level than had been expected at the beginning of the year.

In the US, the latest data available disclosed growth in GDP higher than 3%, mainly guided by the pick-up in domestic demand, with a positive performance of the employment market and a consequent unemployment rate down further to 4.7%. In this context, internal consumption benefited, supported by the gradual pick-up in salaries in the second half of the year, along with the real estate sector. The manufacturing and energy sectors, penalised in the first part of the year, benefited from the rise in the prices of oil and materials in the second half. In November, the US presidential elections were held with the unexpected victory of Donald Trump In conclusion, it should be mentioned that the Federal Reserve, after a “playing for time” approach, raised the reference interests rates in December by 25 base points, also opening up to possible further increases during 2017.

In Europe, economic growth data confirmed a recovery phase, although at modest levels. In order to boost the economy and inflation, having reached all time lows, during the first quarter the European Central Bank increased the securities repurchasing programme (Quantitative Easing) extending it, not only by duration and quantity, also to corporate securities with additional reduction of the returns on bonds. Furthermore, during the December conference the desire to extend the purchase plan until December 2017 was communicated, although reducing the monthly amount from € 80 to € 60 billion a month, as from April 2017. At the end of June, the outcome of the referendum in the UK captured the attention of the operators and the markets, leading to violent fluctuations in the stock market prices at the time of the announcement. The abundant liquidity present and the activities of the central banks however contained the effects.

In Italy, economic recovery remained weak, essentially driven by internal consumption and industrial production, both on the up albeit always at contained levels. With regard to employment, there were no significant signs of a pick-up. The confidence indexes remained expansive, also in the presence of global political risks which marginally reduced the future growth prospects. The final part of the year was characterised by the Constitutional Referendum, whose negative outcome lead to the installation of a new government. This event lead to strong volatility on the market and increased the perception of the country risk.

In Japan, for the purpose of stabilising the economy characterised by a considerable deflationary spiral, the Bank of Japan continued to implement expansive manoeuvres. In detail, it extended purchases not only to government securities but also stock market instruments.

The emerging markets mainly suffered due to the Chinese slowdown and the feared risk of a rise in the rates in the United States. The ongoing reduction in domestic inflation in any event allowed a majority of the central banks to maintain more accommodating monetary policies, supporting the economic scenario. In China, the production surplus together with the reduction in the investments due to the heavy structural indebtedness, meant that the GDP grew less than in the previous year, despite remaining in line with the expectations of the Central Government. Brazil and Russia once again drew attention to the need to bring about profound structural reforms.

Bond markets

The first part of the year was characterised by a strong risk appetite on bonds, with the return minimums achieved during the Summer months. The fears on the growth of the global economy and then with regard to the UK referendum however rendered the periods of appreciation volatile, characterised by sudden phases of momentary risk-off, with the involvement of both core and peripheral securities. Repositioning took place in the last quarter on the European bond segment, with returns showing decisive recovery due to fear of a more restrictive approach of the ECB and, limited to Italy, the risk deriving from the referendum result. In the US, government securities underwent consideration depreciation further to the presidential election and the rise in the December reference rates. On an annual basis, 10-year US government securities closed with a return of 2.5% (+ 20 basis points from the start of the year), while 2-year securities closed at 1.2% (+15 basis points from the start of the year). Corresponding German securities by contrast disclosed returns of 0.2% and -0.8%, with a decrease of 35 and 44 basis points respectively.

Stock markets

The structure of the stock markets was particularly negative at global level in the first half, with the exclusion of the US. In fact, the start of the year was characterised by downwards trends guided by the collapse of the prices of raw materials and the prospects of recession for the global economy. During the second part of the year, a mainly lateral trend was registered, in which periods of growth alternated with consistent profit taking, mainly due to the fears linked to the UK referendum. During the latter months of the year, the heavy losses at the beginning of the year were recovered in part. In the US, in particular, the trend was more positive, supported by positive macro-economic figures and the ambitious Trump political plan, with prices which reached all-time highs. On an annual basis, the U.S. S&P 500 index closed at +11%, while in Europe the Dax closed at +11%, the Eurostoxx50 at +4% and the FTSE MIB at -7%. In Asia, the Hang Seng index fell 4%, while the Nikkei closed with +3%.

Foreign exchange markets

The foreign exchange markets were marked by high volatility following the monetary policy manoeuvres undertaken by the various global central banks and political tensions. The Euro ended the year at 1.05 against the dollar, with a devaluation of 3% with respect to the values at the beginning of the year. With respect to the Yen, there was depreciation of 6.5% to 122.7. By contrast, the dollar experienced a decrease in value of 3% vis-à-vis the Japanese currency, to 117.

Real estate market

The markets continued to disclose satisfactory performances which confirm how the property sector has definitively set itself along a route of moderate growth. Given the abundance of risk capital, the availability of debt and the permanent context of low interest rates, the property investment volumes should continue to rise.

In fact, in the Italian market, with the exclusion of the residential segment, during the third quarter just under € 1.7 billion was invested, up by 17% compared with the same period in the

previous year and the total of the investments reached € 8.4 billion in the last 12 months, exceeding the peak of the two-year period 2005/2006. Also the portion of capital held by Italian business in the Italian market saw a sharp increase in the third quarter of the previous year reaching 48% of the total. The volume of transactions in the first 9 months of the year rose to € 5.4 billion (+5% compared with the same period last year) and also this figure confirms the pick-up in the cycle of investment properties which started after the negative record of 2012.

The rental market by contrast will still have to await the recovery of the economy having overall reported in the year essential stability in prime market rents and a drop in vacancy rates which continues but to a slow extent (Source: BNP Paribas, Jones Lang Lassalle, CBRE).

Insurance The graphs below show certain summary figures published by ANIA1 for the insurance industry industry for the period 2011-2015.

Key economic indicators 160,000 of the insurance sector euro/millions

140,000 30,632 31,071 120,000

100,000 31,618 34,052 32,763 80,000

60,000 110,963 115,504

40,000 85,756 74,368 70,376

20,000

0 2011 2012 2013 2014 2015

Direct and indirect Life premiums Direct and indirect non Life premiums

1 Source ANIA - L’Assicurazione italiana 2015-2016, publication dated July 4th, 2016.

Key indicators Insurance sector %

12.0%

10.0% 9.4% 8.0% 5.9% 6.0% 5.6% 4.5% 4.7% 4.5% 4.2% 3.9% 4.0% 2.0% 0.0%

-2.0%

-3.0% -4.0% -3.4% -6.0% 2011 2012 2013 2014 2015

Technical result/direct and indirect premiums Net income/direct and indirect premiums

According to ANIA in 2016 total premiums written (life and non-life) for the Italian direct portfolio should amount to just over € 136 billion, down 7.1% with respect to the year just ended, after premiums having grown significantly (+21%) in 2014 and to a much lower extent (+2.5%) in 2015. Thus due to both a drop in life premiums, in relation to which a decrease of 9% is estimated in 2016, and to a further slight decrease in non-life premiums (-0.5%). Total premiums as a percentage of GDP should drop from 9% in 2015 to 8.2% in 2016.

Premiums written for the direct Italian portfolio in the non-life sector during 2016 should reach € 32 billion and would once again be down slightly (-0.5%) for the fifth year running. This would however exclusively depend on the decrease in TPL motor and maritime premiums since all the other non-life classes differing from TPL motor should be up. In the TPL motor class, despite the technical margins falling, the insurance companies might find themselves operating in an increasingly competitive market therefore it is estimated that the premiums should fall by 4.5%. This would be the fifth consecutive year of decrease; between 2012 and 2016 the premiums volume of this class should disclose a total decrease of nearly 25%, returning to the values of 1999 (without considering the effects of inflation). The expansive phase of the non-life classes other than the TPL motor class would be confirmed, positively influenced by the pick-up in the general economic cycle. In fact, an increase is estimated for 2016 of 2.7%, after the more contained increase in 2015 (+1.1%). The classes which would contribute the most to this growth are the land vehicle hulls which should rise by 5% (after +2.9% in 2015). This would be the result of a considerable increase in the number of vehicles registered, brand new which in 2015 rose by 15% (they were already up 5.4% in 2014); the growth trend is confirmed in the first five month of 2016 what is more at a more sustained rate (+21%). Also the premiums of the other classes should report positive changes. In detail, mention is made of the growth of the health class (+4%), the fire class (+3%) and the other damage to assets class (+2%).

In the life sector a change in trend should been seen in 2016: after record growth in 2014 (+30%) and that albeit more contained in 2015 (+4%), the premiums written in 2016 should disclose a drop of 9%, to an amount which would touch € 105 billion. After strong growth having been registered in 2015 for unit-linked life policies (which alone had contributed towards the growth of the total premiums of the entire life sector), in 2016 a brusque slowdown might be seen in the marketing of these policies: -35% for an estimated volume of premiums written of almost € 21 billion. Nearly the same premiums would by contrast be confirmed for the traditional life policies (class I) which would collect almost € 80 billion premiums written in 2016 with a slight increase of +2.5%. Since, in fact, these are policies with a mainly bond-based content and with guaranteed minimum returns (both very contained and in some cases also close to zero), this type of life product would have difficulty in expanding further due to the continuing context of low interest rates.

On the basis of the market figures for gross premiums written as of September 30th, 2016, of Italian companies and non-EU representative agencies, (Ania Trends, No. 1, January 2017) total life and non-life premiums were down 8.4%, the non-life classes were down 1.5% and the life classes down 10.3%. The non-life classes fell 4.3% in the motor classes and rose 1.9% in the non-motor classes.

On the basis of the ANIA annual forecasts, the Group’s market share in the non-life sector would rise from 5.5% to 6.2% and in the life sector would pass from 3% to 2.6%.

Total Group market share %

7.00 6.2 6.00 5.5

5.00

4.00 3.6 3.5 3.0 3.00 2.6 2.00

1.00 0.00 2015 2016

Non life Life Total

Institutional In the detailed overview of the measures adopted by the legislator and the sector authorities framework which characterised the year, some of the legislative innovations which affected the insurance sector and the Group are mentioned.

In order to be comprehensive, the main decrees and regulations which came out during 2015 and which had an impact as from January 1st, 2016 (already illustrated in the 2015 financial statements), are illustrated below: Italian Legislative Decree No. 74 dated May 12th, 2015 (Directive 2009/138/EC, Solvency II), Italian Legislative Decree No. 139 dated August 18th, 2015 (Directive 2013/34/EU, Accounting) and IVASS regulations No. 11-16, dated December 22nd, 2015.

IVASS regulations and amending measures

IVASS Regulation No. 17 dated January 19th, 2016 The regulation concerns the calculation of the group solvency as per section XV (group supervision), part I (group supervision) and part III (group supervision instrument) of Italian Legislative Decree No. 209 dated September 7th, 2005 (Private Insurance Code), consequent to the national implementation of Articles 220 to 233 of the Solvency II Directive and the EIOPA guidelines on the financial requirements of the Solvency II regime (1st pillar requirements). The regulation fully rewrites the subject, repealing the ISVAP regulation No. 18 dated March 12th, 2008 and became effective the day following its publication in the Italian Official Gazette No. 24 dated January 30th, 2016; the provisions contained therein apply as from the solvency checks relating to 2016.

IVASS Regulation No. 18 dated March 15th, 2016 The regulation concerns the applicative rules for the determination of the technical provisions as per Article 36 bis of the Italian Private Insurance Code. For the purpose of ensuring the consistent application of the financial requirements of the Solvency II legislative framework, in the regulation the EIOPA guidelines relating to the contractual limits and valuation of the technical provisions are also acknowledged. The regulation became effective the day following its publication in the Italian Official Gazette No. 78 dated April 4th, 2016.

IVASS Regulation No. 19 dated March 15th, 2016 The regulation concerns the exercise of the right to access administrative documents and disciplines the methods for exercising the right to access administrative documents already formed or held permanently by IVASS, existing at the time of the application. The regulation became effective the day following its publication in the Italian Official Gazette No. 72 dated March 26th, 2016 and as from this date the ISVAP provisions 39 and 40 dated September 5th, 1995 are repealed.

IVASS Regulation No. 20 dated May 3rd, 2016 The regulation concerns the use of outside experts for inspections vis-à-vis enterprises which concern the internal models as per part III, chapter IV bis, section III of the Italian Private Insurance Code. The regulation is issued implementing Articles 189, paragraph 2 and 191, paragraph 1, letters b) and s) of the Private Insurance Code, as amended and added to by Italian Legislative Decree No. 74 dated May 12th, 2015.

IVASS Provision No. 46 dated May 3rd, 2016 The provision contains amendments to ISVAP regulation No. 24 dated May 19th, 2008, relating to the procedure for presentation of the complaints to the Supervisory Body and the handling of the complaints by the insurance brokers: it became effective the day after its publication in the Italian Official Gazette No. 125 dated May 30th, 2016. Within 180 days of the applicability of the provision (November 26th, 2016), the following are obliged to adapt to the amendments introduced by the same: - the principal undertakings, with regard to the handling of the complaints of the agents and the direct producers; - the brokers as per sections B and D of the RUI (Consolidated Register of insurance Brokers).

IVASS Regulation No. 21 dated May 10th, 2016 The regulation concerns the periodic quantitative information to be forwarded to IVASS for the purposes of financial stability and macro-prudent supervision and related terms as well as the data transmission methods. The regulation was issued in accordance with Articles 190 and 191 of the Italian Private Insurance Code and became effective the day following its publication in the Italian Official Gazette No. 141 dated June 18th, 2016.

IVASS Regulation No. 22 dated June 1st, 2016 The regulation concerns the identification of the new regulatory instructions which implement a number of provisions of Section XV of the Private Insurance Code, as amended by the decree acknowledging the Solvency II Directive, relating to group supervision, as well as keeping of the register of the parent companies, repealing ISVAP regulation No. 15 dated February 20th, 2008. The regulation became effective the day following its publication in the O.S. No. 23 of the Italian Official Gazette No. 148 dated June 27th, 2016.

IVASS Regulation No. 23 dated June 1st, 2016 The regulation concerns the discipline of the Claim Database, the Witness details database and the Injured Parties details database as per Article 135 of the Private Insurance Code. It replaces ISVAP Regulation No. 31 dated June 1st, 2009, given the need to take into account the legislative evolution which has taken place with regard to anti-fraud aspects, which envisaged the activation of preventive alarm systems against the risks of fraud. The regulation became effective the day following its publication in the Italian Official Gazette No. 134 dated June 10th, 2016.

IVASS Provision No. 47 dated June 1st, 2016 The provision concerns the indicators and the levels of anomaly as per Italian Ministerial Decree No. 108 dated May 11th, 2015, relating to the countering of fraud in the insurance sector, as well as technical indications for the insurance companies. The integrated anti-fraud archive (AIA), the instrument envisaged by the legislator for the purpose of fighting insurance fraud in the TPL motor sector, is managed by IVASS which provides the companies concerned with information regarding the anomaly profiles of the claims with regard to anti-fraud. The provision came into force on June 10th, 2016 with reference to all the up-dates of the Claims Database made as from that date.

IVASS Regulation No. 24 dated June 6th, 2016 The regulation concerns the provisions relating to investments and assets covering the technical provisions as per Section III, Chapter II bis, Article 37 ter, and Chapter III, Article 38 of the Private Insurance Code. The regulation envisages a transitory discipline on the basis

of which the companies are obliged to: (i) adapt to the provisions regarding the coverage of the technical provisions (Part III) and regarding the related registers (Part IV, Section I) as from the fourth quarter of 2016; (ii) adopt, by September 30th, 2016, the three investment policies (Part II, Section I, Chapter II), or rather the investment policy, the asset and liability management policy and the liquidity risk handling policy. The regulation became effective the day following that of its publication in the O.S. No. 23 of the Italian Official Gazette No. 148 dated June 27th, 2016.

IVASS letter dated March 31st, 2016 relating to “Instructions on the transmission to IVASS of the information envisaged by Directive 2009/138/EC (Solvency II) and by the ECB Regulations No. 1374/2014 and 730/2015 on the statistical reporting obligations of the insurance undertakings. Instructions on the transmission to IVASS of the information for Financial Stability”. On January 7th, 2016 (deadline of the reporting window for the quarterly group data), the collection of the reports concluded within the sphere of the Solvency II preparatory phase and the new reporting framework envisaged by Reporting Solvency II came fully onto stream. This framework includes certain additional information with respect to that envisaged by Directive 2009/138/EC, introduced with the EU Regulations No. 1374/2014 and 730/2015 for the purpose of providing the Central European Bank (“ECB”) with statistical information. The collection of this information took place via IVASS using the INFOSTAT platform and via the use of the EIOPA survey supplemented by specific add-ons. The Institute is responsible for transmitting the data to the Bank of Italy for subsequent forwarding to the European Central Bank. The letter to the market identified the parties bound by the reporting obligations, the surveys which will have to be forwarded and the related timescale.

IVASS Regulation No. 25 dated July 26th, 2016 The regulation acknowledges the EIOPA Guidelines relating to the classification of the elements of the underlying own funds. On the basis of the Solvency II legislative framework, own funds which each company must have to cover their capital requirements may be made up of elements of the underlying own funds and elements of own accessory funds. The primary provisions (Article 93 of the directive, assimilated by Article 44 septies of the Italian Private Insurance Code) establish the characteristics which the own funds must have for being classified in the best qualitative levels (level 1 and level 2); the delegated Acts list the elements classified by the European Commission in three levels and indicate, in detail, the characteristics and the aspects which the own funds must have so as to belong to the various levels. The regulation became effective the day following that of its publication in the O.S. No. 32 of the Italian Official Gazette No. 188 dated August 12th, 2016.

IVASS Regulation No. 26 dated July 26th, 2016 The regulation acknowledges the EIOPA Guidelines on the implementation of the measures for the long-term guarantees and the transitory measures on interest rates lacking risk and on technical provisions. “Measures for the long-term guarantees” are understood to mean both the so-called matching adjustment and the so-called volatility adjustment. It is recalled that these mechanisms produce an adjustment of the structure by expiry of the interest rates lacking risk to be used for the calculation of the technical provisions. “Transitory measures” are understood to be: i) the transitory measure on the interest rates lacking risk which produces, like the measures mentioned previously, an adjustment of the structure of the rates

and ii) the transitory measure on the technical provisions which envisages, by contrast, a progressive adjustment from the level of the Solvency I provisions to that of Solvency II. The regulation became effective the day following that of its publication in the O.S. No. 32 of the Italian Official Gazette No. 188 dated August 12th, 2016.

IVASS Regulation No. 27 dated July 26th, 2016 The regulation acknowledges the EIOPA Guidelines on the application of the catastrophe risk sub-module for health insurance. The company establishes the Solvency Capital Requirement, calculated using the standard formula, taking into account, inter alia, the catastrophe risk for health insurance as specific sub-module within the sphere of the health risk. The regulation became effective the day following that of its publication in the O.S. No. 32 of the Italian Official Gazette No. 188 dated August 12th, 2016.

IVASS Regulation No. 28 dated July 26th, 2016 The regulation acknowledges the EIOPA Guidelines on the application of the look-through method. The company establishes the Solvency Capital Requirement, calculated using the standard formula, applying the look-through method to the undertakings for collective investment (UCITs) and to the other investments as per Article 84, paragraph 1, of the delegated Acts (so-called funds as per Article 84), and, on a more general basis, in the event of indirect exposures to market, subscription and counterparty risk. The regulation became effective the day following that of its publication in the O.S. No. 32 of the Italian Official Gazette No. 188 dated August 12th, 2016.

IVASS Regulation No. 29 dated September 6th, 2016 The regulation contains provisions relating to local insurance companies. It is issued in accordance with Section IV, Chapters I and II of the Italian Private Insurance Code, which implements Article 4 of the Solvency II directive, which envisages that the companies which comply with reduced size-related and complexity requisites (defined as “very small companies”) are excluded from the application of the Solvency II framework. The regulation became effective the day following that of its publication in the O.S. No. 43 of the Italian Official Gazette No. 233 dated October 5th, 2016.

IVASS Regulation No. 30 dated October 26th, 2016 The regulation contains the provisions regarding supervisory matters on intercompany transactions and on risk concentrations. The regulation envisages, amongst other aspects, that the insurance and reinsurance companies establish intercompany transactions on a consistent basis with the principles of sound and prudent management, they endow themselves - within the sphere of the corporate governance system - with suitable risk management and internal control mechanisms, which must be set up at both individual and group level, for the purposes of the on-going monitoring of all the intercompany transactions, they define, within a specific policy, criteria and formalities for the intercompany transactions identifying which cases to qualify as “significant”, “very significant” and “to be reported under any circumstance”, in relation to the possible impact on the solvency and the risk profile and in relation to the type of transaction or counterparty. The regulation became effective the day following that of its publication in the Italian Official Gazette No. 264 dated November 11th, 2016.

IVASS Regulations No. 31 and 32 dated November 9th, 2016 Regulation No. 31 concerns the application of the outgoing reinsurance agreements to the sub-module of the underwriting risk for non-life insurance of the standard formula: regulation No. 32 contains regulatory provisions regarding the internal assessment of the risk and the solvency (ORSA) as per Article 30 ter and Article 215 ter of the Italian Private Insurance Code. Both the regulations became effective the day following their publication in the Italian Official Gazette No. 278 dated November 28th, 2016.

IVASS Regulation No. 33 dated December 6th, 2016 The regulation contains provisions regarding disclosure to the general public and to IVASS consequent to the national implementation of the EIOPA Guidelines regarding public disclosure and supervisory reporting. The regulation became effective the day following that of its publication in the Italian Official Gazette No. 296 dated December 20th, 2016.

IVASS Provision No. 53 dated December 6th, 2016 The provision contains amendments and additions to: (i) ISVAP regulation No. 22 dated April 4th, 2008 concerning the provisions and schedules for the drafting of the annual financial statements and the interim report of the insurance and reinsurance companies; (ii) ISVAP regulation No. 7 dated July 13th, 2007, concerning financial statement schedules for insurance and reinsurance companies that are required to adopt the international accounting standards, financial statements and accounting entries, statutory and consolidated financial statements; (iii) IVASS provision No. 3 dated May 21st, 2013 concerning the formalities and the deadlines for the forwarding of the systematic communications of the technical bases of the life products.

The provision became effective the day following that of its publication in the O.S. No. 1 of the Italian Official Gazette No. 7 dated January 10th, 2017. The provisions contained therein apply as from the financial statements, individual and consolidated, relating to 2016 as well as the interim report, individual and consolidated, as at June 30th, 2017.

IVASS Letter dated December 7th, 2016 “Solvency II - Audit activities pursuant to Article 47 septies, paragraph 7 of the Italian Insurance Code required on public disclosure - Report on solvency and on the financial condition (so-called “SFCR”) for 2016”. By means of letter dated December 7th, 2016 IVASS provided the indications for the audit activities to be carried out on the information acquired for prudent purposes and on the SFCR with reference to just 2016.

By means of this letter, IVASS provided the indications for the audit activities on the Solvency II information for the market, specifically: 1) with reference to the activities of the independent auditor, both for individual and Group reporting, the checks concern: a) the balance sheet at current values (form S.02.01.02, with the exclusion of the lines which host the values of the Risk Margin) and the related disclosure of section D of the SCFR; b) the Own Funds admissible to cover the requested capital requirements (form S.23.01.01 at individual level and S.23.01.22 at group level) and the related disclosure of section E.1 of the SFCR. With regard to the elements as per letters a) and b), the independent auditors carried out an audit according to the related professional standards, expressing an opinion of compliance with respect to the directly applicable provisions of the European Union and the Italian sector

legislation, contained within the sphere of a specific audit report published alongside the SFCR report; 2) with the internal audit activities or recourse to an outside expert, the company must implement, with reference to the 2016 Solvency Capital Requirement (SCR) calculated on the basis of just the standard formula (form S.25.01.21 at individual level and S.25.01.22 at group level, with the related disclosure of section E.2 of the SFCR), and to the Minimum Capital Requirement (MCR) (form S.28.01.01 or S.28.02.01 at individual level, with the related disclosure of section E.2 of the SFCR), at least the checks relating to: a) data quality; b) control of the management processes and the organisational procedures for the purpose of verifying that they are suitable for ensuring a correct quantification of the MCR and SCR requirements. The checks carried out by the internal audit will be made during 2017, within the sphere of the timescales which make it possible to produce the first benefits from as early as the publication of the SFCR relating to 2016. The activities performed will have to form the content matter of a specific report.

Other legislative innovations

EU Regulation No. 596/2014

The EU Regulation No. 596/2014 market abuse (hereinafter “MAR”) came into force as from July 3rd, as supplemented by the Delegated Regulation (EU) No. 2016/522, with the consequent repeal of Directive No. 2003/6/EC on market abuse and correlated execution measures (Directives No. 2003/124/EC, 2003/125/EC and 2004/72/EC). The new legislation reshapes all the legislation concerning the countering of market abuse (market manipulation; abuse of privileged information; unlawful recommendation to carry out transactions; unlawful communication of privileged information) and in particular maintaining that the discipline of countering of market abuse and the disclosure obligations of the issuers make reference to a sole notion of “privileged information”, what is more expressly specifying that an intermediate stage of a prolonged process may be considered to be privileged information if it satisfies the envisaged requirements of precision and price sensitiveness. The obligations for communication to the general public of privileged information by listed issuers are confirmed, envisaging the possibility of delaying the divulgation if the following three conditions exist: i) the immediate communicate would probably prejudice the legitimate interests of the issuer; ii) the delay in the communication would probably not have the effect of misleading the general public; iii) the issuer is able to ensure the confidentiality of this information. The maintenance of the register of individuals who have access to privileged information for the listed issuers and for the individuals who act in the name or on behalf of the latter is confirmed, requiring what is more additional information aimed at increasing the utility of the same in the event of investigations, along with the obligation to notify the issuers and the competent authority of the transactions carried out by individuals who exercise administration, control or management functions and by individuals closely linked to the same. The legislation acknowledges the possibility of carrying out market surveys (defined as “communications of privileged information when an individual is in possession of privileged information and communicates this information to another person, except when the communication takes place during the normal exercise of an occupation, profession or

function”) subordinate to the conditions envisaged by the regulation. The new legislation is directly applicable also in Italy, whose legal system (in particular the Consolidated Finance Law (TUF) and the CONSOB Issuers’ Regulations) has not been explicitly changed in light of the above discipline.

Italian Legislative Decree No. 25 dated February 15th, 2016 (New Transparency directive) The decree, approved definitively by the Council of Ministers on February 10th, 2016, implements the new Transparency Directive (Directive 2013/50/EC). The main changes to the Consolidated Finance Law (TUF - Italian Legislative Decree No. 58 dated February 24th, 1998) contained in the decree, concern:  communication obligations of the significant equity investments (Art. 120): the minimum threshold was raised from 2% to 3%; the minimum threshold of 5% for listed SMEs remains unchanged;  annual financial report (Art. 154 ter, paragraph 1): the deadline for publication is fixed as four months (and no longer 120 days) to align it with the provisions of Directive 2013/50;  interim financial report (Art. 154 ter, paragraph 2): the deadline for publication is fixed as three months (and no longer 60 days) to align it with the provisions of Directive 2013/50;  interim management report (Art. 154 ter, paragraphs 5 and 5 bis): the provision of the obligation to publish the interim management report has been eliminated and paragraph 5 now envisages that CONSOB, by means of regulation, can lay down, vis-à-vis listed Italian issuers, including financial bodies, the obligation to publish additional periodic financial information, with a greater frequency than the annual and six-monthly one;  fine system: for the purpose of aligning them to the provisions of the new directive, the following articles have been amended: Art. 192 bis (information on corporate governance); Art. 193 (corporate information and duties of the statutory auditors, the official accounts auditors and the independent auditors); Art. 194 bis (criteria for the determination of the fines); Art. 194 quater (order to cease violations); Art. 194 quinquies (payment to a reduced extent); Art. 195 bis (publication of the fines).

The legislative decree came into force on March 18th, 2016. By means of CONSOB Resolution No. 19614 dated May 26th, 2016, the amendments to the Issuers’ Regulations (CONSOB Resolution No. 11971 dated May 14th, 1999) were approved, necessary for adapting the regulations to the innovations made by the decree with regard to significant equity investments.

CONSOB Resolution No. 19521 dated February 24th, 2016 The resolution concerns the amendments to the Issuers’ Regulations on the sanctioning procedure to make it compliant with the discipline introduced by Italian Legislative Decree No. 72 dated May 12th, 2015, in accordance with Directive 2013/36/EU on the minimum capital requirements of the banking system (so-called Capital Requirements Directive IV). The resolution was published in the Italian Official Gazette No. 55 dated March 7th, 2016.

Italian Law No. 49 dated April 8th, 2016 The law converting Italian Decree Law No. 18 dated February 14th, 2016 with amendments, introduces urgent measures concerning the reform of the co-operative lending banks, the guarantee in the securitisation of non-performing positions, the tax regime relating to crisis procedures and collective asset management. With regard to the co-operative lending banks, with respect to the decree law, the amendments were significant and in particular concerned

the introduction of the “way out“ system, which permits the banks, if certain conditions identified by the legislation apply, to exercise the faculty not to join a banking group. The latter, in fact had 60 days as from the applicability of the conversion law to decide, alone or together with other banks, to apply to the Bank of Italy so as to confer their business in a joint-stock concern carrying out banking activities.

CONSOB Resolution No. 19770 dated October 26th, 2016 (Additional periodic financial information) The resolution contains amendments to the Issuers’ Regulations regarding interim management reports. The amendments, forming part of the legislative process for assimilation of Directive 2013/50/EU (“Transparency II”), introduced Article 82 ter “Additional periodic financial information” which provides the listed companies with the possibility to choose whether to publish the additional periodic financial information or not. In the event of the decision, on a voluntary basis, to publish said information the companies will be obliged to inform the market of this decision, specifying the disclosure elements they intend to provide. Also the possible decision to interrupt the publication will have to be justified and made public and will be effective as from the following year. The resolution was published in the Italian Official Gazette No. 263 dated November 10th, 2016. The new provisions will apply as from January 2nd, 2017.

CONSOB Resolution No. 0110351 dated December 14th, 2016 The communication acknowledged the ESMA Guidelines concerning the individuals who receive market surveys which apply as from January 10th, 2017, and those regarding the delay in the publication of privileged information to the general public which apply as from December 20th, 2016.

Tax measures The main innovations which characterized the year are described as follows.

The “2016 Stability Law” By means of Italian Law No. 208 dated December 28th, 2015 - paragraphs 61 to 66 and 69, the reduction of the IRES rate was envisaged. As from January 1st, 2017, with effect for the tax periods subsequent to that underway as of December 31st, 2016, the IRES rate was established to the extent of 24% (rather than 27.5%). The law reduces the period of amortisation for goodwill and trademarks recorded in the financial statements further to extraordinary merger, spin-off or business conferral transactions from 10 to 5 years, if these assets are subject to special realignment on the basis of Article 15, paragraph 10, of Italian Decree Law No. 185 dated November 29th, 2008, by means of the payment of a substitute tax to the extent of 16%. The amendment is valid for the business combination transactions entered into as from the accounting period subsequent to that underway as of December 31st, 2015.

Italian Decree Law No. 83, dated June 27th, 2015 (converted by means of Italian Law No. 132 dated August, 6th, 2015) The decree containing “Urgent measures concerning bankruptcy, civil and civil procedural aspects and the organisation and functioning of the judicial administration authorities”, under Article 16 introduced the full deductibility of the writedowns and losses on receivables for lending institutions and financial bodies and insurance companies.

During 2016, the special transitory provisions envisaged exclusively for 2015 having ceased to apply, the norm became fully operative; therefore, the value adjustments recognised in the financial statements relating to the amounts due from policyholders for premiums are, for both IRES and IRAP purposes, fully deductible in the period they are booked to the income statement, whether they are “valuational” type adjustments (associated with valuations concerning the degree of recoverability of the receivables) or “realisational” in type (consequent to the assignment of the receivable against consideration).

Italian Decree Law No. 59, dated May 3rd, 2016 “Banks Decree” (converted by means of Italian Law No. 119 dated June 30th, 2016) As from 2015 and until 2029, the decree introduced an annual fee of 1.5% to maintain the right to transform the prepaid taxes (DTAs, Deferred Tax Assets) recorded in the financial statements in relation to the value of the amortisation of the goodwill and the writedowns of receivables due from insured parties, into tax credits in the presence of a loss for the year or a tax loss. The need to introduce the fees became necessary so as to avoid that the transformation of the DTAs in tax credits be considered state aid.

Italian Internal Revenue Agency Circular No. 11/E dated April 7th, 2016 The Italian Internal Revenue Agency has provided new indications with regard to “Patent Box”, or rather the optional soft-term tax regime introduced by the “2015 Stability Law” (Italian Law No. 190 dated December 23rd, 2014) for the earnings deriving from the direct or indirect use of certain types of intangible assets (such as intellectual property rights, industrial patents, trademarks, models, designs and software covered by copyright), on the basis of the model of that which has already occurred in other European countries.

Italian Decree Law No. 193, dated October 22nd, 2016 so-called “Attachment to the 2017 Finance Law” (converted by means of Italian Law No. 225 dated December 1st, 2016) Article 6 of the decree introduced the facilitated definition of the sums entered on the roll which permits the party concerned to discharge the debt, avoiding the payment of fines and default interest. The sums entered on the rolls entrusted to the Collection Agents between 2000 and 2016 can be subject to facilitated definition. The definition concerns the sums referring to the taxes, the social security contributions, the positions under dispute, as well as the local revenues for which the tax authority has availed itself of Equitalia for collection purposes. It should be highlighted that the facilitation in question represents an interesting opportunity for the discharge of the sums entered on the rolls.

Management Report

The Company in 2016

Insurance business

Financial and asset management

Headcount and sales network

Other information

Information on the investee companies

Management Report

The Company in 2016

HIGHLIGHTS Dear Shareholders,

The Cattolica Group closed the year with consolidated profit of € 93.4 million compared with € 81.6 million in the previous year (+14.4%). The Group’s net result came to € 76.3 million, compared with € 60.9 million as of December 31st, 2015 (+25.2%). The consolidated result was affected by writedowns, mainly on banking equity investments, for € 57 million; the normalised consolidated result came to € 150 million and that of the Group to € 132 million. Net of these writedowns, 2016 therefore confirmed significant profitability despite the decrease in premiums written for the channels linked to Banca Popolare Vicenza. The Group’s Solvency II margin came to 1.92 times the regulatory minimum and is calculated according to the Standard Formula with the use of the Undertaking Specific Parameters (USPs).2

On a consistent basis with Cattolica’s strategic choice to strengthen itself in the agricultural and foodstuffs sector also further to the finalisation of strategic agreements with associations of primary importance, at the end of December the merger via incorporation of FATA Assicurazioni Danni (hereinafter FATA) within the Company was finalised. Within the same sphere, Cattolica acquired an investment of 51% in the agent company “Agenzia Generale Agrifides s.r.l.” with headquarters in Rome, with the aim of establishing new sales outlets care of the territorial headquarters of Coldiretti, thereby developing a new sales network for the non-life and life insurance products, which as of December 31st were already 19.

Investment action continued in the real estate sector, with participation in the “Mercury” fund to which 66 properties of three territorial co-operatives forming part of the CONAD Group were assigned, for an overall value of around € 300 million. The Company subscribed units equal to 51% in each of the three segments of the Fund for a total of around € 69 million. Furthermore, an agreement was reached with Cassa Depositi e Prestiti for a property development transaction, in which H-Farm will also participate, which envisaged the establishment of an organic complex of buildings and infrastructures intended for digital school and university education, on the land of Tenuta Ca’ Tron, known as “H-Campus”.

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The Company ended the year with profit of € 63.7 million compared to profit in the previous year of € 44.1 million (+44.5%).

The change in the gross premiums written for direct and indirect business, stating the 2015 figure of the FATA premiums on a pro forma basis, came to -7.6% with premiums for € 2,566 million compared with € 2,777.6 million as of December 31st, 2015.

2 Ratio prior to distribution of the Company dividend which will be subject to the approval of the shareholders’ meeting held on April 22nd, 2017, calculated according to the Standard Formula with the use of the Undertaking Specific Parameters (USP); the Company’s BoD resolved on March 16th, 2017 to present - to the Supervisory Authority - the application for authorisation to use the USPs as from December 31st, 2016. The figures, besides being subject to this authorisation, have not yet been subject to the checks envisaged by the IVASS letter to the market dated December 7th, 2016. Net of the dividend proposal, the solvency margin would be 1.86 times the regulatory minimum.

Direct business premiums of the non-life classes amounted to € 1,658 million (€ 1,721.5 million as of December 31st, 2015; -3.7%) and those of the life classes came to € 861.1 million (€ 1,009.7 million as of December 31st, 2015; -14.7%). In the motor insurance segment, premiums written amounted to € 899.6 million (-4.7% with respect to December 31st, 2015). The non-motor classes, with premiums written for € 758.4 million, decreased 2.4% with respect to December 2015.

The combined ratio of retained business was 94.2%, up slightly with respect to December 31st, 2015 (92.5%). The increase during 2016 is the result of the drop in profitability of the motor class in the presence of a prolonging of the decrease in the average premium which is affecting the entire market, and the effects of the earthquake in central Italy on the non-motor classes.

The quality of the Motor TPL portfolio and the expertise within the sphere of claims settlement permit the Company to maintain the technical balance also in a market context of heavy competition and a pick-up in the frequency of claims.

Life premiums written, for a total of € 861.1 million, reported premiums in the traditional segment for € 558.7 million, unit-linked premiums for € 30 million, health insurance for € 1.1 million, capitalisation for € 121.9 million and pension funds for € 149.4 million.

The result from the financial management of the investments (class C), passed from € 235.4 million to € 247.1 million (+5%). It was characterised by net income from investments which fell from € 273.9 million to € 268 million (-2.2%), of which income from shares and holdings amounted to € 51.2 million (of which € 42.5 million from subsidiaries), compared with € 48.7 million in 2015, and by adjustments net of the value writebacks for € 86.1 million compared with € 133 million as of December 31st, 2015. Net income realised on investments amounted to € 65.2 million, compared with the € 94.4 million as of December 31st, 2015.

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With regard to the Group sales network, the agencies numbered 1,514, in line with the previous year, and were distributed as follows: 50.9% in Northern Italy, 26.9% in Central Italy and 22.2% in Southern Italy and the islands.

Bank branches which place insurance products amounted to 5,649, compared with 5,744 in the previous year: the branches of the BPVi Group fell from 579 to 502, the agreement with Barclays Bank ceased (-91), and those of the Banche di Credito Cooperativo increased (+88). The financial advisors fell to 906, compared with 1,039 at the end of the previous year.

Welfare and pension product advisors are represented by 299 C.P. Servizi Consulenziali sub- agents, compared with 362 as of December 31st, 2015 and by 19 Agenzia Generale Agrifides sub-agents.

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The following tables show the reclassified income statement, the key indicators, the

Management Report

reclassified statement of financial position and the balances relating to the sales network and the headcount, compared with those of the previous year. The figures as of December 31st, 2016 include the balances deriving from the merger via incorporation transaction involving FATA, with recognition for accounting purposes as from January 1st, 2016.

Furthermore, they take into account the legislative innovations introduced with regard to own shares by the recent provisions contained in the IVASS provision No. 53 dated December 6th, 2016 further to the assimilation of the Accounting Directive 2013/34/EU; therefore, a “Negative reserve for own shares in the portfolio” has been recorded at December 31st, 2016 for a negative balance of € 40 million.

The tables which follow in this Report do not include the 2015 pro forma balances either for the FATA merger or for the legislative innovations introduced with regard to own shares: the result for the year ended as of December 31st, 2015, equal to € 44.1 million, stated on a pro forma basis due to the legislative innovations introduced with regard to own shares, amounted to € 39.7 million. Premiums as of December 31st, 2015, shown in the table “Summary of the premiums for the year”, also include those of FATA for the purpose of providing a consistent presentation.

The balance sheet and income statement schedules following the Management report by contrast show the schedules with the 2015 pro forma balances due to the legislative innovations introduced with regard to own shares indicated above.

Table 1 - Summary of the premiums for the year

Pro forma Change

(€ thousands) 2016 2015 Amount % 2015

Gross premiums written 2,565,999 2,777,615 -211,616 -7.6 2,414,006 Direct business - non-life 1,658,022 1,721,479 -63,457 -3.7 1,354,758 Direct business - life 861,062 1,009,681 -148,619 -14.7 1,010,339 Indirect business - non-life 46,867 46,394 473 1.0 48,848 Indirect business - life 48 61 -13 -21.3 61

Table 2 - Reclassified income statement

Change (€ thousands) 2016 2015 Amount %

NON-LIFE BUSINESS Premiums written 1,502,281 1,219,731 282,550 23.2 Claims for the period -985,100 -776,022 -209,078 -26.9 Administrative expenses -120,972 -103,086 -17,886 -17.4 Acquisition and collection costs -281,727 -223,428 -58,299 -26.1 Other technical items -26,707 -25,532 -1,175 -4.6 a) Result of non-life insurance business 87,775 91,663 -3,888 -4.2

LIFE BUSINESS Premiums written 848,171 995,267 -147,096 -14.8 Claims for the period and change in technical provisions -946,726 -1,130,553 183,827 16.3 Administrative expenses -17,727 -19,760 2,033 10.3 Acquisition and collection costs -32,303 -31,780 -523 -1.6 Other technical items -5,454 -916 -4,538 n.s. Technical interest ¹ 139,619 154,892 -15,273 -9.9 b) Result of life insurance business -14,420 -32,850 18,430 56.1

c) = (a+b) Total result of insurance business 73,355 58,813 14,542 24.7

d) Net income from investments 258,272 269,061 -10,789 -4.0 e) Technical interest ¹ -139,619 -154,892 15,273 9.9 f) Other income net of other charges -72,044 -55,597 -16,447 -29.6 g) = (c+d+e+f) Profit (loss) from ordinary operations 119,964 117,385 2,579 2.2

Profit (loss) from extraordinary operations -3,676 15,375 -19,051 n.s. Profit (loss) before taxation 116,288 132,760 -16,472 -12.4 Income taxes for the period 52,580 88,685 -36,105 -40.7 PROFIT (LOSS) FOR THE YEAR 63,708 44,075 19,633 44.5 n.s. = not significant ¹ The item includes technical interest to be acknowledged to the policyholders net of the result of class D investments

Management Report

Table 3 - Key life and non-life indicators

(Balances as %) 2016 2015

Non-life ratios for direct business Claims ratio (Claims for the year / Premiums for the year) 63.9% 64.2% G&A ratio (Other administrative expenses / Premiums for the year) 7.1% 7.6% Commission ratio (Acquisition costs / Premiums for the year) 19.2% 19.2% Total Expense ratio (Operating expenses / Premiums for the year) 26.4% 26.8% Combined ratio (1 - (Technical balance (*) / Premiums for the year) 91.9 92.9%

Non-life ratios for retained business Claims ratio (Claims for the year / Premiums for the year) 65.6% 63.6% G&A ratio (Other administrative expenses / Premiums for the year) 8.1% 8.5% Commission ratio (Acquisition costs / Premiums for the year) 18.8% 18.3% Total Expense ratio (Operating expenses / Premiums for the year) 26.8% 26.8% Combined ratio (1 - (Technical balance (*) / Premiums for the year) 94.2% 92.5%

Life ratios G&A ratio (Other administrative expenses / Premiums for the year) 2.1% 2.0% Commission ratio (Acquisition costs / Premiums for the year) 3.8% 3.2% Total Expense ratio (Operating expenses / Premiums for the year) 5.9% 5.2%

(*) Excludes the income attributable to the non-life technical account and the changes in the equalisation reserve

Table 4 - Reclassified statement of financial position

Change (€ thousands) 2016 2015 Amount %

Assets Land and buildings 101,261 39,380 61,881 n.s. Investments in Group companies and other investees 972,152 1,101,459 -129,307 -11.7 Shares and Units of mutual investment funds 755,951 610,254 145,697 23.9 Bonds and other fixed income securities 6,688,150 6,047,000 641,150 10.6 Loans and other class C.III investments 3,533 14,502 -10,969 -75.6 Deposits with ceding companies 10,668 10,996 -328 -3.0 Class D investments 982,219 1,176,759 -194,540 -16.5 Cash in bank and cash equivalent 35,277 145,976 -110,699 -75.8 Own shares and holdings 0 24,189 -24,189 -100.0 Investment 9,549,211 9,170,515 378,696 4.1 Intangible assets 207,316 206,737 579 0.3 Technical provisions - reinsurance amount 558,929 552,224 6,705 1.2 Other receivables and other assets 1,090,463 944,543 145,920 15.4 TOTAL ASSETS 11,405,919 10,874,019 531,900 4.9

Shareholders’ equity and liabilities Share capital and equity reserves 1,851,946 1,864,954 -13,008 -0.7 Negative reserve for own shares in portfolio -39,908 0 -39,908 n.a. Profit (loss) for the year 63,708 44,075 19,633 44.5 Shareholders' equity 1,875,746 1,909,029 -33,283 -1.7 Premium provision 683,133 573,011 110,122 19.2 Provision for outstanding claims 2,577,662 2,199,747 377,915 17.2 Gross technical provisions - non-life 3,260,795 2,772,758 488,037 17.6 Mathematical provisions 4,440,909 4,195,811 245,098 5.8 Class D provisions 982,219 1,176,760 -194,541 -16.5 Gross technical provisions - life 5,423,128 5,372,571 50,557 0.9 Other gross non-life technical provisions 13,218 12,280 938 7.6 Other gross life technical provisions 128,216 151,514 -23,298 -15.4 Other payables and other liabilities 704,816 655,867 48,949 7.5

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 11,405,919 10,874,019 531,900 4.9 n.s. = not significant n.a. = not applicable

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Table 5 - Headcount and sales network

(number) 2016 2015 Amount %

(1) Headcount 801 636 165 25.9 (1) Full time equivalent Headcount 775 614 161 26.2

Direct network:

Agencies 822 834 -12 -1.4

Partner networks:

Bank branches 627 723 -96 -13.3

Financial advisors 41 105 -64 -61.0

Welfare and pension product advisors 299 362 -63 -17.4

(1) The figure includes 130 FATA Assicurazioni Danni employees (127 FTE), a company merged via incorporation within the Company with accounting and tax effects as from January 1st, 2016 and takes into account the exit as of December 31st, 2016 of 5 co-workers of which 4 members of the Intersectorial Solidarity Fund.

The insurance business

The overall volume of premiums stands at € 2,566 million, of which € 1,658 million in direct non-life business (-3.7% compared with December 31st, 2015), € 861.1 million in direct life business (-14.7%) and € 46.9 million in indirect business compared with € 46.5 million in 2015. Premiums as of December 31st, 2015, shown in the table “Summary of the premiums for the year”, also include those of FATA for the purpose of providing a consistent presentation.

Non-life classes as a percentage of direct business fell from 63% to 65.9% and that of the life classes rose from 37% to 34.1%.

Direct life and non life premiums, indirect premiums euro/millions

2,000 1,722 1,800 1,658 1,600 1,400 1,200 1,010 1,000 861 800 600 400 200 46 47 0 2015 2016

Direct non life premiums Direct life premiums Indirect premiums (life and non life)

Technical provisions relating to direct and indirect non-life business (premiums and claims) amounted to € 3,260.8 million. Technical provisions relating to life business (actuarial and class D) amounted to € 5,423.1 million, of which € 982.2 million relating to class D technical provisions.

With reference to the non-life classes, the direct business indicators presented a ratio of other administration expenses to premiums written for the year of 7.1% (7.6% as of December 31st, 2015) and acquisition costs to premiums written of 19.2% (unchanged with respect to December 31st, 2015). With reference to the life classes, the retained business indicators presented a ratio of other administration expenses to premiums written for the year of 2.1%, essentially in line with December 31st, 2015, and acquisition costs to premiums written of 3.8% (3.2% as of December 31st, 2015).

Financial and asset management

Investments amounted to € 9,549.2 million, with an increase of 4.1% when compared with the previous year and include: 1.1% from land and buildings, 70.4% from fixed-income securities, 10.3% from shares and holdings (9.8% relating to Group companies and other investees), 10.3% from class D investments and 7.9% from other investments.

The results from the management of class C investments (non-life and life), as already indicated, amounted to € 247.1 million, compared with the € 235.4 million as of December 31st, 2015.

Work organisation and operating costs

As of December 31st, there were 801 co-workers, having taken into account the 5 leavers as of December 31st, of which 4 members of the Intersectorial Solidarity Fund, compared with 636 at the end of 2015. The increase was mainly attributable to the inclusion of new professional profiles and the merger of FATA within the company which led to the inclusion of 130 FATA employees at year end. Gross premiums written per full time equivalent employee amounted to around € 4 million, in line with 2015.

Headcount Number 900 801 800 775

700 636 614 600

500

400

300

200 100 0 2015 2016

Staff Staff full time equivalent

Management Report

Own equity - Shareholders’ equity

The shareholders’ equity amounted to € 1,875.7 million, compared with € 1,909 million in 20153: with regard to details relating to its composition, its possibility of being used and the distributable nature of the reserves, please see the related table in the notes to the accounts.

2014-2017 BUSINESS PLAN

The Group also continued during 2016 with its operational and project-related process following the guidelines outlined in the 2014-2017 Business Plan, presented to the financial community in September 2014 and characterised by challenging objectives in terms of profitable growth and expected results, as well as exacting internal reorganisation and corporate rationalisation projects.

The efforts made in the direction of an on-going improvement of the internal efficiency in the production and management processes supporting the business, as well as the strategic overhaul of the Group’s overall structure for further focusing its distinctive positioning on the market, represented the underlying theme which has always guided the corporate choices over the last few years.

However, the persistence of the economic crisis, the slowdown in global economic growth and a number of specific events inside and outside the Group made it necessary to launch a review of the economic targets fixed for 2017.

On November 11th, 2016 the Managing Director informed the Board of Directors that, on the basis of the forecast operating results available at the time, a consolidated profit of around € 150 million was envisaged for 2017. The reason for the difference with respect to the figures communicated in April 2016 (consolidated profit of around € 200 million) were to be found in certain significant factors which came about during the subsequent months of the year, such as:

 the persistence, beyond the forecasts at the start of the year, of a generalised market drop in the average premium for motor TPL policies, what is more accompanied by signs of deterioration in the frequency of claims:  the trend of the life and non-life premiums of the companies in partnership with Banca Popolare di Vicenza, also as a consequence of the withdrawal from the partnership agreements;  the persistent phase of low interest rates, lasting longer than envisaged;  the premiums of the non-life classes curbed by the laboured pick-up of the Italian economy.

The afore-mentioned difficulties did not however divert the Group’s attention from the pursuit of the strategic and developmental lines established at the end of 2014. The first few months of the year underway confirmed the overall negative trend due to the factors indicated above and, in particular, the drop in sales volumes relating to the collaboration with Banca

3 The 2015 shareholders’ equity, expressed on a comparable basis due to the new accounting treatment of own shares, came to € 1,884 million.

Popolare di Vicenza.

The projects of strategic importance in particular include that relating to the merger via incorporation of FATA within the Company, the last step in a process of rapid and effective integration of the insurance company within the Group which, besides the unification of the main company functions, has also launched the complete sharing of the IT platform of the systems of the agencies and management of the portfolio

By means of this additional and important transaction, it is easier to broadly define the development policies in the agricultural and food sector, both with regard to the supply model and innovative services in favour of the agricultural industry, which Cattolica has always been particularly heedful of, and for the efficient handling of the channels supporting distribution, partly further to the agreement with Coldiretti.

The Group’s commitment continued once again throughout the whole of 2016, so as to make its processes increasingly more “digital”, in the information systems and in the relational approaches vis-à-vis the customer, with a global project launched last year which sees the involvement of not only Management but also the Agents, constantly aligned and involved in the choices of the new back office operating formalities and in the overhaul of the operations within the agency.

The main projects and activities completed/launched during 2016 for each of the six strategic lines identified to support the attainment of the goals of the long-term Business Plan are illustrated below:

Profitable growth of the Non-life Business In a market featuring heavy tension on prices and pronounced competition, the Group’s efforts for defending the technical excellence in its motor business continued in 2016 as well, with action targeted at the containment of the costs of the claims (e.g. push towards the use of contracted body repair shops, as well as experimentation throughout Italy of Immediate Medical Claim Settlement Centres) and the development of a more targeted and selected range, via the use of new databases during the tariff rating and risk selection phase.

Activities continued on the corporate segment aimed at rebalancing the portfolio mix towards target products and the containment of the exposures on highly volatile risks. With regard to innovation in the undertaking and pricing phase, mention is made of the launch of the new Small Business product for SMEs, as well as the evolution of the range in the agricultural risks sector, inclusive of services for the farmer.

The efforts made with regard to an on-going strengthening of the Group settlement model led to the launch of a project for the enhancement of the anti-fraud activities, with the development of a new information system which will be fully up and running in the first few months of 2017.

Leadership in the agricultural and foodstuffs sector Development of the insurance potential of the agricultural and foodstuffs sector, playing on the leadership position obtained further to the acquisition of FATA in 2014, represents one of the fundamental strategic lines on which the Business Plan is based.

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The need to handle the Group strategy in a centralised manner in this segment, also aiming for a greater governance and execution capability of the agreement entered into with Coldiretti, is the main reason which led the Group to deem the unification of the two entities (Cattolica and FATA) more efficient, as a natural completion of an operational and systems- related integration process already successfully carried out in the first few months of 2016.

On December 22nd, 2016, as already reported, the deed for the merger via incorporation of FATA in Cattolica was entered into and became effective as from December 31st, 2016, with accounting and tax effects as from January 1st, 2016. The corporate unification will maximise the benefits obtained with the operational integration already achieved in the last few months and will permit a synergic handling of the innovation initiatives put together by the Group, with the development of non-life products for the coverage of the risks both in the agricultural and foodstuffs sector and in the insurance of the crops, endowed with evolved contents supporting the settlement activities and customer service (e.g. use of drones and satellite images during the settlement stage, development of specific apps serving the farms to be used also for foreseeing damaging events, biotic risks or for on-going monitoring of the state of the crops).

The complete valorisation and integration of the FATA and Cattolica networks will be achieved during 2017 with the sharing of the advantages of the business dimension, the skills, the life/non-life product range and the investments in innovation made for the two companies.

Life, Pension and Welfare development During the first half of the year, activities were completed, for all the insurance companies and distribution networks, inherent to the rationalisation of the product catalogue and the simultaneous alignment with the capital absorption and profitability standards defined at Group level. At the same time, steps have been taken to periodically up-date the Information Files of the various types of product according to the rules laid down by COVIP, CONSOB and IVASS.

In November, during the Dottrina Sociale della Chiesa Festival held in Verona, the new life product “Cattolica & Protezione - Dopo di Noi” was presented, representing the Company’s answer to the needs of families of individuals affected by serious disabilities. The Cattolica solution is the result of profitable collaboration with the National Chair of ANFASS (Association of Families of Individuals with intellectual and relational disabilities) and is an additional sign of the social responsibility of the Company. The features of the new “Dopo di Noi” product permit those concerned to fully avail of the tax-related benefits originating from recent legislation.

With regard to management operations, the plan for the simplification of the processes and the transversal review of a series of IT mechanisms indispensable for improving the response times to brokers and customers, as well as for ensuring a more accurate coverage of the legislative compliance rules, was accomplished, according to the original schedule defined. The afore-mentioned IT and procedural measures represented the necessary starting point of a much broader project, launched last May, which regards the complete renewal of the IT platform and the life systems for all the Group companies.

Distribution excellence and Digital Transformation The Group’s commitment continued throughout the year in the realisation of the objectives defined in the digital transformation programme, to equip the distribution networks and head office structures with instruments indispensable for continuing to compete and grow in the changed market context, which sees new and more evolved customer purchasing behaviour establish itself.

The Group is taking action to achieve three fundamental goals:

 operating efficiency, understood as the optimisation of the head office and agency processes, so as to obtain not only a saving in costs, but also to free up time and resources to be dedicated to the handling of the relationships with the customers and the commercial development in the broadest sense;  commercial efficiency, understood as the improvement of the ability to reach the customers also thanks to the use of innovative work methods and instruments, with solutions, services and a range increasingly in line with their needs;  innovation, understood as the process of fully comprehending its business and positioning on the market, aimed at the identification of the new spheres of development according to the developmental trends underway (technological, business and legislative).

The digital transformation project continues in observance of the timescales planned and agreed with the networks and is developed and implemented by an interfunctional team which includes the Distribution and Marketing Division, the Operations Division and the Technical Divisions by means of a process of “conception”, “realisation” and “activation” of the development projects identified.

The fundamental communication-related role, via the Group’s distribution channels, of the direction undertaken is carried out by the Distribution and Marketing Division together with 58 Agents selected as implementers and facilitators of the change process launched (so-called “Digital Ambassadors”), who have been involved in an intense programme for the development of their skills launched on December 14th, 2015.

The Digital Ambassador is involved in all the phases of the model with different depths:

 in the conception stage, within the Workshop of Ideas, the same represent a source of feedback and discussion for the Insurance Company with regard to any new initiatives with impact on the «method of working» in the agency and/or on assessments of innovation of the range and the sales models;  in the realisation stage, within the Digital Factory, the same takes part in the evaluation or possible streamlining of the contents of the instruments developed and to be implemented on the networks;  in the activation stage, the same represents one of the main implementers of the change underway by means of activities for the communication and promotion of the Digital Transformation Programme on the entire network.

In observance of the timescales proposed and agreed on with the distribution networks, on October 15th, 2016 the presentation was launched of the results scheduled on three phases of change of the digital transformation programme which over a period of one year will be made

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available to all the Group’s agencies.

Among the other activities launched during 2016, it is also necessary to mention the strong and rising commitments of the Group in the development of the expertise of its distribution networks, pursued by means of the realisation of new dedicated training courses: for the agency network, for the secondary networks and for the agency employee/co-workers.

A great boost was given to the enhancement of training, with the planning and provision of:  new masters’ courses dedicated to Cattolica and FATA agents (Agents Executive Master) and the Agents Profession Master dedicated to young talent in the network;  new on-line training courses for newly recruited workers;  new on-line training courses for agents;  new courses provided both virtually and frontally for agents, sub-agents and agency co- workers.

Operating efficiency and productivity This area of focus includes a series of activities aimed at simplifying the processes and the internal organisation, as well as developing new methods for managing the staff with regard more to merit, with the aim of increasing efficiency and productivity. In this connection, mention is made of the introduction of a “Performance Management” system for the employees, the definition of new processes for the identification of the “high potential” resources, and for the creation of customised career paths also via job rotation.

The merger of FATA in the Company represented an important occasion for the overhaul of the Group’s organisation with a view to efficiency as well as greater focusing of the head office units supporting the growth of the business and the distribution networks.

Activities continued aimed at the control and rationalisation of the expenditure vis-à-vis third parties via renegotiation and consolidation, where possible, of contracts with the main suppliers of the Group, the evolution of the passive cycle processes/instruments, the operational inspiration (which can translate into new procedures or new IT functions) emerging from interfunctional work groups which have been set up for optimisation on particular types of expenditure.

Within the IT sphere, various projects have been completed for the consolidation of the non- life systems, both for the agency channel and for the bank-assurance one, and a programme has been launched for the evolution of the management of the infrastructures.

New approaches to the management of capital and finance During the year, the Group achieved the process for the consolidation and bringing onto stream of advanced approaches for the management of the investments, which made it possible to optimise its profitability per risk unit. The implementation of the new ALM (Asset Liability Management) management model was in fact completed, consistent with the new Solvency II legislative requirements, already at the time of definition of the 2016 Asset Allocation. Furthermore, the Capital Management Plan for the three-year period 2016-2018 was approved for all the Group companies. The target allocation of the capital and the business areas on which to calculate the expected returns adjusted for the risk has been defined within

this framework. Said implementation was carried out completely in line with the internal assessment of the risk and solvency profile, with a view to Solvency II; this metric started to be used also for the development and monitoring of the individual product classes.

To support the development, investment and solidity initiatives of the Plan - of the overall € 500 million in share capital increase achieved at the end of 2014 - to-date investments have been made for:

 innovation and technology for € 46 million;  adaptations of the organisational model in line with the new Solvency II European directives for around € 13 million;  the Change Management programme for around € 16 million;  the launch of the activities for extending and developing the sales network and the agency co-workers, with the use of still limited resources with respect to that scheduled plus other minor items, for € 8 million.

Within the context of the implementation of the Business Plan, the Company has been and still is involved in the working out and search for growth initiatives, also by external lines, compatibly with the market scenarios and the best opportunities, with a view to a stable creation of value.

WAYS IN WHICH THE GROUP IMAGE AND INFORMATION ARE DISCLOSED

The Investor The Investor Relations Division maintained on-going dialogue with the financial community, Relations involving relations marked by clarity and transparency, in order to ensure the market division and visibility on the results and on the strategies of the Group. studies on the Company During the year, five banks published analysis and comments on Cattolica stock. Individual meetings are periodically organised with the analysts so as to look in-depth at the business trend and meetings were intensified with Italian and international institutional investors. Public conference calls were organised at the time of the publication of the 2015 financial statements, the 2016 interim report and the interim reports as at March 31st, 2016 and September 30th, 2016.

Rating In August, Standard & Poor’s confirmed Cattolica’s rating as BBB- and the outlook as stable. The rating remains limited by that of the Italian Republic, in accordance with the matters envisaged by the standards of the agency.

Standard & Poor’s also confirmed the Stand-Alone Credit Profile (SACP) of Cattolica as bbb+, duly noting both the Group’s financial risk profile, which stands at a “more than adequate” level, and the reconfirmed stability of the risk profile of the business, which remains “satisfactory” also thanks to a “strong” competitive positioning on the Italian market and a well diversified distribution network.

Management Report

SIGNIFICANT EVENTS DURING THE YEAR

The significant events that occurred during the year as part of managing the investments in Group companies, the corporate reorganisation and the consequent rationalisation of activities are set out below, in addition to other significant events during the year.

You are hereby reminded that the Company’s Board of Directors resolved to comply, with effect as from December 13th, 2012, with the opt-out regime as per Articles 70, paragraph 8 and 71, paragraph 1 bis, of the Issuers’ Regulations, therefore availing itself of the faculty to depart from the obligations to publish the disclosure documents laid down at the time of significant merger, spin-off, share capital increase via conferral of assets in kind transactions, acquisitions and transfers.

Cattolica, Group companies and other investees

The merger of FATA in the Company

On April 5th, the Company’s Board of Directors approved the project for merger via incorporation of FATA, as a further initiative to support the achievement of the 2014-2017 Business Plan which considers the growth in the agricultural and foodstuffs sectors to be one of its strong points. By means of resolution No. 119/2016 dated September 20th, 2016 IVASS authorised the merger via incorporation of FATA Assicurazioni within the Company. On October 4th, the respective Boards of Directors resolved the merger. The procedure envisaged by current legislation having concluded, on December 22nd, 2016 the deed for the merger was entered into and, once the legal registration had taken place, became effective as from 11.59 p.m. on December 31st, 2016, with accounting and tax effects as from January 1st, 2016.

In April, a memorandum of understanding was entered into with Coldiretti and a number of Agrarian Consortiums in relation to which in June the final details of the dealings between the Company and FATA with the Coldiretti National Confederation were agreed on. On June 27th, in accordance with the above, Coldiretti transferred to Cattolica, by means of deed filed on the following July 4th care of the Companies’ Register, an equity investment corresponding to 51% of the share capital of the agent company “Agenzia Generale Agrifides s.r.l.” (formerly “Agenzia Generale Coldiretti s.r.l.”) with headquarters in Rome, with the objective of establishing new sales outlets care of the territorial headquarters of Coldiretti, in this way developing a new sales network for the life and non-life insurance products. Within this sphere at the end of 2016, according to the agreements entered into originally, an initial tranche of the units obtained by FATA from the conferral to Fondo Agris of the usufruct for four years of certain properties, were assigned to the participants of the Agrarian Consortiums.

Banca Popolare di Vicenza

The corporate relationships at the beginning of the year were as follows:

 Banca Popolare di Vicenza (hereinafter also BPVi) held an equity investment in Cattolica

equal to 15.07% of the related share capital;  Cattolica held an equity investment in Banca Popolare di Vicenza equal to 0.89% of the related share capital.

Furthermore, in correlation with the partnership existing between Cattolica and BPVi, the joint-holding in the companies Berica Vita, Cattolica Life and ABC Assicura emerged, with equity investments respectively of 60%, in relation to Cattolica, 40% in relation to BPVi, in each of the afore-mentioned companies. The salient facts which concerned the relationships with BPVi during the year are summarised below.

On March 5th, Banca Popolare di Vicenza’s extraordinary shareholders’ meeting resolved its transformation into an Italian joint-stock company.

The bank also launched, in April, an offer to the capital market for € 1.5 billion in accordance with the authorisation granted during the afore-mentioned shareholders’ meeting. On April 29th, the global offering for subscription of the shares of BPVi concluded within the sphere of which applications were presented for 7.66% of the total equivalent value of the offering of € 1.5 billion; Cattolica had, in this context, resolved to take part in this share capital increase for an amount of € 2,686,123.38.

On May 2nd, Borsa Italiana, having duly noted the results of the global offering and the insufficient diffusion of the subscribed shares between the general public, did not authorise the launch of trading for the Bank’s shares. Therefore, the Global Offering of BPVi and, therefore the subscriptions to the same ceased and the Atlante Fund, by virtue of the agreements entered into between BPVi and Unicredit and between the latter and Quaestio Capital Management SGR, subscribed the entire share capital increase so that it now holds 99.33% of the bank’s share capital. On conclusion of the matters described, the Parent Company’s holding in BPVi was diluted from 0.89% to 0.006% of the share capital.

The equity investment of 40% in the following Group companies is therefore referable - indirectly - to Quaestio Capital Management SGR via the Bank: ABC Assicura, Berica Vita and Cattolica Life plus the holdings held by BPVi in Cattolica.

The Company’s Board of Directors therefore from time to time examined the situation which had come about in the partnership dealings with BPVi, in light of the outcome of the global offering for the subscription of shares of the bank, which led, as just indicated, to the integral subscription of the share capital increase by the Atlante fund. Specifically, the Board examined the right to unilaterally withdrawal which the partnership agreements acknowledge to Cattolica after the transformation of BPVi from a co-operative company to a joint- stock concern. The Outline Agreement which disciplines the partnership, renewed on December 14th, 2012, envisaged that Cattolica may at any time and stage of the partnership “unilaterally withdraw” in the event that BPVI should resolve “the transformation of its co-operative legal status or go ahead with a merger for its incorporation in another bank or financial company which does not have a co-operative form”. This right to withdraw could have been exercised within the 180 days after the transformation resolution, effective 180 days after the exercise of this right. This latter deadline having expired, a sale option can be exercised by Cattolica, as specified herein, as a result of which BPVi is obliged to repurchase

Management Report

the entire ownership of the three product companies Berica Vita, ABC Assicura and Cattolica Life, in which BPVi and Cattolica respectively hold 40% and 60% of the related share capital, according to the terms and conditions disciplined in said Outline Agreement; accordingly, BPVi will obviously be free to proceed with the negotiation of new bank-assurance agreements with third party partners.

On August 4th, the Board of Directors therefore resolved to exercise the right to unilaterally withdraw from the partnership agreements with BPVi. The withdrawal, whose full effectiveness takes place on expiry of the sixth month after the receipt by BPVi of the related communication and therefore February 10th, 2017, involves a structured series of immediate or deferred effects under the terms identified under agreement mainly including: (i) the immediate termination, as of the date of communication of the withdrawal, of all the representation and safeguards of BPVi in the management and corporate set-up of Cattolica; (ii) as from the date of communication of withdrawal, BPVi’s commitment to provide, in each corporate venue, including meeting venues, consent to the elimination of modification of each and every clause of Cattolica’s articles of association, deriving from the ceased agreements, if deemed unquestionably appropriate by Cattolica; (iii) the termination of the lock-up commitment on 4,120,976 Cattolica shares held by BPVi; (iv) the effectiveness of specific commitments of BPVi, after the termination of the partnership, in relation to any disposal, full or part, of the related equity investment in Cattolica, provided that it is greater than 3% of its share capital. BPVI will amongst other aspects be obliged, in the event of disposals on the market also of blocks, to adopt formalities which do not involve a negative impact for the listing of the Cattolica shares; (v) the regulation of the premium and penalty mechanisms conventionally envisaged in relation to the performance of the corporate joint ventures (Berica Vita, Cattolica Life, ABC Assicura); (vi) Cattolica’s right, to be exercised within 60 business days of the date of effectiveness of the withdrawal (i.e. as from the expiry of the sixth month after receipt by BPVi of the related communication), to sell (and the mirror right-obligation of BPVI to purchase) the 60% equity investments in Berica Vita, Cattolica Life and ABC Assicura; (vii) the termination, as from the date of exercise of the purchase option as per the previous point (vi) and in any event in the case of failure to exercise as of the date of the related expiry, of all the agreements, including commercial, covered by the partnership.

You are hereby informed that the decisions relating to said withdrawal led to the activation of the procedure on the related party transactions. On August 11th, 2016 a specific Disclosure Document was published, pursuant to Article 5 of the Regulation adopted by CONSOB by means of Resolution No. 17221/10 and subsequent amendments.

On February 10th, 2017, further to the matters communicated on August 4th, 2016, since six months had elapsed as from receipt by BPVi of the communication relating to the unilateral withdrawal of Cattolica from the partnership agreements with the bank, the lock-up restriction on 4,120,976 Cattolica shares owned by BPVi ceased, without prejudice to anything else envisaged in the agreements. Furthermore, as from February 10th, 2017 the period for the exercise of the purchase option which will terminate on May 10th, 2017, will start.

With regard to the equity investment held by BPVi in Cattolica’s share capital, it is hereby formally acknowledged that on January 7th, 2016 the Bank received a communication relating to the affording under pledge of 26,267,793 Cattolica shares to guarantee a loan transaction, which was not followed by further communications by the Bank.

Furthermore, you are hereby informed that further to the acquisition of elements of information during 2016, with regard to the various transactions entered into by BPVi between 2014 and 2016, the Parent Company decided to check any requirements and conditions for the eventual protection of its claims as investor in BPVi, with particular reference to the share capital increase transactions of the same bank in Spring 2014 and the content of the related prospectus. A specific opinion was requested on the matter from qualified legal advisors, who concluded, on the one hand, for the theoretical existence of said compensatory claims of Cattolica and, on the other hand, for the appropriateness of awaiting, due to the launch of the related action, the outcome of the assessments and the sanction procedures vis-à-vis the former exponents of BPVI launched by CONSOB with regard to the same subject.

Other events

In July, on the basis of the new provisions of Irish legislation (Company Act 2014), the name of “Cattolica Life ltd” was changed to “Cattolica Life designated activity company”.

On August 4th, as mentioned in the section “Financial and asset management”, the closing for the establishment of the multi-segment property investment fund known as “Mercury” was finalised, by means of the inflow of 66 properties by the three area co-operatives belonging to the CONAD group. The Company subscribed units equal to around 51% in each of the three segments for a total of around € 69 million.

Other investee companies

On January 7th, the Company informed Veneto Banca of the exercise of the right to withdraw, made further to the decision to transform the bank into an Italian joint-stock company, with regard to the entire investment held in the bank (277,777 shares) also contesting the delimitations; these contestations were repeated after the recent verdicts on the matter delivered by the Council of State. This investment, held since 2014, had been acquired within the sphere of the transaction for the early exercise of the option agreed in 2014 relating to Cassa di Risparmio di Fabriano e Cupramontana shares, which subsequently became Veneto Banca shares, after the absorption of the former in the latter. On March 18th, the Company received the settlement of 3,567 shares subject to withdrawal for a total of € 26,039.1 (€ 7.3 per share). On June 22nd, the global offering of ordinary Veneto Banca shares concluded with applications presented for 2.23% of the total equivalent value of the offering. Borsa Italiana, having duly noted the results of the global offering, did not authorise the launch of trading for the bank’s shares and therefore, on closure of the period envisaged for the exercise of the right to revoke the initial applications, only 1.14% of the overall offering had been effectively subscribed. In accordance with the matters envisaged by the agreement between Veneto Banca and the underwriting syndicate organised and managed by Banca IMI, as well as the sub-guarantee agreement between the latter and Quaestio Capital Management SGR, on June

Management Report

30th the Atlante Fund subscribed the residual unplaced portion of the global offering (98.86%) thus obtaining 97.64% of the bank’s share capital. On conclusion of the matters described, the Company’s holding in Veneto Banca was diluted from 0.22% to 0.003% of the share capital.

On February 17th, a Shareholders’ agreement was established between some of UBI Banca’s shareholders. The shareholders represented conferred, at the time of establishment of the Agreement, 107,765,134 ordinary shares equal to 11.95% of UBI Banca’s share capital. On its part, the Company complied with the Agreement conferring 4,850,000 ordinary shares of the bank. Among the terms of the agreement it is contemplated that the participants in said Agreement meet also to discuss the choice of the most suitable candidates to cover the role of members of the Supervisory Board presenting their own list for the shareholders’ meeting, held on April 2nd, 2016, called to renew the offices with the consequent commitment to vote for the same. The afore-mentioned Agreement, during the shareholders’ meeting, then expressed a sole list with another aggregation of shareholders (the so-called “Patto dei Mille”) and the Cassa di Risparmio di Cuneo Foundation.

On April 20th, the Company’s Board of Directors resolved the binding commitment to subscribe units of the alternative investment fund Atlante, set up and managed by Quaestio Capital Management SGR S.p.A., for a total Group amount of € 40 million, for the purpose of recapitalisation transactions requested from a number of Institutes by the Supervisory Authority and investments in non-performing receivables of Italian banks. In light of the results achieved by the fund and the press release dated January 31st, 2017 of Quaestio Capital Management, manager of the Atlante Fund, the Company took steps to write down its holding in the Fund for a total of € 7.5 million (gross of taxation and the retrocession to the insured parties) equal to 41.8% of the total commitment, which comes to € 18 million.

The extraordinary shareholders’ meeting of Cassa di Risparmio di San Miniato held on April 29th, 2016 following the negative results reported by the bank at the end of 2015, the consequent insufficient assets indicated and the requests for an equity strengthening transaction expressed by the Bank of Italy, resolved to authorise the Board of Directors to proceed with a share capital increase, in tranches, and against payment up to a maximum of 55 million. The Supervisory Authority also requested the Bank to proceed with a review of the 2016-2018/2020 Strategic Plan which, on a consistent basis with the equity strengthening initiatives, should encourage an aggregating outlook.

On May 31st, Intermonte Holding and Cattolica renewed the agreement entered into in 2010 until June 30th, 2017, with a number of amendments and additions.

In September, the Company acquired 10.8% of Nummus.Info, with headquarters in Trento, a company which offers investment portfolio analysis services. The transaction concerned 62,500 shares of the company and was finalised for a total price of around € 78 thousand.

In December, Cattolica together with other shareholders holding 72.13% of Vegagest SGR’s share capital in total, accepted the purchase proposal for the investment made by Europa Investimenti. What is more, the offer is subject to certain conditions including the authorisation of the Bank of Italy.

Recapitalisations

During the year, the Company made the following payments towards share capital:

 in favour of Cattolica Beni Immobili: three payments towards capital for an overall sum of € 10 million for the purpose of permitting the completion of the safety and requalification measures for the properties of the “Cattolica Center”, care of which Cattolica’s shareholders’ meeting was held on April 16th. Furthermore, in relation to the purchase, which took place in July, of a property located in Verona, a payment was made towards share capital for € 9.3 million and on December 2nd a further payment was made for € 7.1 million;  in favour of Cattolica Agricola: three payments towards share capital respectively for €11 million, € 18 million and € 8 million with reference to the purchase of land, equipment and properties adjoining the Cà Tron estate in the municipalities of Quarto d’Altino and Venice;  in favour of BCC Vita: in December BCC Vita requested the shareholders, also in relation to the development of said insurance company, for a recapitalisation measure totalling € 40 million which Cattolica took part in pro rata with a payment towards capital of € 15.3 million made in December. The payment of the additional tranche was made in 2017;  in favour of TUA Assicurazioni, for solvency requirements, a payment was made towards share capital for € 25 million;  for the purpose of supporting the investments in the IT area envisaged for 2016, the allocation to the share capital of Cattolica Services of the € 5 million loan outstanding was agreed, a loan agreed with the Company by means of contract dated December 2015, together with a payment towards share capital of € 4 million. Subsequently, additional payments were made towards share capital in August and December, € 10 and € 11 million respectively.

Supervisory With reference to the Company’s shareholders meeting, held on April 25th, 2015, and the Authority questions posed by a number of shareholders in accordance with Article 2408 of the Italian (IVASS) Civil Code during said meeting, CONSOB subsequently requested, with regard to the aspects as per the aforesaid complaint pursuant to Article 2408 of the Italian Civil Code, additional explanations as well as acquired documents for inspection, which were provided by Cattolica during 2016. As things stand it emerges that the Supervisory Authority has disputed a case of failure to activate, by the Company, the Related Parties Committee, indicating the lack of control measures - in the case in question - by the Board of Statutory Auditors in office until April 2015. The Company and the Board of Statutory Auditors in office during that period, having acquired qualified independent legal opinions, formulated their counter-deductions deeming the dispute unjustified. The proceedings are underway, while - again as things stand - there do not seem to be any disputes or irregularities with regard to the corporate bodies currently in office.

With reference to the notification made by IVASS and received during 2012, for violation of Article 132, paragraph 1, of the Private Insurance Code, in relation to the avoidance of the obligation to contract, with respect to certain categories of insured parties and for specific geographic areas, and to the subsequent order No. 4666/12, received in November 2012, which inflicted a fine of € 2 million, and against which the Parent Company has appealed

Management Report

before the competent Regional Tax Tribunal, in September 2016 this appeal was upheld cancelling said measure. The procedures for the reimbursement of the fines originally paid are underway.

On December 15th, 2016 several of the leading insurance companies operative in Italy in the Motor TPL class, and among these the Company, were notified of the opening of a procedure of the Anti-trust Authority for a possible restrictive agreement by the competition in violation of the pertinent legislation. This procedure, according to the matters declared by the Authority, originates from a number of public declarations of representatives of the Generali Group and the Unipol Group referring to the market as a whole; these declarations could, according to the theories of the Authority, cancel out the uncertainty on the future price strategy in the Motor TPL class and fuel the expectation that any increases, being generalised among the main players, will not be followed by the risk of losing customers, or in other words there may have been the manifestation of a restrictive agreement of the competition among the main players. At the time of notification, inspections took place care of a number of insurance companies, not forming part of the Cattolica Group. The procedure is still in the preliminary stages at present.

Italian Revenue On conclusion of the tax inspection carried out by the Italian Revenue Agency in relation to Agency 2011, in December the Company signed a proposal for the facilitated definition for IRES (company earnings tax) and IRAP (regional business tax) purposes, avoiding the issue of a notice of assessment and consequent dispute.

Management Report

The Company in 2016

Insurance business

Financial and asset management

Headcount and sales network

Other information

Information on the investee companies

Management Report

Insurance business

PREMIUMS BY SECTOR OF ACQUISITION

Gross premiums written, booked by sector of acquisition, are shown with the percentage changes compared with the previous year in the following table.

Further to the merger of FATA, for the purpose of permitting the comparability of the results on a consistent basis, the premiums as of December 31st, 2015, shown in the table below, also include those of FATA.

Table 6 - Premiums for the year

Pro Classes Pro forma change Change forma (€ thousands) 2016 % of total 2015 % of total Amount % 2015 Amount %

01 - Accident and injury 168,965 6.7 172,905 6.3 -3,940 -2.3 152,798 16,167 10.6 02 - Health 55,298 2.2 61,084 2.2 -5,786 -9.5 58,760 -3,462 -5.9 03 - Land vehicle hulls 109,307 4.3 109,418 4.0 -111 -0.1 91,244 18,063 19.8 07 - Goods in transit 6,686 0.3 9,351 0.3 -2,665 -28.5 9,135 -2,449 -26.8 08 - Fire & natural forces 110,718 4.4 109,674 4.0 1,044 1.0 91,632 19,086 20.8 09 - Other damage to assets 186,962 7.4 188,779 6.9 -1,817 -1.0 111,245 75,717 68.1 10 - TPL - Land motor vehicles 790,261 31.4 834,970 30.6 -44,709 -5.4 651,455 138,806 21.3 13 - TPL - General 156,119 6.2 161,709 5.9 -5,590 -3.5 131,928 24,191 18.3 14 - Credit 612 n.s. 867 n.s. -255 -29.4 882 -270 -30.6 15 - Suretyship 14,876 0.6 15,491 0.6 -615 -4.0 8,743 6,133 70.1 16 - Sundry financial losses 11,833 0.5 12,140 0.4 -307 -2.5 8,577 3,256 38.0 17 - Legal protection 11,802 0.5 12,480 0.6 -678 -5.4 9,693 2,109 21.8 18 - Assistance 29,291 1.2 28,486 1.0 805 2.8 24,946 4,345 17.4 Other classes (1) 5,292 0.2 4,125 0.2 1,167 28.3 3,720 1,572 42.3

Total non-life classes 1,658,022 65.9 1,721,479 63.0 -63,457 -3.7 1,354,758 303,264 22.4

Insurance on the duration of human life - 558,669 22.2 741,599 27.2 -182,930 -24.7 741,694 -183,025 -24.7 class I

Insurance on the duration of human life 30,013 1.2 28,719 1.1 1,294 4.5 28,719 1,294 4.5 linked to investment funds - class III

Health insurance - class IV 1,110 n.s. 918 n.s. 192 20.9 918 192 20.9

Capitalisation transactions - class V 121,861 4.8 91,184 3.3 30,677 33.6 91,747 30,114 32.8

Pension funds - class VI 149,409 5.9 147,261 5.4 2,148 1.5 147,261 2,148 1.5

Total life classes 861,062 34.1 1,009,681 37.0 -148,619 -14.7 1,010,339 -149,277 -14.8

Total direct business 2,519,084 100.0 2,731,160 100.0 -212,076 -7.8 2,365,097 153,987 6.5 Total indirect business 46,915 46,455 460 1.0 48,909 -1,994 -4.1

GRAND TOTAL 2,565,999 2,777,615 -211,616 -7.6 2,414,006 151,993 6.3 n.s. = not significant

(1) includes railway rolling stock, aircraft, sea and inland water vessels/hulls and TPL aircraft and sea and inland water vessels.

NON-LIFE BUSINESS

Total non-life premiums amounted to € 1,704.9 million, an increase of 21.5% compared with 2015.

Direct non-life premiums amounted to € 1,658 million (+22.4%); the motor classes increased by 21.1%, while the non-motor classes rose by 23.9%. Indirect non-life premiums came to € 46.9 million (-4.1% compared with 2015).

In order to permit the comparability of the results on a consistent basis and hypothesising the incorporation of FATA as from January 1st, 2015, on the basis of the table below, the direct non-life premiums fell by 3.7% compared with 2015. The motor classes decreased by 4.7%, while the non-motor classes fell 2.4%.

Direct and indirect premiums deriving from the merger of FATA amounted to € 361.6 million.

Main non life classes, direct premiums euro/millions 1,000

900 835 790 800 700 600 500 400 300 189 187 200 173 169 162 156 109 109 110 111 61 100 55 0 Accident and Health Land vehicle Fire & natural Other damage to TPL - Land TPL - General injury hulls forces assets motor vehicles

2015 2016

Direct premiums written are divided up as follows by sales channel: agencies with € 1,591.9 million, banking networks with € 10 million, brokers with € 35.2 million and other channels with € 20.9 million.

2.1% 1.3% Premiums by channel 0.6% Non life direct premiums %

96%

Agencies Bank branches Brokers Other channels

Management Report

The technical results of the individual non-life classes and the overall technical result are represented in concise form in attachments 25 and 26 to the notes to the accounts.

The figures presented below with reference to the main non-life classes relate to direct business.

Accident and The total of the premiums amounted to € 169 million, disclosing an increase of 10.6%. injury Presenting the previous year with the FATA data on a pro forma basis, the change was -2.3%.

Direct premiums deriving from the merger of FATA amounted to € 20.1 million.

The claims to direct premiums ratio disclosed a deterioration from 34.4% to 39.4%.

With regard to the business sphere, premiums written increased with respect to 2015 despite the heightened competition of the market which also influenced the final figure down slightly.

In the retail area, the trend of the accident and injury premiums was essentially stable and benefited from the rise in accident and injury policies of drivers. The initiative launched in the second half of the year, aimed at the offer of the accident and injury policy for the driver within the motor TPL agreement, disclosed satisfactory results.

Table 7 - Accident and injury class - direct business

Change (€ thousands) 2016 2015 Amount %

Gross premiums written 168,965 152,798 16,167 10.6 Premiums written 167,770 149,800 17,970 12.0 Net charges relating to claims / Premiums for the year 39.4% 34.4%

Health Premiums written came to € 55.3 million, disclosing a decrease of 5.9%.

Presenting the previous year with the FATA data on a pro forma basis, the change was -9.5%.

Direct premiums deriving from the merger of FATA amounted to € 2.5 million.

The claims to premiums ratio disclosed a deterioration from 86.7% to 97.8%.

In the business sphere, a situation of considerable commercial competition prevails, determined by the underwriting policies of the main market players. The technical balancing action led to a reduction in premiums written while the deterioration of the technical performance - despite an overall reduction in claims - is due to the deterioration of a number of important agreements.

With regard to the retail sector, the policy aimed at profitability continued with attention paid to the selection of the portfolio; the premium trend was stable.

Table 8 - Health class - direct business

Change (€ thousands) 2016 2015 Amount %

Gross premiums written 55,298 58,760 -3,462 -5.9 Premiums written 54,725 60,836 -6,111 -10.0 Net charges relating to claims / Premiums for the year 97.8% 86.7%

Land vehicle The total of the premiums amounted to € 109.3 million, disclosing an increase of 19.8%. hulls Presenting the previous year with the FATA data on a pro forma basis, the change was -0.1%.

Direct premiums deriving from the merger of FATA amounted to € 18.7 million.

The claims to premiums ratio amounted to 50.5%, up slightly with respect to the previous year.

The trend of the portfolio of land vehicle hull coverage was up and benefited from the trend of the new vehicle registrations.

Table 9 - Land vehicle hulls class - direct business

Change (€ thousands) 2016 2015 Amount %

Gross premiums written 109,307 91,244 18,063 19.8 Premiums written 108,718 87,619 21,099 24.1 Net charges relating to claims / Premiums for the year 50.5% 48.4%

Goods in transit Premiums written amounted to € 6.7 million, disclosing a decrease of 26.8%.

Presenting the previous year with the FATA data on a pro forma basis, the change was - 28.5%.

Direct premiums deriving from the merger of FATA amounted to € 198 thousand.

The claims to premiums ratio rose from 62% to 65.9%.

The decrease in gross premiums written derives from the loss of a number of important customers.

Management Report

Table 10 - Goods in transit class - direct business

Change (€ thousands) 2016 2015 Amount %

Gross premiums written 6,686 9,135 -2,449 -26.8 Premiums written 7,520 8,963 -1,443 -16.1 Net charges relating to claims / Premiums for the year 65.9% 62.0%

Fire & Premiums written came to € 110.7 million, up 20.8%. natural forces Presenting the previous year with the FATA data on a pro forma basis, the change was positive at 1%.

Direct premiums deriving from the merger of FATA amounted to € 19.1 million.

The claims to premiums ratio disclosed a deterioration from 46.9% to 80.5%. The increase in the claims to premiums ratio is mainly due to the catastrophic events linked to the earthquake, which affected the risks falling within the sphere of the Religious Bodies Business Unit.

The premiums and the claims to premiums ratio of the class in the retail sphere were stable.

Table 11 - Fire & natural forces class - direct business

Change (€ thousands) 2016 2015 Amount %

Gross premiums written 110,718 91,632 19,086 20.8 Premiums written 121,836 89,002 32,834 36.9 Net charges relating to claims / Premiums for the year 80.5% 46.9%

Other damage Premiums written came to € 187 million, up 68.1%. to assets Presenting the previous year with the FATA data on a pro forma basis, the change was -1%.

Direct premiums deriving from the merger of FATA amounted to € 76.3 million.

The claims to premiums ratio disclosed a deterioration from 66.3% to 73.8% due to the manifestation of a number of claims in the medium-high bracket.

The premiums and the claims to premiums ratio of the class in the retail sphere were stable.

Table 12 - Other damage to assets class - direct business

Change (€ thousands) 2016 2015 Amount %

Gross premiums written 186,962 111,245 75,717 68.1 Premiums written 192,507 118,421 74,086 62.6 Net charges relating to claims / Premiums for the year 73.8% 66.3%

TPL - Land Premiums written during the year amounted to € 790.3 million, up 21.3% with respect to the motor vehicles previous year.

Presenting the previous year with the FATA data on a pro forma basis, the change was -5.4%.

Direct premiums deriving from the merger of FATA amounted to € 178.5 million.

Having formalised the effect of the FATA merger, the premiums for the year were down due to the reduction in the average policy premiums. The sharp competition of the motor TPL market in fact continued. As a consequence of the reduction in average premiums, there was also a deterioration in the claims to premiums ratio on current generation.

Table 13 - TPL - Land motor vehicles class- direct business

Change (€ thousands) 2016 2015 Amount %

Gross premiums written 790,261 651,455 138,806 21.3 Premiums written 801,767 648,653 153,114 23.6 Net charges relating to claims / Premiums for the year 70.2% 70.9%

TPL - General Gross premiums written amounted to around € 156.1 million, up 18.3% compared with the previous year.

Presenting the previous year with the FATA data on a pro forma basis, the change was -3.5%.

Direct premiums deriving from the merger of FATA amounted to € 29.3 million.

The claims to premiums ratio disclosed a clear improvement from 82.7% to 51.6%.

With regard to the businesses sector, gross premiums written disclosed, net of the FATA component, a slight drop with respect to the previous year.

The technical result benefited from the action still underway for repositioning of the portfolio towards less exposed risk profiles, as well as the favourable evolution of the cost of certain serious claims with injuries to individuals.

Management Report

Table 14 – TPL - General class- direct business

Change (€ thousands) 2016 2015 Amount %

Gross premiums written 156,119 131,928 24,191 18.3 Premiums written 160,539 138,856 21,683 15.6 Net charges relating to claims / Premiums for the year 51.6% 82.7%

Suretyship Premiums written amounted to € 14.9 million, disclosing an increase of 70.1% compared to last year.

Presenting the previous year with the FATA data on a pro forma basis, the change was -4%.

Direct premiums deriving from the merger of FATA amounted to € 6.4 million.

Net of the FATA components, the decrease in premiums written reflects the downwards market performance. 2015 was characterised by a peak claim, while the 2016 technical result, having undergone decisive improvement, benefited from the prudent underwriting policies adopted.

Table 15 - Suretyship class - direct business

Change (€ thousands) 2016 2015 Amount %

Gross premiums written 14,876 8,743 6,133 70.1 Premiums written 17,196 9,738 7,458 76.6 Net charges relating to claims / Premiums for the year 48.9% 142.8%

Sundry The volume of the premiums amounted to € 11.8 million, up by 38%. financial losses Presenting the previous year with the FATA data on a pro forma basis, the change was -2.5%.

Direct premiums deriving from the merger of FATA amounted to € 3.7 million.

Table 16 - Sundry financial losses class - direct business

Change (€ thousands) 2016 2015 Amount %

Gross premiums written 11,833 8,577 3,256 38.0 Premiums written 13,524 9,493 4,031 42.5 Net charges relating to claims / Premiums for the year -5.7% 6.9%

Legal protection Total premiums amounted to € 11.8 million, up with respect to the previous year (+21.8%).

Presenting the previous year with the FATA data on a pro forma basis, the change was -5.4%.

Premiums deriving from the merger of FATA amounted to € 2.6 million.

Table 17 - Legal protection class - direct business

Change (€ thousands) 2016 2015 Amount %

Gross premiums written 11,802 9,693 2,109 21.8 Premiums written 11,902 9,779 2,123 21.7 Net charges relating to claims / Premiums for the year -14.4% 9.6%

Assistance The premiums amount to € 29.3 million, with an increase of 17.4%.

Presenting the previous year with the FATA data on a pro forma basis, the change was +2.8%.

Direct premiums deriving from the merger of FATA amounted to € 3.6 million.

The claims to premiums ratio disclosed an improvement from 30.3% to 26.8%. The high percentage of penetration on motor TPL policies remained constant, despite the drop in the average premiums which characterised the motor TPL sector.

Table 18 - Assistance class - direct business

Change (€ thousands) 2016 2015 Amount %

Gross premiums written 29,291 24,946 4,345 17.4 Premiums written 28,733 24,789 3,944 15.9 Net charges relating to claims / Premiums for the year 26.8% 30.3%

Other non-life The item includes premiums relating to the railway rolling stock, aircraft, sea and inland water classes vessels/hulls and TPL aircraft and sea and inland water vessels classes.

Premiums written came to € 5.3 million, up 42.3%.

Presenting the previous year with the FATA data on a pro forma basis, the change was +28.3%.

Direct premiums deriving from the merger of FATA amounted to € 424 thousand.

Management Report

Religious Bodies During the year, a number of new agreements were entered into and others were renewed, for and non-profit the insurance of Parish Clerical Bodies of important diocesan entities such as: Salerno- community Campagna-Acerno, Catania, Amalfi-Cava dei Tirreni, Camerino-S. Severino Marche, Udine, work Trento, Altamura-Gravina-Acquaviva delle fonti, Aversa, Cesena-Sarsina, Albenga, Asti, associations Brescia, Como, Viterbo, Biella and Cosenza-Bisignano, Novara.

Activities were launched for the signing of new agreements or renewals with the Dioceses of: Lucca, Pistoia, Prato, Bergamo, Foligno, Modena-Nonantola and Pinerolo, Cuneo, Mondovì, Saluzzo, Fossano, Alba, Vittorio Veneto, Vigevano, Alessandria, Grosseto, Pisa, Livorno, Fano, Senigallia, Teggiano-Policastro, Vallo della Lucania, Cerignola-Ascoli Satriano, Bari- Bitonto, Sorrento-Castellamare di Stabia, Conversano-Monopoli, Taranto, Civita Castellana, Civitavecchia, Oristano and Alghero-Bosa.

A number of events were held, including: VIIIth ASCAI Congress Udine September 4-8th, 2016, Uniti per la Pace, Rome, October 12th, 2016, First A.L.I.C. and Italia Onlus Convention, Città della Pieve (PG) October 15-16th, 2016, Corsa dei Santi, Rome October 26th, 2016, CEI Seminar for Administration Managers and Directors, Rome November 10th, 2016, the “Il volto nuovo del volontariato” workshop, Verona November 25th, 2016.

CLAIMS SETTLEMENT

Cattolica Services is the Group company which concentrates the claims management and settlement activities within its Claims division.

During the year, the entire unit was focused on the achievement of the chief objectives, also by means of the on-going re-engineering of the processes, aimed at the constant improvement of the performances.

Organisational efficiency activities continued via the functions of the NSGS (new claims management system) IT system.

The action envisaged by the Business Plan on several fronts was implemented, with the purpose of reducing the costs of both motor and non-motor claims and with the objective of reducing the volumes of disputes.

Direct settlement network As of December 31st, 2016 the Settlement Centres (CDL) present in Italy were 20.

The Direct Network also comprises a Head Office CDL, which sees to the management and settlement of the so-called simple motor TPL claims (material damages without liability being challenged). During the year, analysis continued on the workforces, so as to check the correct distribution of the loads with a view to improving the settlement velocity. The “Anti-fraud” activities continued, enhanced by the introduction of a new management system in relation to which, during the year, rules and processes were identified for the purpose of achieving activation during the first few months of 2017. Various technical review courses were set up and provided (basic and advanced motor TPL, basic and advanced accident and injury, basic and advanced general TPL).

Checks continued to streamline the control reports on the technical performance of the Network (re-openings, run off for the Settlement Centres, injury calculation sheet, material damage calculation sheet).

The reorganisation of the authorised car repair shops continued, with the application of the new contract, and the review of the entire network; as of December 31st, 2016 authorised car repair shops amounted to 960, in line with last year.

Indirect settlement network The Indirect Network is the structure which sees to ensuring the technical and operational support services for the settlement network by means of the handling of the relationships with the Group’s trustees. The evolution of the role made sure that the indirect network has become owner of the quality management and the costs of the trustees with consequent selection, survey, assessment and agreements liabilities for the trustee network. Accordingly, the offices have been constantly involved with the overseeing of the register, the technical control on the documentation and above all else the IT development. At the end of 2016, the indirect network comprised: 192 motor experts, 192 (+150 specialists) doctors, 53 asset damage experts, 413 legal experts and 110 assessors. The Legal Department has strengthened the relationship with the trustee network also by means of the IT instruments and the development of the portal which, thanks to the automatic fee and the automations which derive therefrom, ensures efficient processes within standardised timescales. The development of the digital mandate and the quality portal has been concluded with the creation of automatic generation of the network assessment reporting. Control, negotiation and settlement activities for the fees continued with constant control of average costs and timescales.

The Medics Department defined ad hoc reporting to improve the performances of the approved health professionals, with the representation of the results on the timescales for return and on the quality of the documentation with respect to the national figure.

The Motor Trustee Department, the Damages to Assets Trustee Department and the Assessors Trustee Department have activated a number of implementations to optimise and control the administrative processes and improve the performances.

Settlement The following table shows, for the main non-life classes, the settlement velocity for the velocity and claims, which emerges from the ratio between the number of claims paid in full and the total claims reported number of claims handled, net of those eliminated without follow up.

The 2015 figures include just those of Cattolica.

Management Report

Table 19 - Claims’ settlement velocity

Claims reported in the current year Claims reported in previous years

(% values) 2016 2015 2016 2015

Classes: 01 - Accident and injury 44.9 48.0 75.3 76.0 02 - Health 90.3 89.2 54.0 61.8

03 - Land vehicle hulls 92.3 92.7 89.8 90.4 08 - Fire & natural forces 80.8 81.7 61.5 64.6 09 - Other damage to assets 75.1 77.8 92.3 82.5 10 - TPL - Land motor vehicles CARD Gestionaria 83.4 84.4 77.4 79.7 CARD Debitrice 72.1 72.3 67.0 66.5 NO CARD 60.0 57.7 46.8 47.9 13 - TPL - General 55.3 54.5 34.2 29.9 15 - Suretyship 81.0 44.2 60.4 4.3 16 - Sundry financial losses 83.4 79.8 60.0 56.5 17 - Legal protection 13.2 14.8 41.6 21.2 18 - Assistance 80.5 79.4 25.7 44.3

The figures relating to 2015 include just those of Cattolica.

During the current year, 499,533 claims were reported, of which 356,719 (71.4%) were settled in full.

With regard to the motor TPL class, 99,682 CARD gestionaria claims were reported, of which 78,564 settled in full and 5,465 closed without follow up, with a settlement velocity of 83.4%.

With regard to CARD Debitrice claims, the Company received 92,287 claim reports from the clearing house managed by CONSAP, of which 63,712 paid and 3,872 closed without follow up, with a settlement velocity of 72.1%.

LIFE BUSINESS

Direct life premiums fell from € 1,010.3 million to € 861.1 million (-14.8%).

The Company’s life premiums disclosed a sharp inclination towards traditional type saving and investment solutions, represented by the class I and Class V products linked to segregated schemes. The 2016 volumes were down, as a repercussion of an informed choice, guided by the desire to mitigate the possible diluting effects on the return of these portfolios. The trend of the segment of products with a high financial component, attributable to class III, was stable compared to a market which by contrast disclosed a significant decrease. The performance in the supplementary welfare segment was also in line with the previous year. The technical results of the individual life classes and the overall technical result are represented in concise form in attachments 27 and 28 to the notes to the accounts.

Comments follow on the development of the insurance portfolio as regards of the main life classes.

Main life classes, direct premiums euro/millions 800 742

700

600 559

500

400 300

200 147 150 122 92 100 29 30 0 Class I Class III Class V Class VI

2015 2016

Insurance on Class I, traditional class, premiums written amounted to € 558.7 million, disclosing a decrease the duration of of 24.7% compared to last year. human life The drop in premiums which flow to the segregated schemes is constantly monitored, with a view to ensuring the sustainability over time of the returns offered, which could be partly compromised by the very contained level of the interest rates correlated to the fixed-income securities acquired at the same time as the new incoming assets and/to replace the financial instruments which have expired. By contrast, a significant reduction was seen in the outgoing flows, in relation to the excellent staying power of the returns of the segregated schemes, which are confirmed at the highest levels of the entire Italian insurance market.

Insurance on Class III premiums amounted to € 30 million, compared with € 28.7 million in 2015 (+4.5%) the duration of and were made up of unit linked contracts. human life linked with investment funds

Insurance The Company continue to operate in class IV with coverage combined with pension and covering welfare investment funds. The premiums amounted to € 1.1 million, compared with € 918 non-self thousand in 2015 (+20.9%). sufficiency

Management Report

Capitalisation The premiums amounted to € 121.9 million, compared with € 91.7 million in 2015 (+32.8%). transactions

Class VI Total class VI premiums written in the year amounted to € 149.4 million, compared with € business 147.3 million last year (+1.5%); the overall assets under management at the end of the year came to € 872.7 million.

Contractual and pre-existing pension funds

Premiums written within the sphere of activities relating to the management of class VI contractual and pre-existing pension funds with guarantee of the return of the capital and payment of a minimum return amount to € 82.2 million (-21.6%). The decrease in premiums written is to a good extent attributable to the minor flow of premiums attributable to the agreements in relation to which the expiry took place at the end of 2015 (COOPERLAVORO - Supplementary pension for fund workers, partners and employees of work co-operatives) and during 2016 (PREVICOOPER - National supplementary pension fund subject to capitalisation for employees of co-operative distribution companies). As of December 31st, assets managed amounted to € 641.3 million (-29.7%). In this connection, it is pointed out that, in correspondence with the maturity of the agreements mentioned above, the related assets were made available to the funds and do not contribute, therefore, to forming the total amount under management at year end.

Open-end pension funds established by other companies

The management of the resources in class VI also continued during the year for the “Guaranteed” segment of the Azimut Previdenza Open-end Pension Fund of Azimut Capital Management SGR; the premiums written in the year amounted to € 51.7 million (+80.8%), the assets managed at year end came to € 113.2 million (+74.6%).

Open-end pension funds of the Company

During the year gross premiums (net of the contributions allocated to the funding of the accessory insurance benefits) for a total of € 11.2 million converged in the Cattolica Gestione Previdenza Open-end Pension Fund, which is structured in six segments. The net asset value of the six segments of the Fund amounted to € 80.3 million. As of December 31st, 2016, the Fund had 7,531 active members (7,389 at the end of 2015).

During the year gross premiums (net of the contributions allocated to the funding of the accessory insurance benefits) for a total of € 4.4 million converged in the Risparmio & Previdenza Open-end Pension Fund, which is structured in four segments. The net asset value of the four segments of the Fund amounted to € 37.9 million. As of December 31st, 2016, the Fund had 3,065 active members (2,994 at the end of 2015).

***

Life premiums written via the agency channel amounted to € 475.6 million, those pertaining to the banking channel totalled € 150.1 million, those pertaining to the brokers totalled € 13.8 million, those pertaining to financial advisors came to €206 thousand compared with 521 thousand as of December 31st, 2015 and those pertaining to other channels totalled € 221.4 million, of which € 134.4 million relating to pension funds and € 44.3 million relating to capitalisations. Premiums by channel Direct life premiums 25.7% %

55.3% 1.6%

17.4%

Agencies Banks Brokers e Financial advisors Direct channel

CLAIMS PAID

Claims paid, excluding settlement costs, amounted to € 929.9 million, compared with € 771.4 million in the previous year (+20.6%). Table 20- Breakdown of claims paid by class and type

Change (€ thousands) 2016 % of total 2015 % of total Amount % Class I 486,843 52.4 569,905 73.9 -83,062 -14.6 Claims 50,037 5.4 41,749 5.5 8,288 19.9

Redemptions 185,786 20.0 195,443 25.3 -9,657 -4.9

Maturing 251,020 27.0 332,713 43.1 -81,693 -24.6

Class III 14,324 1.5 11,108 1.5 3,216 29.0 Claims 4,213 0.4 395 0.1 3,818 n.s.

Redemptions 8,952 1.0 8,270 1.1 682 8.2

Maturing 1,159 0.1 2,443 0.3 -1,284 -52.6

Class V 59,893 6.4 108,090 14.0 -48,197 -44.6 Redemptions 27,626 3.0 36,995 4.8 -9,369 -25.3

Maturing 32,267 3.4 71,095 9.2 -38,828 -54.6

Class VI 368,811 39.7 82,247 10.6 286,564 n.s. Redemptions 55,611 6.0 81,991 10.6 -26,380 -32.2

Maturing 313,200 33.7 256 n.s. 312,944 n.s.

Total claims paid (*) 929,871 100.0 771,350 100.0 158,521 20.6

(*) The item does not include settlement costs. n.s. = not significant

Management Report

With reference to class I, the overall amount of the claims paid in the current year decreased with respect to the amount in the previous year mainly due to the decrease in the settlements by maturity (-24.6%).

With reference to class III, the overall increase in the claims paid, equal to € 3.2 million (+29%) is mainly attributable to the increase in settlements for claims, equal in value to € 3.8 million.

With reference to class V, the overall amount of the claims paid in the current year decreased 44.6% with respect to the amount in the previous year. In detail, the change is due to a decrease in both the claims paid due to maturity (-54.6%) and due to redemption (-25.3%).

With reference to class VI, the overall increase in the claims paid (€ 286.6 million) is mainly attributable to the fact that two class VI management agreements matured: the overall change in the maturities amounts to € 312.9 million.

RESEARCH AND DEVELOPMENT ACTIVITIES - NEW PRODUCTS

Non-life With regard to the product catalogue, activities continued for the study and realisation of new business insurance solutions with the objective of keeping competitiveness high in particular in those sectors deemed strategic for the Company.

A range of insurance solutions was proposed on the agency network for protecting groups of individuals in the event of accident or injury: “Cattolica&Salute - INFORTUNI CUMULATIVA”. The new range is made up of six different products, each of which for a specific target: non-professional sports people, volunteers, excursionists, children who attend summer camps or summer schools, students and guides.

With reference to the corporate sector, activities continued for the overhaul of the range dedicated to businesses, making the “Cattolica&Impresa - SMALL BUSINESS” product available to the network, the new insurance solution for protecting industrial and artisan micro-activities, with up to 9 employees and € 10 million in turnover, with innovations relating to the cyber risk coverage to protect the activities from the main threats deriving from the net not only in the case of damages suffered but also in the case of damages to third parties and the emergency response service so as to get the production activities back up and running as soon as possible and minimise the economic losses.

Within the sphere of the specific solutions dedicated to agricultural circles, “Pocket Farm” was launched, an innovative app created by the active collaboration between Cattolica, its customers and Milan University. The new solution allows agricultural entrepreneurs to monitor the vegetative energy of their crops, replacing costly instruments difficult to use with free and intuitive support within everyone’s reach. The study of innovative policies based on climatic indicators such as temperature, rainfall and wind (Index Based) continued. The new policies, today in the experimental phase, will start to be marketed during the next year.

Life business During the year, steps were taken to supplement and up-date the current catalogue dedicated to the protection and savings/investment requirements of the customers, by means of the creation of new products, both individual and collective.

With regard to the banking channel, the range of class I products was characterised by the placement of “DueVie Ed. 2016”, a mixed insurance product with single premium and annual revaluation of capital, additional benefit in the event of demise and “coupon option”, which envisages the periodic settlement of the amount corresponding to the annual revaluation accrued. This product is placed via Banca di Bologna, Banca di Credito Popolare di Torre del Greco, Nuova Cassa di Risparmio di Chieti and Cassa di Risparmio di San Miniato.

Furthermore, for Cassa di Risparmio di San Miniato, Banca di Bologna and Nuova Cassa di Risparmio di Chieti, the “Risparmio Private” product was developed, a mixed insurance product with single premium and annual revaluation of capital and additional benefits in the event of demise, dedicated to customers in the “private” segment;

With regard to the proprietary networks, 2016 was characterised by the research and the development of solutions which are increasingly suitable for the specific needs of individuals and households. The “Dopo di Noi” product was created, an insurance solution dedicated to the parents of disabled children, which makes it possible to set aside resources in favour of someone affected by disabilities intended to guarantee them economic support in the future, when the direct support of the family has ceased.

A new insurance solution has also been developed for the accumulation of savings for youngsters, known as “Piccoli Grandi Passi”. This product involves a tariff with constant annual premium and the possibility of making additional payments: in the event of demise or permanent total disability of the insured party, guarantee of exoneration from the payment of the residual premiums is envisaged, in any event ensuring the satisfactory outcome of the final benefit.

On a general basis, during the year the product catalogue available to the proprietary networks was overhauled following the criteria of consistency and rationalisation of the range for all the sales networks.

Furthermore, several insurance products have been created for the sales networks of the Company, linked to the disbursement of mortgage loans and other loan agreements with the related insurance coverage in the event of demise and other events. In detail, this involves temporary insurance in the event of demise with decreasing capital, such as the collective solutions dedicated to personal loans repayable by means of the transfer of portions of wages or pensions (the so-called “CQS” and “CQP”).

During the year, the Company was awarded, via tender, the contracts for the insurance coverage for employees of the Bank of Italy and the Italian Agency for Development Co- operation of the Foreign Office.

The annual activities for the up-dating of the information contained in the notes of the catalogue products which make up the pension and welfare range were carried out by the end

Management Report

of March, on the basis of the matters envisaged by Italian Legislative Decree No. 252 dated December 5th, 2005 (regarding the “Discipline of supplementary pension forms” and subsequent amendments and additions), as well as the related sector regulations laid down by COVIP, since it is the Supervisory Authority within the supplementary pension and welfare sphere.

Overall, 28 individual products were overhauled.

In conclusion, further to the IVASS/Bank of Italy “Letter to the market” dated August 26th, 2015, the first few months of the year saw the adaptation of the collective products linked to loan agreements (so-called PPP - Payment Protection Insurance), for the purpose of rendering them consistent with the new layout defined by the legislator and aimed at increasing the protection and transparency vis-à-vis the customers.

REINSURANCE

Reinsurance The Company’s reinsurance programme maintained a standardised structure in line with that non-life classes - last year, making reference to a programme of proportional transfers with the complementarity direct business: of optional transfers. transfers The residual retained portion of each class was further protected by claim excess coverage against the occurrence of both individual insured events of a significant amount as well as catastrophic events. The proportional transfer is represented by a multi-class bouquet (fire, theft, accident and injury, land vehicle hulls, leasing, sundry financial losses, agricultural-livestock risks, transport, suretyship and credit) and by specific proportional transfers for the technological classes (construction, assembly risks, ten-year indemnity, machine breakdowns, electronic risks, supply guarantees), assistance, legal defence and sundry financial losses.

On the basis of the actuarial analysis carried out to determine an efficient reinsurance programme according to the Value Based method, steps were taken to lower the transfer portion of the fire class from 16% to 10% and the transfer portions of the theft, accident and injury and land vehicle hull classes from 15% to 10%.

With regard to the other classes the transfers maturing were confirmed.

The breakdown by class of the transfer quotas is presented below:

 fire, theft, accident & injury, land vehicle hulls: 10%;  leasing, sundry financial losses, agricultural-livestock risks, credit: 60%;  suretyship: 70%;  transport: 67.5%  technological risks: 50%;  assistance and legal protection: 90%;  salary-backed loans: 70%.

With regard to the policies combined with loans (PPI), as already indicated with reference to life class products, in light of the changes requested by the IVASS-Bank of Italy “Letter to the market” dated August 26th, 2015, steps were taken to re-think the product portfolio so as to

comply with the requests of the regulator and at the same time streamline and rationalise the range of available products. All this took place by means of the identification of just a few standard products, which the entire business currently existing was directed to. Furthermore, with regard to the main elementary classes (accident and injury, health, fire, theft, technological risks and general TPL), a specific proportional agreement has been renewed known as “Multiline”, for the purpose of intercepting the business typically covered by optional reinsurance and of making access to the same easier, reducing the typical volatility of this type of business and benefiting from greater stability in the reinsurance coverage.

With regard to the catastrophe coverage with combined claim excess for the fire and land vehicle hulls classes, confirming the extreme level of prudence in the definition of the coverage, the decision was made for 2016 to acquire a total capacity of 300 million, corresponding to a period of return of around 293 years (RMS model), greater than the risk aversion measure defined in the Outline reinsurance resolution and equal to 250 years.

A specific agreement has also been renewed to cover earthquake coverage for residential risks. With regard to the medical malpractice section, pertaining to the general third party liability class, optional specific coverage was availed of.

With regard to the hail class, the 2016 reinsurance structure envisages a proportional coverage with transfer percentage equal to 50%. The retention is protected by a stop loss agreement with priority equal to 110% (the coverage is activated when the claims/premiums ratio exceeds this threshold) and combined extent with FATA equal to 70%.

With reference to FATA, merged via incorporation within the Company at the end of December, with accounting and tax effects as from January 1st, 2016, the reinsurance programme was made up of a QS multi-class basket, with transfer percentage equal to 20% for the main classes, with the exception of the specialist classes such as suretyship (70%), credit (50%) and transport (60%). The motor TPL and general TPL classes are transferred only on an XL basis. The retention of the classes transferred under QS, with the exception of the credit class, is protected by suitable claims excess coverage. The hail class envisages a proportional transfer equal to 60%. The retention is protected by a stop loss agreement with priority equal to 110% and extent equal to 70%, combined with the Company. With regard to the livestock class, the decision was made to cover just the portfolio relating to the epizootic risks with a stop loss agreement, while the portfolio relating to the carcass disposal section is retained by the insurance company. The priority of the coverage is equal to an s/p of 90% and coverage limits equal to an s/p of 300% (210% xs 90%). The assistance and legal protection classes are transferred on a proportional basis, equal respectively to 90% and 70%, to specialised reinsurers, while the catastrophe property risk is covered by the agreement of the Company, specified above. Part of these agreements belongs to Cattolica’s share: account is taken of them for the purposes of drawing up the statement of financial position after the merger.

Reinsurance Underwriting concerned exchange business with direct insurance companies with the same non-life classes - characteristics as those of the Company (the greater contribution is represented by the business indirect originating from the CIAR system), as well as reinsurance coverage in favour of the Group business: insurance companies (ABC Assicura, BCC Assicurazioni, TUA Assicurazioni and FATA). On

Management Report

acceptances the other hand, the Company retrocedes to the reinsurance market, via its reinsurance programme (intercompany acceptances by the same in the capacity of reinsurer and subsequent transfer of the risks to the reinsurers as retrocession). For the purpose of further diversifying the risk and guaranteeing the market conditions, the proportional and non-proportional agreements of subsidiaries indicated above were transferred for the most part to the Company (70% of the transferred agreements) and the remainder (30%) was transferred directly to the reinsurance market.

For all intercompany agreements, the corporate resolutions related to ISVAP Regulation No. 25 dated May 27th, 2008 were followed (now repealed and replaced by IVASS regulation No. 30 dated October 26th, 2016), with observance of transaction limits for each reinsurance transaction indicated therein.

With reference to FATA, with regard to indirect business, in 2016 just the coverage with the Pool R.C. Inquinamento and with Consorzio di Coriassicurazione ISMEA, pertaining to the “multi-risk on returns” policies, was active.

Reinsurance With regard to the portfolio of the individual and collective policies, steps were taken to renew life classes - the non-proportional agreements by risk and by event, with the same conditions as those direct business: maturing. transfers With regard to the claim excess programme for risk, due to the negative performance of the peak claims registered in 2015, an increase in the priority became necessary from € 250 thousand to € 350 thousand.

With regard to the business associated with the disbursement of loans (PPI), the matters already indicated in the section relating to the non-life classes is applicable. The renewal, under the same conditions, of the proportional agreements relating to the coverage of the following completes the life reinsurance programme:

 risk of non-self sufficiency (long-term care) with a transfer percentage of 60%;  salary-backed loans for employees and pensioners with a transfer percentage of 70%.

Reinsurance No indirect business acceptance activities have been carried out, except for a residual, life classes - insignificant part, relating to business underwritten in previous years. indirect business: ***** acceptances Dealings with reinsurance companies which present the best prospects of continuity over the long-term have been preferred. When selecting the partners, particular attention was paid to the solidity and reliability of the same, directing the choice towards those with the best rating or those less exposed, in the composition of the portfolio, to risk categories liable to technical- economic imbalances. When defining the reinsurance programme, the Company followed the provisions of the Outline Resolution concerning outgoing reinsurance in pursuance of Article 3 of the ISVAP circular No. 574/D dated December 23rd, 2005.

The Board of Directors approved the structure and the transfer plan for 2016, in February.

Freedom The Company is authorised to operate under the freedom of services regime in: Austria, of activities Belgium, Bulgaria, China, the Vatican City, Croatia, Denmark, Estonia, Finland, France, Germany, Greece, India, Ireland, Latvia, Lithuania, Luxembourg, the Netherlands, Poland, Portugal, the United Kingdom, the Czech Republic, the Republic of Cyprus, the Republic of San Marino, Rumania, Spain, Slovakia, Slovenia, the United States (only the state of New York), Sweden, Switzerland, Turkey and Hungary.

Management Report

The Company in 2016

Insurance business

Financial and asset management

Headcount and sales network

Other information

Information on the investee companies

Management Report

Financial and asset management

Investments amounted to € 9,549.2 million, compared with € 9,170.5 million in the previous year4 (+4.1%).

The table below summarises the most significant asset items.

Table 21 - Investments - breakdown

Change (€ thousands) 2016 % of total 2015 % of total Amount %

Land and buildings (1) 101,261 1.1 39,380 0.4 61,881 n.s.

Group companies and investees 972,152 10.2 1,101,459 12.1 -129,307 -11.7 Shares and holdings 939,819 9.8 1,071,318 11.7 -131,499 -12.3 Bonds 32,333 0.4 25,140 0.3 7,193 28.6 Loans 0 0 5,001 0.1 -5,001 -100.0

Other financial investments 7,447,634 77.9 6,671,756 72.7 775,878 11.6 Shares and holdings 48,403 0.5 89,730 1.0 -41,327 -46.1 Units of mutual investment funds 707,548 7.4 520,524 5.7 187,024 35.9 Bonds and other fixed-income securities 6,688,150 70.0 6,047,000 65.9 641,150 10.6 Loans 3,509 n.s. 4,480 n.s. -971 -21.7 Other investments 24 n.s. 10,022 0.1 -9,998 -99.8

Deposits with ceding companies 10,668 0.1 10,996 0.1 -328 -3.0

Class D investments (2) 982,219 10.3 1,176,759 12.8 -194,540 -16.5 Investment funds and indices (3) 109,475 1.2 91,122 1.0 18,353 20.1 Pension Funds 872,744 9.1 1,085,637 11.8 -212,893 -19.6

Other 35,277 0.4 170,165 1.9 -134,888 -79.3 Cash in bank and cash equivalent 35,277 0.4 145,976 1.6 -110,699 -75.8 Own shares or holdings 0 0 24,189 0.3 -24,189 -100.0

Total investments 9,549,211 100.0 9,170,515 100.0 378,696 4.1 n.s. = not significant (1) net of accumulated depreciation fund and including properties for direct business use (2) investments benefiting policyholders of the life classes who bear the risk and deriving from the management of pension funds (3) assets invested in units of investment funds and assets linked to stock market indices

INVESTMENT PROPERTY

Acquisitions and property transactions

During the year, a number of important investment transactions were finalised for the Company and the Group: the purchase, in March, of units in the Immobiliare Agris Fund on the books for a total of € 14 million, the purchase, in April, via the Euripide property fund managed by Finint sgr, of the NHOW hotel complex in Via Tortona, Milan, managed by the

4 Total 2015 investments, expressed on a comparable basis due to the new accounting treatment of own shares, came to € 9,146.3 million.

NH Hotel group and the purchase, at the end of May, of the RSA (nursing home) Villa Fiorita di Spinea (VE), for a total value of € 74 million for the two transactions. In December, as already mentioned, an initial tranche of the units of the Agris Fund obtained by FATA as a result of the contribution to the fund of the usufruct, with a duration of four years, for € 955 thousand, was assigned to the participants of the Agrarian Consortium, by way of contribution linked to the distribution agreements.

On August 4th, the closing for the establishment of the multi-segment property investment fund known as “Mercury” was finalised, by means of the inflow of 66 properties by the three area co-operatives belonging to the CONAD group; this fund is equipped with a property portfolio worth around € 300 million and a twenty-year duration. The Company subscribed units equal to around 51% in each of the three segments for a total of around € 69 million. The fund’s objective is to hold the property assets for its entire duration ensuring stable and foreseeable flows of income with a limited risk profile. The management of the fund is entrusted to Savills Investment Management SGR.

In August and October Fondo Perseide, managed by Finint SGR, finalised the purchase of eight photovoltaic plants for an overall value of € 39.7 million.

In November, a letter of intent was signed by the Company, Cattolica Beni Immobili, Cattolica Agricola, H-Farm and Cassa Depositi e Prestiti, so as to outline the content and the structuring of the property transaction known as “H-Campus” comprising an organic complex of buildings and infrastructures intended to be used for school and university digital education. The Programme Agreement with the Veneto Regional Authority was signed in January 2017, as described further on.

SECURITIES INVESTMENTS

General section The investment activities took place in a market context characterised by a period of volatility and low returns, essentially influenced by still expansive monetary policies and by a series of crucial events of a political nature.

Operations were characterised by the maintenance of adequate liquidity levels; there were no significant movements between the various investment sectors, while rotations within the same sector took place on a consistent basis with the financial duration objectives of the portfolios expressed by asset & liability management.

During the year investments were made in Italian fixed-rate government issues, the prices of which were supported for the majority of the period by the heavy demand from the domestic market, partly from the foreign market, and the European Central Bank.

With regard to bonds, the company took advantage of interesting opportunities offered by the subscription, both on the primary and secondary market, of bank securities and securities of industrial issuers. Capital gains were also generated, exploiting the volatility of the related financial markets, animating both the floating rate component and the fixed rate one.

The exposure to the share-based component was gradually reduced, on achievement of certain interesting technical thresholds and given the recovery of the prices which characterised the

Management Report

end of the year. The positions maintained in the portfolio were mostly attributable to issues capable of paying the shareholders stable and sustainable dividends over the mid-term, as well as characterised by solid performance from an economic-equity standpoint. The portfolio is denominated principally in Euro, with marginal exposures in US dollars and GBP. Issuers place products primarily in Europe, and to a lesser extent in the United States. However, many issuers presented spheres of operations highly diversified in geographic terms, for the purpose of reducing recession risks as far as possible.

Other Pursuant to Italian Legislative Decree No. 173 dated May 26th, 1997, the IVASS provisions information and circulars regarding classification and valuation of security portfolios, it is hereby revealed that, further to the issue of IVASS Regulation No. 24 dated June 6th, 2016, the Board of Directors adopted, on September 28th, 2016, the framework resolution pursuant to Article 8.

The document contains the guidelines in the financial sphere, the investment objectives, the features and the limits on the basis of which the assets have been identified which comply with the medium/long-term strategic investment needs, on a consistent basis with the economic, financial and operational conditions of the company, both current and forecast. The document also defines the system for measuring and controlling the risks associated with the investments, together with the related reporting contents and analysis methods. The resolution in conclusion contains the indications of the Board of Directors within the sphere of handling of the liquidity risk and asset and liability management.

See the notes to the accounts for further information.

Unrealised At year end, the balance of unrealised capital gains and losses, gross of taxation, on the bond capital gains portfolio, on shares, on mutual fund units and on different class CIII financial investments, and losses disclosed a profit of € 509.5 million and was made up as follows:

 fixed income securities and bond portfolio: the net latent capital gains amount to € 450.4 million;  share portfolio: the net latent capital gains amount to € 1.9 million;  units of mutual investment funds: the net latent capital gains amount to € 57.2 million;  other financial investments: the net latent capital gains amounted to € 24 thousand.

The properties have an overall current value of € 106.7 million, with a latent capital gain of around € 5.4 million.

Financial The following table summarises the most significant part of ordinary Financial income and income and expenses. expenses

Table 22 - Net financial income and expenses

Change (€ thousands) 2016 2015 Amount %

Net income from investments and interest expense 268,018 273,947 -5,929 -2.2 of which income from equities 51,191 48,662 2,529 5.2 Adjustments net of writebacks -86,122 -132,960 46,838 35.2 Profits net of losses on realisation of investments 65,246 94,427 -29,181 -30.9

Total class C net financial income and expenses 247,142 235,414 11,728 5.0 Income net of D class charges 11,130 33,647 -22,517 -66.9 Total net financial income and expenses 1 258,272 269,061 -10,789 -4.0

1 Excluding the changes for exchange differences on technical components

Total net financial income and expenses amounts to € 258.3 million, compared to € 269.1 million in the previous year (-4%).

Net financial and property income euro/millions 250 225 217 200

150 94 100 65 49 51 50 34 11 0 -50

-100 -86

-150 -133 -200 2015 2016

Income from equity Income from other investments Net value adjustments

Net income on sales Class D income

Total class C financial income and expense rose from to € 235.4 million to € 247.1 million (+5%). Net income from investments and interest expense amounted to € 268 million compared with € 273.9 million in the previous year (-2.2%), of which income from shares and holdings amounted to € 51.2 million (of which € 42.5 million from subsidiaries), compared with € 48.7 million in 2015 (of which € 39.4 million from subsidiaries).

Adjustments net of writebacks came to € 86.1 million compared with € 133 million as of December 31st, 2015 and include € 50 million relating mainly to the writedowns on portfolio investments pertaining to the banking equity investments in Cassa di Risparmio di San

Management Report

Miniato, Banca Popolare di Vicenza and Veneto Banca. Net income realised on investments amounted to € 65.2 million, compared with the € 94.4 million as of December 31st, 2015.

Solvency II ratio

Pursuant to Article 4, paragraph 7, of ISVAP regulation No. 22 dated April 4th, 2008, the table with indication of the amount of the solvency capital requirement, as per Article 45 bis of the Insurance Code is presented below, along with the minimum capital requirement, as per Article 47 bis of the same, and the amount, classified by levels, of the own funds admissible to cover the afore-mentioned requirements. The own funds admissible amounted to 1.88 times the Solvency II capital requirement, after the distribution of the dividend, proposed by the Board of Directors, which will be subject to approval by the shareholders meeting held on April 22nd.

Table 23 - Solvency II ratio

(€ thousands) 2016

Solvency Capital Requirement (SCR) 1,006,843

Minimum Capital Requirement (MCR) 453,079

TOTAL OWN FUNDS ADMISSIBLE 1,892,214 of which TIER 1 1,571,422 of which TIER 1 restricted 80,549 of which TIER 2 110,414 of which TIER 3 129,829

Figures not yet subject to the checks envisaged by the IVASS letter to the market dated December 7th, 2016; the figures will be communicated to the Supervisory Body and the market according to the timescales envisaged by current legislation by May 20th, 2017.

ANALYSIS OF THE FINANCIAL RISKS

MARKET AND CREDIT RISKS

Risk Management activities relating to investments are aimed at identifying, assessing and controlling market risks, or the probability of suffering losses due to:

 changes in financial market conditions (interest rates, share prices, credit spreads, exchange rates, etc.);  misalignments between the timing profiles of assets and liabilities;  unforeseen liquidity requirements that call for the liquidation of portfolios of assets, in order to preserve the solvency of the Parent Company and companies in the Group.

The basis of the control system is outlined in the Resolution of Propensity to Risk and in the system of the company policies, in particular the Risk Management Policy and the outline resolutions by means of which the Board of Directors approves the Investment, assets and liability management, and liquidity risk management Policies, disciplining the investment activities of the Company. The system of the Policies contains a definition of the qualitative and quantitative limits of the investments for each type of financial instrument, having taken

into account the specific risk and the regulatory provisions. The close collaboration between the divisions tasked with managing the assets and liabilities, guarantees continual attention towards the objectives of optimising and stabilising the operating results and represents the basis for the adoption of the financial and commercial management strategies.

Interest rate The policies within the sphere of the Company’s investments are focused on the optimisation risk of the management results and on the reduction of the volatility of the same, taking into account the Asset and Liability Management requirements.

In particular, within the life sector the time mismatching is monitored between the liabilities due to policyholders (provisions) and the covering assets, having taken into account the features of the policies portfolio held and the related stratification on terms of level of guarantee.

The Company has established a structured interest rate risk management and assessment process, by means of the formation of a unit dedicated to ALM (Asset Liability Management) analysis. The results of the analysis carried out, any points of attention noted and the action proposals are discussed periodically.

The interest rate risk is actively handled by means of the assignment to the operating structures of a specific limit relating to the maximum misalignment permitted between the duration of the asset and the liability. The value of this indicator is monitored periodically and any violations are brought to the attention of the Board of Directors in accordance with the matters envisaged by the IVASS regulation No. 24 dated June 6th, 2016.

The exposure to the risk is also measured quarterly by means of analysis on the solvency position, both in accordance with the matters envisaged by the Solvency II standard formula and by means of the valuation of scenarios defined internally. Scenario analysis is in conclusion carried out at least annually within the sphere of the assessment of the risks and the solvency (so-called ORSA) and in accordance with the provisions of ISVAP regulation No. 20 dated March 26th, 2008 and subsequent amendments and additions and the Asset and liability management policy.

Share risk With a view to a medium/long-term investment policy, a limited exposure to share risk was maintained, on shares with solid fundamentals and reasonable prospects of dividends, splitting the investment during the year, especially in periods of greater weakness of the markets.

Liquidity risk The liquidity risk is associated with the possibility that the portfolio assets are difficult to disinvest or that said difficulty translates into a capital loss.

The Company handles this type of risk by means of an informed handling of the assets in consideration of the profile of the cash flows expected from the liabilities, in accordance with the matters envisaged by the Asset and liability management policy and via financial planning activities, in accordance with the provisions of the Liquidity Management Policy. All these policies represent a framework protecting a prudent management of the liquidity risk, therefore the misalignments in the estimated flows are handled actively in the

Management Report

investment activities.

Credit risk The credit risk divides up into the risk linked to the investment portfolio - typically measured within the macro-category of the market risk - and in the default risk of the issuer. This second category concerns the credit and similar exposures, mainly vis-à-vis parties such as reinsurers, banks for exposure in current accounts, insured parties and brokers. The Group has adopted a prudent re-insurance and joint-insurance policy, showing preference for re-insurers and delegates with an adequate rating. No significant losses due to insolvency have been reported.

Furthermore, no significant losses due to insolvency have been reported linked to the credit and current account exposures.

Management Report

The Company in 2016

Insurance business

Financial and asset management

Headcount and sales network

Other information

Information on the investee companies

Management Report

Headcount and sales network

HUMAN RESOURCES

The projects and the activities of the Human Resources division have been oriented towards increasing the efficiency and productivity, improving and supporting the individual and group performances, constantly monitoring and containing the personnel costs in line with the Plan objectives and increasing the competitiveness, extending and renewing the skills and the professional qualities present in-house.

As of December 31st, the Company’s overall workforce net of maternity replacements came to 801 (636 as of December 31st, 2015 +165). The increase was mainly attributable to the inclusion of new professional profiles and the corporate transaction for the merger of FATA Assicurazioni within the Company which led to the inclusion of 130 employees, in addition to the 13 already included during the year. The employees are broken down as follows: 31 executives (+3 with respect to 2015), 190 officials (+43 with respect to 2015) and 580 office workers (+119 with respect to 2015).

The employees expressed as full-time equivalents were 775 compared with 614 as of December 31, 2015.

Account was taken of the exit of 5 co-workers at year end in the calculation of the number of employees, of which 4 members of the Intersectorial Solidarity Fund.

Human The Human Resources and Organisational Development division implemented a new human Resource resources management and development strategy in 2016. Management The extension of know-how of the individual has been strengthened by the institute of internal mobility, which supplements the training in a synergic manner and responds, at the same time, to the changing workforce needs. Again with a view to development, the Group has constantly striven to discover and grow future talent, offering internship opportunities in many company divisions, to students and recent graduates.

Development The Development and Training Division, with its contents, methods and instruments, and Training confirmed itself to be one of the strategic levers of the company, whose activities are targeted at supporting the development of each individual worker. A new strategy for the management and development of the human resources was launched during the year, capable of accompanying and supporting the business plan and the evolution of the organisational model.

Training of human resources In line with the turning point which characterised 2015, the active and participative involvement of the workers of the Group, specifically that of the managers, was consolidated.

The change was effectively launched with the assessment of the 2015 performances which involved all the company staff and guided the activities of each worker and their development path via the assessment of the objectives assigned by each manager. Supporting the Performance Management Process (PMP), the managers of resources have been coached as from the start in the comprehension of each stage of the process by means of the activation of targeted measures (individual training and coaching) aimed at enhancing the managerial skills and preparing for the assessment of the services of workers.

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During the second half of the year, new models for developing skills were set up and designed, aimed at permitting each resource and the structures to increase their flexibility and speed, characteristics which make it possible to tackle the challenges of the market.

In order to increase the professionalism of the individual and at the same time the efficiency of the system, a project was implemented which involved around 400 resources for the purpose of assessing the possession of skills consistent with the current and future role and which will make it possible in the coming months to more fully orient the management decisions and the investments in training and development.

Furthermore, measures meeting with the real business needs were achieved to support the corporate reorganisations. Here are a number of examples:  for the Claims division, courses regarding Property, general Civil liability and up-dating on the Business Object;  for the IT Division’s Non-life System department, the process, launched in 2014 and still underway, on the “Agile” method, a new work system aimed at simplifying the issue of the projects of the Department;  for the colleagues of the FATA Network Governance, the course on the functions of the Pass application, in particular for the estimation process and the issue of motor and elementary class policies;  the Group Passive Cycle Evolution course, which saw the attendance in the classroom, within the sphere of the project for extension to the insurance companies of the Cattolica Services Passive Cycle, of the contact individuals actively involved in the input of the purchase request;  a number of training measures dedicated to the Risk Management unit aimed at the use of advanced methods for the analysis of the quantitative data, in line with the strategic profitability objectives and the applicability of Solvency II;  for the Retail division, subject to internal reorganisation, the technical course for strengthening the skills within the front end, legislative, business products and IT data sphere.

Furthermore, the project aimed at developing the personal skills was accomplished, with six themes including “Self effectiveness”, “Team of excellence” and “Valuable dialogue”.

As occurred last year, the “Work Life Balance” course was re-proposed, which dealt with the aspects of Corporate Social Responsibility, company welfare, diversity management and smart working, along with the “Reinsurance” course which made it possible to gain awareness of the types, principles and logics underlying reinsurance.

The launch of the new Group Chiedimi 2.0 – CRM platform was supported by a training plan addressing co-workers of the Group structured in two phases: “Key User” training and user training.

In conclusion, encounters were organised on Digital Transformation, addressing co-workers of the Group aimed at sharing the key themes of the digital evolution programme undertaken by the Group.

With regard to sector-related legislative training, the training sessions dedicated to the Group’s

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workers on the subject of safety continued.

On a parallel with the activities achieved within the company, participation in training events organised outside the company by universities, associations and sector institutes was considerable, including CUOA Foundation, Verona University, Sacro Cuore University in Milan (Cetif, Altis) and Bocconi University in Milan (Business Management School).

During 2016, 1,926 man training days were held for the Company.

Training for the Board of Directors On the basis of the long-term training plan addressing the members of the Boards of Directors and the training plan for 2016, three training sessions were held which involved the members of the Boards of Directors and the Executives of all the Group companies, on aspects of the monitoring of the risks which the Board is obliged to achieve and the labour reform in Italy (Jobs Act).

Industrial During the year, several trade union meetings were held to better understand issues related to relations and personnel. disputes Specifically, agreements were signed to obtain loans from Fondo Banche Assicurazioni (FBA) to provide training for employees. The training plan presented was entitled “Presidiare ed evolvere”. The value of the plan which can be financed amounts to over € 500 thousand in total.

In March, an agreement was entered into with all the trade union organisations which introduced an additional date of access (July 1st, 2016) to the 2016-2021 Intersectorial Solidarity Fund signed in July 2015, for those who will accrue the pension access requisites as of December 31st, 2021.

During May and September, in relation to the reorganisations which affected the Retail division, the Life and Welfare division and Bank-assurance, three agreements were entered into with the trade union organisations concerning the afore-mentioned transactions. These organisational changes, aimed at a rationalisation of the current structures for the achievement of the objectives of the Group’s strategic plan, involved a total of 85 individuals. At the same time as the afore-mentioned agreements, two agreements were entered into which will permit the individuals, subject to the aforesaid procedures, a suitable training course, by means of recourse to loans (over € 50 thousand in total) from the Intersectorial Solidarity Fund, aimed at a profitable professional development and induction in the new role.

Again in May, the Joint Training Committee was set up, by means of a specific trade union agreement, with the task of analysing the results of the training plans, in relation to the training needs and requirements.

In December, the agreement was entered into relating to the reorganisation which involved the entire Group consequent to the merger of FATA in Cattolica.

Again in December, a trade union agreement was entered into in accordance with the matters envisaged by the law concerning installation of video-surveillance systems for the purpose of

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the security and protection of individuals and the protection of the company assets.

A number of legal disputes are ongoing, the estimated liability for which was prudently provided for.

SALES NETWORK

Sales channels Number

1,200

1,000 834 822 800 723 627 600

400 362 299 200 105 41 0 2015 2016

Agencies Bank branches Financial advisors Pension advisors

Agency and The Company ended the year with a total of 822 agencies compared with 834 as of December welfare and 31st, 2015. pension product advisor Welfare and pension product advisors, represented by the C.P. Servizi Consulenziali sub- distribution agents, numbered 299 compared with 362 in 2015.

Agent network Digital Transformation Process and welfare and By virtue of the new technological trends and the new purchasing conduct of the customers, pension product the Company - in order to remain highly competitive within the market and on a consistent advisor training basis with the Business Plan - continued throughout the year with the commitments in the realisation of the objectives defined in the digital transformation programme, to equip the distribution networks and head office structures with instruments indispensable for continuing to compete and grow in the changed market context, which sees new and more evolved customer purchasing behaviour establish itself.

The Company and the Group therefore continue to move in order to achieve three fundamental objectives: the operating efficiency, commercial effectiveness and innovation. As already mentioned, in observance of the timescales proposed and agreed on with the distribution networks, on October 15th, 2016 the roll out was launched of the programme structured on three areas of change which, among other initiatives, envisages an important dedicated training plan provided:

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 in situ, with the support of the Digital Coaches;  on-line with the aid of infographics, video tutorials and Web Based Training (WBT) courses;  with the holding of virtual classrooms which in the first phase of the roll out saw the participation of around 500 agents.

Development of the skills and training Development and digitalisation pass, among other things, via project activities and initiatives whose priority objective is that of stimulating in the agents and their co-workers the acceptance of the culture of on-going change, the growth of all the specific skills: technical, operational, commercial, managerial, relational and digital.

The training programme was therefore enhanced thanks to the inclusion of new development courses, detailed as follows:

 the new training course for the induction of RUI Section E workers (first training 60 hours), available in e-learning mode, dedicated to all the sub-agents and first appointed workers;  the new refresher course “Il ciclo di vita e i bisogni dei clienti”, aimed at analysing and increasing the know-how, skills and professional ability, with an highly consultancy- related tenor;  the profession agent master course (MPA), launched in January and concluded in October 2016, created by a leading firm of consultants, which is a specialist training course highly oriented towards managerial and operational preparation attended by 28 masters students;  the new executive agent master course (MEA), aimed exclusively at Cattolica and FATA agents, for the consolidation of the skills fundamental to the profession and so as to create highly professional and competitive networks. Around 800 Cattolica agencies and more than 100 FATA agencies have applied for the MEA. More than 230 agents were involved in 2016, both belonging to Cattolica and FATA, for more than 650 man days of classroom training;  the specific Change Management & Leadership training course, launched in January 2016 and dedicated to young Cattolica agents and sub-agents with high potential.

Furthermore, with a view to development of the skills of the networks, a training course was launched in the second half of 2016 aimed at developing the technical and commercial skills of the II level agents and networks. The training courses were therefore enhanced by an additional series of courses: three within the legislative sphere and three in the commercial sphere, up-front classroom based, with different beneficiaries, and two virtual classrooms based on supply aspects. This specific campaign of courses saw the attendance of more than 1,400 participants in 85 editions for around 1,200 man days of training.

Bank coverage The bank branches which distribute the Pension & Welfare products came to 627, compared to 723 in 2015.

Bank-assurance IVASS Regulation No. 6 dated December 2nd, 2014, introduced a series of important partner training innovations within the sphere of the up-dating and training of the broker network which the insurance companies avail themselves of, with the intention of harmonising the related regulations and encouraging the enhancement of the professional requisites of the insurance

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brokers laying down specific organisational, technological and professional standards with reference to the products, the requirements of the trainers and the training formalities.

In accordance with the matters envisaged by afore-mentioned Regulation, during the year the network of insurance brokers was involved in refresher courses and professional courses which were structured in line with the needs of the various partners. Via the e-learning platform, which ensures the traceability, interactivity and multimedia nature of the contents required by legislation, the Company provided the partner banks with courses aimed at observing the obligation for professional refresher courses and at the same time provided classroom-based refresher and professional training courses also with the support of certified training companies.

Financial The number of financial advisors who distribute life products in the bank-assurance area of the advisor Company came to 41, compared to 105 as of December 31st, 2015. distribution

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The Company in 2016

Insurance business

Financial and asset management

Headcount and sales network

Other information

Information on the investee companies

Management Report

Other information

CORPORATE GOVERNANCE AND INTERNAL CONTROL SYSTEM

The corporate governance system is proportionate to the nature, the capacity and complexity of the activities of the company, as illustrated in greater detail in the Report on corporate governance and the ownership structures for 2016, pursuant to Article 123 bis of the Consolidated Finance Law available in the Company’s website at the following address - www.cattolica.it - in the Governance section. The Group’s Internal Control System is also illustrated within the same.

It is hereby mentioned that during the year the Actuarial Unit, established by means of resolution of the Board of Directors dated November 11th, 2015 and set up care of the Parent Company and serving the subsidiaries, achieved full operations with the drafting of the reports on the annual results as of December 31st, 2016.

Similar to the other second level control units, the Actuarial Unit is hierarchically dependent on the Chief Risk Officer (C.R.O.) of the Group. The Actuarial Unit has the task of overseeing the adequacy of the calculation of the technical provisions and providing an opinion on the sufficiency and fairness of the same. It is also required to issue opinions relating to the underwriting and reinsurance policies and contributes towards effectively applying the risk management system with reference to the modelling of the risks and the assessment of the solvency.

Even if not yet strictly obligatory in accordance with the reference legislation, it is envisaged that the Actuarial Unit reports to the corporate bodies at the time of each quarterly closure in relation to its duties within the Solvency II sphere, in concurrence with the monitoring of the Solvency II ratio.

PREVENTION AND COUNTERING FRAUD

The Company and its subsidiaries have adopted a specific fraud prevention and countering policy, in which the objectives, the organisational models and the functioning of the company safeguards are defined, also in accordance with the legislative provisions on the subject of countering fraud in the Motor TPL sector. By means of this choice, the Group highlights how the containment of the exposure of the company to the risk of fraud, understood as the risk of suffering economic losses due to the undue conduct of employees or third parties, with possible consequences also in terms of reputation, is a key element in the internal control system. The responsibility model is pervasive and widespread throughout the corporate organisation and is integrated within the internal control system.

In compliance with the matters established by Article 30 of Italian Law No. 27 dated March 24th, 2012 and the IVASS Protocol No. 47-14-000982 dated March 11th, 2014, the estimate of the reduction of the charges for motor TPL claims deriving from the assessment of fraud, consequent to control and fraud suppression activities, for the Company, was quantified as € 15.9 million of which € 3 million deriving from FATA, compared with € 10.8 million in 2015.

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COMPLAINTS MANAGEMENT

The handling of the complaints is entrusted to a specific unit within the Legal Affairs and Corporate Transactions division of the Company, the Complaints group service, appointed as per ISVAP Regulation No. 24 dated May 19th, 2008; it sees to the handling of the complaints made by those who avail of the insurance activities (customers, injured parties, legal advisors, consumer associations).

The unit also contributes towards monitoring the service levels and the company areas in view of possible improvements. On May 31st, 2016 IVASS Provision No. 46 dated May 3rd, 2016 came into force, containing amendments and additions to the ISVAP Regulation No. 24 dated May 19th, 2008, which disciplines the complaints presentation procedure, introducing a specific discipline for the handling of the complaints relating to the insurance brokers, which the Company implemented within the timescales envisaged by the legislation.

During the year, with reference to the Company, a total of 2,463 written complaints were registered, of which 938 were upheld. The complaints were dealt with, on average, in 14.7 days, in line with the previous year.

DISCLOSURE ON SOLVENCY II FULFILMENTS

As from January 1st, 2016, the new Solvency II Directive came into force. For the purpose of implementing the new regulations of the insurance sector effectively, the Board of Directors and Senior Management were involved in a structured manner.

In December 2014, the Company’s Board of Directors resolved on the request to use specific parameters (USPs) for the determination of the capital requirement, without prejudice to the possibility of achieving the validation of the internal model with the aim of representing and handling the company profile in a more consistent manner.

The sphere of application of the use of the specific parameters concerns the Group and the following insurance companies: Cattolica Assicurazioni5 and TUA Assicurazioni.

For the purpose of complying with the indications of the Supervisory Body, the Company has drawn up the documentation necessary for the formal request for approval to use the specific business parameters. On March 16th, 2017 the Board of Directors approved the presentation of the request to the Supervisory Body.

During 2016, the company policies were reviewed as envisaged by current legislation, drafted in 2015, along with the related operating procedures. Furthermore, on the basis of recently issued regulations, the new policies for the Company and the subsidiaries were formalised.

The Group is currently dealing with a developmental process with regard to IT for the purpose of creating a skill centre so as to ensure the governance of the “data quality” and the integrated

5 Consequent to the merger of FATA Assicurazioni Danni within Cattolica Assicurazioni at the end of 2016, Cattolica’s specific parameters are gauged on the business volumes of both the insurance companies.

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rationalisation of the information systems.

The Group has taken steps to send IVASS the results of the internal assessment of the risk and solvency profile (ORSA) on May 31st, 2016, further to the approval of the Board of Directors on May 13th, 2016.

With regard to the Solvency II Reporting, in accordance with the matters envisaged by the EU 2015/35 regulation and the IVASS letter to the market dated March 31st, 2016 regarding instructions for the forwarding to the Authority of the Solvency II information, in May the quantitative (Quantitative Reporting Templates) and qualitative (Regular Supervisory Report) reporting pertaining to the so-called Day 1 (opening figures as of January 1st, 2016) approved by the respective Boards of Directors, was sent to IVASS for all the companies and for the Group. The quantitative information relating to the 1st, 2nd, 3rd and 4th quarters of 2016 was produced and sent for the Company in accordance with the legal deadlines. The annual quantitative reporting relating to 2016, in addition to the qualitative information addressing the Authority and the General Public (Periodic report to IVASS and Report on the solvency and financial condition) will be sent, after the approval of the Board of Directors, by May 20th, 2017.

INFORMATION SYSTEMS

The most important action taken by the IT Division of Cattolica Services is presented below.

Applicative measures During the year, the IT division worked on two main lines: the continuation of the realisation of the projects supporting the “2014 - 2017 Business Plan” and the control of the quality of the IT services provided to the insurance companies.

The integration of FATA in the Group systems and the convergence of the BCC Assicurazioni and Cattolica Divisione Online portfolio on the new non-life platform for multi-channel sales (bank-assurance) were completed during the year.

On the basis of the results of a study concluded at the end of 2015, a programme of evolved measures was completed on the systems of the life area aimed at improving the level of service to the sales network and the customers, increasing the automation of the processes with greater incidence of manual functions and improving the control and the overall quality of the data handled. The project for the creation of a new Group life system was also launched. The project for the evolution of the applications supporting the accounts closing, prices/securities catalogue and security sales transaction handling processes was launched. This project was launched in the latter part of 2016 and will be completed in stages in the two- year period 2017-2018. The definition of the requisites for the evolution of the risk management systems was completed and a new business intelligence solution was created for the implementation of the new anti-fraud system.

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Digital insurance company model The programme of initiatives for a digital transformation of the distribution channel support processes continues for the purpose of implementing an increase in operational efficiency and furthering the commercial effectiveness of the Networks. The main lines of development which will be completed during 2017 are the following:  evolved management of the customers (CRM system);  mobile sales (quoter, electronic signature, mobile payments);  agency ecosystem (marketing portal to render the agency autonomous in the promotional activities, new agency portal, sales force management system, “hybrid” customer management with multi-channel interaction);  dematerialisation of documents.

New approaches for the management of capital and finance In this context, the following fulfilments were completed in the Solvency II sphere:  the QRT Day 1 and quarterly Full Phase production activities;  measures for integration of the historical databases supporting the USP model;  activities for the review of the data quality architecture.

The certification of the new QRT Full Phase Annual is being completed. The realisation of the ALM (Asset Liability Management) system has been completed.

Infrastructures and quality of the IT services The programme for the modernisation of the infrastructures has been launched which, amongst other aspects, extended the timeframe of disbursement of the infrastructural services to 24 hours. The evolution of the disaster recovery solution has been completed and tests have been carried out with the direct involvement of head office users and a number of agents under the supervision of the control units, automated test procedures have been implemented for some of the Group information systems and a project is underway for the extension of the same to all the main applications.

APPOINTMENTS OF SENIOR MANAGEMENT OF THE COMPANY

The shareholders’ meeting of the Company held on April 16th, 2016 appointed the following members of the Board of Directors for the three-year period 2016-2018: Paolo Bedoni, Giovan Battista Mazzucchelli, Aldo Poli, Barbara Blasevich, Pilade Riello, Manfredo Turchetti, Anna Tosolini, Bettina Campedelli, Paola Ferroli, Giovanni Maccagnani, Luigi Mion, Luigi Baraggia, Lisa Ferrarini, Paola Grossi, Alessandro Lai, Carlo Napoleoni, Angelo Nardi from the list presented by the Board of Directors, which emerged as the majority one. Eugenio Vanda was also appointed, a minority director. The meeting also resolved with regard to the determination of the related fees and appointed the members of the Ethics and Disciplinary Board for the three-year period 2016-2018. Pursuant to the matters envisaged by ISVAP regulation No. 39 dated June 9th, 2011, the shareholders’ meeting approved the remuneration policies relating to the directors and officers, the personnel and other parties contemplated as beneficiaries of general principles by said regulation. Upon the proposal of the Board of Directors, the shareholders’ meeting confirmed the plan for the purchase and sale of own shares in accordance with the law, as described further on.

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On April 20th, the Cattolica’s Board of Directors assigned additional corporate offices to the directors elected by the Shareholders’ Meeting held on April 16th. Paolo Bedoni was appointed as Chairman, Giovan Battista Mazzucchelli was appointed as Managing Director, Aldo Poli as Vice Deputy Chairman, Manfredo Turchetti as Deputy Chairman and Alessandro Lai as Board Secretary. Barbara Blasevich and Pilade Riello were appointed as members of the Executive Committee; Giovanni Maccagnani, in the capacity as Chairman, Bettina Campedelli and Paola Ferroli were appointed as members of the Related Parties’ Committee.

In April, Mr. Flavio Piva, General Manager of the Markets and Operations Division, was entrusted the appointment to achieve the project for merger via incorporation of FATA Assicurazioni within the Company and to launch the Italian distribution company mainly invested in by Cattolica envisaged in the agreement with Coldiretti and with the Agricultural Consortiums.

The Board meeting held on 13 July resolved among other aspects a number of organisational amendments including, with a view to enhancing the control and governance facilities, the appointment of Mr. Francesco Merlin as “Chief Risk Officer”, an organisational area which covers Risk Management, Compliance, the Actuarial Unit and Anti-money Laundering Service.

The Board of Directors duly noted the resignation, received on October 24th, 2016, of the Director Anna Tosolini who had joined the Cattolica Board on April 16th, 2016 as non- independent member appointed by BPVi as per the agreements originally in force.

SIGNIFICANT EVENTS DURING THE FIRST FEW MONTHS OF 2017

In January 2017, a Programme Agreement was signed care of the Veneto Regional Authority for the creation of the H-Campus, in relation to which the Company, Cattolica Beni Immobili, Cattolica Agricola, H-Farm and Cassa Depositi e Prestiti, so as to outline the content and the structuring of the property transaction, had signed a letter of intent in November.

On January 17th, 2017 the Board of Directors co-opted amongst its members Ms. Chiara de Stefani and Mr. Nerino Chemello in the capacity of independent and non-executive directors who take over from the outgoing Mr. Luigi Baraggia and Ms. Anna Tosolini.

On January 31st, 2017, the Company made a payment towards share capital in favour of Cattolica Beni Immobili for € 4.9 million, within the sphere of the plan for dealing with the commitments envisaged for the restructuring and safety measures for the premises used for events care of the Cattolica Center.

On February 15th, 2017 the shareholders of BCC Vita paid over in proportion to the respective holding held, additional payments towards share capital for a total of € 10 million already envisaged among the measures at the end of 2016.

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ATYPICAL OR UNUSUAL TRANSACTIONS AND NON-RECURRENT SIGNIFICANT OPERATIONS AND EVENTS

Pursuant to CONSOB DEM/6064293 dated July 28th, 2006, you are hereby informed that no atypical and/or unusual transactions were entered into during the year nor are any non- recurrent significant events or operations with important effects on the Company’s accounts indicated.

TRANSACTIONS WITH RELATED PARTIES

Pursuant to CONSOB Regulation No. 17221 dated March 12th, 2010, and subsequent amendments and additions, as from January 1st, 2011 the “Procedure for the management of related party transactions” approved by the Board of Directors with last up-date by means of resolution dated December 20th, 2016, applies to the situations envisaged by the regulations.

The document relating to this procedure - which should be referred to for details - is published on the Company’s website - www.cattolica.it - in the “Governance” section. With reference to disclosure on transactions with related parties, please see Part C - Other information in the notes to the accounts.

MANAGEMENT AND CO-ORDINATION ACTIVITIES ACCORDING TO ARTICLE 2497 ET SEQ. OF THE ITALIAN CIVIL CODE

The Company has exercised its management and co-ordination powers in observance of the principles of correct corporate and business management and on a consistent basis with the roles assigned to the individual Group companies. With specific reference to the transactions expressly influenced by the Company, in addition to the transactions indicated in other parts of this report, it should be noted that these transactions concerned, among other things:  the resolutions and subsequent activities for adaptation to ISVAP Regulation No. 20 dated March 26th, 2008;  the approval of the guidelines for the handling of the risks at Group level, as well as the forecast assessment of the risk and solvency profile within the sphere of the ORSA process;  the approval of the risk propensity systems, setting the risk tolerance levels;  the adoption of the guidelines for intercompany transactions;  the adoption of governance and management approaches and controls which are standard at Group level;  the implementation of co-ordinated operating policies;  the adoption and the review of the company policies in accordance with the current legislation applicable;  the choices concerning the composition, formation and the remuneration of the corporate bodies, management and other significant roles with respect to the governance set up;  the adoption of safeguards and procedures concerning market abuse, as per EU Regulation No. 596/2014. So as to ensure an evolution of the Group consistent with the lines identified at Company level, the management and co-ordination activities concerned the implementation of co- ordinated management policies and the definition of a number of development lines of the

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Group’s strategic layout. In detail, a number of extraordinary transactions were executed in 2016, as already fully described under significant events during the period.

The Company also intervened with the recapitalisation transactions necessary for ensuring observance by the subsidiaries of the individual capital ratios envisaged by legislation and by internal regulations concerning the risk tolerance.

With regard to financial, tax and administration matters, the central role of the Company is highlighted in the definition of the operating lines in which the Group’s companies are involved.

TAX CONSOLIDATION

The subsidiaries which comply with the national tax consolidation system are: ABC Assicura, Berica Vita, BCC Assicurazioni, BCC Vita, Cattolica Agricola, Cattolica Beni Immobili, Cattolica Immobiliare, Cattolica Services, C.P. Servizi Consulenziali, Lombarda Vita, TUA Assicurazioni and TUA Retail. The reasons why the option has been exercised lie in the appropriateness of offsetting the tax positions with an opposite sign between the Group companies, consequently optimising the financial aspects.

For the purposes of the regulation of the economic transactions deriving from the compliance with the tax consolidation regime, an agreement was entered into with the Company by each investee company. With reference to the allocations of the economic effects associated with the exercise of the option, the subsidiaries transfer the amounts corresponding to the taxes and advances deriving from their taxable position to the Company; by contrast, they receive from the Company the amount corresponding to lower tax paid by the same due to the effects of the use of tax losses transferred by subsidiaries.

SHAREHOLDERS

As of December 31st, the shareholders recorded in the Register amounted to 24,109 compared with 24,066 as of December 31st, 2015. During the year, the admission of 717 new shareholders was resolved and the demise of 26 shareholders was reported. Pursuant to Article 9 bis of the Articles of Association, in the session held on November 11th, the Board resolved the removal of 648 individuals from the capacity of shareholder.

Mutual purpose To observe the mutual purpose, the Articles of Association envisage that the shareholders are of the Company to be offered the possibility to enter into insurance agreements under particularly favourable conditions. During the year, the Company continued to operate, on a consistent basis with the above.

Institutional The shareholders were informed on the performance of the Company’s and Group’s projects communication through the “Chairman’s Letter”, sent in March.

An edition of the publication “Mondo Cattolica” was divulged, sent to all the Shareholders.

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The section EssereSoci is also present on the company’s website www.cattolica.it, containing, among other aspects, the information on dedicated insurance products and the Communication area. Six meetings were held during the year with the shareholders throughout Italy.

OWN SHARES

The shareholders’ meeting held on April 16th, upon the proposal of the Board of Directors, approved the plan for the purchase and sale of own shares pursuant to the law: the plan concerns a maximum number of shares equal to 5% of the share capital, for a maximum total equivalent book value of the own shares of € 60 million for a period of 18 months from the date of the shareholders’ meeting resolution.

During the year, 2,724,299 shares were purchased and 324,657 sold, for a total price of € 15.2 million for purchases and € 2.4 million for sales. As of December 31st, the Company held 5,695,187 own shares, equal to 3.3% of the share capital, recorded for an equivalent book value of € 39.9 million.

NEWLY ISSUED SHARES

No new shares were issued during the year.

OUTLOOK FOR BUSINESS ACTIVITIES

With regard to the year underway, the trends seen in the last few months are confirmed, at present and without prejudice to extraordinary events, still presenting heavy competition on prices in the non-life classes and the persistent reduction of the life premiums written consequent to the dealings with BPVI, in addition to the elevated volatility on financial markets and low interest rates.

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Management Report

The Company in 2016

Insurance business

Financial and asset management

Headcount and sales network

Other information

Information on the investee companies

Management Report

Information on the investee companies

Information on the investee companies is provided below.

INVESTMENTS IN SUBSIDIARIES

Non-life ABC Assicura s.p.a. insurance The insurance company, authorised to operate in the non-life business, intends to satisfy a wide range of needs developing the portfolio of the accident & injury, health and sundry financial losses classes. During the year, it continued the product distribution policy, in particular CPI (credit protection insurance) loans, CPI mortgages and fire multi-risks, which represent the majority of its business.

Distribution takes place through 502 branches of the Banca Popolare di Vicenza Group.

The company, which is 60% owned by Cattolica, wrote premiums for € 18 million (€ 26.7 million in 2015), having been affected by the events which are concerning the BPVi Group, and closed with a profit of € 282 thousand, compared with € 1.1 million last year.

BCC Assicurazioni s.p.a.

The company operates in the non-life bank-assurance sector and offers the Banche di Credito Cooperativo and the Casse Rurali, their shareholders and customers, innovative products and services for households and businesses. In 2014, the partnership between the Group and ICCREA in the bank-assurance sphere was tacitly renewed for another five years.

Business continues to be developed on products sold combined with the disbursement of credit, with heavy concentration on CPI products (credit protection insurance).

The company, which is 51% owned by Cattolica, wrote premiums for € 34.7 million (€ 32.1 million in 2015) and closed with a loss of € 2.3 million, compared with a profit of € 18 thousand last year, attributable essentially to the peak motor claims.

TUA Assicurazioni s.p.a.

The company operates in the non-life business, offering the market a specialist range of insurance and financial products/services able to fully and accurately meet the needs of the personal line, comprising households and small/medium sized Italian businesses. The insurance company places its products using an innovative distribution model characterised by a streamlined and flexible organisational structure and a wide and integrated offer capacity. It is 99.99% owned by Cattolica. The company had 518 agencies as of December 31st.

TUA Assicurazioni’s premiums written amounted to € 263.1 million (€ 249.5 million in 2015) and it closed with a profit of € 9.8 million, compared with € 14.8 million in the previous year, mainly as a result of the sharp drop in the average motor TPL premiums attributable to the strong competitiveness of the sector, which characterised 2015, the first half of 2016 and, albeit at more reduced level, also continued during the second half of the year. Mention should also be made of the occurrence of serious motor claims to a higher extent than

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in the previous year.

Life insurance BCC Vita s.p.a.

It is an insurance company established within the sphere of the Co-operative Credit system which offers innovative insurance solutions aimed at ensuring the capital and a guaranteed minimum return and solutions aimed at protecting the individual.

It operates exclusively via the network of branches of the Banche di Credito Cooperativo of the ICCREA Banking Group: in 2014, the partnership with the Cattolica Group was tacitly renewed for another five years. It is 51% owned by Cattolica.

The company wrote premiums for € 318 million (€ 551.1 million in 2015) and closed with a profit of € 9.1 million, compared with € 8.4 million last year.

Berica Vita s.p.a.

The insurance company, authorized to carry out life insurance activities, is controlled by Cattolica through a 60% holding in the share capital.

The company uses 502 branches of the banks forming the Banca Popolare di Vicenza Group and 78 financial advisors to place it products.

The company wrote premiums for € 146.6 million (€ 332.9 million in 2015), having been affected by the events which are concerning the BPVi Group, and closed with a profit of € 9 million, in line with the previous year.

Cattolica Life DAC

It is a life assurance company with headquarters in Ireland, in the financial district of the city of Dublin, 60% owned by the Company. Its aim is to satisfy the needs of the customers with customised, innovative and high-financial content solutions and it is specialised in the structuring of index-linked and unit-linked contracts by personal customer segment. It is 60% owned by Cattolica.

The insurance company closed the year with premiums written of € 45.4 million (€ 207.7 million in 2015) and a profit6 of € 814 thousand, compared with € 2.1 million last year, due to the elevated phenomenon of redemptions seen.

Lombarda Vita s.p.a.

The company carries out insurance activities in the life classes offering policies for welfare, the protection of the person, savings and investment with the aim of increasing the value of the invested capital.

6Cattolica Life DAC draws up its financial statements in accordance with the international IAS/IFRS accounting standards.

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Management Report

The insurance company distributes its products via the network of 580 branches of the UBI Banca Group and via the network of financial advisors of the latter; it is 60% owned by Cattolica. The company wrote premiums for € 1,400.8 million (€ 1,466.3 million in 2015) and closed with a profit of € 23.6 million, compared with € 35.4 million last year, which had benefited from trading capital gains.

Agricultural-real Cattolica Agricola s.a.r.l. estate property Established on September 28th, 2012 within the sphere of the purchase of the Tenuta Ca’ Tron property complex, Cattolica Agricola is a single-member company which has the exclusive purpose of carrying out agricultural activities pursuant to Article 2135 of the Italian Civil Code.

The company ended the year with a profit of € 1.3 million, compared with a loss of € 561 thousand last year.

Cattolica Beni Immobili s.r.l.

Established on September 28th, 2012 within the sphere of the purchase of the Tenuta Ca’ Tron property complex, Cattolica Beni Immobili is a single-member company which manages the properties not used for agricultural activities existing on said land as well as other properties including the “Cattolica Center” property complex, located in Via Germania, Verona. In January 2017, as already mentioned, a Programme Agreement was signed care of the Veneto Regional Authority for the creation of the H-Campus, in relation to which the Company, Cattolica Beni Immobili, Cattolica Agricola, H-Farm and Cassa Depositi e Prestiti had signed a letter of intent in November so as to outline the content and the structuring of the property transaction.

The company ended the year with a loss of € 841 thousand, compared with a loss of € 913 thousand last year.

Property services Cattolica Immobiliare s.p.a.

The company carries out activities for the development and enhancement of the property assets and those typical to real estate services, it also operates as advisor in the real estate field providing specialized technical consulting and administrative management services to the Group, to its real estate property funds and to third parties.

The company ended the year with a profit of € 9 thousand (loss of € -561 thousand in 2015).

Operating Cattolica Services s.c.p.a. services The company carries out activities for the supply of services for the Group, such as: planning, implementation and management of IT applications and operating processes, along with the services relating to telecommunications systems; supervision of the digital innovation of the Group with regard to IT and organisational aspects; handling of the settlement of Group claims with the exception of the security, hail and transport areas; teaching and training

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services for the Group resources; the life and welfare technical area; non-life operations; accounting and financial statements of the Group companies. On December 13th, it incorporated Cattolica Services Sinistri, with accounting and tax effects as from January 1st, 2016. The company ended the year with profit of € 22 thousand (€ 9 thousand in 2015).

C.P. Servizi Consulenziali s.p.a.

Besides the life business under the Cattolica mandate, the company carries out non-life premium business activities (with TUA and Cattolica products) availing itself of sub-agents. It is wholly owned by Cattolica.

It closed the financial statements with a loss of € 3.2 million, an improvement compared with the loss of € 4.2 million in 2015, thanks to the cost saving action undertaken.

Agenzia Generale Agrifides s.r.l.

It is an agency, with headquarters in Rome, 51% owned by Cattolica and 49% by Coldiretti. New sales outlets are being implemented care of the territorial headquarters of Coldiretti, thereby developing a new sales network.

The company closed the financial statements with a profit of € 27 thousand.

INVESTMENTS IN ASSOCIATED COMPANIES

Operating All Risks Solutions s.r.l. services The Company holds an investment of 20% in All Risks Solutions s.r.l., for the purpose of permitting the Cattolica agency network to provide insurance coverage to customers also for risks not normally undertaken directly by Cattolica, as envisaged by Italian Decree Law No. 179 dated October 18th, 2012 “Decreto Crescita Bis”, converted with amendments into Italian Law No. 221 dated December 17th, 2012.

Banks Cassa di Risparmio di San Miniato s.p.a.

The banking institute, founded in 1830, is one of the oldest Italian savings banks. Over the last few years, it has pursued objectives of geographic expansion, strengthening the dimension of regional bank through the reorganisation of the sales structure and the consolidation of an organisational and management model focused on the market segments, the extension and improvement of the innovative channels, such as internet banking and phone banking. With reference to the matters which took place during the year, please see the aspects described in “Significant events during the year”.

The Company held an investment of 25.12% as of December 31st.

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Management Report

OTHER SIGNIFICANT INVESTMENTS

Banks Banca Popolare di Vicenza s.p.a. Established in 1866 as the first Vicenza bank and the first co-operative bank in the Veneto region, it gradually extended throughout the whole of the North east and the North of Italy thanks to the opening of new banks and the acquisition of small co-operative banks. In 1996, the Banca Popolare di Vicenza Group was created. With reference to the matters which took place during the year, please see the aspects described in “Significant events during the year”: due to these events, the Company during 2016 saw its interest holding in BPVi dilute from 0.89% to 0.006% of the share capital.

Emil Banca Credito Cooperativo s.c.p.a. The banking institute, which has over 20 thousand shareholders and establishes its roots in the long term experience of thirteen Casse Rurali ed Artigiane, uses 46 branches located throughout the area and extends between the provinces of Bologna, Modena and Ferrara. The bank is part of Credito Cooperativo Italiano. It is a local bank, heedful of the promotion and the growth of the area where it operates, reinvesting the funds gathered in situ so as to offer new development opportunities for the local reference communities.

The Company held an investment of 0.17% as of December 31st.

UBI Banca s.p.a. The UBI Group is listed on the Milan stock exchange, fifth in Italy in terms of number of banking branches; it mainly addresses individual customers and essentially operates in the regions of Lombardy and Piedmont, boasting a considerable presence in the most dynamic regions of central and southern Italy. During 2015, UBI Banca confirmed the exclusive right in the distribution agreement with Lombarda Vita and the Company, for the intermediation of the insurance products of Lombarda Vita by the UBI Group banks, for another 5 years (2016-2020).

The Company held an investment of 0.5% as of December 31st.

Banca di Credito Popolare s.c.p.a. Founded in 1888, with a network of branches distributed throughout the region, Banca di Credito Popolare today represents the only expression of autonomy, of a certain size, in the Campania lending system. The growth in size was pursued by means of the extension of the network of branches and the incorporation thus far of four banks: Popolare di Secondigliano, Credito Cooperativo di Nusco, Banca di Credito Cooperativo del Partenio and Credito Cooperativo di Cervino e Durazzano. The bank has been the group parent of the Banca di Credito Popolare Banking Group since 2002.

The Company held an investment of 1.01% as of December 31st.

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Banca di Salerno Credito Cooperativo s.c.p.a.

As a result of the authorisation of the Bank of Italy, the bank commenced full banking activities in 1955. In 1989, the bank opened a branch in the Municipality of Siano and carried out the merger via incorporation of the former Cassa Rurale ed Artigiana di Siano. In 1999, the bank changed its corporate name to Banca di Salerno Credito Cooperativo, at the time of the merger via incorporation of the former “Banca di Credito Cooperativo del Tubenna”. The bank is present in a third municipality with another two branches of San Cipriano Picentino and another in Campigliano. The Company held an investment of 4.54% as of December 31st.

Other Ente Autonomo per le Fiere di Verona

Ente Autonomo per le Fiere di Verona has its origins in the trade fair activities linked to the agricultural sector launched in 1898 by the Municipal Authority of Verona. The purpose of the Entity is to carry out and support any direct and indirect activity aimed at the organisation of trade fairs, as well as the organisation of congress activities and ventures which promote the exchange of goods and services and their marketing at national and international level. In February 2017, the transformation into an Italian joint-stock company became effective, as resolved by the shareholders’ meeting held in November 2016 along with the new corporate name of “Veronafiere s.p.a.”.

The Company held an investment of 6.64% as of December 31st.

H-Farm s.p.a.

H-Farm s.p.a. is the holding company of the H-FARM Group which is a “Venture Incubator” established by H-FARM s.p.a., H-Farm US Inc., H-Farm UK Ltd. and H-Farm India Pvt. Ltd. It is listed on the AIM Italian market.

The Company held an investment of 4.49% as of December 31st.

Intermonte Sim s.p.a.

Intermonte is one of the leading investment banks on the Italian stock market. A benchmark for Italian and international institutional investors. The quality of the research, the effectiveness of the sales and the trading, the on-going assistance for the businesses are guaranteed by the stability of the management and by the stable presence in the main international markets such as London and New York. Numerous listed Italian and foreign international investors and businesses avail of the advisory services of the Intermonte SIM professionals.

The Company held an investment of 11.61% as of December 31st.

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Management Report

INDIRECT INVESTMENTS IN SUBSIDIARIES

Operating TUA Retail s.r.l. services The company, wholly-owned by TUA Assicurazioni, carries out general agency activities and ended the year with profit of € 2 thousand.

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Management Report

Proposal for the allocation of the result for the year

Dear Shareholders,

We submit the financial statements for the year 2016 to your approval with regard to all its components.

We therefore propose the following allocation of the profit for 2016, amounting to € 63,707,745 deriving from a profit of € 73,022,098 of the business relating to the non-life classes and loss of € 9,314,353 of the business relating to the life classes, it being understood that the dividend pertaining to the own shares held as of the ex-dividend date indicated below, for the purposes of Article 2357 ter of the Italian Civil Code, will be booked to the dividend reserve:

to the legal reserve 20% € 12,741,549 to the entitled shares (so as to be able to assign a dividend to the extent of € 0.29 per share, gross of any € 50,545,239 taxes due by law) to the extraordinary reserve € 420,957

Consequently, we hereby propose that the above reserves be provided for in the business relating to the non-life classes and that the surplus of the non-life business with respect to the allocations indicated above, amounting to € 9,314,353, be allocated to the extraordinary reserve within the sphere of this business.

Furthermore, the Board of Directors proposes the allocation to each of the shares in circulation of an additional amount equal to € 0.06 for a total of € 10,457,636, using the extraordinary reserve.

With reference to the loss of the life classes amounting to € 9,314,353, the Board of Directors proposes the coverage by means of the reserves present in said business and, in particular, of the extraordinary reserve for € 456,979 and the share premium reserve for € 8,857,374.

The exchange gain deriving from the foreign currency assets as per Article 2426, paragraph 8 bis, of the Italian Civil Code, amounted at year end to € 361,538, attributable fully to the life business With reference to this, it is hereby proposed that the amount of € 361,538 be set aside to the restricted exchange gains reserve of the life classes and for such purposes to make the extraordinary reserve unavailable for the same amount within the sphere of said business. As a result of the amounts realised during the year, it is also proposed that the exchange gain reserve be made available for an amount equal to € 1,548,002, of which € 228,820 in the non- life business and € 1,319,182 in the life business.

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If the proposals indicated above are approved by yourselves, the total dividend of € 0.35 (€ 0.29 ordinary and € 0.06 extraordinary) per share gross of any legal withholdings, may be distributed, owing to current legislation, as from May 24th 2017, with ex-dividend date on the 22nd of said month (coupon number 27) and record date on May 23th, 2017, in compliance with Borsa Italiana’s calendar.

THE BOARD OF DIRECTORS

Verona, Italy, March 16th, 2017

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Management Report

Dear Shareholders,

During 2016, the Group generated net profit of € 93 million. Without the writedown consequent to the banking system crisis, the profit would have been € 150 million. The performance of the Group’s industrial and financial activities therefore confirms the force of the positioning on the market and its ability to generate profitability in line with the targets. The Solvency II margin came to 1.92 times the regulatory minimum demonstrating the solidity of the Group. Cattolica is now required to provide new answers, in terms of insurance solutions, to the problems of a social context deeply marked by the economic crisis which has led to the reduction of the purchasing capacity as well as changes and selectivity in the structure of consumption. During the meeting held on March 16th, the Board of Directors approved the draft financial statements and decided to propose a dividend of € 0.35 per share to the shareholders’ meeting.

Solidity and new growth prospects

The Cattolica Group therefore continues with the process of gradual and governed growth which has characterised it over the year and which is the expression of a dynamic approach to the problems of the insurance sector in a phase of its economic cycle distinguished by sharp competition and high financial volatility. Thanks to this approach, it has been possible to achieve qualified investment in innovation and launch programmes with the necessary strategic scope which open up prospects of growth in new and important market segments. The process for the integration of Fata was completed during the year, with the incorporation of the company acquired in 2014, and the partnership with Coldiretti was strengthened which has permitted Cattolica to significantly extend its distribution network in the agricultural sector, a premise necessary for creating new growth conditions in the agricultural and foodstuffs sector. At the time of the Giubileo della Misericordia, in collaboration with the association and voluntary circles, the Cattolica Business Unit dedicated to religious and non-profit making bodies extended the presence in the Third sector with new and qualifying insurance solutions in a social area of enormous importance. It is important to emphasise how the overall framework of the results is the fruit of a balanced and careful development of the resources and the professional skills of the Group which over the years has continued a process of technological innovation, enhancement and integration of the distribution networks and progressive renewal of its structures.

Social responsibility commitment

An additional boost was given to the social responsibility commitment on the subjects of solidarity, disability and social hardship thanks to the presence and measures of the Cattolica Foundation. New partnerships with the University and the high schools in Verona lead to a considerable extension of the area of intervention of “Progetto di vita. Cattolica per i giovani”. 2016 was also a year of considerable growth in terms of the number of initiatives and quality of the cultural proposal, including the Festival della Dottrina Sociale della Chiesa which was

135

mainly held in the areas of the Cattolica Center with the opening of the video-message of Pope Francis. On a consistent basis with the Cattolica identifying values, the encounters with the shareholders were of particular importance and which, on the occasion of the 120th anniversary of the establishment of the Company, were dedicated to the theme: “Cattolica: aperta al mercato, ancorata al territorio” (Cattolica: open to the market, anchored to the area). These are the two leading co-ordinates which have outlined the path of the Group in its 120 years of existence and which remain strong points of irremissible reference also for the future.

The Board of Directors expresses the greatest of appreciation for the work carried out and thanks the Managing Director, Giovan Battista Mazzucchelli, management, the executives, employees and co-workers.

THE BOARD OF DIRECTORS

Verona, Italy, March 16th, 2017

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Statement of financial position and Income Statement

Attachment 1

Company CATTOLICA ASSICURAZIONI SOC. COOP.

Subscribed share capital € 522,881,778 Paid in € 522,881,778

Registered

offices in Verona

Court in Verona

Statement of financial position

2016 E. E. (amounts in €)

141

STATEMENT OF FINANCIAL POSITION

ASSETS

Balances for the year

A. AMOUNTS DUE FROM SHAREHOLDERS PER SUBSCRIBED SHARE CAPITAL NOT PAID IN 1 0

of which called capital 2 0

B. INTANGIBLE ASSETS

1. Acquisition commissions to amortise

a) life business 3 13,178,647

b) non-life business 4 0 5 13,178,647

2. Other acquisition costs 6 0

3. Start-up and expansion costs 7 12,176,309

4. Goodwill 8 177,860,764

5. Other long-term costs 9 4,100,679 10 207,316,399

C. INVESTMENTS

I - Land and buildings

1. Property used for business activities 11 63,570,071

2. Property used by third parties 12 37,690,696

3. Other property 13 0

4. Other realty rights 14 0

5. Property under construction and advance payments 15 0 16 101,260,767

II - Investments in Group companies and other investees

1. Company shares and holdings:

a) parent companies 17 0

b) subsidiaries 18 867,793,941

c) affiliated companies 19 0

d) associated companies 20 558,414

e) other companies 21 71,467,013 22 939,819,368

2. Bonds issued by:

a) parent companies 23 0

b) subsidiaries 24 0

c) affiliated companies 25 0

d) associated companies 26 51,189

e) other companies 27 32,282,156 28 32,333,345

3. Loans to:

a) parent companies 29 0

b) subsidiaries 30 0

c) affiliated companies 31 0

d) associated companies 32 0

e) other companies 33 0 34 0 35 972,152,713 to be carried forward 207,316,399

142

Balances for the previous year

181 0

182 0

183 12,551,253

184 0 185 12,551,253

186 0

187 16,568,197

188 172,479,742

189 5,137,572 190 206,736,764

191 39,379,948

192 0

193 0

194 0

195 0 196 39,379,948

197 0

198 952,516,552

199 0

200 35,056,057

201 83,745,503 202 1,071,318,112

203 0

204 0

205 0

206 5,886,712

207 19,253,416 208 25,140,128

209 0

210 5,000,833

211 0

212 0

213 0 214 5,000,833 215 1,101,459,073

to be carried forward 206,736,764

143

STATEMENT OF FINANCIAL POSITION

ASSETS

Balances for the year

carry forward 207,316,399

C. INVESTMENTS (continued)

III - Other financial investments

1. Shares and holdings

a) Listed shares 36 41,940,022

b) Unlisted shares 37 6,463,125

c) Holdings 38 0 39 48,403,147

2. Units of mutual investment funds 40 707,547,644

3. Bonds and other fixed income securities

a) listed 41 6,679,717,017

b) unlisted 42 8,302,103

c) convertible bonds 43 131,150 44 6,688,150,270

4. Loans

a) loans with secured guarantee 45 1,646,180

b) loans on policies 46 1,712,416

c) other loans 47 150,000 48 3,508,596

5. Units in mutual investments 49 0

6. Deposits with credit institutions 50 0

7. Sundry financial investments 51 24,190 52 7,447,633,847

IV - Deposits with ceding companies 53 10,667,940 54 8,531,715,267

D. INVESTMENTS FOR BENEFITS OF LIFE-ASSURANCE POLICYHOLDERS WHO BEAR THE INVESTMENT RISK AND DERIVING FROM THE MANAGEMENT OF PENSION FUNDS

I - Investments relating to benefits associated with investment funds and stock market indices 55 109,474,898 - Investments deriving from the management of pension II funds 56 872,743,641 57 982,218,539

D bis. TECHNICAL PROVISIONS - REINSURANCE AMOUNT

I - NON-LIFE CLASSES

1. Premium provision 58 114,956,024

2. Provision for outstanding claims 59 415,234,527

3. Reserve for profit-sharing and repayments 60 0

4. Other technical provisions 61 0 62 530,190,551

II - LIFE CLASSES

1. Mathematical provisions 63 24,452,876

2. Premium provision of supplementary insurance 64 0

3. Provision for outstanding claims 65 4,285,940

4. Reserve for profit-sharing and repayments 66 0

5. Other technical provisions 67 0 6. Technical provisions for contracts where the investment risk is borne by the policyholders and provisions deriving from the management of pension funds 68 0 69 28,738,816 70 558,929,367

to be carried forward 10,280,179,572

144

Balances for the previous year

carry forward 206,736,764

216 86,476,568

217 3,253,471

218 0 219 89,730,039

220 520,523,691

221 6,042,726,144

222 4,273,539

223 0 224 6,046,999,683

225 1,801,783

226 2,678,993

227 0 228 4,480,776

229 0

230 10,000,000

231 22,106 232 6,671,756,295

233 10,995,986 234 7,823,591,302

235 91,122,022

236 1,085,637,305 237 1,176,759,327

238 118,300,663

239 399,811,994

240 0

241 0 242 518,112,657

243 28,487,182

244 0

245 5,623,764

246 0

247 0

248 0 249 34,110,946 250 552,223,603

to be carried forward 9,759,310,996

145

STATEMENT OF FINANCIAL POSITION

ASSETS

Balances for the year

carry forward 10,280,179,572

E. RECEIVABLES

I - Receivables, deriving from direct insurance transactions, due from:

1. Policyholders

a) for premiums for the year 71 121,142,957

b) for premiums for previous years 72 11,161,539 73 132,304,496

2. Insurance brokers 74 208,353,428

3. Insurance companies - current accounts 75 24,411,615 4. Policyholders and third parties for sums to be recovered 76 32,050,537 77 397,120,076

II - Receivables deriving from re-insurance transactions, due from:

1. Insurance and reinsurance companies 78 56,752,046

2. Reinsurance brokers 79 0 80 56,752,046

III - Other receivables 81 452,996,840 82 906,868,962

F. OTHER ASSET ITEMS

I - Tangible assets and inventories:

1. Furniture, office machines and internal means of transport 83 2,335,959

2. Movable assets recorded in public registers 84 314,129

3. Plant and equipment 85 1,360,670

4. Inventories and miscellaneous assets 86 0 87 4,010,758

II - Cash in bank and cash equivalent

1. Bank and postal account deposits 88 35,272,192

2. Cheques and cash amounts 89 5,291 90 35,277,483

IV - Other assets

1. Transitory reinsurance accounts - receivable 92 0

2. Sundry assets 93 121,846,301 94 121,846,301 95 161,134,542

G. ACCRUALS AND DEFERRALS

1. For interest 96 57,343,477

2. For rental fees 97 5,124

3. Other accruals and deferrals 98 387,809 99 57,736,410

TOTAL ASSETS 100 11,405,919,486

146

Balances for the previous year

carry forward 9,759,310,996

251 148,143,718

252 14,012,428 253 162,156,146

254 131,061,103

255 24,505,898

256 23,569,569 257 341,292,716

258 60,973,541

259 0 260 60,973,541

261 410,203,582 262 812,469,839

263 2,068,679

264 473,712

265 1,060,787

266 0 267 3,603,178

268 145,946,027

269 30,292 270 145,976,319

272 0

273 71,343,898 274 71,343,898 275 220,923,395

276 55,921,877

277 0

278 391,376 279 56,313,253

TOTAL ASSETS 280 10,849,017,483

147

STATEMENT OF FINANCIAL POSITION

LIABILITIES AND SHAREHOLDERS’ EQUITY

Balances for the year

A. SHAREHOLDERS' EQUITY

I - Subscribed share capital or equivalent fund 101 522,881,778

II - Share premium reserve 102 794,309,808

III - Revaluation reserves 103 62,498,794

IV - Legal reserve 104 268,733,505

V - Statutory reserves 105 0

VI - Reserves for shares of the parent company 400 0

VII - Other reserves 107 203,521,313

VIII - Retained profits (losses) 108 0

IX - Profit (loss) for the year 109 63,707,745

X - Negative reserve for own shares in portfolio 401 -39,907,419 110 1,875,745,524

B. SUBORDINATED LIABILITIES 111 180,000,000

C. TECHNICAL PROVISIONS

I - NON-LIFE BUSINESS

1. Premium provision 112 683,132,283

2. Provision for outstanding claims 113 2,577,662,225

3. Reserve for profit-sharing and repayments 114 0

4. Other technical provisions 115 203,035

5. Equalisation reserves 116 13,015,020 117 3,274,012,563

II - LIFE BUSINESS

1. Mathematical provisions 118 4,440,909,290

2. Premium provision of supplementary insurance 119 1,293,772

3. Provision for outstanding claims 120 95,484,982

4. Reserve for profit-sharing and repayments 121 17,668

5. Other technical provisions 122 31,419,488 123 4,569,125,200 124 7,843,137,763

D. TECHNICAL PROVISION FOR CONTRACTS WHERE THE INVESTMENT RISK IS BORNE BY THE POLICYHOLDERS AND PROVISIONS DERIVING FROM THE MANAGEMENT OF PENSION FUNDS

I - Provisions relating to contracts whose benefits are linked to investment funds

and stock market indices 125 109,474,899

- Provisions deriving from the management of pension II funds 126 872,743,641 127 982,218,540

to be carried forward 10,881,101,827

148

Balances for the previous year

281 522,881,778

282 804,352,082

283 62,498,794

284 259,918,603

285 0

500 0

287 221,803,369

288 0

289 39,716,491

501 -27,143,949 290 1,884,027,168

291 180,000,000

292 573,011,301

293 2,199,746,681

294 0

295 233,980

296 12,045,500 297 2,785,037,462

298 4,195,811,378

299 1,443,913

300 124,001,256

301 54,775

302 26,014,112 303 4,347,325,434 304 7,132,362,896

305 91,122,019

306 1,085,637,632 307 1,176,759,651

to be carried forward 10,373,149,715

149

STATEMENT OF FINANCIAL POSITION

LIABILITIES AND SHAREHOLDERS’ EQUITY

Balances for the year

carry forward 10,881,101,827

E. PROVISIONS FOR RISKS AND CHARGES

1. Provisions for pensions and similar commitments 128 3,384,093

2. Provision for taxation 129 9,055,405

3. Other provisions and allowances 130 53,414,434 131 65,853,932

F. DEPOSITS RECEIVED FROM RE-INSURERS 132 42,111,584

G. PAYABLES AND OTHER LIABILITIES

I - Payables, deriving from direct insurance transactions, due to:

1. Insurance brokers 133 16,096,851

2. Insurance companies - current accounts 134 4,000,814

3. Policyholders for guarantee deposits and premiums 135 18,650,968

4. Guarantee funds in favour of policyholders 136 7,816 137 38,756,449

II - Payables, deriving from reinsurance transactions, due to:

1. Insurance and reinsurance companies 138 33,015,713

2. Reinsurance brokers 139 0 140 33,015,713

III - Bond loans 141 0

IV - Payables due to banks and financial institutions 142 11,395,576

V - Payables with secured guarantee 143 0

VI - Sundry loans and other financial payables 144 0

VII - Employee severance indemnities 145 6,658,855

VIII - Other payables

1. For taxes payable by policyholders 146 29,908,311

2. For sundry tax charges 147 91,561,288 3. Amounts due to social security and welfare institutions 148 2,533,905

4. Sundry payables 149 91,874,852 150 215,878,356

IX - Other liabilities

1. Transitory reinsurance accounts - payable 151 0

2. Commission for premiums being collected 152 20,132,402

3. Sundry liabilities 153 81,696,692 154 101,829,094 155 407,534,043

to be carried forward 11,396,601,386

150

Balances for the previous year

carry forward 10,373,149,715

308 4,010,448

309 800,000

310 32,863,577 311 37,674,025

312 46,869,830

313 17,448,508

314 3,359,037

315 21,305,404

316 311 317 42,113,260

318 31,808,212

319 0 320 31,808,212

321 0

322 10,000,000

323 0

324 0

325 6,121,637

326 17,829,173

327 134,860,952

328 1,841,903

329 72,567,972 330 227,100,000

331 0

332 19,568,926

333 47,770,043 334 67,338,969 335 384,482,078

to be carried forward 10,842,175,648

151

STATEMENT OF FINANCIAL POSITION

LIABILITIES AND SHAREHOLDERS’ EQUITY

Balances for the year carry forward 11,396,601,386

H. ACCRUALS AND DEFERRALS 1. For interest 156 5,876,758 2. For rental fees 157 0 3. Other accruals and deferrals 158 3,441,342 159 9,318,100

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 160 11,405,919,486

balancing 0

152

Balances for the previous year carry forward 10,842,175,648

336 6,715,649 337 0 338 126,186 339 6,841,835

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 340 10,849,017,483

153

The undersigned declare that these financial statements are true and consistent with the underlying accounting records The legal representatives of the company (*)

The Chairman PAOLO BEDONI (**)

(**)

(*) For foreign companies, the signature must be that of the general representative for Italy. (**) Indicate the office covered by the signee.

154

Company CATTOLICA ASSICURAZIONI SOC. COOP.

Subscribed share capital € 522,881,778 Paid in € 522,881,778

Registered

offices in Verona

Court in Verona

Income statement

2016

(amounts in €)

155

INCOME STATEMENT Balances for the year

I. TECHNICAL ACCOUNT - NON-LIFE BUSINESS

1. PREMIUMS FOR THE YEAR, NET OF TRANSFERS UNDER REINSURANCE a) Gross premiums written 1 1,704,888,389

b) (-) Ceded premiums 2 225,613,251

c) Change in gross premium provision 3 -30,859,779

d) Change in premium provision - reinsurers’ share 4 -7,854,775 5 1,502,280,142

2. (+) PORTION OF PROFIT FROM INVESTMENT TRANSFERRED FROM THE NON-TECHNICAL ACCOUNTS (ITEM III. 6) 6 57,116,000

3. OTHER TECHNICAL INCOME, NET OF REINSURANCE 7 17,169,318

4. CLAIMS INCURRED, NET OF RECOVERIES AND REINSURANCE

a) Claims paid

aa) Gross amount 8 1,165,231,489

bb) (-) reinsurance amount 9 145,324,399 10 1,019,907,090

b) Change in recoveries net of reinsurers’ share

aa) Gross amount 11 22,951,320

bb) (-) reinsurance amount 12 0 13 22,951,320

c) Change in provision for outstanding claims

aa) Gross amount 14 -35,735,676

bb) (-) reinsurance amount 15 -23,879,463 16 -11,856,213 17 985,099,557

5. CHANGE IN OTHER TECHNICAL PROVISIONS, NET OF REINSURANCE 18 -106,695

6. REPAYMENTS AND PROFIT-SHARING, NET OF REINSURANCE 19 694,851

7. OPERATING EXPENSES:

a) Acquisition commissions 20 266,623,848

b) Other acquisition costs 21 60,486,479

c) Change in commission and other acquisition expenses

to be amortised 22 0

d) Collection commission 23 13,402,492

e) Other administrative expenses 24 120,971,682

f) (-) Commission and profit-sharing received from re-insurers 25 58,785,397 26 402,699,104

8. OTHER TECHNICAL CHARGES, NET OF REINSURANCE 27 43,016,767

9. CHANGE IN EQUALISATION RESERVES 28 270,598

10. RESULT OF TECHNICAL ACCOUNT - NON-LIFE BUSINESS (Item III. 1) 29 144,891,278

156

Balances for the previous year

111 1,403,605,964 112 206,584,809

113 -259,299

114 22,450,928 115 1,219,731,382

116 51,988,000

117 16,622,414

118 963,633,871 119 130,230,809 120 833,403,062

121 14,260,447 122 0 123 14,260,447

124 -53,591,435 125 -10,470,396 126 -43,121,039 127 776,021,576

128 -23,303

129 593,392

130 228,152,921 131 47,051,107

132 0 133 1,336,493

134 103,086,222 135 53,112,189 136 326,514,554

137 41,326,971

138 257,311

139 143,651,295

157

INCOME STATEMENT Balances for the year

II. TECHNICAL ACCOUNT - LIFE BUSINESS

1. PREMIUMS FOR THE YEAR, NET OF REINSURANCE a) Gross premiums written 30 861,110,334

b) (-) Ceded premiums 31 12,938,973 32 848,171,361

2. INCOME FROM INVESTMENTS:

a) Income deriving from shares and holdings 33 14,879,999

( of which: deriving from Group companies 34 11,296,289 )

b) Income deriving from other investments:

aa) from land and buildings 35 0

bb) from other investments 36 154,902,354 37 154,902,354

( of which: deriving from Group companies 38 955,582 )

c) reversal of adjustment on investments 39 12,280,367

d) Profits on realisation of investments 40 29,400,990

( of which: deriving from Group companies 41 0 ) 42 211,463,710

3. INCOME AND UNREALISED CAPITAL GAINS ON INVESTMENT BENEFITING POLICYHOLDERS

WHO BEAR THE INVESTMENT RISK AND ON INVESTMENTS DERIVING FROM THE MANAGEMENT OF PENSION FUNDS 43 32,769,115

4. OTHER TECHNICAL INCOME, NET OF REINSURANCE 44 4,900,751

5. CLAIMS INCURRED, NET OF REINSURANCE a) Claims paid aa) Gross amount 45 931,718,346 bb) (-) reinsurance amount 46 17,659,902 47 914,058,444

b) Change in provision for outstanding claims

aa) Gross amount 48 -28,516,274

bb) (-) reinsurance amount 49 -1,337,824 50 -27,178,450 51 886,879,994

6. CHANGE IN MATHEMATICAL PROVISIONS AND OTHER TECHNICAL PROVISIONS, NET OF REINSURANCE a) Mathematical provisions: aa) Gross amount 52 245,097,880 bb) (-) reinsurance amount 53 -4,034,305 54 249,132,185

b) premium provision of supplementary insurance

aa) Gross amount 55 -150,141

bb) (-) reinsurance amount 56 0 57 -150,141

c) Other technical provisions

aa) Gross amount 58 5,405,375

bb) (-) reinsurance amount 59 0 60 5,405,375

d) technical provisions for contracts where the investment risk is borne

by the policyholders and deriving from the management of pension funds

aa) Gross amount 61 -194,541,111

bb) (-) reinsurance amount 62 0 63 -194,541,111 64 59,846,308

158

Balances for the previous year

140 1,010,399,769 141 15,132,794 142 995,266,975

143 17,463,578 ( of which: deriving from Group companies 144 13,700,576 )

145 0 146 161,508,426 147 161,508,426

( of which: deriving from Group companies 148 2,144,721 )

149 5,318,986 150 28,331,492

( of which: deriving from Group companies 151 875,150 ) 152 212,622,482

153 51,762,714

154 6,816,456

155 773,186,968 156 15,389,751 157 757,797,217

158 9,636,815 159 171,902 160 9,464,913 161 767,262,130

162 244,545,250 163 -6,333,756 164 250,879,006

165 67,199 166 0 167 67,199

168 -2,114,177 169 0 170 -2,114,177

171 114,459,230 172 0 173 114,459,230 174 363,291,258

159

INCOME STATEMENT

Balances for the year

7. REPAYMENTS AND PROFIT-SHARING, NET OF REINSURANCE 65 4,932

8. OPERATING EXPENSES: a) Acquisition commissions 66 15,880,360

b) Other acquisition costs 67 15,063,981

c) Change in commission and other acquisition expenses

to be amortised 68 627,394

d) Collection commission 69 3,666,747

e) Other administrative expenses 70 17,726,772

f) (-) Commission and profit-sharing received from re-insurers 71 1,680,575 72 50,029,891

9. EQUITY AND FINANCIAL CHARGES:

a) Charges for management of investments and interest expense 73 9,721,627

b) Adjustment on investments 74 35,255,666

c) Losses on realisation of investments 75 8,867,411 76 53,844,704

10. EQUITY AND FINANCIAL CHARGES AND UNREALISED CAPITAL LOSSES ON INVESTMENTS FOR BENEFIT OF LIFE - ASSURANCE POLICYHOLDERS WHO BEAR THE INVESTMENT RISK AND DERIVING FROM THE MANAGEMENT OF PENSION FUNDS 77 21,639,141

11. OTHER TECHNICAL CHARGES, NET OF REINSURANCE 78 10,349,981

12. (+) PORTION OF PROFIT FROM INVESTMENT TRANSFERRED TO THE NON-TECHNICAL ACCOUNTS (item III. 4) 79 16,109,000

13. RESULT OF TECHNICAL ACCOUNT - LIFE BUSINESS (Item III. 2) 80 -1,399,014

III. NON-TECHNICAL ACCOUNT

1. RESULT OF TECHNICAL ACCOUNT - NON-LIFE BUSINESS (Item I. 10) 81 144,891,278

2. RESULT OF TECHNICAL ACCOUNT - LIFE BUSINESS (Item II. 13) 82 -1,399,014

3. INVESTMENT INCOME IN THE NON-LIFE CLASSES a) Income deriving from shares and holdings 83 36,310,864

( of which: deriving from Group companies 84 33,847,234 )

b) Income deriving from other investments:

aa) from land and buildings 85 1,887,586

bb) from other investments 86 76,511,053 87 78,398,639

( of which: deriving from Group companies 88 318,910 )

c) reversal of adjustment on investments 89 3,771,940

d) Profits on realisation of investments 90 51,879,576

( of which: deriving from Group companies 91 0 ) 92 170,361,019

160

Balances for the previous year

175 13,248

176 15,761,894 177 14,838,280

178 113,454 179 3,250,846

180 19,760,099

181 1,957,316 182 51,540,349

183 8,583,312 184 43,909,715

185 12,387,882 186 64,880,909

187 18,116,359

188 7,718,821

189 16,458,000

190 -22,812,447

191 143,651,295

192 -22,812,447

193 31,198,151 ( of which: deriving from Group companies 194 30,662,237 )

195 0 196 76,989,759 197 76,989,759

( of which: deriving from Group companies 198 811,518 )

199 2,031,655 200 84,358,212

( of which: deriving from Group companies 201 283,052 ) 202 194,577,777

161

INCOME STATEMENT Balances for the year

4. (+) PORTION OF PROFIT FROM INVESTMENTS TRANSFERRED FROM THE TECHNICAL ACCOUNT - LIFE BUSINESS (Item II. 12) 93 16,109,000

5. EQUITY AND FINANCIAL CHARGES OF THE NON-LIFE CLASSES: a) Charges for management of investments and interest expense 94 6,752,511 b) Adjustment on investments 95 66,918,733 c) Losses on realisation of investments 96 7,166,665 97 80,837,909

6. (-) PORTION OF PROFIT FROM INVESTMENTS TRANSFERRED TO THE TECHNICAL ACCOUNT - NON-LIFE BUSINESS (Item I. 2) 98 57,116,000

7. OTHER INCOME 99 48,704,928

8. OTHER CHARGES 100 120,748,719

9. RESULT OF ORDINARY ACTIVITIES 101 119,964,583

10. EXTRAORDINARY INCOME 102 5,837,703

11. EXTRAORDINARY CHARGES 103 9,514,433

12. RESULT OF EXTRAORDINARY ACTIVITIES 104 -3,676,730

13. PROFIT (LOSS) BEFORE TAXATION 105 116,287,853

14. INCOME TAXES FOR THE YEAR 106 52,580,108

15. PROFIT (LOSS) FOR THE YEAR 107 63,707,745

162

Balances for the previous year

203 16,458,000

204 4,629,367 205 96,401,247

206 5,873,985 207 106,904,599

208 51,988,000

209 42,498,751

210 98,096,090

211 117,384,687

212 25,140,895

213 13,312,042

214 11,828,852

215 129,213,539

216 89,497,048

217 39,716,491

163

The undersigned declare that these financial statements are true and consistent with the underlying accounting records The legal representatives of the company (*)

The Chairman PAOLO BEDONI (**)

(**)

(*) For foreign companies, the signature must be that of the general representative for Italy. (**) Indicate the office covered by the signee.

164

Notes to the Accounts

Foreword

Format The financial statements, accompanied by the management report on operations in its entirety, comprise the statement of financial position and the income statement, the notes to the accounts and the related attachments, as well as the Cash flow statement, and have been drawn up in compliance with the provisions of Italian Legislative Decree No. 209 dated September 7th, 2005, ISVAP Regulation No. 22 dated April 4th, 2008, as amended by IVASS Provision No. 53 dated December 6th, 2016, Italian Legislative Decree No. 173 dated May 26th, 1997, as amended further to the assimilation of the 2009/138/EC Directive, Solvency II and the 2013/34/EU Directive, Accounting.

The list of assets as per Article 10 of Italian Law No. 72 dated March 19th, 1983 is part of the notes to the accounts.

On December 31st, 2016, as already mentioned in the Report, the merger via incorporation of FATA became effective, and the accounting and tax effects were booked to the financial statements of the incorporating company as from January 1st, 2016.

For the purpose of permitting the comparability on a standard basis, in these Notes to the accounts the income statement and statement of financial position figures of the Parent Company for 2015 have been appropriately stated on a pro forma basis to make the comparisons and the analysis of the effective operating performance for 2016 consistent.

The criteria used for the purpose of adjusting the figures are illustrated below:

 the income statement balances and the statement of financial position balances of the Company and FATA have been aggregated as if the transaction had been effective as from 2015, carrying out the elimination of the reciprocal income statement and statement of financial position balances. You are hereby informed that it was not necessary to make adjustments to the Accounting principles between the two companies;  the book value of the FATA equity investment was cancelled;  steps were taken to book the merger deficit to the asset and liability items and the difference to goodwill;  the shareholders’ equity balances as at January 1st, 2016 of the Company and FATA have been aggregated, making the adjustments deriving from the merger.

It is also hereby disclosed that the accounting standards and policies used for the financial statements for the year ended December 31st, 2016 take into account the innovations introduced in the Italian legal system by Italian Legislative Decree No. 139/2015, via which implementation of the 2013/34/EU Directive was launched. As a result of the afore-mentioned decree, the accounting standards and policies are consistent with the new provisions contained in the Italian accounting standards and ISVAP Regulation No. 22 dated April 4th, 2008, as amended by the IVASS Provision No. 53 dated December 6th, 2016.

The amendment to the Italian accounting standards and the ISVAP Regulation No. 22 dated April 4th, 2008, led to effects on the opening balance of the shareholders’ equity with regard to the new legislation on own shares. On a consistent basis with the new dictates of OIC 28 (December 2016 edition) and in accordance with the recent provisions envisaged by the afore-mentioned ISVAP Regulation

169

No. 22 dated April 4th, 2008, the purchase value of the own shares has been recognised with a “negative sign” among the shareholders’ equity items in a specific reserve entitled “Negative reserve for own shares in portfolio”. Further on in these Notes to the accounts, disclosure is provided on the changes which affected each of the shareholders’ equity items and the related accounting effects.

In conclusion, as envisaged by the pertinent Italian accounting standards, for the purpose of permitting comparability of the balances and the information, the legislative provisions regarding own shares have been applied to the balances for the previous year leading to changes in the composition of the shareholders’ equity and the result.

170

Notes to the Accounts

Part A - Accounting principles

Notes to the Accounts Part A Accounting principles

Accounting The accounting standards adopted are those in force in Italy and established by legal standards provisions, as up-dated during the year.

Going concern According to the provisions of Bank of Italy/CONSOB/ISVAP document No. 2 dated February 6th, 2009, it should be noted that the economic outlook is positive, even though there are uncertainties linked to the performance of the markets and rates in particular, taking account of the timescales and ways in which the current situation is developing. The Company’s solid fundamentals do not generate or leave any doubts regarding the company as a going concern.

Reporting According to the provisions of Article 4 of ISVAP regulation No. 22 dated April 4th, 2008, as currency amended by the IVASS provision No. 53 dated December 6th, 2016 and pursuant to Article used in the 2423, paragraph 6, of the Italian Civil Code, the statement of financial position and the income financial statement have been prepared in Euro units; the notes to the accounts are in thousands of Euro. statements The rounded off amount of totals and subtotals in the statement of financial position and income statement is the sum of the rounded off amounts of the individual items. According to the provisions of Article 15, paragraph 3, of the afore-mentioned regulations, the amounts have been rounded up or down to the closest unit; if the amount presents a half, then it is rounded up. The roundings of the balances contained in the notes to the accounts are made so as to ensure the consistency of the amounts in the statement of financial position and income statement formats.

Foreign In accordance with Article 2426, paragraph 8 bis, of the Italian Civil Code, the monetary currency items assets and liabilities in foreign currency are recorded using the spot exchange rate ruling as of the year end date; the consequent exchange gains and losses must be recognised to the income statement and any net profit is set aside in a specific restricted reserve until realised. The non- monetary foreign currency assets and liabilities are recognised at the exchange rate in force at the time of their acquisition.

ILLUSTRATION OF THE ACCOUNTING PRINCIPLES

The most significant standards used for the formation of the annual financial statements are illustrated below; they have been agreed with the Board of Statutory Auditors, where envisaged.

INTANGIBLE ASSETS

Acquisition Non-life business commission to be amortised As from the enforcement of Article 5, paragraph 4, of Italian Legislative Decree No. 7 dated January 31st, 2007 (so-called Bersani bis decree), which introduced the faculty - for the policyholders - of withdrawing annually from long-term contracts, without charges and by giving notice of sixty days, the commission relating to the contracts issued is settled annually and recognised at cost in the period of accrual of the premium instalment.

175

Life business

The acquisition commissions of the life business is amortised in accordance with Article 16, paragraph 10, of Italian Legislative Decree No. 173 dated May 26th, 1997. 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.

Start-up and This item comprises: expansion costs  the registration tax paid following the acquisition of the business segment from Risparmio & Previdenza with effect as from December 31st, 2013. This cost, considered to have long-term usefulness, is amortised on the basis of the residual useful life of the portfolio acquired, equal to 4.6 years for the life business and 1.4 years for the non-life business;  the costs pertaining to the share capital increase which took place in 2014, amortised over a useful life of five years.

Goodwill The item includes:

 the goodwill recorded in Duomo Previdenza (a company absorbed in 2007), attributable to the merger transactions concluded during 2001, which represents the values of the portfolios and the sales networks of the insurance companies absorbed. It is amortised, on a straight-line basis and proportionally over time, over a period of twenty years, deemed suitable in relation to the period of use of the intangible elements it is made up of;  the goodwill deriving from the acquisition, in 2010, of the business segment from the subsidiary C.I.R.A. relating to the activities achieved via the broker and agent channels. In relation to the economic useful life of the segment in question, it is amortised on a straight-line basis in twenty annual portions;  the goodwill acquired in 2011 following the spin-off transaction of Duomo Uni One in the Company, for the absorption of Maeci Assicurazioni. It is amortised on the basis of a twenty-year plan on a straight-line basis, in relation to the average residual duration of the underlying contracts;  the deficit recognised in 2011 following the spin-off transaction for Duomo Uni One in the Company; it is amortised on the basis of an eighteen-year plan, in relation to the average residual duration of the underlying contracts;  the deficit recognised in 2012 following the partial spin-off transaction for Cattolica Gestione Investimenti in the Company; it is amortised on the basis of a ten-year plan, in relation to the average duration of the assets;  the goodwill, recognised in 2013, consequent to the transfer transaction for the business segment from Risparmio & Previdenza; it is amortised on the basis of the residual useful life of the portfolio acquired, equal to 4.6 years for the life business and 1.4 years for the non-life business; with regard to the goodwill pertaining to the same transfer transaction but acquired as a consequence of the total spin-off of Cattolica Previdenza, the duration of the amortisation is 5 years, in relation to the duration of the acquired portfolio;  the deficit recognised in 2013 following the total spin-off transaction for Cattolica Previdenza in the Company; it is amortised on the basis of a seven-year amortisation plan, in relation to the average duration of the acquired portfolio.

176

Notes to the Accounts

 the deficit recognised in the year following the merger through incorporation transaction of FATA within the Company. It is amortised, on a straight-line basis and proportionally over time, over a period of 13 years; the amortisation plan is deemed suitable in relation to the period of use of the intangible elements it is made up of.

Other These are represented by costs benefiting the long-term, and are stated net of the amortisation long-term costs provided. The amortisation is calculated over a useful life of five years as a rule, or on the basis of the residual useful life.

INVESTMENTS

Land and These are considered to be assets with long-term use destined to remain among the company buildings assets; they are recognised at purchase cost increased by incremental value costs and the revaluations made over time. The valuation is consistent with the dictates of Article 16, paragraphs 1, 2 and 3 of Italian Legislative Decree No. 173 dated May 26th, 1997.

In relation to the obligation as per Article 16, paragraph 7, of Italian Legislative Decree No. 173 dated May 26th, 1997, the current value of the properties, calculated individually for each property owned by the Company, on a consistent basis with the matters established by Article 18 of the afore-mentioned legislative decree and ISVAP regulation No. 22 dated April 4th, 2008, as amended by IVASS provision No. 53 dated December 6th, 2016, emerges from an estimate report prepared with reference to December 2016.

Property used The properties intended for direct use and third party use are systematically depreciated each for business year in relation to the residual possible use according to economic-technical criteria. activities The plots of land and the pertinent areas have been acquired autonomously, are recognised at and used by purchase cost and are not depreciated. third parties During 2008, the faculty to revalue the property assets in the financial statements as of December 31st, 2007 was exercised, as envisaged by Italian Legislative Decree No. 185 dated November 29th, 2008 converted with Italian Law No. 2 dated January 28th, 2009, following the comparative method approach (or market method). It is confirmed that the revalued value of the assets does not exceed the market value attributable to the same as also emerges from the appraisals carried out by the company specialised with regard to real estate property appraisal activities. The Company has made use of the faculty to assign tax-related importance to the revaluation of the properties (even if the effects are deferred over time) by means of the payment of the substitute tax.

Securities In compliance with IVASS Regulation No. 24 dated June 6th, 2016, the investments with a investments long-term use and those not with a long-term use have been identified, by means of outline resolution of the Board of Directors regarding financial matters, as commented on in the section “Other information” in the part “Financial and asset management” in the Management Report.

The criteria adopted for the classification of the securities portfolio in the segments of the

177

investments for long-term use and non-long term use follow the principles of coherence with respect to the economic and financial performance, current and forecast, of the Company, with a view to maintaining the performances consistent with the commitments vis-à-vis policyholders, given the profile of the liabilities and on the basis of the estimates of the performance of the overall reserves, within the sphere of the asset & liability management activities.

They have been identified as fixed assets in accordance with Articles 4 and 15 of Italian Investments in Legislative Decree No. 173 dated May 26th, 1997, unless otherwise indicated as justified in Group the notes to the accounts, and are recorded on the basis of the criteria, listed below, determined companies in accordance with Article 16 of Italian Legislative Decree No. 173 dated May 26th, 1997. and in other investee companies

Company Investments in subsidiary, associated and other companies, in which a long-term relationship shares and takes place as per Article 4, paragraph 2, of Italian Legislative Decree No. 173 dated May holdings 26th, 1997, are recognised at the lower between the purchase value and that which, as of the year end date, is deemed will remain lower, as per Article 16, paragraph 3, of Italian Legislative Decree No. 173 dated May 26th, 1997.

The shares recognised under assets which are not long-term are valued analytically at the lower between the book value and the realisable value, established on the basis of market trends as per Article 16, paragraph 6, of Italian Legislative Decree No. 173 dated May 26th, 1997.

Bonds issued by Fixed income securities issued by subsidiary, associated and other companies, in which a Group long-term relationship takes place as per Article 4, paragraph 2, of Italian Legislative Decree companies and No. 173 dated May 26th, 1997, are recognised at purchase or subscription cost and are written investees and down in the presence of permanent impairment losses, as per Article 16.3 of Italian Legislative other fixed Decree No. 173 dated May 26th, 1997. The amortisation of the additional cost has been income adopted as envisaged by paragraph 16 of the same article. securities The financial statement item also includes investments in bonds which represent non- permanent assets and therefore are recorded in the financial statements pursuant to Article 16, paragraph 6, of Italian Legislative Decree No. 173 dated May 26th, 1997.

Other financial Other financial investments are recognised on the basis of the criteria, listed below, investments determined in accordance with Article 16 of Italian Legislative Decree No. 173 dated May 26th, 1997.

Shares and The shares are valued analytically at the lower between the book value and the realisable holdings value, established on the basis of market trends. The price of the last open market day is adopted as the realisable value. In accordance with Article 16, paragraph 6, of Italian Legislative Decree No. 173 dated May 26th, 1997, the securities, written down in previous years, for which the reasons which led to the write-down have ceased to exist, are revalued, with the limit of the historical cost.

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Notes to the Accounts

Bonds and other Bonds which represent assets which are not long-term are valued analytically at the lower fixed income between the book value and the realisable value, established on the basis of market trends as securities - per Article 16, paragraph 6, of Italian Legislative Decree No. 173 dated May 26th, 1997. listed The price of the last open market day is adopted as the realisable value.

The purchase cost or the book value of the bonds is adjusted by issue discounts, in other words the differences between the issue values of the securities and the related redemption values.

Bonds which represent long-term assets are recognised at purchase or subscription cost and are written down in the presence of permanent impairment losses, as per Article 16, paragraph 3, of Italian Legislative Decree No. 173 dated May 26th, 1997. The book values are analytically valued and adjusted by the issue and trading discounts recognised on an accruals basis, as per the law indicated above.

In accordance with the dictates of Article 16, paragraphs 3 and 6 of Italian Legislative Decree No. 173 dated May 26th, 1997, the securities, written down in previous years, for which the reasons that led to the writedown have ceased to exist, are revalued, in the limit of the historical cost.

Bonds and other The securities included in this category are valued analytically at the lower between the book fixed income value and the realisable value, established with reference to the market value of listed securities - securities with similar features. unlisted The financial statement item also includes investments in bonds which form part of the permanent use segment and which therefore, pursuant to Article 16, paragraph 3, of Italian Legislative Decree No. 173 dated May 26th, 1997, are recognised at purchase or subscription cost and are written down in the presence of permanent impairment losses.

Units of mutual The units of mutual investment funds are valued analytically at the lower between the book investment value and the realisable value, established on the basis of market trends. funds The price of the last open market day is adopted as the realisable value. The investments in private equity funds structured according to the formula of the committed fund are recognised as per the guidelines issued by the EVCA (European Private Equity & Venture Capital Association), which envisage the recognition under the assets of the values paid over to the fund and the indication in the memorandum accounts of the residual commitment vis-à-vis the same.

Repurchase The assets forming the subject matter of repurchase transactions are recognised, as per Article transactions 2424 bis of the Italian Civil Code, in the statement of financial position of the seller and the related income and charges, including therein the difference between the forward price and the spot price, are recognised for the portions pertaining to the period.

Derivative Derivative financial instruments used for hedging purposes are valued in accordance with the financial principle of valuation consistency which envisages that the capital gains and losses from instruments valuation are booked to the income statement on a consistent basis with the corresponding capital gains and losses from valuation on the assets hedged. The market value of the derivative contracts is determined in reference to the respective listings and, in the absence thereof, on the basis of a prudent valuation of their estimated

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realisable value, as per market practices.

Derivative financial instruments used to increase the profitability are valued at the lower between the book value and the realisable value, which is equal to the current value of the future performances.

INVESTMENTS FOR BENEFITS OF LIFE ASSURANCE POLICYHOLDERS WHO BEAR THE INVESTMENT RISK AND DERIVING FROM THE MANAGEMENT OF PENSION FUNDS

These are recognised in accordance with the matters laid down by Articles 16, 17 and 19 of Italian Legislative Decree No. 173 dated May 26th, 1997. The value of the investments classified in class D “Investments for benefits of life assurance policyholders who bear the investment risk and related to the management of pension funds” is determined on the basis of the current value expressed on the last day of transaction in the year, as communicated by the issuing bodies or, for listed securities, according to listed market prices.

RECEIVABLES

Receivables are recognised at estimated realisable value as per Article 16.9 of Italian Legislative Decree No. 173 dated May 26th, 1997, determined by countering the face value with the writedowns calculated using analytical methods for the receivables deriving from dealings with agents, reinsurance companies and other types of receivables, and with forfeit methods for those deriving from dealings with policyholders, taking into account the experience acquired and the historical analysis of the trend in collections.

OTHER ASSET ITEMS

Furniture and These are recognised at purchase cost, as per Article 16, paragraphs 1 and 2, of Italian plant Legislative Decree No. 173 dated May 26th, 1997, and are adjusted by the corresponding accumulated depreciation. The related cost is depreciated systematically in each year in relation to the residual possibility of use which derives from a valuation made on the intended use, the expected physical wear and tear and the technological obsolescence, using economic-technical criteria on the basis of the experience acquired. In relation to the period in which use of the asset concludes, the following depreciation rates are calculated:

 ordinary office furniture and machines: 12%;  plant and equipment: 15%;  electronic machines and hardware: 20%;  vehicles and internal means of transport: 25%. The rates are applied to the extent of 50% for purchases made during the year. The result obtained does not differ significantly from that calculated on the basis of the effective duration of the period of possession.

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Notes to the Accounts

Movable assets subject to rapid economic deterioration whose individual costs are of scant significance, are depreciated in full during the year.

Cash in bank These are stated at their face value. and cash equivalent SHAREHOLDERS' EQUITY

Negative reserve Further to the amendments introduced by Article 6, paragraph 1, of Italian Legislative Decree for own shares No. 139 dated August 18th, 2015, by way of implementation of the 2013/34/EU Directive own in portfolio shares are recognised in the financial statements directly reducing the shareholders’ equity, in accordance with the matters laid down by Article 2357, paragraph 3 ter, of the Italian Civil Code.

ACCRUALS AND DEFERRALS

The approach for recognising accruals and deferrals makes reference to the assignment to the accrual period of income and expenses common to several years. The accruals and deferrals are calculated on an accruals basis in accordance with the matching principle, in observance of Article 2424, paragraph 6 bis, of the Italian Civil Code.

SUBORDINATED LIABILITIES

These are stated at their face value.

TECHNICAL PROVISIONS

Life business The technical provisions, for the exercise of private life assurance, have been valued on the technical basis of the actuarial standards and the applicative rules set forth by attachment 14 to the provisions ISVAP Regulation No. 22 dated April 4th, 2008, as amended by IVASS provision No. 53 dated December 6th, 2016.

The technical calculation bases adopted are consistent with the provision contained in attachment 14 to ISVAP Regulation No. 22 dated April 4th, 2008, as amended by IVASS provision No. 53 dated December 6th, 2016.

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

The Company applies the provisions of section 21 et seq. of attachment No. 14 to the ISVAP regulation No. 22, dated April 4th, 2008, as amended by IVASS provision No. 53 dated December 6th, 2016, regarding the determination of the foreseeable return of the additional provisions for financial risk, along with those of sections 36 et. seq. of the afore-mentioned attachment, regarding the establishment and calculation of an additional provision for demographic risk.

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Furthermore, the Company applies section 41 of said attachment, which envisages the coverage of the mortality risk and guaranteed benefits falling due for the contracts as per Article 41, paragraph 1, of Italian Legislative Decree No. 209/2005 and subsequent amendments.

The provisions relating to the acceptances are calculated in relation to the criteria envisaged by attachment No. 16 to ISVAP regulation No. 22 dated April 4th, 2008, as amended by IVASS provision No. 53 dated December 6th, 2016.

The provisions relating to reinsurers include the gross amounts pertaining to the same and are determined in compliance with the contractual reinsurance agreements, on the basis of the gross amounts of the technical provisions.

Provision for The provision is made up of the amount necessary for covering the payment of capital and outstanding accrued returns, redemptions and claims to be settled. claims

Premium The premium provision of supplementary insurance includes the related premium provision. provision of supplementary insurance

Reserve for The reserve for profit-sharing and repayments includes the amounts to be assigned to the profit-sharing policyholders or the beneficiaries of profit-sharing and repayment agreements provided that and repayments these are not already considered in the mathematical provision.

Other technical The other technical provisions include the provision for future expenses, which are expected to provisions have to be incurred on the basis of prudent valuations as per section 17 of attachment No. 14 to ISVAP regulation No. 22 dated April 4th, 2008, as amended by IVASS provision No. 53 dated December 6th, 2016.

Technical The provisions relating to index-linked and unit-linked contracts and pension funds have been provisions for calculated taking into account both the contractual commitments and the financial assets contracts where linked to said policies. the investment risk is borne by They are formed in accordance with section 39 et seq. of attachment 14 to ISVAP regulation the No. 22 dated April 4th, 2008, as amended by IVASS provision No. 53 dated December 6th, policyholders 2016, and cover the commitments deriving from the insurance of the life classes whose return and provisions is determined in relation to investments for which the policyholder bears the risk or in relation deriving from to an index. the management of pension funds

Non-life The provision for non-life insurance premiums comprises both the provision for unearned business premiums and the provision for current risks. provisions The provision for unearned premiums is calculated analytically using the pro-rata accruals method (section 5 of attachment 15 of ISVAP Regulation No. 22, dated April 4th, 2008, as

182

Notes to the Accounts

amended by IVASS provision No. 53 dated December 6th, 2016) 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 the acquisition commissions and the other acquisition costs, limited to the directly chargeable costs, for the portion relating to the accounting period.

The value thus obtained has been supplemented by the provisions for insurance of the security class, the damages caused by hail, the provisions deriving from natural disasters and damages deriving from nuclear energy, calculated according to the criteria set out in section 10 et seq. of attachment 15 to ISVAP regulation No. 22, dated April 4th, 2008, as amended by IVASS provision No. 53 dated December 6th, 2016.

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 unearned premiums and the premiums which will be collectable by virtue of these policies, according to section 6 et seq. of attachment No. 15 to ISVAP regulation No. 22 dated April 4th, 2008 as amended by IVASS provision No. 53 dated December 6th, 2016.

The premiums’ provisions relating to transfers to re-insurers are determined on the basis of methods consistent with those for direct business and, in any event, in accordance with reinsurance contractual agreements.

The premiums’ provisions relating to the acceptances are calculated in relation to the criteria envisaged by section 16 et seq. of attachment No. 16 to ISVAP regulation No. 22 dated April 4th, 2008, as amended by IVASS provision No. 53 dated December 6th, 2016.

The provision for outstanding claims is determined on the basis of a prudent evaluation of the 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.

When defining the provisions for outstanding claims, the Company makes reference to the concept of last estimable cost, identifying this value, in compliance with sections 23 et seq. of attachment No. 15 to ISVAP regulation No. 22 dated April 4th, 2008, as amended by IVASS provision No. 53 dated December 6th, 2016.

In particular, when establishing the liability relating to the claims, steps are taken to separately evaluate each claim (inventory method), based on the analysis of the documentation relating to each individual damage case, realised by the staff assigned to settle the claims; With regard to the classes characterised by slow settlement processes and for which the analytical valuation does not make it possible to take into account all the envisageable charges, the inventory method is flanked by an additional valuation by means of statistical-actuarial procedures or forecast systems on the evolution of the costs, in compliance with the provisions of section 24 of attachment No. 15 to ISVAP regulation No. 22 dated April 4th, 2008, as amended by IVASS provision No. 53 dated December 6th, 2016.

With regard to the assessment of the cost of the current generation, the Company avails itself, as envisaged by section 25 of attachments No. 15 to ISVAP regulation No. 22 dated April 4th,

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2008, as amended by IVASS provision No. 53 dated December 6th, 2016, of the average cost approach (with the exception of the credit and security classes) for the classes which due to technical features lend themselves to the application of the same criteria. With regard to the claims for the current generation, which do not present sufficient numerousness and quantitative and qualitative standardisation, the inventory method is applied.

The provisions includes the valuation of the claims which have taken place but have not been reported as of the year ended date on the basis of the provisions of sections 27 et seq. of attachment No. 15 to ISVAP regulation No. 22 dated April 4th, 2008, as amended by IVASS provision No. 53 dated December 6th, 2016.

The provision for outstanding claims regarding Card and No Card claims of the land vehicle TPL class is established on the basis of sections 30 et seq. of attachment 15 of ISVAP regulation No. 22 dated April 4th, 2008, as amended by IVASS provision No. 53 dated December 6th, 2016; the overall amount of the provision is calculated in relation to the matters laid down by section 31, paragraph 2.

The portions of the claims’ provisions pertaining to re-insurers are determined adopting the same criteria used for the direct business provisions and taking into account the contractual clauses of the agreements.

The provisions for outstanding claims relating to the acceptances are calculated in relation to the criteria envisaged by sections 24 et seq. of attachment No. 16 to ISVAP regulation No. 22 dated April 4th, 2008, as amended by IVASS provision No. 53 dated December 6th, 2016.

Other technical They include the senescence provision of the health class for the rise in the age of the provisions policyholders, in accordance with section 42 et seq. of attachment 15 and section 34 of attachment No. 16 of ISVAP Regulation No. 22, dated April 4th, 2008, as amended by IVASS provision No. 53 dated April 6th, 2016.

Equalisation These comprise the equalisation reserve of the credit class, as well as the equalisation reserve reserves for natural calamity risks and for damages deriving from nuclear energy as per sections 37 et seq. of attachment No. 15 and section 29 of attachment No. 16 of ISVAP regulation No. 22 dated April 4th, 2008, as amended by IVASS provision No. 53 dated December 6th, 2016.

PROVISIONS FOR RISKS AND CHARGES

Provision for The item includes the amount of the mathematical provision corresponding to the pensions and commitments undertaken regarding to the individual members enrolled (active members and similar pensioners) in the Internal Pension Fund for Company Employees and the appraisals at year commitments end not yet included in the mathematical provision as of that date. This item indicates the Company’s commitment envisaged by the supplementary in-house agreement dated October 29th, 1999 which amended the original agreement dated June 1st, 1963 in favour of the employees taken on up until March 15th, 1982 (if officials, until November 17th, 1982).

The Fund, complying with the defined benefit regime and managed in insurance form, was set up in accordance with Article 2117 of the Italian Civil Code; the value of the benefit accrued is determined analytically for each individual position using the criteria established in the

184

Notes to the Accounts

afore-mentioned agreement.

Provision for The provision comprises the deferred taxes estimated, relating to the timing differences taxation between the taxable results and those deriving from the statutory financial statements, which involve the deferral of the taxation.

Prepaid taxes relating to the deductible timing differences are recorded in the assets item E.III. “Other receivables”.

This approach is in line with the accounting standard on taxation No. 25 issued by the OIC - Italian Accounting Body.

Other The item includes the provisions provided to cover known or likely specific losses or provisions and liabilities, the timing or extent of which cannot be determined at year end. allowances

PAYABLES AND OTHER LIABILITIES

Employee Employee severance indemnities are calculated in accordance with the matters envisaged by severance legal provisions and employment contracts. indemnities The provision, net of advances paid out, covers the Company’s commitments regarding to the employees at year end.

Payables These are stated at their face value.

INCOME STATEMENT

Gross premiums These are recognised in accordance with Article 45 of Italian Legislative Decree No. 173 written dated May 26th, 1997 with reference to the moment of accrual, which corresponds with the moment of expiry of the premiums as emerging from the contractual documentation, independency of the fact that these amounts have been effectively collected or that they refer in full or in part to subsequent periods and are determined net of cancellations in accordance with the afore-mentioned legislation.

Income Income is recognised taking into account its pertinence and regardless of the date of collection. Dividends are recorded in the period they are received.

Costs and Charges are recognised taking into account the pertinence of the same, regardless of the date charges of payment.

Cost allocation Directly chargeable costs inherent to business, the settlement of claims and investments are approach allocated to the life and non-life business and to the individual classes on the basis of analytical criteria.

Indirectly chargeable acquisition costs are allocated in relation to the number of new business contracts, those relating to administration on the basis of the contracts in the portfolio and those relating to settlement on the basis of the number of claims settled and reserved for the

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non-life classes and the number of settlements for the life classes. The charges relating to investments are assigned to the life and non-life business on the basis of the volume of the provisions.

Transfers of The allocation of portions of the profit of the investments to the non-life technical account and income and the transfer from the life technical account to the non-technical account is carried out in charges accordance with Article 55 of Italian Legislative Decree No. 173 dated May 26th, 1997 and sections 22 and 23 of ISVAP regulation No. 22, dated April 4th, 2008, as amended by IVASS provision No. 53 dated December 6th, 2016.

Taxation for the Current taxes for the year are provided for on an accruals basis with reference to current year legislation.

Deferred tax assets and liabilities are recognised on the timing differences between the value assigned to the assets and liabilities according to statutory criteria and the value assigned to the same assets and liabilities for tax purposes.

The assets deriving from prepaid taxes are recognised since, having checked the observance of the prudent principle, there is reasonable certainty of the existence, in the years when the related timing differences will reverse, of taxable income greater than the amounts of the differences which will be cancelled.

Prepaid taxes and deferred taxes relating to the timing differences arising during the year have been recognised in the financial statements separately, by means of recording the same respectively in “Other receivables” under the assets and in the “Provision for deferred taxation” as a matching balance to the specific income statement item 14 “Income taxes for the year”. Compliance with the tax consolidation scheme does not lead to exceptions or changes to the standards illustrated above.

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Notes to the Accounts

Part B - Information on the Statement of financial position and Income statement

Notes to the Accounts Part B

Statement of financial position - Assets

Further to the transaction for the merger of FATA which affected the Company, with accounting and tax-related efficacy as from January 1st, 2016, the following table shows the statement of financial position assets with the balances as of December 31st, 2015 adjusted in accordance with the criteria described in the Introduction of these Notes to the accounts, supplemented with the breakdown of the absorbing company and the absorbed company. Furthermore, for the purpose of permitting comparability of the balances and the information, the legislative provisions regarding own shares have been applied to the balances for the previous year.

Table 24 - Pro-forma statement of financial position - Assets

2016 2015 Cattolica Adjustme ASSETS pro forma Cattolica Fata nts (€ thousands) Cattolica (d=a+b+c) (a) (b) (c) A. Amounts due from shareholders for subscribed share capital not paid in 0 0 0 0 0 B. Intangible assets 207,316 238,834 206,737 2,168 29,929 1. Acquisition expenses to amortise 13,179 12,551 12,551 0 0 2. Other assets 194,137 226,283 194,186 2,168 29,929 C. Investments 8,531,715 8,236,037 7,823,591 599,312 -186,866 I - Land and buildings 101,261 103,999 39,380 64,619 0 II - Investments in Group companies and other investees 972,152 886,466 1,101,459 4 -214,997 1. Shares and holdings 939,819 856,325 1,071,318 4 -214,997 2. Bonds 32,333 25,140 25,140 0 0 3. Loans 0 5,001 5,001 0 0 III - Other financial investments 7,447,634 7,234,553 6,671,756 534,666 28,131 1. Shares and holdings 48,403 109,409 89,730 18,526 1,153 2. Units of mutual investment funds 707,548 540,026 520,524 19,084 418 3. Bonds and other fixed income securities 6,688,150 6,570,599 6,047,000 497,039 26,560 4. Loans 3,509 4,480 4,480 0 0 5. Other 24 10,039 10,022 17 0 IV - Deposits with ceding companies 10,668 11,019 10,996 23 0 D. Investments for benefits of life assurance policyholders who bear the investment risk 982,219 1,176,759 1,176,759 0 0 and deriving from the management of pension funds I - Investments relating to benefits associated with investment funds and 109,475 91,122 91,122 0 0 stock market indices II - Investments deriving from the management of pension funds 872,744 1,085,637 1,085,637 0 0 D bis. Technical provisions - reinsurance amount 558,929 600,843 552,224 52,417 -3,798 I - Non-life business technical provisions 530,190 566,732 518,113 52,417 -3,798 II - Life business technical provisions (excluding the technical provisions as per point 28,739 34,111 34,111 0 0 III) III - Life business technical provisions where the investment risk is borne 0 0 0 0 0 by the policyholders and provisions deriving from the management of pension funds E. Receivables 906,869 929,290 812,469 132,016 -15,195 I - Receivables deriving from direct insurance transactions 397,120 406,966 341,293 65,673 0 II - Receivables deriving from reinsurance transactions 56,752 63,663 60,973 3,957 -1,267 III - Other receivables 452,997 458,661 410,203 62,386 -13,928 F. Other asset items 161,135 232,751 220,924 11,827 0 I - Tangible assets and inventories 4,011 4,051 3,604 447 0 II - Cash in bank and cash equivalent 35,277 154,236 145,976 8,260 0 IV - Other assets 121,847 74,464 71,344 3,120 0 G. Accruals and deferrals 57,736 60,515 56,313 4,209 -7 TOTAL ASSETS 11,405,919 11,475,029 10,849,017 801,949 -175,937

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SECTION 1 - INTANGIBLE ASSETS (Item B)

Intangible assets, presented in summary form in attachment 4, showed the following changes:

Table 25 - Intangible assets

Pro forma Changes (€ thousands) 2016 2015 Amount % 2015

Acquisition commissions to amortise - life business 13,179 12,551 628 5.0 12,551 Start-up and expansion costs 12,176 16,568 -4,392 -26.5 16,568 Goodwill 177,861 202,409 -24,548 -12.1 172,480 Other long-term costs 4,100 7,306 -3,206 -43.9 5,138 TOTAL (item B) 207,316 238,834 -31,518 -13.2 206,737

The following tables, relating to gross amounts of amortisation and the accumulated amortisation, do not contain the acquisition commissions to be amortised since it is amortised using the direct method.

Table 26 - Intangible assets - gross amortisation amounts

(€ thousands) January 1st, 2016 Increases Decreases 2016

Start-up and expansion costs 22,976 0 0 22,976 Goodwill 321,258 29,929 0 351,187 Other long-term costs 33,344 404 0 33,748 TOTAL 377,578 30,333 0 407,911

The gross amounts as at January 1st, 2016 as per the item “Other long-term costs” include the opening balances of the absorbed company FATA for a total of € 13.925 million.

Table 27 - Intangible assets - accumulated amortisation

(€ thousands) January 1st, 2016 Increases Decreases 2016

Start-up and expansion costs 6,408 4,392 0 10,800 Goodwill 148,778 24,548 0 173,326 Other long-term costs 26,038 3,610 0 29,648 TOTAL 181,224 32,550 0 213,774

The accumulated amortisation amounts as at January 1st, 2016 as per the item “Other long-term costs” include the opening balances of the absorbed company FATA for a total of € 11.757 million.

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Notes to the Accounts

Acquisition commission to amortise Acquisition commissions to be amortised for the life business amounted to € 13.179 million, compared with € 12.551 million at the end of the previous year. As of December 31st, no commission to be amortised for the non-life classes has been recorded.

Other acquisition costs No value had been recorded at the year end date.

Start-up and expansion costs The item, net of the amortisation charges for the period of € 4.392 million, amounted to € 12.176 million and includes the following expansion costs:

 the residual value of the registration tax paid by the Company during the year following the acquisition of the business segment from Risparmio & Previdenza for € 618 thousand, net of the amortisation for the year totalling € 412 thousand;  the residual value of the capitalised costs, associated with the share capital increase subscribed in 2014, for € 11.558 million, net of the amortisation charge for the year of € 3.98 million.

Goodwill The item amounted to € 177.861 million at year end (€ 172.48 million as of December 31st, 2015) and includes:  the price paid by Duomo Previdenza (company incorporated in 2007) for the merger through incorporation of the companies Maeci Vita and Le Mans Vita net of the portions of amortisation calculated on the basis of a straight-line twenty-year plan. The residual value at the end of the year amounted to € 8.366 million, net of the amortisation charge for € 2.092 million;  the price paid for the acquisition of the business segment from subsidiary C.I.R.A. net of the portions of amortisation calculated on the basis of a straight-line twenty-year plan. The residual value at the end of the year amounted to € 5.135 million, net of the amortisation charge for € 395 thousand;  the price paid by Duomo Uni One, net of the portions of amortisation calculated on a straight-line twenty-year plan for the incorporation of Maeci Assicurazioni, acquired following the spin-off of Duomo Uni One in the Company. The residual value at the end of the year amounted to € 1.502 million, net of the amortisation charge for € 375 thousand;  the deficit recognised following the spin-off transaction for Duomo Uni One in the Company. The residual value at the end of the year, net of the amortisation charge for € 7.881 million, amounted to € 94.465 million;  the deficit recognised following the partial spin-off of Cattolica Gestione Investimenti in the Company for a total of € 16.69 million. The residual value, net of the amortisation charge of € 1.669 million, calculated on the basis of a straight-line ten-year plan, amounted to € 8.345 million;  the price paid for the acquisition of the business segment from subsidiary Risparmio & Previdenza net of the portions of amortisation calculated on the basis of the portfolio acquired (4.6 years for the life classes and 1.4 years for the non-life classes). The residual value at the end of the year amounted to € 319 thousand, net of the amortisation charge for € 214 thousand;  the deficit recognised following the spin-off of Cattolica Previdenza in the Company for a total of € 32.053 million, net of the amortisation charge for the year of € 6.411 million;  the price paid by Cattolica Previdenza for the purchase of the business segment of Risparmio & Previdenza. The residual value at the end of the year amounted to € 49 thousand, net of the amortisation charge for the year of € 24 thousand;

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 the deficit recognised following the merger via incorporation of FATA in the Company for a total of € 29.929 million whose residual value, net of the related amortisation charge for € 2.302 million, amounted to € 27.627 million. The Company has taken steps to make a registration on a residual basis, after having booked the merger deficit to the asset and liability items.

It is hereby disclosed that, during the year, the amortisation plan for the deficit recognised following the merger through incorporation transaction of San Miniato Previdenza in the Company, which took place in 2012, concluded: the amortisation charged relating to the period amounts to € 3.185 million.

Other long-term costs The item amounted to € 4.1 million and included:  € 2.267 million reflecting the charges deriving from the agreement with ICCREA Holding, stated net of the amortisation charge for the year of € 600 thousand;  € 1.16 million reflecting the amount of the long-term costs pertaining to the issue of the bond incurred for a total amount of € 1.678 million, whose amortisation charge came to € 168 thousand;  € 182 thousand reflecting other long-term charges, relating to the website, displayed net of the amortisation charge for the year of € 152 thousand;  € 177 thousand reflecting the costs incurred for software implementations, stated net of the amortisation charge for the period of € 45 thousand;  € 150 thousand reflecting the charges deriving from the agreement with Banca di Credito Popolare in relation to the commercial venture launched in 2009, stated net of the amortisation charge for the period of € 300 thousand;  € 132 thousand reflecting the costs associated with leasehold improvements, displayed net of the amortisation charge for the year of € 104 thousand;  € 32 thousand reflecting the costs incurred for the implementation of software acquired with the spin-off of Cattolica Previdenza, displayed net of the amortisation charge for the year of € 73 thousand.

As of December 31st, 2015 the item amounted to € 7.306 million, including the amount of € 2.168 million reported by the absorbed company as of the end of the previous year.

SECTION 2 - INVESTMENTS (Item C)

Land and buildings The item “Land and buildings” amounted to € 101.261 million.

The current value of the properties amounted to € 106.68 million; it was up-dated on the basis of the market value as of December 2016, as emerging from the appraisal report. As a result of this valuation, the need to proceed with adjustments of the book values of the entire property complex did not emerge.

As disclosed below, the item is made up as follows:

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Notes to the Accounts

Table 28 - Land and buildings

Pro forma Change (€ thousands) 2016 2015 Amount % 2015

Property used for business activities 63,570 65,440 -1,870 -2.9 39,380 Property used by third parties 37,691 38,559 -868 -2.3 0 TOTAL (item C.I) 101,261 103,999 -2,738 -2.6 39,380

In the tables which follow, the balances as at January 1st, 2016 include the balances of the absorbed company for € 64.619 million.

Table 29 - Land and buildings - gross depreciation amounts

(€ thousands) January 1st, 2016 Increases Decreases 2016

Property used for business activities 88,387 212 0 88,599 Property used by third parties 45,362 0 0 45,362 TOTAL 133,749 212 0 133,961

Table 30- Land and buildings - accumulated depreciation

(€ thousands) January 1st, 2016 Increases Decreases 2016

Property used for business activities 22,947 2,082 0 25,029 Property used by third parties 6,803 868 0 7,671 TOTAL 29,750 2,950 0 32,700

Property used for business activities Property destined to be used for business activities amounted to € 63.57 million. The balance compares with the € 65.44 million reported at the end of the previous year which includes the value of the absorbed company for € 26.06 million. The gross amounts come to € 88.599 million compared with € 88.387 million in the previous year which include the FATA balances for a total of € 34.766 million. The accumulated depreciation amounts to € 25.029 million. The balance compares with the € 22.947 million reported at the end of the previous year: this includes the value of the absorbed company for € 8.706 million. During the year, the increase in accumulated depreciation, totalling € 2.082 million, was entirely attributable to the depreciation charge for the year.

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Property used by third parties The item was established further to the contribution deriving from the merger and amounts to € 37.691 million. The balance compares with the € 38.559 million as recorded in the 2015 financial statements of the absorbed company. The gross balances amount to € 45.362 million and have not undergone any increases during the year. The accumulated depreciation amounts to € 7.671 million; the increase of € 868 thousand is attributable to the charge for the year. During the year, the absorbed company FATA transferred the usufruct right on 3 property units for third party use specifically identified, to the reserved alternative property investment fund known as “AGRIS”, for a duration of four years and for an overall value of € 4.066 million.

Investments in Group companies and other investees Pursuant to Article 2426 of the Italian Civil Code and Article 58 of the “Testo unico delle imposte sui redditi”, the investments in Group companies (subsidiary, associated and other investees), represent fixed assets. The class C.II.2.e) bonds are recorded under securities not for long-term use for € 24.415 million and under long-term securities for € 7.867 million, as indicated in another part of the notes. The changes during the year in investments in Group companies and other investees are shown in attachment 5. With regard to the investee companies, detailed information is provided in attachment 6 and attachment 7.

Company shares and holdings The item includes the investments in subsidiary, associated and other companies. The attached table shows the financial statement balances and the related changes during the year.

Table 31 - Investments - summary of values

Change Company 2016 2015 amount Subsidiaries 867,794 952,517 -84,723 Associated companies 558 35,056 -34,498 Other 71,467 83,745 -12,278 TOTAL (item C.II.1) 939,819 1,071,318 -131,499

The main changes described analytically in the section “Significant events during the year” in the Management report are summarised below and the share capital increase subscriptions and the recapitalisations made during the year, along with transactions of minor importance, are shown in detail.

196

Notes to the Accounts

SUBSIDIARIES

The item fell from € 952.517 million to € 867.794 million, reporting an overall decrease of € 84.723 million.

Increases The increases during the period are essentially attributable to the following transactions:

 in February and May, the Parent Company made three payments towards capital in favour of Cattolica Beni Immobili for a total of 10 million for the purpose of permitting the completion of the requalification measures on the “Cattolica Center” area. A further € 16.4 million was paid over in July and December;  in May, the Company made a payment towards share capital in favour of Cattolica Agricola for € 11 million. A further € 26 million was paid over in July and August;  in June, the Company agreed on the allocation of the € 5 million loan outstanding and dating back to December 2015, to Cattolica Services’ share capital. The Company also made a new payment towards share capital for € 4 million. A further € 21 million was paid over in August and December;  in December, the Company took part on a pro rata basis in the recapitalisation in favour BCC Vita for € 15.3 million, so as to strengthen the solvency requirements;  in December, the Company made a payment towards share capital in favour of the subsidiary TUA Assicurazioni for € 25 million, so as to strengthen the solvency requirements;  in June, the Company received the transfer of 51% of the share capital of the agent company “Agenzia Generale Agrifides s.r.l.” (formerly “Agenzia Generale Coldiretti s.r.l.”), corresponding to an equivalent value of € 5 thousand;  further to the FATA merger transaction, the Company received a holding equal to 0.005% relating to the investment in Cattolica Services corresponding to € 1 thousand.

Decreases The cessation of the investment in FATA led to a decrease in the item subsidiaries for € 215.222 million.

Writedowns Following an analytical valuation process, the investment held in C.P. Servizi Consulenziali was written down for € 3.207 million.

The data of the subsidiary and associated companies, as defined by Article 2359 of the Italian Civil Code, as indicated in attachment 6 of the notes to the accounts, is listed in the following tables, as per Article 2427.1, point 5 of the Italian Civil Code. Pursuant to Article 2429, paragraphs 3 and 4 of the Italian Civil Code, the data included in these tables is accompanied for the associated companies and subsidiaries included in the scope of consolidation by a summary statement of the highlights from the last sets of approved financial statements.

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Table 32 - Summary data of subsidiaries

Value of which Shareholding assigned profit (+) % in the Share Shareholders' or loss (-) financial capital equity for the year Name or business name Registered offices statements

ABC Assicura s.p.a. Verona 8,925 15,543 282 60.00 15,649 Agenzia Generale Agrifides s.r.l. Rome 10 36 27 51.00 5 BCC Assicurazioni s.p.a. Milan 14,448 12,067 -2,272 51.00 5,739 BCC Vita s.p.a. Milan 62,000 156,806 9,055 51.00 97,808 Berica Vita s.p.a. Vicenza 31,000 74,160 8,972 60.00 90,000 C.P. Servizi Consulenziali s.r.l. Verona 120 2,832 -3,174 100.00 2,799 Cattolica Agricola s.a.r.l. Verona 35,500 133,163 1,292 100.00 137,500 Cattolica Beni Immobili s.r.l. Verona 7,000 45,312 -841 100.00 48,500 Cattolica Immobiliare s.p.a. Verona 400 3,030 9 100.00 3,021 Cattolica Life d.a.c. (*) Dublin (Ireland) 635 23,421 814 60.00 33,100 Cattolica Services s.c.p.a. Verona 20,954 60,604 22 99.96 60,481 Lombarda Vita s.p.a. Brescia 185,300 272,609 23,588 60.00 238,894 TUA Assicurazioni s.p.a. Milan 23,161 133,232 9,803 99.99 134,298 (*) The figures for the shareholders’ equity and result for the year as of December 31st, 2016 are shown as per the financial statements of the company drawn up in accordance with the international accounting standards (IAS/IFRS).

The investment in ABC Assicura highlights a difference between the value assigned in the financial statements and the corresponding portion of shareholders’ equity for € 6.323 million (€ 5.883 million in 2015) mainly ascribable to the goodwill recognised within the sphere of the partnership agreement with the Banca Popolare di Vicenza Group.

The investment in BCC Vita discloses a difference between the book value and the corresponding portion of shareholders’ equity of € 17.837 million (€ 18.408 million in 2015) ascribable to the goodwill recognised at the time of purchase of 51% of the investment.

The investments in Berica Vita and Cattolica Life disclose a difference between the book value and the corresponding portion of shareholders’ equity respectively for € 45.504 million and € 19.047 million (€ 45.735 million and € 19.535 million in 2015) ascribable to the goodwill recognised within the sphere of the partnership agreement with the Banca Popolare di Vicenza Group.

The investment in Lombarda Vita discloses a difference between the book value and the corresponding portion of shareholders’ equity for € 75.329 million (€ 70.582 million in 2015) ascribable to the goodwill, in consideration of the future earnings prospects, recognised within the sphere of the renewal of the partnership agreement with the UBI Banca Group deriving from the portfolio value and the ability to generate new business.

The investment in Cattolica Agricola discloses a difference between the book value and the corresponding portion of shareholders’ equity of € 4.337 million (€ 5.629 million in 2015) and it is ascribable to the loss reported in the first years of activities.

198

Notes to the Accounts

The investment in Cattolica Beni Immobili discloses a difference between the book value and the corresponding portion of shareholders’ equity of € 3.188 million (€ 2.347 million in 2015) and it is ascribable to the loss reported in the first years of activities.

The investments in Cattolica Immobiliare, C.P. Servizi Consulenziali and Cattolica Services disclose an essential alignment between the book value and the corresponding portion of shareholders’ equity.

With regard to insurance equity investments, the value assigned in the financial statements is supported by analytical assessments made by the Company.

ASSOCIATED COMPANIES

The item comes to € 558 thousand and presents an overall decrease with respect to last year of € 34.498 million.

Writedowns

Further to an analytical valuation process, the investment in the associated company Cassa di Risparmio di San Miniato was written down during the year for € 34.498 million.

The company reported a significant loss in 2015, due to the deterioration of the loan portfolio, which led to the need for recapitalisation aimed at restoring the supervisory ratios. In June the company had drawn up a new plan, which envisaged the recapitalisation of the bank, on the basis of which the valuations as of June 30th, 2016 were based. The accounting standards used for the purposes of the impairment test are structured in the two following steps:  first of all the fundamental value was estimated moving from the plan flows and then comparing the implicit Price to Tangible Book Value multiple with those of transactions aimed at control, at withdrawal and regarding minority investments. The analysis made it possible to check the alignment of the implicit multiple which reflects the value of the equity investment based on the balance sheet balances and the income-earning prospects;  the value estimated in the previous point was then adjusted downwards so as to incorporate the potential diluting effect deriving from the proposed share capital increase. The potential diluting effect was obtained on the basis of the implicit discount in the multiples of listed European banks subject to share capital increases with respect to those of European listed banks not subject to share capital increases. The analysis highlighted how in the current market context, on the basis of the most recent share capital increase transactions achieved during the last quarter, there is a scarcity of investors willing to participate in share capital increase transactions, unless at prices (and implicit multiples) which are extremely contained and which disclose significant discounts with respect to the fundamental values.

For the purposes of an overall check of the values obtained for Cassa di Risparmio di San Miniato, as at June 30th, 2016 steps were also taken to carry out a comparison between the Price to Tangible Book Value multiples implicit in the final price for transactions aimed at the achievement of share capital increases of unlisted Italian banks during the first half of the year.

As of December 31st, the valuation of Cassa di Risparmio di San Miniato was up-dated on the basis of the latest available information. The analysis disclosed a loss in value for a total of € 34.498 million.

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Table 33 - Summary data of associated companies

Value of which profit assigned Share (+) Shareholding in the Shareholders' or loss (-) Registered financial Name or business name capital equity for the year % offices statements

Cassa di Risparmio di San Miniato s.p.a. (*) S. Miniato (PI) 177,215 181,250 -67,603 25.12 556

All Risks Solutions s.r.l. Rome 10 63 20 20.00 2

(*) Figures from the last set of individual accounts referring to December 31st, 2015.

OTHER

The item includes equity investments entirely recorded in the long-term segment for € 71.467 million (€ 83.745 million as of December 31st, 2015 of which € 79.822 million recorded in the long-term segment and € 3.923 million recorded in the current segment). The decrease came to € 12.278 million. The main changes are summarised below.

Increases As already indicated more specifically on the Management Report, the increases during the period are attributable to the following transactions:

 in September, Cattolica subscribed 62,500 Nummus Info S.p.A. shares for an equivalent value of € 78 thousand;  an increase of € 276 thousand further to the FATA merger transaction, said FATA having held the investment in Emil Banca credito cooperativo;  other increases for € 4.013 million, attributable to the change in category and segment, further to the application of IVASS Regulation No. 10 dated December 22nd, 2015 regarding the treatment of the equity investments consequent to implementation of the EIOPA guidelines on the financial requirements of the Solvency II regime. In detail, the shares held in Banca di Credito Popolare, Banca di Salerno and Istituto di Certificazione Etica nello Sport were transferred from category C.III to category C.II.

Decreases The decreases during the year are attributable to the following transactions:

 in February, Cattolica transferred 436,850 shares from the current to the non-current segment for a value of € 1.545 million further to compliance with the new UBI Banca shareholders’ agreement; the transaction led to the recognition of a capital loss on valuation for € 925 thousand;  in March, 3,657 shares held in Veneto Banca were reimbursed for a total of € 26 thousand; the transaction did not have any economic effects;  in December, 250,000 shares held in UBI Banca were sold for a total of € 717 thousand; this transaction involved the registration of a capital loss on disposal for € 736 thousand;  other decreases for € 5.041 million relating to segment and category transfers due to the application of the afore-mentioned IVASS Regulation No. 10. In detail, the shares held in Istituto Atesino per lo Sviluppo, Veneto Banca and Infracom Italia were transferred from class C.II to class C.III.

200

Notes to the Accounts

Writedowns The year end valuation led to the recognition of capital losses from valuation on the investment holding in Banca Popolare di Vicenza for € 5.547 million; furthermore, the investments held in Veneto Banca were written down for € 1.974 million and in Compagnia Investimenti e Sviluppo for € 134 thousand. In conclusion, as reported above, steps were taken to adjust the value of the equity investment in UBI Banca for € 925 thousand.

Writebacks The year end valuation did not lead to the recognition of writebacks.

Table 34 - Summary data of the other investments

Value of which profit assigned Share (+) Shareholding in the Shareholders' or loss (-) financial Name or business name Registered offices capital equity for the year % statements Banca di Credito Popolare s.c.p.a. (**) Torre Del Greco (NA) 20,113 229,276 9,281 1.01 2,376

Banca di Salerno Credito Coop. s.c.p.a. (*) Salerno 1,516 19,916 -1,077 4.54 82 Banca Popolare di Vicenza s.p.a. (**) Vicenza 677,204 2,465,088 -1,399,393 0.01 89

Emil Banca Credito Coop. s.c.p.a. (*) Bologna 57,723 211,171 2,236 0.17 317

H-Farm s.p.a. (***) Roncade (TV) 8,924 44,029 -4,229 4.49 3,623

Intermonte Sim s.p.a (**) Milan 45,950 98,892 19,597 11.61 19,200

Ist. di Certific. Etica nello Sport s.p.a. (***) Verona 270 264 -15 3.70 10 Nummus.Info s.p.a. Trento 580 543 12 10.78 78 U.C.I. s.c.a.r.l. (***) Milan 529 575 50 2.19 -

UBI Banca s.p.a. (*) Bergamo 2,440,751 8,329,653 -493,425 0.50 35,115

Vegagest SGR s.p.a. (**) Milan 5,771 7,404 487 17.74 -

Verfin s.p.a. (***) Verona 6,553 14,009 -25 3.94 429

Veronafiere s.p.a. (***) (****) Verona 63,265 72,908 -5,627 6.64 10,148

(*) The balances for the shareholders’ equity and result for the year are shown, prepared in accordance with the international accounting standards (IAS/IFRS).

(**) The balances for shareholders’ equity and the result for the year as of December 31st, 2015, drawn up according to the international accounting standards (IAS/IFRS), have been shown since the 2016 financial statements had not yet been approved as of the date of approval of Cattolica’s financial statements by the Board of Directors. (***) The balances for shareholders’ equity and the result for the year as of December 31st, 2015, drawn up according to the national accounting standards, have been shown since the 2016 financial statements had not yet been approved as of the date of approval of Cattolica’s financial statements by the Board of Directors. (****) As from February 1st, 2017 Ente Autonomo per le Fiere di Verona changed its corporate name to Veronafiere s.p.a.

With regard to the equity investments held in Veneto Banca and Popolare di Vicenza, already in the first half of the year steps were taken to adjust the book value, equal to the withdrawal price “pursuant to Article 2437 ter of the Italian Civil Code” (which had been fixed by the respective Boards of Directors as € 7.3 for Veneto Banca and € 6.3 for Banca Popolare di Vicenza) to the price established for the share capital increase, equal to € 0.1. Pursuant to Article 2427 bis of the Italian Civil Code, you are hereby informed that there are no long-term financial assets recorded for a value greater than the fair value established on the basis of the valuations made by the Company, with the exception of the investments held in the share capital of UBI Banca, H-Farm and Verona Fiere.

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The lower values, in light of the valuations made by the company also in accordance with the OIC 21 accounting standard, are not believed to be permanent, therefore steps were not taken to make a writedown.

Bonds issued by companies The item, amounting to € 32.333 million, includes bonds issued by associated companies for € 51 thousand (recorded in full in the long-term segment) and by other investee companies for € 32.282 million (of which € 7.867 million recognised in the long-term segment). The value for the previous year came to € 25.14 million. The bonds issued by companies amount to € 6.925 million for the non-life portfolio and € 25.408 million for the life portfolio. With regard to the issuer, the bonds were issued for € 32.282 million by UBI Banca and for € 51 thousand by Cassa di Risparmio di San Miniato. Sales and repayments for the year amounted to € 959 thousand, while purchases amount to € 13.973 million. The positive issue discounts amount to € 6 thousand, the positive trading discounts total € 64 thousand. The period end valuation led to value adjustments for € 5.891 million.

Loans to companies No balance has been recognised. At the end of June, the interest-bearing loan disbursed by the Company in favour of the subsidiary Cattolica Services for € 5 million matured. Subsequently, the transformation of the loan into a payment towards share capital was agreed for the same amount, with recognition under the shareholders’ equity of the subsidiary.

Other financial investments The table which follows shows the breakdown of the item as of the year end date:

Table 35 - Other financial investments - breakdown

Pro forma Changes (€ thousands) 2016 2015 Amount % 2015

Shares and holdings 48,403 109,409 -61,006 -55.8 89,730 Units of mutual investment funds 707,548 540,026 167,522 31.0 520,524 Bonds and other fixed income securities 6,688,150 6,570,599 117,551 1.8 6,047,000 Loans 3,509 4,480 -971 -21.7 4,480 Deposits with credit institutions 0 10,000 -10,000 -100.0 10,000 Sundry financial investments 24 39 -15 -38.5 22 Total (item C.III) 7,447,634 7,234,553 213,081 2.9 6,671,756

The income and charges are illustrated respectively in attachments 21 and 23 to the notes to the accounts.

202

Notes to the Accounts

Shares and holdings Investments in shares and holdings amount to € 48.403 million, attributable for € 24.064 million to the life business and € 24.339 million to the non-life business; they exclusively comprise securities not for long-term use. During the year purchases were made for € 56.039 million, mainly attributable to the increase in listed shares, sales for € 111.15 million and other positive net changes for € 2.567 million. The period end valuation led to the recognition of capital losses for € 2.915 million and writebacks for € 1.144 million. The balance deriving from the transaction for the merger of FATA amounts to € 12.988 million, entirely attributable to the non-long term segment; the amount recorded in the financial statements as of December 31st, 2015 of the absorbed company came to € 18.526 million. The current value as of December 31st came to € 50.294 million.

Units of mutual investment funds The investments in Units of mutual investment funds do not represent fixed assets. At year end, these amounted to € 707.548 million: € 373.862 million for the non-life portfolio and € 333.686 million for the life portfolio. During the year purchases were made for € 193.813 million along with sales for € 63.542 million. Furthermore, other positive changes were recognised made up of recalls vis-à-vis share capital for commitments undertaken, equal to € 64.884 million and other negative changes relating to reimbursements vis-à-vis share capital for commitments undertaken, equal to € 27.092 million. The year end valuations lead to the recognition of value adjustments for € 14.239 million and writebacks for € 8.739 million. The balance deriving from the transaction for the merger of FATA amounts to € 24.461 million; the amount recorded in the financial statements as of December 31st, 2015 of the absorbed company came to € 19.084 million. The current value of the item at the end of the year came to € 764.776 million.

Bonds and other fixed income securities The investments in bonds and other fixed income securities include securities not for long-term use and securities used for the long-term segment. Overall, they amount to € 6,688.15 million: € 2,540.032 million for the non-life portfolio and € 4,148.118 million for the life portfolio. The current value at the end of the year came to € 7,138.543 million.

The amount deriving from the acquisition of the merger balances of FATA amounts to € 520.765 million, of which € 125.906 million recorded in the long-term segment and € 394.859 million recorded in the current segment; the amount recorded in the financial statements as of December 31st, 2015 of the absorbed company came to € 497.039 million.

During the year, purchases were made for € 3,269.869 million in short-term securities. Sales and repayments amounted to € 3,135.342 million. The year end valuation led to the recognition of value adjustments for € 31.976 million and writebacks for € 6.168 million. The negative issue discounts (costs) amount to € 1.684 million and the positive ones (revenues) amount to € 10.177 million; negative trading discounts (costs) total € 730 thousand while the positive ones (revenues) came to € 3.903 million.

The long-term investments amount to € 1,533.276 million, while current ones amount to € 5,154.874 million.

With reference to the securities in the long-term segment, the changes during the year are summarised below:  the incorporation of the merger balances of FATA amounted to € 125.906 million;

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 the repayments of instruments which have reached their natural maturity amounted to € 7.032 million (€ 70 thousand for non-life and € 6.962 million for life);  the year end valuation led to the recognition of capital losses from valuation for € 1.171 million relating to the non-life sector;  the positive issue discounts amounted to € 5.436 million, the negative ones € 170 thousand;  in conclusion, as already indicated, the positive trading discounts amounted to € 3.903 million, the negative ones € 730 thousand.

During the year, steps were not taken to make any transfer from the non-long-term segment to the long-term one.

The information relating to the breakdown and the changes based to the use of the other financial investments and the current value are contained in attachment 8 and attachment 9 to the notes to the accounts.

The table below provides a breakdown of the Company’s exposures in government debt securities issued or guaranteed by PIGS countries (Portugal, Ireland, Greece and Spain).

Table 36 - Exposure in government debt securities issued or guaranteed by PIGS countries (Portugal, Ireland, Greece and Spain)

(€ thousands) Book value Market value 15,247 15,247 Portugal 26,862 31,261 Ireland 0 0 Greece 52,548 54,634 Spain

TOTAL 94,657 101,142

The following table shows the positions with a significant figure divided up by issuer group.

Table 37 - C.III.3 class bonds - main issuer Groups

Issuer Group % breakdown Italian government 69.6% Intesa Sanpaolo 3.2% Dunia Cap Bv 1.8% Unicredit 1.4% Banco Popolare Società Cooperativa 1.4%

The amount of the instruments issued by Icelandic banks and included in the item “Debt securities and other fixed income securities” amounts to € 334 thousand.

204

Notes to the Accounts

Loans The item, amounting to € 3.509 million, compared with € 4.48 million in the previous year mainly includes:  the loan with collateral granted to Opera San Giovanni Bosco in Sicilia, for € 1.646 million. Interest accrued for € 54 thousand during the year;  the loans on life policies for € 1.712 million (€ 2.679 million at the end of the previous year).

Please see attachment 10 for variations in the item during the year.

Deposits with credit institutions No value had been recorded at the year end date. The “Time Deposit” contract entered into with the intermediary Veneto Banca, restricted for an overall duration of nine months, expired on February 20th. The total amount of interest accruing amounted to € 132 thousand.

Sundry financial investments Sundry financial investments are made up of current assets, which total € 24 thousand, compared with € 22 thousand at the end of the previous year, of which € 16 thousand for the non-life business and € 8 thousand for the life business. The current value at the end of the year came to € 48 thousand.

Foreign currency investments Other financial investments included foreign currency securities for an overall equivalent value, as of December 31st, of € 17.186 thousand, corresponding entirely to bonds. Variations in the exchanges rates which took place after the end of the year would have a negative effect on these investments for € 253 thousand.

Securities transferred from class D No securities were transferred during the year.

Repurchase transactions No repurchase transactions were carried out during the year.

Deposits with ceding companies The items included the deposits established with transferring insurance companies, in relation to the risks undertaken with reinsurance. During the year, the value decreased by € 351 thousand, passing from € 11.019 million to € 10.668 million.

SECTION 3 - INVESTMENTS FOR BENEFITS OF LIFE ASSURANCE POLICYHOLDERS WHO BEAR THE INVESTMENT RISK AND DERIVING FROM THE MANAGEMENT OF PENSION FUNDS (Item D)

The item, amounting to € 982.219 million, includes the assets hedging index and unit-linked contracts, analytically identified in attachment 11 to the notes to the accounts, as well as those deriving from the management of pension funds summarised in Attachment 12 to the notes to the accounts. The balance of the items in the previous year amounted to € 1,176.759 million.

It is also specified that the capital gains and losses from realisation and valuation, as well as the capitalisation of the issues discounts are matched by a change for the same amount in the related mathematical provisions of the life classes.

205

Table 38 - Investments for benefits of life assurance policyholders who bear the investment risk and deriving from the management of pension funds - breakdown

Changes (€ thousands) 2016 2015 Amount %

Investments relating to benefits associated with investment funds and stock market indices 109,475 91,122 18,353 20.1 Investments deriving from the management of pension funds 872,744 1,085,637 -212,893 -19.6 TOTAL (item D) 982,219 1,176,759 -194,540 -16.5

Investments relating to benefits associated with investment funds and stock market indices The item includes the assets hedging index and unit-linked contracts for a total amount of € 109.475 million. The assets hedging the index-linked contracts amount to € 239 thousand, those relating to unit-linked contracts total € 109.236 million. The balance of the item in the previous year amounted to € 91.122 million.

Investments deriving from the management of pension funds Investments deriving from the management of pension funds amounted to € 872.744 million, down € 212.893 million with respect to December 31st, 2015. The change is essentially attributable to the minor flow of premiums consequent to the expiry of the agreement which occurred at the end of 2015 for the Cooperlavoro Fund and during 2016 for the Previcooper Fund.

Tables 55 and 56 show the values of the provisions and the assets at the end of the year, as well as the gross premiums written in the period, for each pension fund. Please refer to the financial statements of the Open-end Pension Funds, attached to Cattolica’s financial statements, for details and comments on the assets and the volumes produced during the year relating to the management of the afore-mentioned funds.

206

Notes to the Accounts

SECTION 4 - REINSURANCE AMOUNTS OF TECHNICAL PROVISIONS (Item D bis)

The reinsurance amount of technical provisions calculated using the method adopted for direct business comprises:

Table 39 - Reinsurance amounts of technical provisions

Pro forma Changes (€ thousands) 2016 2015 Amount % 2015

Non-life business Premium provision 114,956 125,485 -10,529 -8.4 118,301 Provision for outstanding claims 415,234 441,247 -26,013 -5.9 399,812 Total non-life 530,190 566,732 -36,542 -6.4 518,113 Life business Mathematical provisions 24,453 28,487 -4,034 -14.2 28,487 Provision for outstanding claims 4,286 5,624 -1,338 -23.8 5,624 Total life 28,739 34,111 -5,372 -15.7 34,111 TOTAL (item D bis) 558,929 600,843 -41,914 -7.0 552,224

The reinsurance amounts of technical provisions amount in total to € 558.929 million, of which € 530.19 million relating to non-life business and € 28.739 million relating to life business. With regard to the non-life business, the premium provision amounted to € 114.956 million (of which € 4.431 million relating to the provision for outstanding risks and € 17.197 million relating to supplementary provisions) and the provision for outstanding claims for € 415.234 million. With regard to the life business, the mathematical provisions pertaining to reinsurers amount to € 24.453 million, while the provision for outstanding claims ended the year with a balance of € 4.286 million.

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SECTION 5 - RECEIVABLES (Item E)

Receivables are made up as follows:

Table 40 - Receivables

Pro forma Changes (€ thousands) 2016 2015 Amount % 2015

Policyholders 132,304 178,479 -46,175 -25.9 162,156 Insurance brokers 208,353 171,596 36,757 21.4 131,061 Insurance companies - current accounts 24,412 29,048 -4,636 -16.0 24,506 Policyholders and third parties for sums to be recovered 32,051 27,843 4,208 15.1 23,570 Total (item E.I) 397,120 406,966 -9,846 -2.4 341,293 Insurance and reinsurance companies 56,752 63,663 -6,911 -10.9 60,973

Total (item E.II) 56,752 63,663 -6,911 -10.9 60,973 Other receivables (Item E.III) 452,997 458,661 -5,664 -1.2 410,203 Total (item E) 906,869 929,290 -22,421 -2.4 812,469

Receivables deriving from reinsurance transactions

Receivables from policyholders The item amounted to € 132.304 million, of which € 121.143 million for premiums in the year and € 11.161 million for premiums relating to previous years. As of December 31st, 2015 the item amounted to € 178.479 million. The item was adjusted for a total of € 20.405 million, of which € 17.208 million relating to the non-life business and € 3.197 thousand relating to the life business, for writedowns due to doubtful collection, assumed on the basis of the experience of previous accounting periods. The writedown allowance essentially includes € 2.946 million attributable to the Accident, injury and health classes, € 2.937 million to the general TPL class, € 4.441 million for the Suretyship class, € 2.334 million for Fire & natural forces, € 1.667 million for other damage to assets and € 2.184 million for the motor TPL class.

Receivables from insurance brokers The balance of receivables from brokers, totalling € 208.353 million, disclosed an increase compared to last year of € 36.757 million, mainly attributable to the collections relating to the last ten days and settled in the first few days of the following year. Amounts receivable from agents are stated net of the writedown allowance; it amounts to € 11.805 million and was established on the basis of the valuations concerning the recoverability of the said receivables.

Receivables from insurance companies - current accounts The item, net of the writedown allowance for € 565 thousand, amounts to € 24.412 million, compared with € 29.048 million in the previous year. The writedown allowance, calculated analytically on the basis of valuations regarding the recoverability of the receivables, was used for € 193 thousand.

208

Notes to the Accounts

Receivables from policyholders and third parties for sums to be recovered The item, net of the allowance for doubtful accounts for € 9.525 million, amounts to € 32.051 million, compared with € 27.843 million in the previous year. The allowance for doubtful accounts, calculated analytically on the basis of valuations regarding the recoverability of the receivables, disclosed an increase of € 6.671 million and uses of € 9.155 million. The balance deriving from the incorporation of FATA amounted to € 1.908 million.

Receivables deriving from reinsurance transactions The item includes the entries with credit balances through reinsurance companies and brokers and amounted to € 56.752 million (€ 63.663 million as of December 31st, 2015). The receivables are stated net of the related allowance for doubtful accounts; the entity of the allowance, € 5.323 million, is commensurate with the estimated losses due to non-collectability.

Other receivables Other receivables amount to € 452.997 million, with respect to the € 458.661 million relating to the previous year and include the amounts due from the tax authorities, for deferred tax assets, from Group companies and other receivables. The breakdown is shown in the table below:

Table 41 - Other receivables - breakdown

Pro forma Changes (€ thousands) 2016 2015 Amount % 2015

Receivables due from the tax authorities 236,479 220,709 15,770 7.1 201,259 Receivables for deferred tax assets 139,850 147,312 -7,462 -5.1 125,091 Receivables due from Group companies 33,509 56,618 -23,109 -40.8 64,452 Sundry receivables 43,159 34,022 9,137 26.9 19,401 Total (item E.III) 452,997 458,661 -5,664 -1.2 410,203

Receivables due from the tax authorities amounted to € 236.479 million and compare with a balance of € 220.709 million in the previous year. The increase is due to the additional advances paid by way of taxation on premiums and on income. The item mainly refers to the amounts due for advances paid, for Group’s IRES and for the Company’s IRAP, as well as for the surpluses deriving from the tax declarations presented for € 28.561 million; to the withholdings made on bank interest and other withholdings for € 4.666 million; to amounts due from the tax authorities transferred to the Company by subsidiaries which have complied with the tax consolidation scheme for € 3.868 million. The item also comprises prepaid taxes pursuant to Italian Law No. 265 dated November 22nd, 2002, concerning the taxation of the life provisions for € 77.218 million, and amounts due from tax authorities for the payment of the annual advance of tax on insurance premiums envisaged by Article 9, paragraph 1 bis, of Italian Law No. 1216 dated 1961, for € 47.062 million.

Prepaid tax assets, recorded for € 139.85 million, derive from the deductible timing differences, such as writedowns and losses on receivables from policyholders for € 42.09 million, the writedown of other receivables and the provisions for risks and charges for € 17.242 million, the capital losses from valuation on shares amounting to

209

€ 1.809 million, the change in the provision for outstanding claims for € 21.932 million, the amortisation of the goodwill from business segments acquired for € 9.538 million and other adjustments for € 1.429 million. Other assets also include the prepaid taxes (€ 45.81 million) recorded on the goodwill and the other intangible assets freed up in accordance with Italian Decree Law No. 185 dated November 29th, 2008: The timing differences relating to IRAP amount to € 4.702 million.

Receivables from Group companies amount in total to € 33.509 million, of which € 23.28 million for the transfer of tax positions represented by current IRES of the companies who have settled for the tax consolidation system, € 7.429 million for invoices to be issued to Group companies and other intercompany receivables amounting to € 2.8 million.

The remaining balance of other receivables, which amount to € 43.159 million, mainly includes the amounts due for guarantee and restricted deposits amounting to around € 20.638 million, advances to suppliers for € 2.994 million, amounts due from guarantee funds for € 2.341 million, amounts due from unit-linked management funds and pension funds for € 1.556 million and amounts due from tenants for € 951 thousand.

SECTION 6 - OTHER ASSET ITEMS (Item F)

Tangible assets and inventories During the year, tangible assets and inventories underwent the following changes:

Table 42 - Tangible assets and inventories

Pro forma Changes (€ thousands) 2016 2015 Amount % 2015

Furniture and equipment 2,336 2,393 -57 -2.4 2,069 Assets recorded in public registers 314 506 -192 -37.9 474 Plant and equipment 1,361 1,152 209 18.1 1,061 TOTAL (item F) 4,011 4,051 -40 -1.0 3,604

Table 43 - Tangible assets and inventories - gross depreciation amounts

(€ thousands) 2015 Increases Decreases 2016

Furniture and equipment 46,395 1,049 44 47,400 Assets recorded in public registers 1,104 84 236 952 Plant and equipment 2,902 592 108 3,386 TOTAL 50,401 1,725 388 51,738

210

Notes to the Accounts

Table 44 - Tangible assets and inventories - accumulated depreciation

(€ thousands) 2015 Increases Decreases 2016

Furniture and equipment 44,002 1,106 44 45,064 Assets recorded in public registers 598 246 206 638 Plant and equipment 1,750 304 29 2,025 TOTAL 46,350 1,656 279 47,727

The gross amounts come to € 51.738 million compared with € 50.401 million in the previous year which include the FATA balances for a total of € 11.836 million (furniture and equipment for € 11.167 million, assets recorded in public registers for € 37 thousand, plant and equipment for € 632 thousand). The accumulated depreciation amounts to € 47.727 million. The balance compares with the € 46.35 million reported at the end of the previous year: this includes the value of the absorbed company for € 11.389 million. During the year, the increase in accumulated depreciation, totalling € 1.656 million, was entirely attributable to the depreciation charge for the year. The decreases were consequent to the realisations and disposals which took place during the year.

Financial lease transactions The Company did not enter into any financial lease transactions during the year.

Cash in bank and cash equivalent Cash and cash equivalents amount to € 35.277 million. At the end of the previous year they came to € 154.236 million, of which € 8.26 million referring to the absorbed company FATA. With regard to the change in the item, please see the Cash flow statement.

Other assets Other assets amount to € 121.847 million. At the end of the previous year they came to € 74.464 million, of which € 3.12 million referring to the absorbed company FATA.

The item includes the balance of the liaison account between the non-life and life sectors for € 70.353 million registered as a credit to the life business. The amount is matched by an equal balance under “Other liabilities” in the non-life sector.

The other amounts which are recorded mainly relate to € 19.109 million for the amount relating to the taxation on mathematical provisions for the life classes accrued during the year, € 23.542 million relating to the indemnities paid to agents who have left, not yet charged for recovery, stated net of the related allowance for doubtful accounts as well as € 4.544 regarding the amounts relating to technical items for transactions under reconciliation to be settled as of the year end date.

211

SECTION 7 - ACCRUALS AND DEFERRALS (Item G)

Table 45 - Accruals and deferrals

Pro forma Changes (€ thousands) 2016 2015 Amount % 2015

For interest 57,343 60,057 -2,714 -4.5 55,922 For rental fees 5 59 -54 -91.5 0 Other accruals and deferrals 388 399 -11 -2.8 391 TOTAL (item G) 57,736 60,515 -2,779 -4.6 56,313

The item almost entirely includes accruals relating to interest income on securities, pertaining to the year, whose coupon matures in the current year. Balances due after twelve months have not been recorded.

SUBORDINATED ASSETS The following table analytically discloses the subordinated assets. The subordination with respect to the receivables with a greater level of seniority expresses its effects exclusively in the event of insolvency or winding up; the recovery on the asset up until the extent of the principal and the interest due can be realised solely further to the complete satisfaction of the more senior creditors.

212

Notes to the Accounts

Statement 1 - Subordinated assets

Early repayment clauses (in €)

% interest rate Call as of Dec. 31st, First call repayment Description of the Security Nominal value Book value Currency 2016 Maturity repayment date price

ACAFP 17/03/27 2.625% 8,900,000 8,468,248 EUR 2.625 03/17/2027

GENERALI 12/12/42 7.75% 800,000 800,000 EUR 7.750 12/12/2042

AXA 04/40 TF/TV 100,000 111,320 EUR 5.250 04/16/2040

BANK OF AMERICA 28/03/18 TV 5,000,000 4,978,360 EUR 0.523 03/28/2018

BANK OF AMERICA 06/05/19 4.75% 1,000,000 948,341 EUR 1.147 05/06/2019

BANK OF AMERICA 09/18 TV 4,975,000 4,905,035 EUR 0.234 09/14/2018

BARCLAYS 11/11/25 2.625% 2,000,000 1,931,148 EUR 2.625 11/11/2025

BARCLAYS PERPETUAL TF/TV 2,970,000 2,556,673 EUR 4.750 PERPETUAL 03/15/2020 100.00

BARCLAYS 01/18 6% 1,500,000 1,499,115 EUR 6.000 01/23/2018

BARCLAYS PERPETUAL 6.50% 7,000,000 6,782,020 EUR 6.500 PERPETUAL 09/15/2019 100.00

BELDEN INC 15/04/23 5.5% 2,775,000 2,856,123 EUR 5.500 04/15/2023

GOVERNOR BK IE 11/06/24 4.25% 500,000 514,105 EUR 4.250 06/11/2024

BANCA AGRILEASING 20/02/17 TV 3,700,000 2,146,000 EUR 0.788 02/20/2017

BNP PARIBAS 11/01/27 2.25% 6,800,000 6,602,528 EUR 2.250 01/11/2027

BNP PARIBAS 27/01/26 2.75% 8,995,000 8,938,252 EUR 2.750 01/27/2026

BNP PARIBAS 14/10/27 2.625% 10,900,000 10,912,534 EUR 2.625 10/14/2027

BNP 10/11 PERP 4.875% 5,000,000 4,150,000 EUR 4.875 PERPETUAL 10/17/2017 100.00

BANCO POPOLARE 05/11/20 6% 6,000,000 5,948,183 EUR 6.000 11/05/2020

BANCO POPOLARE 31/05/21 6.375% 3,319,000 3,250,958 EUR 6.375 05/31/2021

BREEZE 06/28 12.5% 2,000,000 200,000 EUR 12.500 06/30/2028

CITIGROUP 02/19 4.75% 3,000,000 2,970,845 EUR 1.088 02/10/2019

CITIGROUP 25/02/30 4.25% 2,500,000 2,915,125 EUR 4.250 02/25/2030

CERBERUS 01/02/20 8.25% 1,550,000 1,570,141 EUR 8.250 02/01/2020

COMMERZBANK 23/03/26 4.00% 6,300,000 6,357,149 EUR 4.000 03/23/2026

COMMERZ. 22/03/19 6.375% 106,000 98,144 EUR 6.375 03/22/2019

CREDEM 13/03/25 3.125% 4,500,000 4,326,075 EUR 3.125 03/13/2025

213

Early repayment clauses (in €)

% interest rate Call as of Dec. 31st, First call repayment Description of the Security Nominal value Book value Currency 2016 Maturity repayment date price

CRSM 15/09/19 5.25% SUB CONV 5,886,712 51,189 EUR 5.250 09/15/2019

DANSKE BANK PERPETUAL 5.875% 1,025,000 1,027,600 EUR 5.875 PERPETUAL 04/06/2022 100.00

DEUTSCHE BANK 19/05/26 4.50% 3,300,000 3,276,932 EUR 4.500 05/19/2026

DB CONT 29/05/49 8% 150,000 135,750 EUR 8.000 PERPETUAL 05/15/2018 100.00

SNS BANK 10/20 6.25% 850,000 42,500 EUR 0 10/26/2020

DNB NOR BANK 08/03/22 4.75% 2,500,000 2,496,838 EUR 4.750 03/08/2022

DEUTSCHE POSTBANK PERPETUAL TF/TV 900,000 879,390 EUR 5.983 PERPETUAL 06/29/2017 100.00

ERSTE BANK 29/12/49 8.875% 400,000 400,000 EUR 8.875 PERPETUAL 10/15/2021 100.00

HSBC HOLD.PLC 07/06/28 3.125% 7,000,000 7,003,237 EUR 3.125 06/07/2028

ING BANK NV 11/04/28 3.00% 1,000,000 1,002,581 EUR 3.000 04/11/2028

ING BANK 25/02/26 3.625% CALL 6,350,000 6,337,650 EUR 3.625 02/25/2026

ING BANK 05/23 TF/TV 5,000,000 4,992,204 EUR 6.125 05/29/2023

INTESA SANPAOLO 23/04/25 2.855% 8,900,000 8,672,498 EUR 2.855 04/23/2025

INTESA 15/09/26 3.928% 9,750,000 9,669,593 EUR 3.928 09/15/2026

INTESA 05/18 6.625% 2,850,000 3,032,856 EUR 6.625 05/08/2018

INTESA SANPAOLO 13/09/23 6.625% 1,196,000 1,135,205 EUR 6.625 09/13/2023

INTESA PERPETUAL 7.00% 675,000 667,028 EUR 7.000 PERPETUAL 01/19/2021 100.00

INTESA PERPETUAL TF/TV 650,000 650,000 EUR 8.375 PERPETUAL 10/14/2019 100.00

ROYAL KPN PERPETUAL 6.125% 443,000 473,350 EUR 6.125 PERPETUAL 09/14/2018 100.00

LB BADEN WUERTT 28/09/26 2.875% 3,000,000 2,982,510 EUR 2.875 09/28/2026

HBOS EURO FINAN 29/12/49 2,650,000 2,263,750 EUR 2.559 PERPETUAL 03/09/2017 100.00

LLOYDS 18/03/30 4.50% 4,000,000 4,403,440 EUR 4.500 03/18/2030

LLOYDS 03/20 6% 150,000 149,858 EUR 6.500 03/24/2020

LOXAM 23/07/22 7.00% 3,250,000 3,250,000 EUR 7.000 07/23/2022

MAPFRE SA 24/07/37 5.921% 15,900,000 13,330,730 EUR 5.921 07/24/2037

MONTEPASCHI 04/03/19 7.00% 2,500,000 1,351,150 EUR 7.000 03/04/2019

MUNICH RE PERPETUAL TF/TV 5,000,000 4,673,600 EUR 5.767 PERPETUAL 06/12/2017 100.00

B.POP.MILANO 20/10/18 TV 2,250,000 2,156,063 EUR 1.21000 10/20/2018

214

Notes to the Accounts

Early repayment clauses (in €)

% interest rate Call as of Dec. 31st, First call repayment Description of the Security Nominal value Book value Currency 2016 Maturity repayment date price

B.P.MILANO 03/21 7.125% 1,300,000 1,353,903 EUR 7.12500 03/01/2021

RABOBANK 26/05/26 2.50% 1,000,000 997,964 EUR 2.50000 05/26/2026

RBS PERPETUAL 5.5% 6,750,000 6,366,719 EUR 5.50000 PERPETUAL 03/31/2017 100.00

RBS PERPETUAL 5.25% 1,000,000 941,450 EUR 5.25000 PERPETUAL 03/30/2017 100.00

RBS 04/18 6.934% 300,000 284,645 EUR 6.93400 04/09/2018

SANTANDER ISS 18/03/25 2.50% 3,200,000 3,127,130 EUR 2.50000 03/18/2025

SANTANDER ISS 04/04/26 3.25% 7,800,000 7,738,674 EUR 3.25000 04/04/2026

SANTANDER PERPETUAL 6.25% 4,100,000 3,828,129 EUR 6.25000 PERPETUAL 03/12/2019 100.00

SOGEN 12/06/23 TV 20,000,000 19,986,005 EUR 6.30000 06/12/2023

STANDARD CHART 19/11/24 3.125% 3,000,000 2,986,424 EUR 3.12500 11/19/2024

TELEFONICA 29/12/49 3.75% PERPETUAL 300,000 293,103 EUR 3.75000 PERPETUAL 03/15/2022 100.00

UBI 05/05/26 4.25% 14,100,000 13,917,207 EUR 4.25000 05/05/2026

UBS 12/02/26 4.75% 2,100,000 2,145,363 EUR 4.75000 02/12/2026

UBS 22/05/23 4.75% 11,800,000 11,369,293 USD 4.75000 05/22/2023

UNICREDITO 12/17 TV 48,000,000 47,960,667 EUR 5.14000 12/04/2017

UNICREDITO 03/01/27 4.375% 5,250,000 5,193,054 EUR 4.37500 01/03/2027

UNICREDITO 09/17 5.75% 11,150,000 11,548,501 EUR 5.75000 09/26/2017

UNICREDITO 06/18 6.7% 250,000 266,148 EUR 6.70000 06/05/2018

VOLVO TREASURY 10/06/75 TV 1,900,000 1,896,511 EUR 4.20000 06/10/2075

Total 343,015,712 325,444,811

215

Part B

Statement of financial position - Liabilities and Shareholders’ equity

Further to the transaction for the merger of FATA which affected the Company, with accounting and tax-related efficacy as from January 1st, 2016, the following table shows the statement of financial position liabilities with the balances as of December 31st, 2015 adjusted in accordance with the criteria described in the Introduction of these Notes to the accounts, supplemented with the breakdown of the absorbing company and the absorbed company. Furthermore, for the purpose of permitting comparability of the balances and the information, the legislative provisions regarding own shares have been applied to the balances for the previous year.

Table 46 - Pro-forma statement of financial position - Liabilities and shareholders’ equity

2016 2015 Cattolica Adjustme LIABILITIES pro forma Cattolica Fata nts (€ thousands) Cattolica (d=a+b+c) (a) (b) (c)

A. Shareholders' equity 1,875,746 1,884,027 1,884,027 164,686 -164,686 I - Subscribed share capital or equivalent fund 522,882 522,882 522,882 5,202 -5,202 II - Share premium reserve 794,310 804,352 804,352 0 0 III - Legal reserve 268,734 259,919 259,919 1,040 -1,040 IV - Reserves for own shares and those of the parent company 0 0 0 0 0 IV - Other equity reserves 266,020 279,706 284,302 131,567 -136,163 V - Retained profits (losses) 0 0 0 22,281 -22,281 VI - Net profit (loss) for the year 63,708 44,312 39,716 4,596 0 VII - Negative reserve for own shares in portfolio -39,908 -27,144 -27,144 0 0 B. Subordinated liabilities 180,000 180,000 180,000 0 0 C. Technical provisions 7,843,138 7,688,676 7,132,363 560,111 -3,798 I - Non-life business 3,274,013 3,341,351 2,785,038 560,111 -3,798 1. Premium provision 683,133 714,622 573,011 141,792 -181 2. Provision for outstanding claims 2,577,662 2,613,674 2,199,747 417,544 -3,617 3. Sundry technical provisions 203 310 234 76 0 4. Equalisation reserves 13,015 12,745 12,046 699 0 II - Life business 4,569,125 4,347,325 4,347,325 0 0 1. Mathematical provisions 4,440,909 4,195,811 4,195,811 0 0 2. Provision for outstanding claims 95,485 124,001 124,001 0 0 3. Sundry technical provisions 32,731 27,513 27,513 0 0 D. Technical provisions for contracts where the investment risk is borne by the 982,219 1,176,760 1,176,760 0 0 policyholders and provisions deriving from the management of pension funds I - Provisions relating to contracts whose benefits are linked to investment funds 109,475 91,122 91,122 0 0 and stock market indices II - Provisions deriving from the management of pension funds 872,744 1,085,638 1,085,638 0 0 E. Provisions for risks and charges 65,853 55,286 37,674 9,863 7,749 F. Deposits received from re-insurers 42,112 48,437 46,870 1,567 0 G. Payables and other liabilities 407,533 434,874 384,481 65,588 -15,195 I - Payables deriving from direct insurance transactions 38,756 51,782 42,113 9,669 0 II - Payables deriving from reinsurance transactions 33,016 39,202 31,808 8,661 -1,267 III - Bond loans 0 0 0 0 0 IV - Payables due to banks and financial institutions 11,395 10,000 10,000 0 0 V - Payables and sundry loans 215,878 253,427 227,099 40,256 -13,928 VI - Employee severance indemnities 6,659 8,722 6,122 2,600 0 VII - Other liabilities 101,829 71,741 67,339 4,402 0 H. Accruals and deferrals 9,318 6,969 6,842 134 -7 TOTAL LIABILITIES 11,405,919 11,475,029 10,849,017 801,949 -175,937

216

Notes to the Accounts

SECTION 8 - SHAREHOLDERS' EQUITY (Item A)

The breakdown of the items which make up the Company’s shareholders’ equity is provided below; the balances relating to the previous year do not take into account the profit generated by the absorbed company FATA as of December 31st, 2015:

Table 47 - Shareholders' equity

Changes (€ thousands) 2016 2015 Amount %

Share capital 522,882 522,882 0 0 Share premium reserve 794,310 804,352 -10,042 -1.2 Revaluation reserve 62,499 62,499 0 0 Legal reserve 268,734 259,919 8,815 3.4 Other reserves 203,521 221,802 -18,281 -8.2 Profit (loss) for the year 63,708 39,717 23,991 60.4 Negative reserve for own shares in portfolio -39,908 -27,144 -12,764 -47.0 TOTAL (item A) 1,875,746 1,884,027 -8,281 -0.4

As indicated in the Introduction, for the purpose of permitting comparability of the balances and the information, the legislative provisions regarding own shares have been applied to the balances for the previous year leading to changes in the composition of the shareholders’ equity and the result.

Share capital The fully subscribed and paid in share capital as of December 31st, amounts to € 522.882 million and is composed of 174,293,926 ordinary shares.

Share premium reserve The share premium reserve amounts to € 794.31 million and was used for € 10.099 million to cover the loss to the life classes reported last year. It contains the payments of the shareholder admission fees totalling € 57 thousand. Furthermore, the amount of € 24.189 million was included as a result of the cancellation of the “Reserve for own shares” due to the change introduced to ISVAP Regulation No. 22 dated April 4th, 2008 by the recent IVASS provision No. 53 dated December 6th, 2016.

Revaluation reserves These include € 41.459 million relating to the reserves recorded pursuant to Italian Law No. 413 dated December 30th, 1991 and € 21.04 million for the net balance of the revaluation of the property assets carried out in 2008 under provisions of Italian Decree Law No. 185 dated November 29th, 2008, converted into Italian Law No. 2 dated January 28th, 2009.

Legal reserve The legal reserve rose from € 259.919 million to € 268.734 million due to the allocation of the profit for 2015.

217

Other reserves They are as follows:  € 140.375 million for the extraordinary reserve. The increase of € 12.441 million is due to the allocation of the 2015 profit. The decrease of € 26.144 relates to the distribution of the extraordinary dividend as per the shareholders’ resolution dated April 16th, 2016 as well as, for € 4.18 million, the coverage of the loss of the life classes in the previous year. Further to the matters introduced by the new provisions of Article 2357 ter of the Italian Civil Code with regard to the book value of the own shares held in the portfolio, the extraordinary reserve received the prior capital losses pertaining to the valuation of said shares made in previous years; the amount recorded came to € 2.954 million. This reserve also includes the realised gains (net of the losses) recorded in the income statement in previous years for a total of € 183 thousand;  € 57.575 million for the dividend reserve. This includes the dividends prescribed and deriving from the allocation of the previous years’ profits. During the year, € 1.449 million was allocated to the reserve as a result of the cancellation of the 2015 dividend on own shares;  € 1.103 million for the taxed reserve, already existing at the end of 1982 and freed up as per Italian Legislative Decree No. 467 dated December 18th, 1997;  € 689 thousand for the reserve represented by the merger surplus of the companies Plotino and San Zeno;  € 2.901 million for the reserve for restricted net exchange gains provided in accordance with Italian Legislative Decree No. 6 dated January 17th, 2003, as per Article 2426, paragraph 8 bis, for net gains from valuation on exchange rates; as per the resolution dated April 16th, 2016, the unrestricted reserve provided in accordance with Italian Legislative Decree No. 6 dated January 17th, 2003, as per Article 2426, paragraph 8 bis, for net gains from valuation on exchange rates for a total of € 2.545 million, was restricted;  € 1.264 million for the reserve for unrestricted net exchange gains, as established by the resolution dated April 16th, 2016, due to the realisations during 2015;  € 397 thousand for the establishment of the “Reserve for amounts realised on disposal of difference from cancellation of own shares” due to the change introduced to ISVAP Regulation No. 22 dated April 4th, 2008 by the recent IVASS provision No. 53 dated December 6th, 2016. As of December 31st, 2016, it presented a negative balance and included the losses realised during the year which amount to € 580 thousand;  € 11 thousand relating to the exchange deficit for the spin-off transaction concerning Duomo Uni One in the Company.

The profit reserves subject to deferred taxation which, when used, contribute towards the formation of the Company’s taxable income and which, if distributed, represent earnings for the shareholders, amount to € 93.172 million, of which € 30.556 million recorded to the share capital.

Negative reserve for own shares in portfolio Due to the effects consequent to the enforcement of Article 6, paragraph 1, of Italian Legislative Decree No. 139 dated August 18th, 2015, in accordance with the 2013/34/EU Directive, the own shares are recognised in the financial statements directly reducing the shareholders’ equity, in accordance with the matters laid down by Article 2357, paragraph 3 ter. Consequently, the “Negative reserve for own shares in portfolio” was established. It amounts to € 39.908 million, of which € 28.11 million pertaining to the non-life class and € 11.798 million pertaining to the life class, corresponding to 5,695,187 shares, or 3.3% of the share capital.

The following table presents an analysis of the availability and distributable nature of the shareholders’ equity entries; in this regard, it is noted that the Company is also required to comply with the overall capitalisation requirements established by specific regulations proposed for their calculation in relation to the activities directly and through its subsidiaries.

218

Notes to the Accounts

Table 48 - Shareholders’ equity - origin, possibility of use and distribution, as well as use in previous years

Summary of uses in the last three years Possibility Portion Coverage Other (€ thousands) Amount of use (*) available of losses reasons

Share capital 522,882 Capital reserves Share premium reserve 794,310 a, b, c 754,402 (**) 10,099 Revaluation reserve 62,499 a, b, c 62,499 (***) Other reserves 700 a, b 700 Profit reserves Legal reserve 268,734 b 268,734 Other reserves 202,821 a, b, c 199,920 4,180 26,144 Negative reserve for own shares in portfolio -39,908 Total 1,812,038 1,286,255 14,279 26,144 Restricted portion 269,434 Residual unrestricted portion 1,016,821 (*) a - for share capital increase b - for coverage of losses c - for distribution to shareholders (**) Net of the negative reserve for own shares in portfolio (***) The revaluation reserve can be distributed only with the observance of the provisions as per Article 2445, paragraphs 2 and 3 of the Italian Civil Code, as well as the provisions envisaged by the related revaluation laws.

The share capital and the share premium reserve, in particular, are available in accordance with the legal and Article of Association provisions and general meeting resolutions, also in relation to the specific co-operative corporate form and the related regulations.

The following table shows the changes during the year in the shareholders’ equity items. It is specified that in the table, for the purpose of permitting comparability of the balances and the information, the opening balances as of January 1st, 2016 have been recalculated so as to take into account the legislative provisions regarding own shares; the new provisions led to changes in the composition of the shareholders’ equity and the result.

219

Table 49 - Shareholders' equity - changes during the year

Share premium Negative Retained Share reserves Revaluation Legal Reserve for reserve for Other earnings Profit (€ thousands) capital reserve reserve own shares own shares reserves for the year Total

Shareholders’ equity as of December 31st, 522,882 799,206 62,499 238,086 5,075 188,100 0 109,164 1,925,012 2014 Allocation of profit (loss) for 2014

Dividend payment (€ 0.35 per share) -61,003 -61,003

Allocation to reserves 21,833 26,328 -48,161 0 Other allocations 0 Other changes 2015: Cancellation of dividend on own shares 839 839 Other -19,043 19,114 35 106 Profit (loss) for 2015 44,075 44,075 Shareholders’ equity as of December 31st, 522,882 780,163 62,499 259,919 24,189 215,302 0 44,075 1,909,029 2015 Adjustment of opening balances Jan. 1st, 2016 24,189 -24,189 -27,144 2,142 -25,002 Shareholders’ equity as of January 1st, 2016 522,882 804,352 62,499 259,919 0 -27,144 217,444 0 44,075 1,884,027 Allocation of profit (loss) for 2015 0

Dividend payment (€ 0.20 per share) -34,859 -34,859

Allocation to reserves 8,815 14,680 -23,495 0 Other allocations 0

Dividend payment (€ 0.15 per share) -26,144 -26,144

Coverage of life loss for 2015 -10,099 -4,180 14,279 0 Other uses 0 Other changes 2016: 0 Cancellation of dividend on own shares 1,449 1,449 Other 57 -12,764 272 -12,435 Profit (loss) for 2016 63,708 63,708 Shareholders’ equity as of December 31st, 522,882 794,310 62,499 268,734 0 -39,908 203,521 0 63,708 1,875,746 2016

SECTION 9 - SUBORDINATED LIABILITIES (Item B)

Subordinated liabilities as of December 31st, 2016 comprised:

 a loan of € 80 million granted by UBI Banca on September 30th, 2010 with the following specifications:  duration: unspecified;  early repayment: as from September 30th, 2020;  interest rate: 6-month Euribor + 200 basis points;  subordination: with respect to all the unsubordinated creditors including the policyholders;  Classification on the basis of the SII directive: Basic Own Funds Tier 1-restricted, on the basis of the matters envisaged by Article 308 ter section 9 of the 2009/138 “Solvency II” Directive (so-called “grandfathering”). The amount of interest pertaining to the period amounted to € 1.512 million;

 a subordinated bond issue for € 100 million, issued on December 17th, 2013 with the following specifications:  duration: 30 years;  early repayment: faculty to repay early as from tenth year (call option);  interest rate: 7.25% until the end of the tenth year. In case of failure to exercise the call option, the rate becomes floating and is equal to the 3-month Euribor + 619 basis points;  subordination: with respect to other non-subordinated securities;

220

Notes to the Accounts

 Classification on the basis of the SII directive: Basic Own Funds Tier 2, since this is compliant with the requisites envisaged by Article 73 of the Delegated Decree (EU) 2015/35 of the European Commission dated October 10th, 2014. The amount of interest pertaining to the period amounted to € 7.25 million.

SECTION 10 - TECHNICAL PROVISIONS (Item C)

Table 50 - Breakdown of technical provisions

Pro forma Changes (€ thousands) 2016 2015 Amount % 2015

Premium provision 683,133 714,622 -31,489 -4.4 573,011 Provision for outstanding claims 2,577,662 2,613,674 -36,012 -1.4 2,199,747 Other technical provisions 203 310 -107 -34.5 234 Equalisation reserves 13,015 12,745 270 2.1 12,046 Total non-life classes (item C.I) 3,274,013 3,341,351 -67,338 -2.0 2,785,038

Mathematical provisions 4,440,909 4,195,811 245,098 5.8 4,195,811 Premium provisions of supplementary insurance 1,293 1,444 -151 -10.5 1,444 Provision for outstanding claims 95,485 124,001 -28,516 -23.0 124,001 Reserves for profit-sharing and repayments 18 55 -37 -67.3 55 Other technical provisions 31,420 26,014 5,406 20.8 26,014 Total life classes (item C.II) 4,569,125 4,347,325 221,800 5.1 4,347,325 TOTAL TECHNICAL PROVISIONS 7,843,138 7,688,676 154,462 2.0 7,132,363

Non-life business

Premium provision The premium provision amounts to € 683.133 million and comprises € 598.262 million for the provision for unearned premiums (of which € 567.071 million for direct business), € 73.619 million for supplementary provisions of the provision for unearned premiums (of which € 70.4 million for direct business) as well as € 11.252 million for the provision for risks in progress (of which € 10.155 million for direct business). After the checks made, the Company deemed it appropriate to establish a supplementary provision for risks outstanding on class 13, general TPL, for € 9.405 million (€ 10.452 million as of December 31st, 2015) and on class 2, health, for € 751 thousand. The provision for risks in progress relating to indirect business on class 10 has also been recognised, amounting to € 1.096 thousand (as of December 31st, 2015 it amounted to € 233 thousand on class 9). In conclusion, supplementary provisions have been recognised for a total of € 73.619 million (€ 50.758 million as of December 31st, 2015), of which € 70.4 million on direct business (€ 11.792 million on class 1, accident and injury, € 175 thousand on class 7, goods in transit, € 23.23 million on class 8, fire & natural forces, € 22.561 million on class 9, other damage to assets, € 58 thousand on class 13, general TPL, € 2 thousand on class 14, credit, € 12.582 million on class 15, suretyship) and € 3.219 million on indirect business (€ 7 thousand on class 1, accident and injury, € 2 thousand on class 7, goods in transit, € 3.21 million on class 8, fire & natural forces).

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In accordance with the matters envisaged by section 7 of attachment 15 to ISVAP regulation No. 22 dated April 4th, 2008, as amended by IVASS provision No. 53 dated December 6th, 2016, the Company used an empiric method to evaluate the coverage of the impending risks after the end of the accounting period, so as to cover all the compensation and costs deriving from insurance contracts entered into before that date, to the extent that the estimated cost of these risks exceeds that of the same provision for unearned premium, increased by the premiums which will be collectable due to these policies. This method is based on the calculation of the claims to premiums written to the pertaining year. Based on the results of this check, the Company took steps to make the necessary integration calculated on the provision for unearned premiums and on the instalments falling due, both net of the purchase commission or the directly attributable costs. The tables which follow indicate the provisions for unearned premiums, for each class and separately for direct and indirect business.

Table 51 - Provisions for unearned premium - direct business

Pro forma Changes

(€ thousands) 2016 2015 Amount % 2015

Classes: 01 - Accident and injury 55,230 54,336 894 1.6 47,204 02 - Health 22,273 22,450 -177 -0.8 21,562 03 - Land vehicle hulls 38,470 37,881 589 1.6 31,714 04 - Railway rolling stock 106 7 99 n.s. 7 05 - Aircraft hulls 206 665 -459 -69.0 665 06 - Ships (sea and inland water vessels) 412 413 -1 -0.2 367 07 - Goods in transit 867 1,712 -845 -49.4 1,662 08 - Fire & natural forces 47,577 51,342 -3,765 -7.3 42,718 09 - Other damage to assets 44,762 50,370 -5,608 -11.1 40,084 10 - TPL - Land motor vehicles 265,636 277,143 -11,507 -4.2 219,394 11 - TPL - Aircraft 36 90 -54 -60.0 90 12 - TPL - Shipping (sea & inland) 614 610 4 0.7 492 13 - TPL - General 49,305 52,566 -3,261 -6.2 41,348 14 - Credit 8,753 8,974 -221 -2.5 8,480 15 - Suretyship 10,436 12,348 -1,912 -15.5 6,520 16 - Sundry financial losses 9,263 10,952 -1,689 -15.4 9,356 17 - Legal protection 3,902 4,002 -100 -2.5 3,095 18 - Assistance 9,223 8,665 558 6.4 7,684 TOTAL 567,071 594,526 -27,455 -4.6 482,442 n.s. = not significant

222

Notes to the Accounts

Table 52 - Provisions for unearned premium - indirect business

Pro forma Changes

(€ thousands) 2016 2015 Amount % 2015

Classes: 01 - Accident and injury 2,058 2,316 -258 -11.1 2,316 02 - Health 1,325 1,183 142 12.0 1,341 03 - Land vehicle hulls 2,312 2,032 280 13.8 2,032 06 - Ships (sea and inland water vessels) 9 8 1 12.5 19 07 - Goods in transit 61 45 16 35.6 55 08 - Fire & natural forces 13,499 12,837 662 5.2 12,837 09 - Other damage to assets 3,838 3,986 -148 -3.7 3,986 10 - TPL - Land motor vehicles 1,830 1,104 726 65.8 1,106 13 - TPL - General 1,795 1,665 130 7.8 1,610 15 - Suretyship 4,442 3,783 659 17.4 3,780 16 - Sundry financial losses 22 44 -22 -50.0 44 TOTAL 31,191 29,003 2,188 7.5 29,126

Provision for outstanding claims The provision for outstanding claims amounts to € 2,577.662 million and comprises € 2,262.99 million for the provision for outstanding claims which have occurred and been reported, € 213.009 million for the provision for outstanding claims which have occurred but have not yet been reported as well as € 101.663 million for the provision for settlement costs. The estimate of the provision for outstanding claims made, as per the last cost principle, was realized by applying a multi-phase calculation procedure:  steps are taken to separately evaluate each claim (inventory method), based on the analysis of the documentation relating to each individual damage case, realized by the staff assigned to settle the claims;  with regard to the classes characterised by slow settlement processes and for which the analytical valuation does not make it possible to take into account all the envisageable charges, the inventory method is flanked by an additional valuation by means of statistical-actuarial procedures or forecast systems on the evolution of the costs.

The valuation of the provision for outstanding claims which have occurred but have not yet been reported was carried by separately estimating the number of delayed claims expected and the related average cost.

With regard to the change during the year in the components of the premium provision and the provision for outstanding claims, please refer to attachment 13.

Other technical provisions The item amounts to € 203 thousand (of which € 197 thousand for direct business and € 6 thousand for indirect business) and includes the senescence provision of the health class determined for the rise in the age of the policyholders; it was calculated using the forfeit method envisaged by section 44, paragraph 3, of attachment 15 to

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ISVAP regulation No. 22 dated April 4th, 2008, as amended by IVASS provision No. 53 dated December 6th, 2016.

Equalisation reserves The item includes the equalisation reserve for natural calamity risks which amounts to € 13.015 million (of which € 12.913 million for direct business and € 102 thousand for indirect business), disclosing an increase of € 270 thousand. In detail, by class, is comprises: € 5.734 million relating to the fire & natural forces class, € 4.436 million relating to the land vehicle hull class, € 1.324 million relating to the accident and injury class, € 814 thousand relating to other damage to assets, € 635 thousand relating to the goods in transit class, € 36 thousand concerning the credit class and € 36 thousand relating to other classes. The calculation is compliant with the matters envisaged by Article 1, paragraph 1 of Italian Ministerial Decree No. 705 dated November 19th, 1996.

Life business

Mathematical provisions They amount to € 4,440.909 million and include the provision for pure premiums, the withdrawal of premiums relating to annual-premium payment policies, the provision for health and professional excess premiums, the provision for integration of the population and financial bases (also for pension funds), the additional provision for mortality-risk and guarantee related to unit linked contracts pension funds, the additional provision to cover the cost related to the early repayment of the pure risk contracts linked to loans and the provision for risk of undertaking pure risk contracts at average rate. The mathematical provisions reported an increase of € 245.098 million.

Provisions for outstanding claims The provisions for outstanding claims amount to € 95.485 million (of which € 61.3 million relating to class I, € 23.182 million relating to class III and € 11.003 million relating class V). These provisions reported a decrease of € 28.516 million.

Other technical provisions Other technical provisions, amounting to € 31.42 million, are made up of the provisions for future expense totalling € 28.969 million (of which € 20.718 million relating to Class I, € 6.678 million relating to Class III, € 1.535 million relating to Class V and € 38 thousand relating to Class IV) and of the supplementary provision relating to Class I for € 2.451 million. This provision refers to the amount of the expected claims for death coverage.

With regard to the change during the year in the components of the mathematical provisions and the reserve for profit-sharing and repayments, please refer to attachment 14.

SECTION 11 - TECHNICAL PROVISIONS FOR CONTRACTS WHERE THE INVESTMENT RISK IS BORNE BY POLICYHOLDERS AND PROVISIONS DERIVING FROM THE MANAGEMENT OF PENSION FUNDS (item D)

The item amounts in total to € 982.219 million, down by € 194.541 million with respect to the end of the previous year. The provisions pertaining to the risk of death, the credit risk and supplementary insurance are included respectively in the items “mathematical provisions” and “premium provision of supplementary insurance”.

224

Notes to the Accounts

Provisions relating to contracts whose benefits are linked to investment funds and stock market indices These amount to € 109.475 million and are established in the presence of index and unit linked contracts, amounting respectively to € 239 thousand and € 109.236 million, reporting an increase of € 18.353 million compared to December 31st, 2015, attributable to the increase in premiums written.

Provisions deriving from the management of pension funds The provisions deriving from the management of pension funds rose from € 1,085.638 million to € 872.744 million.

During 2016, the resources of the segments with guarantee of a return on capital and the payment of a minimum return were managed for 7 pension funds, of which one open ended. At the end of 2015 the expiry of the agreement Cooperlavoro - Supplementary pension for fund workers, partners and employees of work co-operatives came about and, during 2016, so did that with Previcooper - National supplementary pension fund subject to capitalisation for employees of co-operative distribution companies). In correspondence with the maturity of the agreements mentioned above, the related assets were made available to the Funds and do not contribute, therefore, to forming the total amount under management at year end. Again within the sphere of the activities pertaining to pension funds, during the year the Company managed the resources of the open-end pension fund Cattolica Gestione Previdenza and the Risparmio & Previdenza open-end pension fund.

The Cattolica Gestione Previdenza open-end pension fund is a defined-contribution pension fund, it was set up by the Company in accordance with Article 12 of Italian Legislative Decree No. 252 dated December 5th, 2005 and was authorised by means of the provision of the Pension Fund Supervisory Commission on July 29th, 1998 and started to operate on February 15th, 1999. The Fund is structured in six segments (Monetario Globale, Obbligazionario Globale, Garantito, Bilanciato Globale, Azionario Globale and Etico). The Company sees directly to the management of the Fund’s assets, along with the disbursement of the benefits. The functions of custodian bank for the Fund’s resources were carried out by Istituto Centrale delle Banche Popolari Italiane S.p.A. During the year just ended, applications were taken by the agency channel, the head offices of the Company and the bank branches specifically appointed to do so. As of December 31st, 2016, the Fund had 7,531 active members (7,389 at the end of 2015).

The Risparmio & Previdenza open-end pension fund is a defined-contribution pension fund, it was set up by the Company in accordance with Article 12 of Italian Legislative Decree No. 252 dated December 5th, 2005 and was authorised by means of the provision of the Pension Fund Supervisory Commission on July 29th, 1998 and started to operate on February 19th, 1999. The Fund is structured in four segments (Bilanciato Prudente, Bilanciato Globale, Etico, Garantito). For the management of each of the segments making up the Fund, authorisation has been granted to UBI Pramerica Sgr, which operates as per the instructions imparted by the Company. The benefits are disbursed directly. The functions of Custodian Bank for the Fund’s resources were carried out by RBC Investor Services Bank S.A. As of December 31st, 2016, the Fund had 3,065 active members (2,994 at the end of 2015).

At the end of the year, the sum of the net assets intended for the benefits of the segments which the two Funds are structured in, amounted to € 118.293 million. The change in the assets, positive, compared to 2015, amounted to € 10.289 million.

The following tables show the net assets intended for the benefits of each of the segments which the Cattolica Gestione Previdenza open-end pension fund and the Risparmio & Previdenza open-end pension fund are structured in.

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Table 53 - Cattolica Gestione Previdenza open-end pension fund - net asset value by segment

Changes (€ thousands) 2016 2015 Amount %

Azionario Globale 19,033 18,137 896 4.9 Bilanciato Globale 16,324 15,214 1,110 7.3 Etico 1,154 969 185 19.1 Garantito 32,336 28,497 3,839 13.5 Monetario Globale 4,369 4,176 193 4.6 Obbligazionario Globale 7,131 6,626 505 7.6

Total Cattolica Gestione Previdenza open-end pension fund 80,347 73,619 6,728 9.1

Table 54 - Risparmio & Previdenza open-end pension fund - net asset value by segment

Changes (€ thousands) 2016 2015 Amount %

Bilanciato Globale 12,622 11,250 1,372.0 12.2 Etico 1,093 1,054 39.0 3.7 Garantito 13,090 11,822 1,268.0 10.7 Bilanciato Prudente 11,141 10,259 882.0 8.6

Total Risparmio & Previdenza open-end pension fund 37,946 34,385 3,561 10.4

226

Notes to the Accounts

In the following table, provisions, assets and premiums for the year relating to the open-end pension funds are compared with the balances as of December 31st, 2015.

Table 55 - Open-end pension funds of the Company- Investments, provisions and gross premiums written

Net asset value Class DII provisions Gross premiums written (€ thousands) 2016 2015 2016 2015 2016 2015

Cattolica Gestione Previdenza open-end pension fund 80,347 73,619 80,347 73,619 11,161 9,923

Risparmio & Previdenza open-end pension fund 37,946 34,385 37,946 34,385 4,366 3,885

With reference to the other pension funds managed by the Company in the following tables, the values of the provisions, the assets and the gross premiums written are shown, on a comparative basis with those for the previous year, along with the type and extent of the guarantee provided.

Table 56 - Other pension funds - Investments, provisions and gross premiums written

Net asset value Class DII provisions Gross premiums written

(€ thousands) 2016 2015 2016 2015 2016 2015

Azimut Previdenza open-end pension fund 113,167 64,816 113,167 64,816 51,697 28,588

Cometa 446,461 436,719 446,461 436,719 41,622 50,598

Cooperlavoro 0 171,467 0 171,467 0 21,844

Journalists’ fund 41,189 37,961 41,189 37,961 3,701 3,481

Previcooper 0 135,843 0 135,843 12,367 15,715

Fontex supplementary pension fund 5,408 4,808 5,408 4,808 1,084 724

Fopadiva 22,453 22,430 22,453 22,430 1,828 782

Solidarietà Veneto - Pension fund 125,773 103,590 125,773 103,590 21,582 11,721

Total 754,451 977,634 754,451 977,634 133,881 133,453

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Table 57 - Other Pension Funds - Type and extent of the guarantee provided

Extent of guarantee provided Pension fund Type of guarantee provided (guaranteed minimum rate of return)

COMETA (National pension fund for workers in the Coverage provided on occurrence of the events Annual reference rate (TAR) Maximum metalwork and mechanical engineering, plant envisaged in the agreement and on expiry of the annual interest rate which can be installation industry and similar sectors) agreement guaranteed (TMG)

Coverage provided on occurrence of the events JOURNALISTS’ FUND (Supplementary pension envisaged in the agreement and on expiry of the Severance indemnity revaluation rate fund for Italian journalists) agreement

AZIMUT PREVIDENZA OPEN-END PENSION Coverage provided on occurrence of the events 2% FUND envisaged in the agreement

Coverage provided on occurrence of the events FONTEX SUPPLEMENTARY PENSION FUND envisaged in the agreement and on expiry of the Severance indemnity revaluation rate agreement

FOPADIVA (Supplementary pension fund for the Coverage provided on occurrence of the events employee workers of the Autonomous Valle d’Aosta envisaged in the agreement and on expiry of the 2% Regional Authority) agreement

Coverage provided on occurrence of the events SOLIDARIETÀ VENETO - PENSION FUND envisaged in the agreement and on expiry of the Severance indemnity revaluation rate agreement

SECTION 12 - PROVISIONS FOR RISKS AND CHARGES (Item E)

The breakdown of the provisions and the related changes with respect to the previous year are shown in the following table and analytically in attachment 15 to the notes to the accounts.

Table 58 - Provisions for risks and charges

(€ thousands) January 1st, 2016 Increases Decreases 2016 Provisions for pensions and similar commitments 4,010 0 626 3,384 Provision for taxation 2,144 7,749 837 9,056 Other provisions and allowances 41,382 26,914 14,882 53,414 TOTAL (item E) 47,536 34,663 16,345 65,854

The initial values include the opening balances of the absorbed company FATA, € 1.344 million in the taxation provision and € 8.518 million under other provisions and allowances.

The item, which rose from € 47.536 to € 65.854 million, includes the provision for pensions and similar commitments for € 3.384 million, provisions for taxation for € 9.056 million and other provisions and allowances for € 53.414 million.

228

Notes to the Accounts

The provision for pensions represents the Company’s financial commitment deriving from the supplementary in- house agreement dated June 1st, 1963 and subsequent amendments and additions toward employees employed until March 15th, 1982 and, if executives, up until November 17th, 1982. It is calculated analytically for each employee working and for each pensioner.

The item “Taxation” is essentially made up of liabilities for deferred taxes which amount to € 8.473 million. The recognition of deferred tax liabilities in the Company is consequent to the merger via incorporation of FATA; it included € 724 thousand relating to the residual portions of the taxes on capital gains generated on the sales of properties as well as € 7.749 million for deferred taxes recorded in the financial statements in the presence of a greater assessment of the securities deriving from the allocation of the merger deficit on the same. The item also includes € 583 thousand relating to the liability concerning the notification by the Italian Internal Revenue Agency of the report on findings, further to the tax inspections relating to the 2010 tax period.

Other provisions rose from € 41.382 million to € 53.414 million. The increases for the year amounted in total to € 26.914 million, while the decreases came to € 14.882 million.

Further to the agreements signed on July 14th, 2015 and March 15th, 2016 between the Group companies (Cattolica Assicurazioni, FATA and Cattolica Services) and the company trade union delegations and the issue of the related compliance invitations, concerning the corporate reorganisation processes and the effects of the organisational efficiency activities and the innovation and digitalisation processes, having accomplished the trade union negotiation procedures envisaged by current agreements, the parties agreed to activate - for the employees in possession of the requirements envisaged by said agreements - recourse to the extraordinary section of the Intersectorial Solidarity Fund for the insurance sector. In 2016, the agreements produced an overall liability of € 1.536 million. The income statement matching balance is recorded among the negative components of income of the extraordinary business. With regard to the former employees who complied with the invitations, the use of the Intersectorial Fund took place during the year in the presence of payments to INPS for the extraordinary income support allowance, for the monthly contribution useful for obtaining the right to a pension as well as for the payment of the policy premiums, for a total amount of € 1.865 million. The provision existing at the end of the year came to € 5.315 million.

Furthermore, the item mainly comprised amounts set aside for:  legal disputes and costs for € 10.884 million, inclusive of the opening balance of the absorbed company for € 974 thousand (€ 2.137 million was provided and € 3.296 million used during the year);  sums to be paid out for agents’ leaving indemnities for € 5.999 million, inclusive of the opening balance of the absorbed company for € 2.16 million (€ 1.3 million was provided and € 960 thousand was used during the year);  disputes pending with former trustees and sundry summons, pertaining to the claims area, amounting to € 4.25 million, inclusive of the opening balance of the absorbed company for € 130 thousand (€ 1.12 million was provided and € 300 thousand used during the year);  risks for the assistance of employees in the event of non-self sufficiency, for € 1.304 million;  the estimated liability relating to disputes open with regard to employment matters for € 455 thousand, inclusive of the opening balance of the absorbed company for € 190 thousand (€ 50 thousand was provided and € 710 thousand used during the year);  formal notices and reports on findings which can be served by the IVASS for € 704 thousand, inclusive of the opening balance of the absorbed company for € 150 thousand (€ 397 thousand was provided and € 2.29 million used during the year).  liabilities pertaining to the financial requirements relating to health premiums of retired staff for € 5.12 million;

229

 liabilities pertaining to the financial requirements relating to length-of-service bonuses of employees for € 6.991 million.

DEPOSITS RECEIVED FROM RE-INSURERS

These are recorded in the financial statements for € 42.112 million (€ 48.437 million at the end of the previous year) and represent payables for deposits which the Company withholds in the event of reinsurance payable.

SECTION 13 - PAYABLES AND OTHER LIABILITIES (Item G)

At the end of the year, these came to € 407.533 million, compared with € 434.874 million at the end of the previous year, of which € 71.772 million for insurance and reinsurance transactions; € 11.395 million for payables due to banks and financial institutions, € 6.659 million for employee severance indemnities and € 317.707 million for other payables and other liabilities.

Table 59 - Payables deriving from insurance and reinsurance transactions

Pro forma Changes (€ thousands) 2016 2015 Amount % 2015

Payables, deriving from direct insurance transactions, due to:

Insurance brokers 16,097 24,171 -8,074 -33.4 17,449 Insurance companies - current accounts 4,000 5,879 -1,879 -32.0 3,359 Policyholders for guarantee deposits and premiums 18,651 21,732 -3,081 -14.2 21,305 Guarantee funds in favour of policyholders 8 0 8 n.a. 0 Total (item G.I) 38,756 51,782 -13,026 -25.2 42,113

Payables, deriving from reinsurance transactions, due to:

Insurance and reinsurance companies 33,016 39,202 -6,186 -15.8 31,808 Total (item G.II) 33,016 39,202 -6,186 -15.8 31,808 n.a. = not applicable

Payables deriving from direct insurance transactions

Payables deriving from direct insurance transactions amount to € 38.756 million.

Payables due to direct insurance brokers The item amounts in total to € 16.097 million, of which € 14.398 million regarding the non-life business and € 1.699 million the life business.

230

Notes to the Accounts

As of December 31st, 2015, it came to € 24.171 million, of which € 6.722 million relating to the absorbed company FATA.

Payables due to insurance companies - current accounts The item amounts in total to € 4 million, of which € 3.741 million regarding the non-life business and € 259 thousand the life business. As of December 31st, 2015 it came to € 5.879 million, of which € 2.52 million relating to the absorbed company FATA.

Payables due to policyholders for guarantee deposits and premiums The item amounts in total to € 18.651 million, of which € 11.884 million attributable to the non-life business and € 6.767 million to the life business, essentially pertaining to amounts collected relating to contracts issued in the following year. As of December 31st, 2015 the item came to € 21.732 million, of which € 427 thousand relating to the absorbed company FATA.

Payables deriving from reinsurance transactions

Payables due to insurance and reinsurance companies The item amounts in total to € 33.016 million, of which € 32.357 million attributable to the non-life business and € 659 thousand to the life business, compared with € 39.202 million at the end of the previous year.

Payables due to banks and financial institutions

At year end, the following loan agreements existed, the main characteristics of which are summarised below:  loan with maximum commitment of € 30 million, taken out in May 2014 with HSBC Bank plc through a credit line, valid through May 2017. As of December 31st, the credit facility had not been use;  credit openings care of banks, usable for cash flexibility. As of December 31st, credit facilities granted had been used for € 11.396 million.

The loan with maximum commitment of € 40 million granted by Mediobanca - Banca di Credito Finanziario S.p.A. in May 2014, was paid off on December 15th, 2016. The balance of the item at the end of the previous year came to € 10 million.

Employee severance indemnities

The employee severance indemnity provision (Article 2427.4 of the Italian Civil Code) disclosed the changes analytically indicated in attachment 15 during the year. The opening balance includes the balance acquired due to the merger via incorporation of FATA for a total of € 2.599 million.

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Table 60 - Employee severance indemnities

January 2016 (€ thousands) 1st, 2016 Increases Decreases

Employee severance indemnities (item G.VII) 8,722 3,629 5,692 6,659

Other payables

These include payables: for taxes payable by policyholders, for sundry tax liabilities, amounts due to welfare and social security institutions, due to suppliers and due to Group companies, as well as other sundry payables.

Table 61 - Other payables - breakdown

Pro forma Changes (€ thousands) 2016 2015 Amount % 2015

For taxes payable by policyholders 29,908 28,676 1,232 4.3 17,829 For sundry tax charges 91,561 137,222 -45,661 -33.3 134,861 Amounts due to social security and welfare institutions 2,534 2,442 92 3.8 1,842 Sundry payables 91,875 85,087 6,788 8.0 72,567 Total (item G.VIII) 215,878 253,427 -37,549 -14.8 227,099

Payables for sundry tax charges “Payables for sundry tax charges” mainly include € 19.109 million for the current payable deriving from the assessment of the taxation on the mathematical provisions of the life business pertaining to the year, € 35.155 million for the liability for IRES, € 9.77 million for IRAP, as well as the payable, for € 23.28 million, relating to the liability for IRES of the companies taking part in the tax consolidation.

Sundry payables The item amounts to € 91.875 million. The item mainly includes the amounts payable to Group companies for € 37.486 million, sundry payables to personnel for € 16.807 million, payables to management funds for € 4.395 million, payables to Cassa Previdenza Agenti for € 3.15 million, as well as payables to suppliers for € 20.805 million. With particular reference to the transfer of tax positions further to compliance with the tax consolidation scheme, the amounts payable to subsidiary and associated companies included € 24.537 million relating to credit positions vis-à-vis the tax authorities, transferred to Cattolica by the companies taking part in the Group taxation system.

232

Notes to the Accounts

Other liabilities

Table 62 - Other liabilities - breakdown

Pro forma Changes (€ thousands) 2016 2015 Amount % 2015

Commission for premiums being collected 20,132 22,895 -2,763 -12.1 19,569 Sundry liabilities 81,697 48,846 32,851 67.3 47,770 Total (item G.IX) 101,829 71,741 30,088 41.9 67,339

The item includes sundry liabilities for € 81.697 million and commission for premiums being collected for € 20.132 million. The item “Sundry liabilities” comprises the balance of the liaison account between the non-life and life sectors for € 70.353 million booked as a liability of the non-life business. Furthermore, the item includes the amounts relating to technical items for transactions under settlement to be settled as at the year end date.

SECTION 14 - ACCRUALS AND DEFERRALS

The item amounts to € 9.318 million. Deferred income “for interest” includes € 5.539 million relating to the portion of the coupons relating to the bonds acquired with reference to the restructuring transaction of the segregated life funds, deferred to subsequent years on the basis of the residual maturity of these securities, greater than 5 years. The item “Other accruals and deferrals” includes the revenue accrual deriving from the transaction for the conferral of the usufruct right, on 3 property units for third party use, to the “AGRIS” investment fund for a total of € 3.304 million and in relation to which reference is made to the matters illustrated for the item “Land and buildings”.

SECTION 15 - ASSETS AND LIABILITIES RELATING TO GROUP COMPANIES AND OTHER INVESTEES

Attachment 16 shows the statement of assets and liabilities relating to Group companies and other investees.

SECTION 16 - RECEIVABLES AND PAYABLES

Receivables outstanding, with a maturity beyond December 31st, 2016 and by December 31st, 2020, concern the agent portfolio indemnity recovery for € 18.359 million and the receivables for insurance tax advance pursuant to Italian Law No. 265 dated November 22nd, 2002 and subsequent amendments, regarding the taxation of life provisions for € 77.218 million. Receivables outstanding with a maturity of more than five years concern the agent portfolio indemnity recovery for € 20.156 million.

Loans on life insurance policies have not been considered since they do not have a pre-established expiry and collection of the same is certain. There are no payables due beyond twelve months. As of December 31st, there were no payables with secured guarantees.

233

Pursuant to Article 2427, paragraph 8, of the Italian Civil Code, it is hereby specified than there are no financial charges booked during the year to the balances recorded under the statement of financial position assets.

With reference to the breakdown of the receivables and payables by geographic area, the positions concerning other EU and non-EU countries are not significant.

SECTION 16 BIS - INDIVIDUAL PENSION FUNDS

The Company did not set up any new, individual pension funds during the year pursuant to Article 13, paragraph 1, letters a) and b) of Italian Legislative Decree No. 252 dated December 5th, 2005.

234

Notes to the Accounts

SECTION 17 - GUARANTEES, COMMITMENTS. POTENTIAL LIABILITIES AND OTHER MEMORANDUM ACCOUNTS

Table 63 - Guarantees, commitments and other memorandum accounts

Pro forma Changes (€ thousands) 2016 2015 Amount % 2015

Guarantees given 90,428 79,160 11,268 14.2 74,895 Guarantees received 145,562 147,036 -1,474 -1.0 135,374 Commitments 72,651 44,654 27,997 62.7 42,416 Third party assets 61 70 -9 -12.9 70 Securities lodged with third parties 9,389,519 9,267,845 121,674 1.3 8,733,175 TOTAL 9,698,221 9,538,765 159,456 1.7 8,985,930

Guarantees given The item, totalling € 90.428 million, includes the sureties issued on our behalf in favour of CONSAP and third parties (the guarantees pertaining to these sureties do not give rise to potential liabilities as of December 31st). The item also includes, for € 760 thousand, the contract entered into with ANIA for compliance with SISCO, relating to the handling of non-life claims with joint-insurance. Unsecured guarantees include € 3.16 million relating to the guarantee given to Cattolica Immobiliare with regard to the possible request for the repayment of the loan granted to Fondo Euripide, together with the property complex located in Milan, further to the transfer of all the units of said fund by Cattolica Immobiliare to the Company.

Guarantees received The item, which amounts in total to € 145.562 million, mainly includes the value (€ 110.431 million) of the guarantees as per Article 4 ANA ed. 2003 received from agents enrolled in Gruppo Aziendale Agenti Cattolica, former Duomo Gruppo Aziendale Agenti Cattolica, former UniOne Gruppo Aziendale Agenti Cattolica and the Circolo Agenti Cattolica for insurance sureties entered into with COFACE. It also includes the value of the guarantees (€ 7.412 million) received from agents not enrolled in the Gruppo Aziendale Agenti Cattolica, former Duomo Gruppo Aziendale Agenti Cattolica, former UniOne Gruppo Aziendale Agenti Cattolica and the Circolo Agenti Cattolica but who have complied with the insurance agreement entered into with COFACE directly by Cattolica (€ 214 thousand) and who have provided bank sureties (€ 7.198 million). It also includes the value of the guarantees (€ 13.767 million) received from the agents enrolled in the Gruppi Aziendali Agenti FATA (further to the merger via incorporation transaction), as well as the value of the guarantees (€ 2.98 million) received from the agents enrolled in the Gruppi Aziendali Agenti TUA. The item also includes the value of the guarantees (€ 4.332 million), supporting the end of management account, received from the Agents who have had an agency mandate issued by the Company during the year, but with whom the relationship has now ended. These guarantees are held by Cattolica and will be returned and released when the relationship ends. In conclusion, the secured guarantee issued for the loan granted to Opera San Giovanni Bosco in Sicilia has been recorded for € 4 million.

235

Commitments The item includes the residual commitment toward the private equity funds for € 63.977 million. The item also includes € 5.1 million for the commitments undertaken vis-à-vis the capitalisation of the subsidiary BCC Vita as well as € 3.574 million for the commitment undertaken vis-à-vis the subsidiary Cattolica Life for the purchase at face value of the tax credit deriving from the payment of the tax on life mathematical provisions, for the portion which can effectively be transferred, pursuant to Article 1, paragraph 2, of Italian Decree Law No. 209/2002 converted, with amendments, into Italian Law No. 265/2002.

Third party assets This item includes the deposits received from third parties and is made up of bank deposit books.

Securities lodged with third parties The item includes the amount, corresponding to the book value as of December 31st, of the securities under management or deposited care of banks and asset managers. The securities relating to Group companies and other investees (class C and class D) lodged with third parties amount to € 972.571 million.

There are no commitments or potential liabilities other than those already indicated in the statement of financial position and the income statement.

236

Notes to the Accounts Part B

Income statement

Further to the transaction for the merger of FATA which affected the Company, with accounting and tax-related efficacy as from January 1st, 2016, the following table shows the income statement with the balances as of December 31st, 2015 adjusted in accordance with the criteria described in the Introduction of these Notes to the accounts, supplemented with the breakdown of the absorbing company and the absorbed company. Furthermore, for the purpose of permitting comparability of the balances and the information, the legislative provisions regarding own shares have been applied to the balances for the previous year. Table 64 - Pro-forma Income Statement

2016 2015 Cattolica pro forma Cattolica Fata Adjustments (€ thousands) Cattolica (c=a+b) (a) (b) (c) I. TECHNICAL ACCOUNT - NON-LIFE BUSINESS 1. Premiums for the year, net of transfers under reinsurance 1,502,281 1,547,533 1,219,731 327,908 -106 2. (+) Portion of profit from investments transferred from the non-technical account 57,116 65,133 51,988 13,145 0 3. Other technical income, net of reinsurance 17,169 20,460 16,622 3,838 0 4. Claims incurred, net of recoveries and reinsurance 985,100 1,013,247 776,022 237,225 0 5. Change in other technical provisions, net of reinsurance -106 -23 -23 0 0 6. Repayments and profit-sharing, net of reinsurance 695 593 593 0 0 7. Operating expenses: 402,699 411,758 326,514 86,008 -764 a) Acquisition costs, net of commission and profit-sharing 281,727 285,431 223,428 62,003 0 received from re-insurers b) Administrative expenses 120,972 126,327 103,086 24,005 -764 8. Other technical charges, net of reinsurance 43,016 48,280 41,327 6,953 0 9. Change in equalisation reserves 271 276 257 19 0 10. Result of technical account - non-life business 144,891 158,995 143,651 14,686 658 II. TECHNICAL ACCOUNT - LIFE BUSINESS 1. Premiums for the year, net of reinsurance 848,171 994,609 995,267 0 -658 2. Income from investments 211,463 212,622 212,622 0 0 a) Income deriving from investments 169,782 178,972 178,972 0 0 b) Reversal of adjustment on investments 12,280 5,319 5,319 0 0 c) Profits on realisation of investments 29,401 28,331 28,331 0 0 3. Income and unrealised capital gains on investments benefiting policyholders who bear the investment risk and on investments deriving from the management of pension funds 32,769 51,763 51,763 0 0 4. Other technical income, net of reinsurance 4,901 6,816 6,816 0 0 5. Claims incurred, net of reinsurance 886,880 767,262 767,262 0 0 6. Change in mathematical provisions and other technical provisions net of 59,846 363,291 363,291 0 0 reinsurance a) Mathematical provisions, premium provisions of supplementary insurance and other technical provisions 254,387 248,832 248,832 0 0 b) Technical provisions for contracts where the investment risk is borne by the policyholders and deriving from the management of pension funds -194,541 114,459 114,459 0 0 7. Repayments and profit-sharing, net of reinsurance 5 13 13 0 0 8. Operating expenses 50,030 51,540 51,540 0 0 a) Acquisition costs, net of commission and profit-sharing 32,303 31,780 31,780 0 0 received from re-insurers b) Administrative expenses 17,727 19,760 19,760 0 0 9. Equity and financial charges 53,844 64,881 64,881 0 0 a) Charges for management of investments and interest expense 9,722 8,583 8,583 0 0 b) Adjustment on investments 35,255 43,910 43,910 0 0 c) Losses on realisation of investments 8,867 12,388 12,388 0 0 10. Equity and financial charges and unrealised capital losses on investments benefiting policyholders who bear the risk and on investments deriving from the management of pension funds 21,639 18,116 18,116 0 0 11. Other technical charges, net of reinsurance 10,350 7,719 7,719 0 0 12. (-) Portion of profit from investments transferred to the non-technical account 16,109 16,458 16,458 0 0 13. Result of technical account - life business -1,399 -23,470 -22,812 0 -658

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2016 2015 Cattolica pro forma Cattolica Fata Adjustments

(€ thousands) Cattolica (c=a+b) (a) (b) (c) III. NON-TECHNICAL ACCOUNT 1. Result of technical account - non-life business (Item I. 10) 144,891 158,995 143,651 14,686 658 2. Result of technical account - life business (Item II. 13) -1,399 -23,470 -22,812 0 -658 3. Investment income in the non-life classes 170,361 220,511 194,578 25,933 0 a) Income deriving from investments 114,710 125,367 108,188 17,179 0 b) Reversal of adjustment on investments 3,772 2,448 2,032 416 0 c) Profits on realisation of investments 51,879 92,696 84,358 8,338 0 4. (+) Portion of profit from investments transferred from the technical account - life business 16,109 16,458 16,458 0 0 5. Equity and financial charges of the non-life classes 80,838 115,588 106,905 8,683 0 a) Charges for management of investments and interest expense 6,752 8,220 4,630 3,590 0 b) Adjustment on investments 66,919 100,652 96,401 4,251 0 c) Losses on realisation of investments 7,167 6,716 5,874 842 0 6. (-) Portion of profit from investments transferred to the technical account - non-life business 57,116 65,133 51,988 13,145 0 7. Other income 48,705 47,961 42,499 8,320 -2,858 8. Other charges 120,749 107,370 98,096 12,132 -2,858 9. Result of ordinary activities 119,964 132,364 117,385 14,979 0 10. Extraordinary income 5,838 28,792 25,142 3,650 0 11. Extraordinary charges 9,514 15,932 13,313 2,619 0 12. Result of extraordinary activities -3,676 12,860 11,829 1,031 0 13. Profit (loss) before taxation 116,288 145,224 129,214 16,010 0 14. Income tax for the period 52,580 100,912 89,498 11,414 0 15. Net profit (loss) for the year 63,708 44,312 39,716 4,596 0

SECTION 18 - INFORMATION CONCERNING THE TECHNICAL ACCOUNT - NON-LIFE BUSINESS (I)

The technical result of the non-life classes amounts to € 144.891 million, of which € 193.275 million attributable to direct business and € 48.384 million to reinsurance activities. It is characterised by:

 the decrease in premiums written from € 1,547.533 million to € 1,502.281 million;  the decrease in charges relating to claims from € 1,013.247 million to € 985.1 million, representing 65.6% of premiums written (65.5% as of December 31st, 2015);  the increase in the incidence of management expenses on premiums written from 26.6% to 26.8%. In detail, acquisition and collection costs amounted to € 281.727 million, representing 18.8% of premiums written (18.4% in 2015). Other administrative expenses dropped from € 126.327 to € 120.972 million, representing 8.1% of premiums written (8.2% in 2015);  the balance of other technical items (including the change in other technical provisions and the equalisation reserve), which passed from a negative balance of € 28.666 million to a negative balance of € 26.707 million;  the positive contribution of financial operations, with a portion of profit transferred from the non-technical account for € 57.116 million. Specifically, the contribution of financial operations of the non-life business was positive for € 89.523 million (€ 104.923 million in net income as of December 31st, 2015). As of December 31st, 2015 the technical balance amounted to € 158.995 million.

The summary information concerning the non-life business technical account is shown in attachments 19, 25 and 26 to the notes to the accounts.

238

Notes to the Accounts

Table 65 - Reclassified non-life technical account - Italy and foreign portfolio

(€ thousands) Direct Ceded Indirect Retroceded Total

Gross premiums written and ceded premiums 1,658,022 -221,352 46,867 -4,261 1,479,276 Change in premium provision 35,253 -6,483 -4,393 -1,372 23,005 Claims incurred -1,081,501 120,336 -25,044 1,109 -985,100 Change in other technical provisions 106 0 0 0 106 Balance of other technical items -27,708 1,570 -404 0 -26,542 Operating expenses -446,249 57,146 -15,235 1,639 -402,699 Technical balance 137,923 -48,783 1,791 -2,885 88,046 Change in equalisation reserves -168 0 -103 0 -271 Portion of profit from investments transferred from the 55,520 0 1,596 0 57,116 non-technical account

Result of technical account 193,275 -48,783 3,284 -2,885 144,891

Gross premiums written Gross premiums written amount to € 1,704.889 million, of which € 1,658.022 million for direct business and € 46.867 million for indirect business. The premiums ceded and retroceded came to € 225.613 million. In the “Management Report”, table 6 shows the amounts of gross premiums written by class. The gross premiums of the Company as of December 31st, 2015 came to € 1,767.873 million. of which € 367.065 relating to the absorbed company FATA.

Portion of profit transferred from the non-technical account The portion of profit from investments transferred from the non-technical account to the technical account of the life classes was calculated on the basis of the criteria established by ISVAP regulation No. 22 dated April 4th, 2008, as amended by IVASS provision No. 53 dated December 6th, 2016. The amount to be transferred, equal to € 57.116 million, was calculated by multiplying the value of the income from investments pertaining to the non-life classes, net of the equity and financial charges recorded in the non- technical account by the percentage obtained from the ratio between the arithmetic average of the technical provisions at the start and end of the year and the same sum increased by the semi-sum of the shareholders’ equity at the start and end of the year.

Other technical income The other technical income amounted to € 17.169 million (€ 20.46 million as of December 31st, 2015, of which € 3.838 million relating to the absorbed company) and includes the use of the provision relating to the writedown of receivables due from policyholders for € 6.521 million, cancellations of commission for € 4.409 million, cancellations on premiums ceded for € 2.318 million, the recovery of legal costs for € 1.322 million and other technical items for € 2.599 million, relating amongst other things to the final balance of the management fees of the direct compensation Agreement.

Claims incurred The liabilities relating to claims amounted in total to € 985.1 million compared with € 1,013.247 in the previous year (of which € 237.225 million reported in the 2015 financial statements of the absorbed company FATA).

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Table 66 - Claims settled - direct and indirect business

Pro forma Changes (€ thousands) 2016 2015 Amount % 2015

Compensation and expenses 1,050,198 1,082,012 -31,814 -2.9 873,284 Settlement costs 95,747 96,280 -533 -0.6 75,145 Contribution to road accident victim fund 19,286 19,673 -387 -2.0 15,205 Gross balance 1,165,231 1,197,965 -32,734 -2.7 963,634

Claims paid relating to the current year amounted to € 477.634 million and include compensation and direct costs for € 403.021 million, internal and external claims settlement costs for € 55.327 million and the contribution in favour of the road accident victim guarantee fund for € 19.286 million. The total amount of the item for claims settled relating to previous years came to € 687.597 million and concerned compensation and direct costs for € 647.177 million and settlement costs for € 40.42 million. The reinsurance amount amounted to € 145.324 million.

The change in the gross amount of the provision for outstanding claims came to € 35.735 million (revenue). During the previous year it amounted to € 53.591 million (revenue). Again in the previous year, the change in the gross amount of the provision for outstanding claims of FATA came to € 42.006 million (cost). The reinsurance amount amounted to € 23.879 million (cost). The value of the initial provision for outstanding claims amounted to € 2,199.747 million (€ 2,174.277 million relating to direct business and € 25.47 million relating to indirect business); this item at the end of the year amounted to € 2,577.662 million, of which € 2,549.879 million relating to direct business and € 27.783 million to indirect business. The balance of the portfolio changes at the end of the year amounted to € 413.65 million (revenue) and mainly includes the provision for outstanding claims at the end of the previous year of FATA, net of the intercompany cancellations, for € 413.927 (revenue).

Repayments and profit-sharing, net of reinsurance The item, amounting to € 695 thousand, includes amounts paid for profit-sharing.

Commissions and profit-sharing received from re-insurers This item amounts to € 58.785 million and mainly includes the commission received from reinsurers for € 57.236 million.

Other technical charges This balance amounts to € 43.016 million and mainly includes the writedown of the receivables due from policyholders for the year amounting to € 6.582 million, cancellations of prior years’ premiums for technical reasons for € 9.769 million, and cancellations of premiums due to non-collectability for € 9.925 million. The balance of the item at the end of the previous year came to € 48.28 million, of which € 6.953 million relating to the absorbed company FATA.

Change in equalisation reserves The negative change for the year amounting to € 271 thousand comprises the increase in the equalisation reserve for natural calamity risks as per sections 37 et seq. of attachment 15 and section 29 of attachment 16 to the ISVAP regulation No. 22 dated April 4th, 2008, as amended by IVASS provision No. 53 dated December 6th, 2016.

240

Notes to the Accounts

SECTION 19 - INFORMATION CONCERNING THE TECHNICAL ACCOUNT - LIFE BUSINESS (II)

The summary information concerning the life business technical account is shown in attachments 20, 27 and 28.

The technical account closed with a negative result of € 1.399 million compared with a negative result of € 23.47 million in 2015 and was characterised by:  the decrease in premiums written, which fell from € 994.609 million to € 848.171 million;  the increase in the incidence of management expenses on premiums written, which rose from 5.2% to 5.9%: in absolute value this cost dropped from € 51.54 million to € 50.03 million;  the decrease in other administrative expenses, which fell from € 19.76 million to € 17.727 million;  the increase in acquisition and collection costs, which rose from € 31.78 million to € 32.303 million and which as a ratio of premiums written came to around 3.8% (3.2% in 2015);  the decrease in outstanding claims and the change in the technical provisions, which fell from € 1,130.553 million to € 946.726 million;  the greater contribution of the class C financial operations with net income of € 157.619 million compared with € 147.741 million in 2015; the change with respect to the previous period is mainly attributable to the lower recording of value adjustments on investments which, net of recoveries, fell from € 38.591 million to € 22.975 million; net profits on the realisation of investments rose from € 15.943 million to € 20.534 million; income, net of investment management charges, fell from € 170.389 million to € 160.06 million;  net income of class D amounted to € 11.13 million compared with € 33.647 million in the previous year;  the balance of the other technical items whose result presented a negative balance of € 5.454 million, compared with an again negative balance of € 916 thousand reported in 2015.

Premiums for the year, net of reinsurance The overall amount of the gross premiums written amounts to € 861.11 million, of which € 861.062 million relating to direct business and € 48 thousand relating to indirect business. The premiums ceded came to € 12.939 million. In the “Management Report”, table 6 shows the amounts of gross premiums written by class. Gross premiums written at the end of the same period in the previous year came to € 1,009.742 million. Premiums ceded totalled € 15.133 million. Life premiums disclosed a decrease of 14.7%.

Income from investments Attachment 21 provides a breakdown of the income from investments. Income from class C investments amounts to € 211.463 million, of which € 14.88 million deriving from shares and holdings (of which € 11.296 million from shares and holdings of group companies and other investee companies), € 154.902 million from other investments, € 12.28 million from writebacks on investments written down in previous years and € 29.401 million from profits on the realisation of investments. The balance of the item at the end of the previous year came to € 212.622 million. In absolute value, the item therefore reported a decrease of € 1.159 million: income from other investments decreased € 6.606 million along with income deriving from shares and holdings by € 2.584 million, while profits deriving from the realisation of investments increased € 1.07 million along with writebacks on investments written down in previous years by 6.961 million.

Income and unrealised capital gains on investments benefiting policyholders who bear the investment risk A breakdown is provided in attachment 22 to the notes to the accounts. Class D income amounts to € 32.769 million and disclosed a decrease of € 18.994 million. The balance of the item at the end of the previous year came to € 51.763 million.

241

Other technical income The balance recorded for € 4.901 million mainly includes € 4.25 million in income paid by mutual fund managers relating to the investment transactions essentially associated with class III and VI policies. The item at the end of the previous year amounted to € 6.816 million.

Claims incurred The item in its entirety comes to € 886.88 million and compares with a balance at the end of the previous year of € 767.262 million. The amounts paid for benefits amounted to € 931.718 million (of which € 931.292 million relating to direct business and € 426 thousand relating to indirect business). The balance includes settlement costs for the year which amounted to € 1.847 million. With reference to direct business, the repayment for redemptions amounted to € 277.975 million, repayments for contracts which have matured amounted to € 597.548 million and repayments for claims amounted to € 53.922 million. The reinsurance amount of claims paid came to € 17.66 million. The change in the gross amounts of the outlay provision amounted to € 28.516 million (revenue) and the reinsurance portion amounted to € 1.338 million (cost).

Change in technical provisions The class C technical provisions amounted to € 4,569.125 million (€ 4,347.325 million at the end of the previous year) and include the mathematical provisions, the premium provision of supplementary insurance and the other technical provisions. The class D technical provisions amounted to € 982.219 million (€ 1,176.76 million at the end of the previous year). The change in technical provisions net of those relating to reinsurers amounted to € 59.846 million (cost), of which € 254.387 million (cost) concerning the mathematical provisions, premiums provision of supplementary insurance and the other technical provisions and € 194.541 million (revenue) relating to the technical provisions where the investment risk is borne by the policyholders and those from the management of pension funds

Equity and financial charges The overall value, equating to € 53.844 million, includes € 9.722 million for investment management charges, € 35.255 million for value adjustments on investments deriving from the year end valuations (of which € 3.207 million relating to investments held in Group companies) and € 8.867 million for losses deriving from the realisation of investments. The balance of the item at the end of the previous year came to € 64.881 million. An analytical statement of the equity and financial charges is provided in attachment 23 to the notes to the accounts.

Equity and financial charges and unrealised capital losses relating to investments benefiting policyholders who bear the risk The item, as per attachment 24 to the notes to the accounts, includes the equity and financial charges and the capital losses from valuation of assets hedging the index and unit-linked contracts for a total of € 21.639 million. The balance of the item at the end of the previous year came to € 18.116 million.

Operating expenses The item overall amounted to € 50.03 million and is made up of collection and acquisition commissions, the change in commission to be amortised and other acquisition expenses for € 33.984 million and other administrative expenses for € 17.727 million; commission and profit-sharing received from re-insurers amounted to € 1.681 million.

242

Notes to the Accounts

The balance of the item at the end of the previous year came to € 51.54 million.

Other technical charges Recorded for € 10.35 million, these are mainly attributable to maintenance commission paid to the banking and agency network for a total of € 6.336 million and the provision to the policyholder receivables writedown allowance for € 2.275 million. The item at the end of the previous year amounted to € 7.719 million.

Portion of profit transferred to the non-technical account The portion of profit from investments transferred to the non-technical account from the technical account of the life classes was calculated on the basis of the criteria established by Article 23 of ISVAP regulation No. 22 dated April 4th, 2008, as amended by IVASS provision No. 53 dated December 6th, 2016. The amount, equal to € 16.109 million, was calculated by multiplying the value of the income from investments, net of the equity and financial charges recorded in the life classes technical account by the percentage obtained from the ratio between the arithmetic average of the shareholders’ equity at the start and end of the year plus the subordinated liabilities and the same sum increased by the semi-sum of the technical provisions net of transfers under reinsurance, appropriately reduced in observance of the limit of the amount of the profits from investments acknowledged contractually to the policyholders, until its cancellation.

243

SECTION 20 - DEVELOPMENT OF THE CLASS TECHNICAL ITEMS

Non-life insurance The summary of the technical accounts by individual class of the Italian portfolio is shown in attachment 25 and the summary of all the classes is summarised in attachment 26 to the notes to the accounts. The recognition to the individual class of the items took place on an analytical basis as a rule. The items common to several classes have been divided up using different criteria according to the nature of the cost as illustrated in “Part A - “Accounting principles” in the notes to the accounts.

Life insurance The summary of the technical accounts by individual class of the Italian portfolio is shown in attachment 27 and the summary of all the classes is summarised in attachment 28 to the notes to the accounts. Like the Non-life classes, also in the Life classes the recognition to the individual class of the items took place on an analytical basis as a rule. The items common to several classes have been divided up using different criteria according to the nature of the cost as illustrated in “Part A - “Accounting principles” in the notes to the accounts.

SECTION 21 - INFORMATION CONCERNING THE NON-TECHNICAL ACCOUNT (III)

Income from investments The item amounted in total to € 170.361 million. Income from shares and holdings amounted to € 36.311 million and derives for € 33.847 million from shares and holding of subsidiaries, associated companies and other investees. Income from other investments amounts to € 78.399 million, the writebacks on investments written down in previous years amount to € 3.772 million and profits on the realisation of investments amount to € 51.879 million. In absolute value, the item decreased by € 50.15 million, attributable to the drop in the realisation of investments for € 40.817 million and the decrease deriving from shares and holdings from other investments for € 10.657 million, offset by the increase in write-backs on investments written down in previous years for € 1.324 million. The balance of income from investments as of December 31st, 2015 amounted to € 220.511 million. The analytical statement of the income from investments is provided in attachment 21.

Equity and financial charges The overall value, equating to € 80.838 million, includes € 6.752 million for investment management charges, € 66.919 million for value adjustments deriving from the year end valuations (of which € 44.819 million relating to investments held in Group companies and other investments) and € 7.167 million for losses deriving from the realisation of investments. The balance of charges from investments as of December 31st, 2015 amounted to € 115.588 million. An analytical statement of the equity and financial charges is provided in attachment 23.

244

Notes to the Accounts

Other income The item is made up as follows:

Table 67 - Other income - breakdown

Pro forma Changes (€ thousands) 2016 2015 Amount % 2015

Exchange gains 16 357 -341 -95.5 352 Recoveries of administrative expenses and charges from third parties 813 1,104 -291 -26.4 1,036 Other income from Group companies 17,701 17,334 367 2.1 14,502 Recoveries from provision for risks and charges and writedowns 28,670 27,375 1,295 4.7 25,236 Other income 1,505 1,791 -286 -16.0 1,373 TOTAL (item III.7) 48,705 47,961 744 1.6 42,499

The item amounts to € 48.705 million. It includes the uses of write-down provisions for risks and charges for € 28.67 million. These uses are mainly represented by € 9.155 million for withdrawals from writedown allowances for sums to be recovered, € 3.922 for withdrawals from the writedown allowance on recoveries allocated and to be allocated, € 3.296 million for uses of the risk provision for legal disputes, € 2.29 million for uses of the provision for future formal notifications and irregularities by the Supervisory Bodies and € 1.865 million in relation to the intersectorial solidarity fund. The item also includes recoveries from Group companies for € 17.701 million relating mainly to charges of costs for the provision of services, and intercompany secondments. Other income and recoveries, totalling € 2.334 million, mainly relate to interest on bank deposits. The balance of the item at the end of the same period in the previous year came to € 47.961 million and includes the FATA amount for € 8.32 million.

Other charges The item is made up as follows:

Table 68 - Other charges - breakdown

Pro forma Changes (€ thousands) 2016 2015 Amount % 2015

Exchange losses 11 145 -134 -92.4 142 Interest expense 9,954 9,839 115 1.2 9,838 Amortisation of deferred charges 32,549 32,225 324 1.0 29,244 Other taxes 2,694 2,606 88 3.4 1,518 Provisions and allowances for risks and charges and writedown of receivables 40,477 23,834 16,643 69.8 23,048 Other charges 35,064 38,721 -3,657 -9.4 34,306 TOTAL (item III.8) 120,749 107,370 13,379 12.5 98,096

245

The item comes to € 120.749 million and compares with a balance as of December 31st, 2015 of € 107.37 million. The item includes interest expense relating to the subordinated loans for € 8.762 million; goodwill amortisation for € 24.548 million, other deferred charges for € 3.505 million, start-up and expansion costs for € 4.392 million and leasehold improvements for € 104 thousand; provisions and allowances for the write-down of risks and charges for € 40.477 million. The remaining charges, which amount to € 35.064 million, mainly include costs incurred on behalf of Group companies and charged to the same for € 17.096 million, as well as charges consequent to the payment of the amounts due to former employees who joined the Intersectorial solidarity Fund for € 1.865 million. In conclusion, the item includes the amount of € 2.397 million for fines, of which € 2 million relating to the fine imposed by the Anti-trust Authority in relation to which a specific provision had been set aside for potential liabilities.

Extraordinary income The item presents a balance of € 5.838 million and mainly includes € 1.183 million relating to contingent gains for income components referring to previous years, € 2.415 million referring to the adjustment of the estimate of the income taxes relating to the previous year with respect to the calculation made at the time of payment of the same. The balance of the item at the end of the same period in the previous year came to € 32.338 million; you are reminded that it included, for more than € 20 million, the amount of the realisations of securities included in the long-term segment.

Extraordinary charges The item presents a balance of € 9.514 million. It includes taxes referring to previous years for € 4.79 million and capital losses realised further to the disposal of long-term securities for € 973 thousand. As already illustrated previously, further to the agreements signed on July 14th, 2015 and March 15th, 2016 between the Group companies and the company trade union delegations, recourse to the extraordinary section of the Intersectorial Solidarity Fund for the insurance sector was activated. In 2016, the agreement produced an overall liability of € 1.536 million. The liability is recorded with a matching balance in the item “Provision for risks and charges” under the liabilities. In conclusion, contingent losses were recorded for negative components of income pertaining to previous years for € 492 thousand. The balance of the item at the end of the same period in the previous year came to € 15.931 million.

Income taxes for the year Income taxes for the year disclosed a balance of € 52.58 million, made up of current taxes (IRES and IRAP) for € 44.925 million, prepaid taxes for € 8.275 million (cost) and deferred taxes for € 620 thousand (revenue).

The prepaid taxes relating to the period have been recorded in observance of the prudent approach on the basis of the reasonable certainty that taxable income will exist, in the years in which they will reverse, which permits recovery of the recognised taxes.

As a result of the enforcement of Italian Law No. 208 dated December 28th, 2015, as from January 1st, 2017, the IRES rate was established to the extent of 24% (rather than 27.5%) with effect for the tax periods subsequent to that underway as of December 31st, 2016. The adjustment of the prepaid and deferred taxation produced economic effects already on the 2015 financial statements, which are referred to for reference purposes. The adjustment made in 2016 did not produce any further significant effects.

246

Notes to the Accounts

The amount relating to the substitute tax as per Italian Decree Law No. 185 dated November 29th, 2008, amounting to € 2.346 million, derives from the deferral of the charge for substitute tax paid for the tax recognition of the spin- off deficit of Duomo Uni One Assicurazioni and the merger deficit of San Miniato Previdenza.

Table 69 - Income taxes for the year

IRAP (€ thousands) IRES (COMPANY (REGIONAL EARNINGS TAX) BUSINESS TAX) Total

Current taxes 35,155 9,770 44,925 Change in prepaid taxes 6,202 -273 5,929 Change in deferred taxes -620 0 -620 Substitute tax (Italian Decree Law No. 185/2008) 2,346 0 2,346 TOTAL 43,083 9,497 52,580

As per Article 2427 of the Italian Civil Code, the following table describes the timing differences which have led to the recognition of prepaid taxes, with indication of the changes with respect to the previous year and the amounts credited and debited to the income statement.

Table 70 - Recognition of prepaid taxes and consequent effects

Opening balance Increases Decreases Closing balance (€ thousands) Taxable Taxable Taxable Taxable amount Taxation amount Taxation amount Taxation amount Taxation

IRES (COMPANY EARNINGS TAX)

Change in provision for outstanding 91,445 21,932 claims 113,951 28,121 0 0 22,506 6,189 Provisions and allowances for risks and 44,179 10,603 charges 28,809 7,114 22,954 5,509 7,584 2,020

Writedown of receivables from 164,514 39,483 policyholders 173,173 41,864 0 0 8,659 2,381

Allowance for writedown of other 27,661 6,639 receivables 26,161 6,416 15,099 3,624 13,599 3,401 Valuation capital losses 15,119 3,632 4,061 975 11,642 2,798 7,538 1,809 Excess amortisation/depreciation 25,138 6,033 8,499 2,040 2,621 629 31,016 7,444 Tax losses 602 144 0 0 602 144 0 0 Professional fees 488 134 0 0 0 0 488 134 Other adjustments 8,482 2,083 5,466 1,312 8,543 2,100 5,405 1,295 Total 391,923 95,541 56,079 13,460 75,756 19,662 372,246 89,339

IRAP (REGIONAL BUSINESS TAX) Writedown of receivables from 37,920 2,586 policyholders 39,794 2,714 122 8 1,996 136 Excess amortisation/depreciation 25,138 1,714 8,499 580 2,621 179 31,016 2,115 Total 64,932 4,428 8,621 588 4,617 315 68,936 4,701 Other adjustments to statement of financial position Total prepaid taxes 99,969 14,048 19,977 94,040 Net effect in Income statement 5,929

247

Table 71 - Recognition of deferred taxes and consequent effects

Opening balance Increases Decreases Closing balance (€ thousands) Taxable Taxable Taxable Taxable amount Taxation amount Taxation amount Taxation amount Taxation IRES (COMPANY EARNINGS TAX)

Capital gains on fixed assets 5,271 1,344 0 0 2,253 620 3,018 724 Total 5,271 1,344 0 0 2,253 620 3,018 724 Other adjustments 6,806

IRAP (REGIONAL BUSINESS TAX) Other adjustments to statement of financial position 943 Total Deferred taxes 1,344 620 8,473 Net effect in Income statement -620

The following table shows the reconciliation between the ordinary rate and the effective rate.

Table 72 - Income taxes for the year - reconciliation between the ordinary rate and the effective rate

2016 2015 (Balances as %) IRES IRAP Total IRES IRAP Total Ordinary rate applicable 27.50% 6.82% 34.32% 27.50% 6.82% 34.32% Effect of increases (decreases) with respect to the ordinary rate: Permanent differences: Capital gains subject to the “participation exemption” regime 0.00% -4.05% 0 Capital losses subject to the “participation exemption” regime 11.12% 23.18% 0 Adjustments due to the provisions on “dividend washing” 0.66% 0.34% 0 Interest expense 0.09% 0.08% 0 Dividends -11.50% -9.58% 0 Non-deductible amortisation/depreciation 1.44% 2.11% 0 Other adjustments 7.74% 1.35% 13.33% -0.05% Tax adjustment for IRES rate reduction 7.12% Effective rate 37.05% 8.17% 45.22% 60.03% 6.77% 66.80%

248

Notes to the Accounts

SECTION 22 - SUNDRY INFORMATION RELATING TO THE INCOME STATEMENT

The following statements containing information on the income statement are attached:

 statement relating to transactions with Group companies and other investees (attachment 30);  summary statement of direct business premiums written (attachment 31);  statement of charges relating to staff, directors and auditors (attachment 32).

Transactions on derivative contracts

Pursuant to ISVAP regulation No. 22 dated April 4th, 2008, as amended by IVASS provision No. 53 dated December 6th, 2016, the data and information on investment activities concerning class C and D financial derivatives is presented below.

During the year, the Company maintained a line of conduct aimed at prudence, thus observing the norms established by the ISVAP regulation indicated above and by the outline resolution on financial aspects approved by the board of directors with regard to the use of derivative products.

The derivative transactions did not lead to significant economic results.

249

Statement 2 - Operations on derivatives - C and D class

(in €)

Book value as Nominal Underlying of Dec. 31st, amount nominal Exchange 2016 Description currency amount (a) Underlying type Unit value (b) rate (c) [(a*b)/100]/c

Class C derivative instruments - warrants and rights

DIR. TOTAL SA-SCRIP EUR 1,560 OTHER 0.61000 1.00 952 DIR. TOTAL SA-SCRIP EUR 25,800 OTHER 0.61000 1.00 15,738 WARR. GPI SPA - CW21 EUR 25,000 INDEX BASKET 0.30000 1.00 7,500

Total class C derivative instruments - warrants and 24,190 rights

TOTAL CLASS C DERIVATIVE INSTRUMENTS 24,190

Book value Nominal Underlying as of Dec. amount nominal Underlying Unit value Exchange 31st, 2016 Description currency amount (a) type (b) rate (c) [(a*b)/100]/c

Class D derivative instruments - rights

DIR. TOTAL SA-SCRIP EUR 100 OTHER 0.61000 1.00 61 Total class D derivative instruments - rights 61

TOTAL CLASS D DERIVATIVE INSTRUMENTS 61

TOTAL CLASS C + D DERIVATIVE INSTRUMENTS 24,251

Statement 3 - Derivatives valued at fair value - C and D class

(€ thousands)

Description Market value Class C derivative instruments - warrants 31 Class C derivative instruments - rights 17 Total class C derivative instruments 48

Total class D derivative instruments 0

TOTAL CLASS C+D DERIVATIVE INSTRUMENTS 48

On January 20th, 2016 a forward hedging agreement was entered into with a government security BTPS 01/08/21 maturing on March 21st, 2016 as the underlying instrument. The maturity of the agreement led to the consignment of the underlying instrument at the strike price, which as of the date was lower than the market price. The transaction led to a minor amount realised of around € 400 thousand.

250

Notes to the Accounts

Part C - Other Information

Notes to the Accounts Part C

Other information

SHAREHOLDERS’ EQUITY

Pursuant to ISVAP regulation No. 22 dated April 4th, 2008, as amended by IVASS provision No. 53 dated December 6th, 2016, below is the table with indication - separately for the life classes and non-life classes, - of the amount of each element of the shareholders’ equity updated on the basis of the changes which will take place due to the application of the proposal for the allocation of the result for the year as previously illustrated in the “Management Report”.

Table 73 - Change in shareholders’ equity after the end of the year

Shareholders’ equity updated on the basis of the proposal to distribute the profits emerging from the Shareholders’ equity at the end of the year financial statements or other equity elements and changes which have taken place after the end of the year (*)

(€ thousands) Non-life Life Total Non-life Life Total

Share capital 359,482 163,400 522,882 359,482 163,400 522,882

Share premium reserve 559,482 234,828 794,310 559,482 225,971 785,453

Revaluation reserve 37,232 25,267 62,499 37,232 25,267 62,499

Legal reserve 217,462 51,272 268,734 230,204 51,272 281,476

Other reserves 199,742 3,779 203,521 199,019 3,322 202,341

Retained profits (losses) 0 0 00 0 0

Profit (loss) for the year 73,022 -9,314 63,708 0 0 0

Negative reserve for own shares in portfolio -28,110 -11,798 -39,908 -28,110 -11,798 -39,908

TOTAL (item A) 1,418,312 457,434 1,875,746 1,357,309 457,434 1,814,743

(*) gross of the divided pertaining to own shares

PUBLICATION OF THE FEES FOR THE ACCOUNTS AUDIT AND OTHER SERVICES OTHER THAN THE AUDIT

The following table, prepared according to Article 149 duodecies of the CONSOB Issuers’ Regulations supplemented by CONSOB resolution No. 15915 dated May 3rd, 2007, illustrates the fees for 2016 for the accounts audit services and certification provided by the Independent Auditors and bodies belonging to the same network.

The amounts do not include out-of-pocket expenses acknowledged or VAT.

255

Table 74 - Independent Auditors’ fees

(€ thousands) Type of service Party providing the service Recipient Fee Accounts audit Deloitte & Touche s.p.a. Parent Company 907 Deloitte & Touche s.p.a. Subsidiaries 589

Deloitte & Touche network Subsidiaries 69

Certification services (1) Deloitte & Touche s.p.a. Parent Company 697 Deloitte & Touche s.p.a. Subsidiaries 544 Deloitte & Touche network Subsidiaries 26 Other services Deloitte & Touche s.p.a. Parent Company 400 Deloitte & Touche s.p.a. Subsidiaries 75

Total 3,307 (1) Fees for segregated management schemes, internal funds, pension funds, signing of tax declarations and certification of Economic Balance Sheet and Own Funds Solvency II December 31st, 2016.

ACTIVITIES CARRIED OUT WITH THE SHAREHOLDERS

After completing the matters illustrated in the management report, you are hereby informed that the premiums written in the year for contracts to which the more favourable conditions envisaged for the shareholders have been applied, or for dedicated products, amounted to € 10.767 million for the non-life classes and € 53.372 million for the life classes. As envisaged by the Articles of Association, the shareholders have benefited from more favourable conditions when taking out policies with an economic advantage for the same of € 6.685 million.

CONSOLIDATED FINANCIAL STATEMENTS

The Company prepares the Group consolidated financial statements in compliance with the international accounting standards (IAS/IFRS), pursuant to Italian Legislative Decree No. 38 dated February 28th, 2005. The consolidated financial statements have the purpose of providing more complete information on the equity, financial and economic situation of the Group.

DIRECTORS’ AND STATUTORY AUDITORS’ EMOLUMENTS

CONSOB resolution No. 18049, published on December 23rd, 2011, which implemented the provisions concerning remuneration contained in Article 123 ter of the “Consolidated Finance Act”, came into force on December 31st, 2011 and envisages the drawing up and subsequent resolution by the 2013 shareholders’ meeting of the report on remuneration for the companies, to be made public in accordance with the deadlines as per the formalities envisaged by current legislation, which in Section II includes the analytical indication of the fees paid during the year for any reason by the Parent Company and the subsidiary and associated companies. Pursuant to Article 2427, paragraph 16, of the Italian Civil Code, the amount of the emoluments payable to the Company’s Directors and Statutory Auditors collectively for each category (excluding expenses, VAT and various contributions) amounted respectively to € 6.156 million for the Directors and € 824 thousand for the Statutory Auditors.

256

Notes to the Accounts

SIGNIFICANT EVENTS DURING THE FIRST FEW MONTHS OF 2017

Pursuant to Article 2427, paragraph 22 quarter, of the Italian Civil Code, with reference to the nature, description and balance sheet, financial and income statement effect of the significant events after the end of the year, please refer to the specific paragraph of the section “Other information” in the Management Report.

PROPOSAL FOR THE ALLOCATION OF THE RESULT FOR THE YEAR

Pursuant to Article 2427, paragraph 22 septies, of the Italian Civil Code, with reference to the proposal for the allocation of the result for the year, please refer to the section at the end of the Management Report.

TRANSACTIONS WITH RELATED PARTIES

With reference to dealings with the Group companies, pursuant to Article 2497 bis and with other related parties pursuant to Article 2427, paragraph 22 bis, of the Italian Civil Code, the effects that these activities have had on the business of the company and its results are illustrated. In this context it is specified that, during the year, the following have been established:  agreements for the disbursement of general services, for services relating to the management of the investments and to other operational activities;  insurance/reinsurance dealings which it has been deemed appropriate to maintain with the Group;  the joint option for tax consolidation;

The calculation of the amounts recharged for the provision of intercompany services has been carried out observing the guidelines and the commitments of a general nature established in the outline agreement in force, approved by the competent bodies, and the procedure for the allocation of the intercompany costs. Agreement on the management procedures and the monitoring of the disbursement of the services has made it possible to make an accurate allocation of the portions of cost relating to the companies using the service. The model used is that involving recharging of costs. The allocation criteria is based on the identification of specific indicators aimed at establishing the portion of cost associated with the activity to be charged to the individual companies which benefit from the same.

Intercompany reinsurance transactions concerned the agreements entered into by the Company with ABC Assicura, BCC Assicurazioni, TUA Assicurazioni and FATA (merged by means of incorporation within the Company as of December 31st, 2016 with accounting and tax effects as from January 1st, 2016). With regard to the main specificities of the transfer programmes for the subsidiaries, note that, in consideration of the sizes of the respective portfolios, the subsidiaries transferred a multi-class basket to the Company, which in turn carried out retrocession to the reinsurance market, via its reinsurance programmes (intercompany acceptance by the Company in the capacity of reinsurer and subsequent transfer of the risks to the reinsurers as retrocession).

In greater detail, with regard to 2016, for the purpose of further diversifying the risk and guaranteeing the market conditions, the proportional and non-proportional agreements of subsidiaries were transferred for the most part to the Company (70% of the transferred agreements) and the remainder (30%) was transferred directly to the reinsurance market.

257

In certain cases, on the basis of the singularities of the business and the type of transfer, the coverage was placed directly on the open market. For all intercompany agreements, the corporate resolutions related to ISVAP regulation No. 25 dated May 27th, 2008 were followed (now repealed and replaced by IVASS regulation No. 30 dated October 26th, 2016), with observance of transaction limits for each reinsurance transaction indicated therein. As already mentioned, at the end of June the allocation to the share capital of Cattolica Services of the € 5 million loan was agreed, a loan agreed with the Parent Company by means of contract dated December 2015. Note that Cattolica Group has entered into several extraordinary transactions with related parties, not atypical and/or unusual, aimed at rationalising and reorganising the corporate structure of the same, or growth by external lines. These transactions, some of which directly involved the Company, are illustrated in other sections of this Report. With regard to transactions with related parties, with reference to the approval procedures described in the Company’s Report on Corporate Governance, shareholders are hereby informed that, for reporting purposes, a procedure has been set up for detecting the outstanding transactions, via the prior acquisition of the necessary information in relation to international accounting standards and subsequent extrapolation of the transactions relating to the same. The table below shows the equity and economic positions deriving from the afore-mentioned transactions of the Company with subsidiary and associated companies and other related parties; the changes during the year are commented on in the section “Significant events during the year”. With reference to the statement of financial position dealings, and in particular those relating to the tax consolidation, the item “Other receivables” mainly includes the amounts due from the subsidiaries for the transfer of the current IRES to Cattolica; the item “Other payables” mainly comprises the amounts due to the subsidiaries for the income recognised in the presence of tax losses transferred and amounts due for the transfer of the receivables of the subsidiaries for withholdings, for advance payments and for tax credits on mutual investment funds. With reference to the income statement dealings, the item “dividends” include those collected from the subsidiaries. You are hereby informed that as a result of the merger via incorporation of FATA, steps were taken to make an adjustment to the item “dividends” for an amount equal to € 4.578 million corresponding to the 2015 dividend distributed by the absorbed company and collected by the Company during the year. Furthermore, the item “other revenues” includes the recharging of costs and services and sundry recoveries of administrative charges. “Other costs” mainly include the amounts charged by subsidiaries for services and sundry administrative charges. As a result of the merger transaction already referred to, the necessary adjustments and cancellations were made to the amounts pertaining to the intercompany transactions between the Company and FATA as emerging as of the year end date. With reference to the dealings with Banca Popolare di Vicenza s.p.a. (BPVi) and its subsidiaries as already described in detail in the management report, on August 4th, the Board of Directors resolved to exercise the right to unilaterally withdraw from the partnership agreements with BPVi The withdrawal, whose full effectiveness takes place on expiry of the sixth month after the receipt by BPVi of the related communication and therefore February 10th, 2017, led to a structured series of immediate or deferred effects under the terms identified under agreement and cancelled out the connotation of related party. You are hereby informed that the decisions relating to the withdrawal from the agreement with BPVi led to the activation of the procedure on the related party transactions. In relation to said resolutions, qualified as a transaction of greater significance with related parties, a specific Disclosure Document was published on August 11th, 2016, pursuant to Article 5 of the Regulations adopted by CONSOB by means of Resolution No. 17221/10 and subsequent amendments, made available to the general public care of the Parent Company’s registered offices, on the website and on the authorised storage mechanism “eMarket STORAGE”, a Document to which reference is made herein for the matters required in accordance with Article 5, paragraph 9, of said Regulations. With regard to

258

Notes to the Accounts

the matters indicated above, mention is made of the following dealings as of December 31st, 2016: the BPVi shares, having taken into account the writedowns made, amounted to € 89 thousand, while no bonds issued by the bank had been recorded; the current account transactions come to € 21.291 million. Commissions were paid during the year to BPVi for a total of € 167 thousand, under market conditions. With regard to the dealings with the Quaestio Group, it is hereby revealed that as of December 31st, 2016 the Company held 18 units of the mutual investment fund know as “Atlante” of the issuer Questio Capital Management sgr, for an equivalent book value of € 7.077 million. Overall, the other transactions with other related parties, which are formally acknowledged as having taken place in line with market values, are not considered to be significant for disclosure purposes.

Table 75 - Equity position and economic transactions with companies subject to management and co- ordination, associated companies and other related parties

Statement of financial position transactions Associated companies and their Total (€ thousands at book values) Subsidiaries subsidiaries 2016

Assets Shares 867,794 558 868,352 Bonds 51 51 of which subordinated bonds 51 51 Receivables of the insurance and reinsurance operations 4,962 17 4,979 Other receivables 34,746 34,746 Current account transactions 620 620 Total 907,502 1,246 908,748 Liabilities Payables of the insurance and reinsurance operations 32 4 36 Reinsurance technical provisions 41,982 41,982 Other payables 37,743 37,743 Total 79,757 4 79,761 Economic transactions and relationships

Associated companies and their Total (€ thousands at book values) Subsidiaries subsidiaries 2016

Profits and revenues Gross premiums written 1,757 1,757 Revenues from reinsurance transactions 31,795 31,795 Financial and equity revenues 120 310 430 Dividends 42,513 42,513 Other revenues 14,926 14,926 Total 91,111 310 91,421

Losses and expenses Costs for reinsurance transactions 29,514 29,514 Commissions 7,470 1,565 9,035 Other costs 117,581 117,581 Total 154,565 1,565 156,130

259

The undersigned declare that these financial statements are true and consistent with the underlying accounting records The legal representatives of the company (*)

The Chairman PAOLO BEDONI (**)

(**)

(*) For foreign companies, the signature must be that of the general representative for Italy. (**) Indicate the office covered by the signee.

260

Cash flow statement

(€ thousands) 2016 (1) 2015 (2)

A. CASH FLOWS DERIVING FROM OPERATING ACTIVITIES Profit (loss) for the year 63,708 39,715 Adjustments for non-monetary elements and other adjustments Adjustment of reserves: Change in non-life premiums provision -20,962 -16,628 Change in provision for outstanding claims and other non-life technical provisions -9,836 -40,554 Change in mathematical provisions and other life technical provisions 32,631 372,783 Amortisation/depreciation 37,155 2,437 Increase in employee severance indemnity and contractual pension fund 3,629 2,752 Net increase in other funds/provisions 10,568 8,659 Other non-monetary income and charges from financial activities -11,747 -13,846 Capital gains and losses from valuation deriving from financial activities 87,746 129,573 Writedown of receivables and loans 542 -4,069 (Increase) / decrease in trade receivables and other assets -22,724 138,249 (Increase) / decrease in payables and other liabilities -30,650 -49,485 CASH FLOW FROM OPERATING ACTIVITIES (A) 140,060 569,586

B. CASH FLOW DERIVING FROM INVESTMENT ACTIVITIES Intangible fixed assets -1,031 29,042 Tangible fixed assets -1,617 -1,404 Property -212 -220 Purchases of financial fixed assets and current financial assets -5,514,054 -5,016,824 Sales of financial fixed assets and current financial assets 5,328,207 4,530,677 Loans to third parties 5,973 1,508 CASH FLOW FROM INVESTMENT ACTIVITIES (B) -182,734 -457,221

C. CASH FLOW DERIVING FROM FINANCING ACTIVITIES Loan capital Increase/(decrease) in short-term payables due to banks 1,396 -40,000 Loans taken out/(repaid) 0 0 Own equity Changes in shareholders’ equity 328 106 Sale/(purchase) of own shares -12,763 -15,567 Seniority indemnity disbursed -5,692 -3,010 Dividends -59,554 -60,164 CASH FLOW FROM FINANCING ACTIVITIES (C) -76,285 -118,635

INCREASE / (DECREASE) IN CASH AT BANK AND CASH EQUIVALENT (A+B+C) -118,959 -6,270 Cash in bank and cash equivalent as at January 1st 154,236 152,246 Cash in bank and cash equivalent as of December 31st 35,277 145,976 INCREASE / (DECREASE) IN CASH AT BANK AND CASH EQUIVALENT -118,959 -6,270 (1) The changes take into account the balances as at January 1st, 2016 deriving from the merger via incorporation transaction involving FATA, with recognition for accounting purposes as from January 1st, 2016. (2) For the purpose of permitting comparability of the balances and the information, the legislative provisions regarding own shares have been applied to the balances for the previous year.

265

The undersigned declare that these financial statements are true and consistent with the underlying accounting records The legal representatives of the company (*)

The Chairman PAOLO BEDONI (**)

(**)

(*) For foreign companies, the signature must be that of the general representative for Italy. (**) Indicate the office covered by the signee.

266

Attachments to the Note to the Accounts

Company CATTOLICA ASSICURAZIONI SOC. COOP.

Subscribed share capital E. 522,881,778 Paid in E. 522,881,778

Registered offices in Verona

Court in Verona

Attachments to the Notes to the Accounts

Financial Year 2016

(amounts in thousands of €)

Notes to the Accounts - Attachment 1

Company CATTOLICA ASSICURAZIONI SOC. COOP.

STATEMENT OF FINANCIAL POSITION - NON-LIFE BUSINESS

ASSETS

Balances for the year

A. AMOUNTS DUE FROM SHAREHOLDERS PER SUBSCRIBED SHARE CAPITAL NOT PAID IN 1 0

of which called capital 2 0

B. INTANGIBLE ASSETS

1. Acquisition commission to amortise 4 0

2. Other acquisition costs 6 0

3. Start-up and expansion costs 7 7,946

4. Goodwill 8 137,073

5. Other long-term costs 9 3,867 10 148,886

C. INVESTMENTS

I - Land and buildings

1. Property used for business activities 11 63,570

2. Property used by third parties 12 37,691

3. Other property 13 0

4. Other realty rights 14 0

5. Property under construction and advance payments 15 0 16 101,261

II - Investments in Group companies and other investees

1. Company shares and holdings:

a) parent companies 17 0

b) subsidiaries 18 703,344

c) affiliated companies 19 0

d) associated companies 20 558

e) other companies 21 36,557 22 740,459

2. Bonds issued by:

a) parent companies 23 0

b) subsidiaries 24 0

c) affiliated companies 25 0

d) associated companies 26 6

e) other companies 27 6,919 28 6,925

3. Loans to:

a) parent companies 29 0

b) subsidiaries 30 0

c) affiliated companies 31 0

d) associated companies 32 0

e) other companies 33 0 34 0 35 747,384 to be carried forward 148,886

Financial Year 2016

Balances for the previous year

181 0

182 0

184 0

186 0

187 10,683

188 119,767

189 4,535 190 134,985

191 39,380

192 0

193 0

194 0

195 0 196 39,380

197 0

198 689,772

199 0

200 35,056

201 44,666 202 769,494

203 0

204 0

205 0

206 709

207 0 208 709

209 0

210 5,001

211 0

212 0

213 0 214 5,001 215 775,204 to be carried forward 134,985

STATEMENT OF FINANCIAL POSITION - NON-LIFE BUSINESS ASSETS

Balances for the year

carry forward 148,886

C. INVESTMENTS (continued)

III - Other financial investments

1. Shares and holdings

a) Listed shares 36 22,899

b) Unlisted shares 37 1,440

c) Holdings 38 0 39 24,339

2. Units of mutual investment funds 40 373,862

3. Bonds and other fixed income securities

a) listed 41 2,535,215

b) unlisted 42 4,817

c) convertible bonds 43 0 44 2,540,032

4. Loans

a) loans with secured guarantee 45 1,646

b) loans on policies 46 0

c) other loans 47 150 48 1,796

5. Units in mutual investments 49 0

6. Deposits with credit institutions 50 0

7. Sundry financial investments 51 16 52 2,940,045

IV - Deposits with ceding companies 53 7,149 54 3,795,839

D bis. TECHNICAL PROVISIONS - REINSURANCE AMOUNT

I - NON-LIFE CLASSES

1. Premium provision 58 114,956

2. Provision for outstanding claims 59 415,234

3. Reserve for profit-sharing and repayments 60 0

4. Other technical provisions 61 0 62 530,190 to be carried forward 4,474,915

Balances for the previous year

carry forward 134,985

216 18,867

217 836

218 0 219 19,703

220 232,030

221 2,156,780

222 275

223 0 224 2,157,055

225 1,801

226 0

227 0 228 1,801

229 0

230 0

231 3 232 2,410,592

233 7,275 234 3,232,451

238 118,301

239 399,812

240 0

241 0 242 518,113 to be carried forward 3,885,549

STATEMENT OF FINANCIAL POSITION - NON-LIFE BUSINESS ASSETS

Balances for the year

carry forward 4,474,915

E. RECEIVABLES

I - Receivables, deriving from direct insurance transactions, due from:

1. Policyholders

a) for premiums for the year 71 108,092

b) for premiums for previous years 72 9,771 73 117,863

2. Insurance brokers 74 169,982

3. Insurance companies - current accounts 75 24,472

4. Policyholders and third parties for sums to be recovered 76 32,051 77 344,368

II - Receivables deriving from re-insurance transactions, due from:

1. Insurance and reinsurance companies 78 50,688

- 2. Reinsurance brokers 79 0 80 50,688

III - Other receivables 81 302,546 82 697,602

F. OTHER ASSET ITEMS

I - Tangible assets and inventories:

1. Furniture, office machines and internal means of transport 83 2,023

2. Movable assets recorded in public registers 84 295

3. Plant and equipment 85 1,309

4. Inventories and miscellaneous assets 86 0 87 3,627

II - Cash in bank and cash equivalent

1. Bank and postal account deposits 88 5,000

2. Cheques and cash amounts 89 4 90 5,004

IV - Other assets

1. Transitory reinsurance accounts - receivable 92 0

2. Sundry assets 93 25,246 94 25,246 95 33,877

of which Liaison account with the life business 901 0

G. ACCRUALS AND DEFERRALS

1. For interest 96 17,315

2. For rental fees 97 5

3. Other accruals and deferrals 98 317 99 17,637

TOTAL ASSETS 100 5,224,031

Balances for the previous year

carry forward 3,885,549

251 119,153

252 12,322 253 131,475

254 108,733

255 24,592

256 23,570 257 288,370

258 59,548

259 0 260 59,548

261 261,194 262 609,112

263 1,762

264 426

265 993

266 0 267 3,181

268 120,324

269 22 270 120,346

272 0

273 22,905 274 22,905 275 146,432

903 0

276 14,593

277 0

278 320 279 14,913

280 4,656,006

STATEMENT OF FINANCIAL POSITION - NON-LIFE BUSINESS LIABILITIES AND SHAREHOLDERS’ EQUITY

Balances for the year

A. SHAREHOLDERS' EQUITY

I - Subscribed share capital or equivalent fund 101 359,482

II - Share premium reserve 102 559,482

III - Revaluation reserves 103 37,232

IV - Legal reserve 104 217,462

V - Statutory reserves 105 0

VI - Reserve for own shares of the parent company 400 0

VII - Other reserves 107 199,742

VIII - Retained profits (losses) 108 0

IX - Profit (loss) for the year 109 73,022

X - Negative reserve for own shares in portfolio 401 -28,110 110 1,418,312

B. SUBORDINATED LIABILITIES 111 140,000

C. TECHNICAL PROVISIONS

I - NON-LIFE BUSINESS

1. Premium provision 112 683,133

2. Provision for outstanding claims 113 2,577,662

3. Reserve for profit-sharing and repayments 114 0

4. Other technical provisions 115 203

5. Equalisation reserves 116 13,015 117 3,274,013

to be carried forward 4,832,325

Balances for the previous year

281 359,482

282 559,221

283 37,232

284 208,647

285 0

500 0

287 212,566

288 0

289 55,323

501 -18,872 290 1,413,599

291 140,000

292 573,011

293 2,199,747

294 0

295 234

296 12,046 297 2,785,038

to be carried forward 4,338,637

STATEMENT OF FINANCIAL POSITION - NON-LIFE BUSINESS LIABILITIES AND SHAREHOLDERS’ EQUITY

Balances for the year

carry forward 4,832,325

E. PROVISIONS FOR RISKS AND CHARGES

1. Provisions for pensions and similar commitments 128 2,741

2. Provision for taxation 129 8,473

3. Other provisions and allowances 130 42,394 131 53,608

F. DEPOSITS RECEIVED FROM RE-INSURERS 132 23,941

G. PAYABLES AND OTHER LIABILITIES

I - Payables, deriving from direct insurance transactions, due to:

1. Insurance brokers 133 14,398

2. Insurance companies - current accounts 134 3,742

3. Policyholders for guarantee deposits and premiums 135 11,884

4. Guarantee funds in favour of policyholders 136 8 137 30,032

II - Payables, deriving from reinsurance transactions, due to:

1. Insurance and reinsurance companies 138 32,358

2. Reinsurance brokers 139 0 140 32,358

III - Bond loans 141 0

IV - Payables due to banks and financial institutions 142 8,427

V - Payables with secured guarantee 143 0

VI - Sundry loans and other financial payables 144 0

VII - Employee severance indemnities 145 6,311

VIII - Other payables

1. For taxes payable by policyholders 146 29,392

2. For sundry tax charges 147 52,776

3. Amounts due to social security and welfare institutions 148 1,672

4. Sundry payables 149 57,932 150 141,772

IX - Other liabilities

1. Transitory reinsurance accounts - payable 151 0

2. Commission for premiums being collected 152 18,606

3. Sundry liabilities 153 73,002 154 91,608 155 310,508

of which Liaison account with the life business 902 70,353 to be carried forward 5,220,382

Balances for the previous year

carry forward 4,338,637

308 3,277

309 0

310 26,391 311 29,668

312 24,561

313 14,425

314 3,359

315 14,076

316 0 317 31,860

318 30,274

319 0 320 30,274

321 0

322 5,000

323 0

324 0

325 5,683

326 12,052

327 86,558

328 1,314

329 40,913 330 140,837

331 0

332 18,738

333 30,335 334 49,073 335 262,727

904 27,917 to be carried forward 4,655,593

STATEMENT OF FINANCIAL POSITION - NON-LIFE BUSINESS LIABILITIES AND SHAREHOLDERS’ EQUITY

Balances for the year

carry forward 5,220,382

H. ACCRUALS AND DEFERRALS

1. For interest 156 319

2. For rental fees 157 0

3. Other accruals and deferrals 158 3,330 159 3,649

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 160 5,224,031

Balances for the previous year

carry forward 4,655,593

336 382

337 0

338 31 339 413

340 4,656,006

Notes to the Accounts - Attachment 2

Company CATTOLICA ASSICURAZIONI SOC. COOP.

STATEMENT OF FINANCIAL POSITION - LIFE BUSINESS

ASSETS

Balances for the year

A. AMOUNTS DUE FROM SHAREHOLDERS PER SUBSCRIBED SHARE CAPITAL NOT PAID IN 1 0

of which called capital 2 0

B. INTANGIBLE ASSETS

1. Acquisition commission to amortise 3 13,179

2. Other acquisition costs 6 0

3. Start-up and expansion costs 7 4,230

4. Goodwill 8 40,788

5. Other long-term costs 9 233 10 58,430

C. INVESTMENTS

I - Land and buildings

1. Property used for business activities 11 0

2. Property used by third parties 12 0

3. Other property 13 0

4. Other realty rights 14 0

5. Property under construction and advance payments 15 0 16 0

II - Investments in Group companies and other investees

1. Company shares and holdings:

a) parent companies 17 0

b) subsidiaries 18 164,450

c) affiliated companies 19 0

d) associated companies 20 0

e) other companies 21 34,910 22 199,360

2. Bonds issued by:

a) parent companies 23 0

b) subsidiaries 24 0

c) affiliated companies 25 0

d) associated companies 26 45

e) other companies 27 25,363 28 25,408

3. Loans to:

a) parent companies 29 0

b) subsidiaries 30 0

c) affiliated companies 31 0

d) associated companies 32 0

e) other companies 33 0 34 0 35 224,768 to be carried forward 58,430

Financial Year 2016

Balances for the previous year

181 0

182 0

183 12,551

186 0

187 5,885

188 52,713

189 603 190 71,752

191 0

192 0

193 0

194 0

195 0 196 0

197 0

198 262,745

199 0

200 0

201 39,079 202 301,824

203 0

204 0

205 0

206 5,178

207 19,253 208 24,431

209 0

210 0

211 0

212 0

213 0 214 0 215 326,255 to be carried forward 71,752

STATEMENT OF FINANCIAL POSITION - LIFE BUSINESS ASSETS

Balances for the year

carry forward 58,430

C. INVESTMENTS (continued)

III - Other financial investments

1. Shares and holdings

a) Listed shares 36 19,041

b) Unlisted shares 37 5,023 c) Holdings 38 0 39 24,064 2. Units of mutual investment funds 40 333,686

3. Bonds and other fixed income securities:

a) listed 41 4,144,502

b) unlisted 42 3,485 c) convertible bonds 43 131 44 4,148,118 4. Loans

a) loans with secured guarantee 45 0

b) loans on policies 46 1,713 c) other loans 47 0 48 1,713 5. Units in mutual investments 49 0 6. Deposits with credit institutions 50 0

7. Sundry financial investments 51 8 52 4,507,589

IV - Deposits with ceding companies 53 3,519 54 4,735,876

D. INVESTMENTS FOR BENEFITS OF LIFE-ASSURANCE POLICYHOLDERS WHO BEAR

THE INVESTMENT RISK AND DERIVING FROM THE MANAGEMENT OF PENSION FUNDS

I - Investments relating to benefits associated with investment funds and stock market indices 55 109,475

II - Investments deriving from the management of pension funds 56 872,744 57 982,219

D bis. TECHNICAL PROVISIONS - REINSURANCE AMOUNT

II - LIFE CLASSES

1. Mathematical provisions 63 24,453 2. Premium provision of supplementary insurance 64 0 3. Provision for outstanding claims 65 4,286 4. Reserve for profit-sharing and repayments 66 0 5. Other technical provisions 67 0 6. Technical provisions for contracts where the investment risk is borne by the policyholders and deriving from the management of pension funds 68 0 69 28,739 to be carried forward 5,805,264

Balances for the previous year

carry forward 71,752

216 67,609

217 2,418

218 0 219 70,027

220 288,494

221 3,885,946

222 3,999

223 0 224 3,889,945

225 0

226 2,679

227 0 228 2,679

229 0

230 10,000

231 19 232 4,261,164

233 3,721 234 4,591,140

235 91,122

236 1,085,637 237 1,176,759

243 28,487

244 0

245 5,624

246 0

247 0

248 0 249 34,111 to be carried forward 5,873,762

STATEMENT OF FINANCIAL POSITION - LIFE BUSINESS ASSETS Balances for the year

carry forward 5,805,264

E. RECEIVABLES

I - Receivables, deriving from direct insurance transactions, due from:

1. Policyholders

a) for premiums for the year 71 13,051

b) for premiums for previous years 72 1,390 73 14,441

2. Insurance brokers 74 38,371 3. Insurance companies - current accounts 75 -60

4. Policyholders and third parties for sums to be recovered 76 0 77 52,752

II - Receivables deriving from re-insurance transactions, due from:

1. Insurance and reinsurance companies 78 6,064

- 2. Reinsurance brokers 79 0 80 6,064

III - Other receivables 81 150,451 82 209,267

F. OTHER ASSET ITEMS

I - Tangible assets and inventories:

1. Furniture, office machines and internal means of transport 83 313

2. Movable assets recorded in public registers 84 19

3. Plant and equipment 85 52

4. Inventories and miscellaneous assets 86 0 87 384

II - Cash in bank and cash equivalent

1. Bank and postal account deposits 88 30,272

2. Cheques and cash amounts 89 1 90 30,273

IV - Other assets

1. Transitory reinsurance accounts - receivable 92 0

2. Sundry assets 93 96,601 94 96,601 95 127,258

of which Liaison account with the non-life business 901 70,353

G. ACCRUALS AND DEFERRALS

1. For interest 96 40,028

2. For rental fees 97 0

3. Other accruals and deferrals 98 71 99 40,099

TOTAL ASSETS 100 6,181,888

Balances for the previous year

carry forward 5,873,762

251 28,991

252 1,690 253 30,681

254 22,328

255 -86

256 0 257 52,923

258 1,425

259 0 260 1,425

261 149,009 262 203,357

263 307

264 48

265 68

266 0 267 423

268 25,622

269 8 270 25,630

272 0

273 48,439 274 48,439 275 74,492

903 27,917

276 41,328

277 0

278 72 279 41,400

280 6,193,011

STATEMENT OF FINANCIAL POSITION - LIFE BUSINESS LIABILITIES AND SHAREHOLDERS’ EQUITY

Balances for the year

A. SHAREHOLDERS' EQUITY

I - Subscribed share capital or equivalent fund 101 163,400

II - Share premium reserve 102 234,828

III - Revaluation reserves 103 25,267

IV - Legal reserve 104 51,272

V - Statutory reserves 105 0

VI - Reserve for own shares of the parent company 400 0

VII - Other reserves 107 3,779

VIII - Retained profits (losses) 108 0

IX - Profit (loss) for the year 109 -9,314

X - Negative reserve for own shares in portfolio 401 -11,798 110 457,434

B. SUBORDINATED LIABILITIES 111 40,000

C. TECHNICAL PROVISIONS

II - LIFE BUSINESS

1. Mathematical provisions 118 4,440,909

2. Premium provision of supplementary insurance 119 1,294

3. Provision for outstanding claims 120 95,485

4. Reserve for profit-sharing and repayments 121 18

5. Other technical provisions 122 31,419 123 4,569,125

D. TECHNICAL PROVISION FOR CONTRACTS WHERE THE INVESTMENT RISK IS BORNE BY THE POLICYHOLDERS AND PROVISIONS DERIVING FROM THE MANAGEMENT OF PENSION FUNDS

I - Provisions relating to contracts whose benefits are linked to investment funds and stock market indices 125 109,475

II - Provisions deriving from the management of pension funds 126 872,744 127 982,219 to be carried forward 6,048,778

Balances for the previous year

281 163,400

282 245,131

283 25,267

284 51,272

285 0

500 0

287 9,237

288 0

289 -15,607

501 -8,272 290 470,428

291 40,000

298 4,195,811

299 1,444

300 124,001

301 55

302 26,014 303 4,347,325

305 91,122

306 1,085,638 307 1,176,760 to be carried forward 6,034,513

STATEMENT OF FINANCIAL POSITION - LIFE BUSINESS LIABILITIES AND SHAREHOLDERS’ EQUITY

Balances for the year

carry forward 6,048,778

E. PROVISIONS FOR RISKS AND CHARGES

1. Provisions for pensions and similar commitments 128 643

2. Provision for taxation 129 582

3. Other provisions and allowances 130 11,020 131 12,245

F. DEPOSITS RECEIVED FROM RE-INSURERS 132 18,171

G. PAYABLES AND OTHER LIABILITIES

I - Payables, deriving from direct insurance transactions, due to:

1. Insurance brokers 133 1,699 2. Insurance companies - current accounts 134 258

3. Policyholders for guarantee deposits and premiums 135 6,767

4. Guarantee funds in favour of policyholders 136 0 137 8,724

II - Payables, deriving from reinsurance transactions, due to:

1. Insurance and reinsurance companies 138 658

2. Reinsurance brokers 139 0 140 658

III - Bond loans 141 0

IV - Payables due to banks and financial institutions 142 2,968

V - Payables with secured guarantee 143 0

VI - Sundry loans and other financial payables 144 0

VII - Employee severance indemnities 145 348

VIII - Other payables

1. For taxes payable by policyholders 146 516

2. For sundry tax charges 147 38,785

3. Amounts due to social security and welfare institutions 148 862

4. Sundry payables 149 33,943 150 74,106

IX - Other liabilities

1. Transitory reinsurance accounts - payable 151 0

2. Commission for premiums being collected 152 1,526

3. Sundry liabilities 153 8,695 154 10,221 155 97,025

of which Liaison account with the non-life business 902 0 to be carried forward 6,176,219

Balances for the previous year

carry forward 6,034,513

308 733

309 800

310 6,473 311 8,006

312 22,309

313 3,024

314 0

315 7,229

316 0 317 10,253

318 1,534

319 0 320 1,534

321 0

322 5,000

323 0

324 0

325 439

326 5,777

327 48,303

328 528

329 31,654 330 86,262

331 0

332 831

333 17,435 334 18,266 335 121,754

904 0 to be carried forward 6,186,582

STATEMENT OF FINANCIAL POSITION - LIFE BUSINESS LIABILITIES AND SHAREHOLDERS’ EQUITY

Balances for the year

carry forward 6,176,219

H. ACCRUALS AND DEFERRALS

1. For interest 156 5,558

2. For rental fees 157 0

3. Other accruals and deferrals 158 111 159 5,669

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 160 6,181,888

Balances for the previous year

carry forward 6,186,582

336 6,333

337 0

338 96 339 6,429

340 6,193,011

Notes to the Accounts - Attachment 3

Company CATTOLICA ASSICURAZIONI SOC. COOP. Financial Year 2016

Statement relating to the breakdown of the result for the year between non-life business and life business

Non-life business Life business Total

Result of technical account ………………………………………. 1 144,891 21 -1,399 41 143,492

Investments income ...... ………………………………………..... + 2 170,361 42 170,361

Equity and financial charges …………………………………...... - 3 80,838 43 80,838

Portions of profit from investments transferred from the technical account - life business ...... + 24 16,109 44 16,109

Portions of profit from investments transferred from the technical account - non-life business ...... - 5 57,116 45 57,116

Interim operating profit (loss)...... 6 177,298 26 14,710 46 192,008

Other income...... + 7 39,012 27 9,693 47 48,705

Other charges...... - 8 88,588 28 32,161 48 120,749

Extraordinary income...... + 9 5,377 29 461 49 5,838

Extraordinary expense...... - 10 6,734 30 2,780 50 9,514

Profit (loss) before taxation...... 11 126,365 31 -10,077 51 116,288

Income taxes for the year ...... - 12 53,343 32 -763 52 52,580

Profit (loss) for the year ...... 13 73,022 33 -9,314 53 63,708

Notes to the Accounts - Attachment 4

Financial Year 2016

Company CATTOLICA ASSICURAZIONI SOC. COOP.

Assets - Changes during the year in intangible assets (item B) and land and buildings (item C.I)

Intangible assets Land and buildings

B C.I

Gross opening balances ...... + 1 376,204 31 53,621

Increases during the year ...... + 2 44,886 32 80,340 for: purchases or increases ...... 3 30,333 33 212

reversal of impairment losses...... 4 0 34 0

Revaluations ...... 5 0 35 0

other changes ...... 6 14,553 36 80,128

Decreases during the year ...... - 7 0 37 0 for: sales or decreases ...... 8 0 38 0

permanent writedowns ...... 9 0 39 0

other changes ...... 10 0 40 0

Gross closing balances (a) ...... 11 421,090 41 133,961

Amortisation/depreciation:

Opening balances ...... + 12 169,467 42 14,241

Increases during the year ...... + 13 44,307 43 18,459 for: depreciation/amortisation charge for the year ...... 14 32,550 44 2,950

other changes ...... 15 11,757 45 15,509

Decreases during the year ...... - 16 0 46 0 for: reductions due to disposals ...... 17 0 47 0

other changes ...... 18 0 48 0

Closing balances - amortisation/depreciation (b) (*) ...... 19 213,774 49 32,700

Book value (a - b) ...... 20 207,316 50 101,261

Current value...... 51 106,680

Total revaluations ...... 22 52 0

Total writedowns ...... 23 0 53 0

Page deliberately left blank

Notes to the Accounts - Attachment 5

Company CATTOLICA ASSICURAZIONI SOC. COOP. Financial Year 2016

Assets - Changes during the year in investments in Group companies and other investees: shares and holdings (item C.II.1), bonds (item C.II.2) and loans (item C.II.3)

Shares and holdings Bonds Loans C.II.1 C.II.2 C.II.3

Opening balances ...... + 1 1,071,318 21 25,140 41 5,001

Increases during the year: ...... + 2 138,073 22 14,043 42 0 for: purchases, subscriptions or disbursements ...... 3 83 23 13,973 43 0

reversal of impairment losses ...... 4 0 24 0 44 0

revaluations ...... 5 0

other changes ...... 6 137,990 26 70 46 0

Decreases during the year: ...... - 7 269,572 27 6,850 47 5,001 for: sales or reimbursements ...... 8 1,479 28 959 48 5,001

writedowns ...... 9 46,286 29 5,891 49 0

other changes ...... 10 221,807 30 0 50 0

Book value ...... 11 939,819 31 32,333 51 0

Current value ...... 12 926,946 32 33,608 52 0

Total revaluations ...... 13 0

Total writedowns ...... 14 46,286 34 5,891 54 0

The item C.II.2 includes:

Listed bonds ...... 61 32,282

Unlisted bonds ...... 62 51

Book value ...... 63 32,333 of which convertible bonds ...... 64 0

Company CATTOLICA ASSICURAZIONI SOC. COOP.

Assets - Statement containing information relating to investee companies (*)

Ord. Type Listed or Activities Name and registered offices Currency No. unlisted carried out (**) (1) (2) (3) 9 b NL 1 ABC ASSICURA SPA - VERONA 242 81 b NL 1 AGENZIA GENERALE AGRIFIDES SRL - ROME 242 4 b NL 1 BCC ASSICURAZIONI SPA - MILAN 242 67 b NL 1 BCC VITA SPA - MILAN 242 57 b NL 1 BERICA VITA SPA - VICENZA 242 74 b NL 4 CATTOLICA AGRICOLA SARL - VERONA 242 75 b NL 4 CATTOLICA BENI IMMOBILI SRL - VERONA 242 10 b NL 9 CATTOLICA IMMOBILIARE SPA - VERONA 242 59 b NL 1 CATTOLICA LIFE DAC - DUBLIN (IRELAND) 242 52 b NL 9 CATTOLICA SERVICES SCPA - VERONA 242 80 b NL 9 C.P. SERVIZI CONSULENZIALI SPA - VERONA 242 79 b NL 1 FATA ASSICURAZIONI DANNI SPA - ROME 242 7 b NL 1 LOMBARDA VITA SPA - BRESCIA 242 19 b NL 9 PRISMA SRL - IN LIQUIDAZIONE - MILAN 242 71 b NL 1 TUA ASSICURAZIONI SPA - MILAN 242 77 d NL 9 ALL RISKS SOLUTIONS SRL - ROME 242 16 d NL 3 CASSA DI RISPARMIO DI SAN MINIATO SPA - SAN MINIATO (PISA) 242 83 e NL 3 BANCA DI CREDITO POPOLARE SCPA - TORRE DEL GRECO (NAPLES) 242 84 e NL 3 BANCA DI SALERNO CREDITO COOPERATIVO SCPA - SALERNO 242 63 e NL 3 BANCA POPOLARE DI VICENZA SPA - VICENZA 242 26 e NL 2 COMPAGNIA INVESTIMENTI E SVILUPPO SPA - VERONA 242 42 e NL 3 EMIL BANCA CREDIT COOPERATIVO SCPA - BOLOGNA 242 73 e NL 9 VERONAFIERE SPA - VERONA 242 78 e L 9 H-FARM SPA - RONCADE (TREVISO) 242 34 e NL 9 INFRACOM ITALIA SPA - VERONA 242 69 e NL 2 INTERMONTE SIM SPA - MILAN 242 54 e NL 2 ISTITUTO ATESINO PER LO SVILUPPO SPA - TRENTO 242 85 e NL 9 ISTITUTO DI CERTIFICAZIONE ETICA NELLO SPORT SPA - VERONA 242 82 e NL 9 NUMMUS.INFO SPA - TRENTO 242 62 e L 3 UBI BANCA SPA - BERGAMO 242 30 e NL 9 U.C.I. SCARL - MILAN 242 37 e NL 6 VEGAGEST SGR SPA - MILAN 242 76 e NL 3 VENETO BANCA SPA - MONTEBELLUNA (TREVISO) 242 35 e NL 2 VERFIN SPA - VERONA 242

(*) The Group companies and the other companies in which a holding is directly held also via trust companies or third parties, must be listed (**) The order number must be higher than "0"

(1) (3) Activities carried out (4) Amounts in original currency T a = Parent companies 1 = Insurance company b = Subsidiaries 2 = Finance company (5) Indicate the total holding held c = Affiliated companies 3 = Credit institution d = Associated companies 4 = Real estate property company e = Others 5 = Trust company 6 = Mutual investment fund management or distribution company (2) Indicate L for securities listed on organised 7 = Consortium k and NL for the others 8 = Industrial company 9 = Other company or body

Notes to the Accounts - Attachment 6

Financial Year 2016

Share capital Holding (5) Shareholders' equity (***) Profit or Loss Amount Number of for the last year (***) Direct Indirect Total (4) shares (4) (4) % % % 8,925 17,500,000 15,543 282 60.00 60.00 10 2 36 27 51.00 51.00 14,448 2,889,600 12,067 -2,272 51.00 51.00 62,000 62,000,000 156,806 9,055 51.00 51.00 31,000 3,100,000 74,160 8,972 60.00 60.00 35,500 1 133,163 1,292 100.00 100.00 7,000 1 45,312 -841 100.00 100.00 400 400,000 3,030 9 100.00 100.00 635 634,850 23,421 814 60.00 60.00 20,954 20,954,083 60,604 22 99.96 0.03 99.99 120 24,000 2,832 -3,174 100.00 100.00

185,300 37,060,000 272,609 23,588 60.00 60.00

23,161 4,632,126 133,232 9,803 99.99 99.99 10 3 63 20 20.00 20.00 177,215 22,151,924 181,250 -67,603 25.12 25.12 20,113 7,795,819 1.01 1.01 1,516 574,379 4.54 4.54 677,204 15,100,587,829 0.01 0.01

57,723 2,235,608 0.17 0.17 63,265 12 6.64 6.64 8,924 89,241,650 4.49 4.49

45,950 45,950,000 11.61 11.61

270 270,000 3.70 3.70 580 580,000 10.78 10.78 2,440,751 976,300,395 0.50 0.50 529 1,037,000 2.19 1.82 4.01 5,771 5,770,956 17.74 17.74

6,553 1,270,000 3.94 3.94

(***) To be filled in only for subsidiary and associated companies

Company CATTOLICA ASSICURAZIONI SOC. COOP.

Assets - Breakdown of the changes in investments in Group companies and other investees: shares and holdings

Ord. Type Name Increases during the year No. For purchases Other (1) (2) (3) Quantity Value increases 9 b D ABC ASSICURA SPA 00 0 81 b D AGENZIA GENERALE AGRIFIDES SRL 15 0 4 b D BCC ASSICURAZIONI SPA 00 0 67 b D BCC VITA SPA 00 7,650 67 b V BCC VITA SPA 00 7,650 57 b D BERICA VITA SPA 00 0 57 b V BERICA VITA SPA 00 0 74 b D CATTOLICA AGRICOLA SARL 0 0 37,000 75 b D CATTOLICA BENI IMMOBILI SRL 0 0 26,400 10 b D CATTOLICA IMMOBILIARE SPA 00 0 10 b V CATTOLICA IMMOBILIARE SPA 00 0 59 b D CATTOLICA LIFE DAC 00 0 59 b V CATTOLICA LIFE DAC 00 0 52 b D CATTOLICA SERVICES SCPA 0 0 29,936 52 b V CATTOLICA SERVICES SCPA 00 65 7 b D LOMBARDA VITA SPA 00 0 7 b V LOMBARDA VITA SPA 00 0 71 b D TUA ASSICURAZIONI SPA 0 0 20,192 71 b V TUA ASSICURAZIONI SPA 00 4,808 80 b V C.P. SERVIZI CONSULENZIALI SPA 00 0 79 b D FATA ASSICURAZIONI DANNI SPA 00 0 79 b V FATA ASSICURAZIONI DANNI SPA 00 0 19 b D PRISMA SRL - IN LIQUIDATION 00 0 16 d D CASSA DI RISPARMIO DI SAN MINIATO SPA 00 0 77 d D ALL RISKS SOLUTIONS SRL 00 0

Total C.II.1

a Parent companies

b Subsidiaries

c Affiliated companies

d Associated companies

e Other

Total D.I

Total D.II

(1) Must correspond with that indicated in Attachment 6 (3) Indicate: D for the investments assigned to the non-life business (item C.II.1) (2) Type V for the investments assigned to the life business (item C.II.1) a = Parent companies V1 for the investments assigned to the life business (item D.I) b = Subsidiaries V2 for the investments assigned to the life business (item D.2) c = Affiliated companies The investment, even if split, must however be d = Associated companies assigned the same order number e = Others

Notes to the Accounts - Attachment 7 Financial Year 2016

Decreases during the year Book value (4) Purchase Current For sales Other Quantity Value cost value Quantity Value decreases

0 0 0 10,500,000 15,649 15,649 15,649 0 0 0 1 55 5 0 0 0 1,473,696 5,739 10,639 5,739 0 0 0 15,810,000 48,904 57,304 48,904 0 0 0 15,810,000 48,904 57,304 48,904 0 0 0 930,000 45,000 45,000 45,000 0 0 0 930,000 45,000 45,000 45,000 0 0 0 1 137,500 137,500 137,500 0 0 0 1 48,500 48,500 48,500 0 0 0 313,250 2,366 3,433 2,366 0 0 0 86,750 655 951 655 0 0 0 190,455 16,550 16,550 16,550 0 0 0 190,455 16,550 16,550 16,550 0 0 0 20,900,369 60,349 65,537 60,349 0 0 0 45,714 132 141 132 0 0 0 19,948,000 214,313 245,712 214,313 0 0 0 2,288,000 24,581 28,183 24,581 0 0 0 3,741,166 108,470 108,470 108,470 0 0 0 890,834 25,828 25,828 25,828 0 0 3,207 24,000 2,799 9,971 2,799 0 0 107,611 0 00 0 0 0 107,611 0 00 0 0 0 0 0 00 0 0 0 34,498 5,564,136 556 96,138 556 0 0 0 1 22 2

(4) Indicate using (*) if carried at equity (only for Type b and d)

Company CATTOLICA ASSICURAZIONI SOC. COOP.

Assets - Breakdown of the changes in investments in Group companies and other investees: shares and holdings

Ord. Type Name Increases during the year No. For purchases Other (1) (2) (3) Quantity Value increases 83 e V BANCA DI CREDITO POPOLARE SCPA 00 2,376 84 e D BANCA DI SALERNO CREDITO COOPERATIVO SCPA 00 41 84 e V BANCA DI SALERNO CREDITO COOPERATIVO SCPA 00 41 63 e D BANCA POPOLARE DI VICENZA SPA 00 0 26 e V COMPAGNIA INVESTIMENTI E SVILUPPO SPA 00 0 42 e D EMIL BANCA CREDITO COOPERATIVO SCPA 00 276 34 e D INFRACOM ITALIA SPA 00 0 69 e V INTERMONTE SIM SPA 00 0 54 e V ISTITUTO ATESINO PER LO SVILUPPO SPA 00 0 85 e D ISTITUTO DI CERTIFICAZIONE ETICA NELLO SPORT SPA 00 10 30 e D U.C.I. SCARL 00 0 62 e D UBI BANCA SPA 00 1,545 62 e V UBI BANCA SPA 00 0 37 e V VEGAGEST SGR SPA 00 0 76 e D VENETO BANCA SPA 00 0 35 e D VERFIN SPA 00 0 73 e V VERONAFIERE SPA 00 0 78 e V H-FARM SPA 00 0 78 e D H-FARM SPA 00 0 82 e D NUMMUS.INFO SPA 62,500 78 0

Total C.II.1 83 137,990

a Parent companies

b Subsidiaries 5 133,701

c Affiliated companies

d Associated companies 0 0

e Other 78 4,289

Total D.I 0 0

Total D.II 0 0

Notes to the Accounts - Attachment 7 Financial Year 2016

Decreases during the year Book value (4) Purchase Current For sales Other Quantity Value cost value Quantity Value decreases

0 0 0 78,521 2,376 2,376 3,181 0 0 0 13,042 41 41 405 0 0 0 13,042 41 41 405 0 0 5,547 894,674 89 53,618 89 0 0 134 0 00 0 0 0 0 3,734 317 317 519 0 0 14 0 00 0 0 0 0 5,333,333 19,200 19,200 30,468 0 0 5,000 0 00 0 0 0 0 10,000 10 10 10 0 0 0 22,664 07 0 0 0 2,469 4,850,000 35,115 36,040 12,668 250,000 1,453 0 0 00 0 0 0 0 1,023,844 0 5,612 0 3,567 26 2,002 0 00 0 0 0 0 50,000 429 516 460 0 0 0 1 10,148 10,148 7,666 0 0 0 3,475,000 3,145 3,145 2,294 0 0 0 531,111 478 478 351 0 0 0 62,500 78 78 78

1,479 268,093 939,819 1,165,994 926,946

0 218,429 867,794 938,227 867,794

0 34,498 558 96,140 558 1,479 15,166 71,467 131,627 58,594 0 0 0 0 0 0 0 0 0 0

(4) Indicate using (*) if carried at equity (only for Type b and d)

Notes to the Accounts - Attachment 8 Company CATTOLICA ASSICURAZIONI SOC. COOP. Financial Year 2016 Assets - Breakdown on the basis of the use of other financial investments: company shares and holdings, units of mutual investment funds, bonds and other fixed income securities, units in mutual investments and sundry financial investments (items C.III.1, 2, 3, 5, 7) I - Non-life business Portfolio for permanent use Portfolio for non-permanent use Total Book value Current value Book value Current value Book value Current value 1. Company shares and holdings: 1 0 21 0 41 24,339 61 24,703 81 24,339 101 24,703

a) listed shares ...... 2 0 22 0 42 22,899 62 22,986 82 22,899 102 22,986

b) unlisted shares ...... 3 0 23 0 43 1,440 63 1,717 83 1,440 103 1,717

c) holdings ...... 4 0 24 0 44 0 64 0 84 0 104 0

2. Units of mutual investment funds ...... 5 0 25 0 45 373,862 65 397,873 85 373,862 105 397,873

3. Bonds and other fixed income securities .. 6 539,758 26 611,330 46 2,000,274 66 2,036,138 86 2,540,032 106 2,647,468

a1) listed government securities ...... 7 308,742 27 336,092 47 1,556,543 67 1,581,122 87 1,865,285 107 1,917,214

a2) other listed securities ...... 8 226,386 28 270,638 48 443,544 68 454,822 88 669,930 108 725,460

b1) unlisted government securities ...... 9 0 29 0 49 0 69 0 89 0 109 0

b2) other unlisted securities ...... 10 4,630 30 4,600 50 187 70 194 90 4,817 110 4,794

c) convertible bonds ...... 11 0 31 0 51 0 71 0 91 0 111 0

5. Units in mutual investments ...... 12 0 32 0 52 0 72 0 92 0 112 0

7. Sundry financial investments ...... 13 0 33 0 53 16 73 16 93 16 113 16

II - Life Business Portfolio for permanent use Portfolio for non-permanent use Total Book value Current value Book value Current value Book value Current value 1. Company shares and holdings: 121 0 141 0 161 24,064 181 25,591 201 24,064 221 25,591

a) listed shares ...... 122 0 142 0 162 19,041 182 19,566 202 19,041 222 19,566

b) unlisted shares ...... 123 0 143 0 163 5,023 183 6,025 203 5,023 223 6,025

c) holdings ...... 124 0 144 0 164 0 184 0 204 0 224 0

2. Units of mutual investment funds ...... 125 0 145 0 165 333,686 185 366,903 205 333,686 225 366,903

3. Bonds and other fixed income securities... 126 993,518 146 1,183,160 166 3,154,600 186 3,307,915 206 4,148,118 226 4,491,075

a1) listed government securities ...... 127 692,900 147 810,677 167 2,237,729 187 2,336,121 207 2,930,629 227 3,146,798

a2) other listed securities ...... 128 298,986 148 370,851 168 914,887 188 969,797 208 1,213,873 228 1,340,648

b1) unlisted government securities ...... 129 1,632 149 1,632 169 1,610 189 1,623 209 3,242 229 3,255

b2) other unlisted securities ...... 130 0 150 0 170 243 190 243 210 243 230 243

c) convertible bonds ...... 131 0 151 0 171 131 191 131 211 131 231 131

5. Units in mutual investments ...... 132 0 152 0 172 0 192 0 212 0 232 0

7. Sundry financial investments ...... 133 0 153 0 173 8 193 32 213 8 233 32

Notes to the Accounts - Attachment 9

Company CATTOLICA ASSICURAZIONI SOC. COOP. Financial Year 2016

Assets - Changes during the year in other financial investments for permanent use: company shares and holdings, units of mutual investment funds, bonds and other fixed income units in mutual investments and sundry financial investments (items C.III.1, 2, 3, 5, 7)

Shares and holdings Units of mutual Bonds and other Units in mutual Sundry financial fixed income investment funds investments investments securities C.III.1 C.III.2 C.III.3 C.III.5 C.III.7

Opening balances ...... + 1 334 21 0 41 1,407,134 81 0 101 0

Increases during the year: ...... + 2 0 22 0 42 135,245 82 0 102 0 for: purchases ...... 3 0 23 0 43 0 83 0 103 0

reversal of impairment losses ...... 4 0 24 0 44 0 84 0 104 0

transfers from non-permanent portfolio ...... 5 0 25 0 45 0 85 0 105 0

other changes ...... 6 0 26 0 46 135,245 86 0 106 0

Decreases during the year: ...... - 7 334 27 0 47 9,103 87 0 107 0 for: sales ...... 8 0 28 0 48 7,032 88 0 108 0

writedowns ...... 9 0 29 0 49 1,171 89 0 109 0

transfers to non-permanent portfolio ...... 10 321 30 0 50 0 90 0 110 0

other changes ...... 11 13 31 0 51 900 91 0 111 0

Book value ...... 12 0 32 0 52 1,533,276 92 0 112 0

Current value ...... 13 0 33 0 53 1,794,490 93 0 113 0

Notes to the Accounts - Attachment 10

Financial Year 2016

Company CATTOLICA ASSICURAZIONI SOC. COOP.

Assets - Changes during the year in loans and deposits with credit institutions (items C.III.4, 6)

Loans Deposits with credit institutions C.III.4 C.III.6

Opening balances ...... + 1 4,480 21 10,000

Increases during the year: ...... + 2 212 22 0 for: disbursements ...... 3 150

reversal of impairment losses ...... 4 0

other changes ...... 5 62

Decreases during the year: ...... - 6 1,184 26 10,000 for: reimbursements ...... 7 1,184

writedowns ...... 8 0

other changes ...... 9 0

Book value ...... 10 3,508 30 0

Notes to the Accounts - Attachment 11

Company CATTOLICA ASSICURAZIONI SOC. COOP. Financial Year 2016

Assets - Statement of assets relating to benefits associated with investment funds and stock market indices (item D.I)

01 Fund code: 01 Fund description: Index

Current value Acquisition cost Financial Year Previous year Financial Year Previous year

I. Land and buildings ...... 1 0 21 0 41 0 61 0

II. Investments in Group companies and other investees:

1. Shares and holdings ...... 2 0 22 0 42 0 62 0

2. Bonds ...... 3 0 23 0 43 0 63 0

3. Loans ...... 4 0 24 0 44 0 64 0

III. Units of mutual investment funds ...... 5 0 25 0 45 0 65 0

IV. Other financial investments:

1. Shares and holdings ...... 6 239 26 961 46 7,074 66 7,396

2. Bonds and other fixed income securities ...... 7 0 27 0 47 0 67 0

3. Deposits with credit institutions ...... 8 0 28 0 48 0 68 0

4. Sundry financial investments ...... 9 0 29 0 49 0 69 0

V. Other assets ...... 10 0 30 0 50 0 70 0

VI. Cash in bank and cash equivalent ...... 11 0 31 0 51 0 71 0

Other liabilities 12 0 32 0 52 0 72 0

13 0 33 0 53 0 73 0

Total ...... 14 239 34 961 54 7,074 74 7,396

Notes to the Accounts - Attachment 11

Company CATTOLICA ASSICURAZIONI SOC. COOP. Financial Year 2016

Assets - Statement of assets relating to benefits associated with investment funds and stock market indices (item D.I)

02 Fund code: 02 Fund description: Unit

Current value Acquisition cost Financial Year Previous year Financial Year Previous year

I. Land and buildings ...... 1 0 21 0 41 0 61 0

II. Investments in Group companies and other investees:

1. Shares and holdings ...... 2 0 22 0 42 0 62 0

2. Bonds ...... 3 0 23 0 43 0 63 0

3. Loans ...... 4 0 24 0 44 0 64 0

III. Units of mutual investment funds ...... 5 81,146 25 71,700 45 77,175 65 68,500

IV. Other financial investments:

1. Shares and holdings ...... 6 0 26 0 46 0 66 0

2. Bonds and other fixed income securities ...... 7 26,154 27 15,367 47 26,915 67 15,289

3. Deposits with credit institutions ...... 8 0 28 0 48 0 68 0

4. Sundry financial investments ...... 9 0 29 0 49 0 69 0

V. Other assets ...... 10 1,804 30 234 50 1,804 70 234

VI. Cash in bank and cash equivalent ...... 11 1,160 31 3,699 51 1,160 71 3,699

Other liabilities 12 -1,028 32 -839 52 -1,028 72 -839

13 0 33 0 53 0 73 0

Total ...... 14 109,236 34 90,161 54 106,026 74 86,883

Notes to the Accounts - Attachment 11

Company CATTOLICA ASSICURAZIONI SOC. COOP. Financial Year 2016

Assets - Statement of assets relating to benefits associated with investment funds and stock market indices (item D.I)

Fund code: Fund description: TOTAL

Current value Acquisition cost Financial Year Previous year Financial Year Previous year

I. Land and buildings ...... 1 0 21 0 41 0 61 0

II. Investments in Group companies and other investees:

1. Shares and holdings ...... 2 0 22 0 42 0 62 0

2. Bonds ...... 3 0 23 0 43 0 63 0

3. Loans ...... 4 0 24 0 44 0 64 0

III. Units of mutual investment funds ...... 5 81,146 25 71,700 45 77,175 65 68,500

IV. Other financial investments:

1. Shares and holdings ...... 6 239 26 961 46 7,074 66 7,396

2. Bonds and other fixed income securities ...... 7 26,154 27 15,367 47 26,915 67 15,289

3. Deposits with credit institutions ...... 8 0 28 0 48 0 68 0

4. Sundry financial investments ...... 9 0 29 0 49 0 69 0

V. Other assets ...... 10 1,804 30 234 50 1,804 70 234

VI. Cash in bank and cash equivalent ...... 11 1,160 31 3,699 51 1,160 71 3,699

Other liabilities 12 -1,028 32 -839 52 -1,028 72 -839

13 0 33 0 53 0 73 0

Total ...... 14 109,475 34 91,122 54 113,100 74 94,279

Notes to the Accounts - Attachment 12

Company CATTOLICA ASSICURAZIONI SOC. COOP. Financial Year 2016

Assets - Statement of assets deriving from the management of pension funds (item D.II)

01 Code: 01 Pension fund description: Pension Funds

Current value Acquisition cost Financial Year Previous year Financial Year Previous year

I. Investments in Group companies and other investees:

1. Shares and holdings ...... 1 0 21 0 41 0 61 0

2. Bonds ...... 2 0 22 2,099 42 0 62 2,134

II. Other financial investments:

1. Shares and holdings ...... 3 21,780 23 29,291 43 24,246 63 29,595

2. Bonds and other fixed income securities ...... 4 795,531 24 821,907 44 802,363 64 823,412

3. Units of mutual investment funds ...... 5 48,391 25 38,117 45 45,219 65 36,846

4. Deposits with credit institutions ...... 6 0 26 0 46 0 66 0

5. Sundry financial investments ...... 7 0 27 0 47 0 67 0

III. Other assets ...... 8 1,364 28 5,531 48 1,364 68 5,531

IV. Cash in bank and cash equivalent ...... 9 7,135 29 190,353 49 7,135 69 190,353

Other liabilities 10 -1,457 30 -1,661 50 -1,457 70 -1,661

11 0 31 0 51 0 71 0

Total ...... 12 872,744 32 1,085,637 52 878,870 72 1,086,210

Notes to the Accounts - Attachment 13

Company CATTOLICA ASSICURAZIONI SOC. COOP. Financial Year 2016

Liabilities - Changes during the year in the components of the premium provision (item C.I.1) and the provision for outstanding claims (item C.I.2) of the non-life classes

Type Financial Year Previous year Change

Premium provision:

Provisions for unearned premiums ...... 1 671,881 11 562,326 21 109,555

Provision for risks in progress ...... 2 11,252 12 10,685 22 567

Book value ...... 3 683,133 13 573,011 23 110,122

Provision for outstanding claims:

Provision for compensation and direct expenses ...... 4 2,262,990 14 1,886,695 24 376,295

Provision for settlement costs ...... 5 101,663 15 98,246 25 3,417

Provision for claims not reported ...... 6 213,009 16 214,806 26 -1,797

Book value ...... 7 2,577,662 17 2,199,747 27 377,915

Notes to the Accounts - Attachment 14

Company CATTOLICA ASSICURAZIONI SOC. COOP. Financial Year 2016

Liabilities - Changes during the year in the components of the mathematical provisions (item C.II.1) and the provision for profit-sharing and repayments (item C.II.4)

Type Financial Year Previous year Change

Mathematical provision for pure premiums ...... 1 4,360,410 11 4,105,502 21 254,908

Premium carry forward...... 2 23,213 12 23,483 22 -270

Provision for mortality risk ...... 3 1,824 13 3,210 23 -1,386

Integration provisions ...... 4 55,462 14 63,616 24 -8,154

Book value ...... 5 4,440,909 15 4,195,811 25 245,098

Provision for profit-sharing and repayments ...... 6 18 16 55 26 -37

Notes to the Accounts - Attachment 15

Company CATTOLICA ASSICURAZIONI SOC. COOP. Financial Year 2016

Liabilities - Changes during the year in provisions for risks and charges (item E) and employee severance indemnities (item G.VII)

Provision for Employee pensions and similar Provision for taxation Other provisions and severance commitments allowances indemnities

Opening balances ...... + 1 4,010 11 800 21 32,864 31 6,122

Provisions for the year ...... + 2 0 12 7,749 22 26,914 32 3,366

Other increases ...... + 3 0 13 1,344 23 8,518 33 2,647

Uses for the year ...... - 4 625 14 837 24 14,882 34 4,661

Other decreases ...... - 5 1 15 0 25 0 35 815

Book value ...... 6 3,384 16 9,056 26 53,414 36 6,659

Notes to the Accounts - Attachment 16

Company CATTOLICA ASSICURAZIONI SOC. COOP. Financial Year 2016

Analytical statement of assets and liabilities relating to group companies and other investees

I: Assets

Parent Affiliated Associated Subsidiaries Other Total companies companies companies

Shares and holdings ...... 1 0 2 867,794 3 0 4 558 5 71,467 6 939,819 Bonds ...... 7 0 8 0 9 0 10 51 11 32,282 12 32,333 Loans ...... 13 0 14 0 15 0 16 0 17 0 18 0

Units in mutual investments ...... 19 0 20 0 21 0 22 0 23 0 24 0

Deposits with credit institutions ...... 25 0 26 0 27 0 28 0 29 0 30 0

Sundry financial investments ...... 31 0 32 0 33 0 34 0 35 0 36 0

Deposits with ceding companies ...... 37 0 38 0 39 0 40 0 41 0 42 0

Investments relating to benefits associated with investment funds and stock market indices ...... 43 0 44 0 45 0 46 0 47 0 48 0

Investments deriving from the management of pension funds ...... 49 0 50 0 51 0 52 0 53 0 54 0

Receivables deriving from direct insurance transactions ...... 55 0 56 1,547 57 0 58 17 59 39 60 1,603

Receivables deriving from reinsurance transactions ...... 61 0 62 3,415 63 0 64 0 65 0 66 3,415

Other receivables ...... 67 0 68 34,746 69 0 70 0 71 0 72 34,746

Bank and postal account deposits ...... 73 0 74 0 75 0 76 620 77 22,097 78 22,717

Sundry assets ...... 79 0 80 0 81 0 82 0 83 0 84 0

Total ...... 85 0 86 907,502 87 0 88 1,246 89 125,885 90 1,034,633 of which subordinated assets ...... 91 0 92 0 93 0 94 51 95 13,917 96 13,968

Analytical statement of assets and liabilities relating to group companies and other investees

II: Liabilities

Parent Affiliated Associated Subsidiaries Other Total companies companies companies

Subordinated liabilities ...... 97 0 98 0 99 0 100 0 101 80,000 102 80,000

Deposits received from re-insurers ...... 103 0 104 0 105 0 106 0 107 0 108 0

Payables deriving from direct insurance transactions ...... 109 0 110 32 111 0 112 4 113 7 114 43

Payables deriving from reinsurance transactions ...... 115 0 116 0 117 0 118 0 119 0 120 0

Payables due to banks and financial institutions ...... 121 0 122 0 123 0 124 0 125 0 126 0

Payables with secured guarantee ...... 127 0 128 0 129 0 130 0 131 0 132 0

Other loans and other financial payables ...... 133 0 134 0 135 0 136 0 137 0 138 0

Sundry payables ...... 139 0 140 37,743 141 0 142 0 143 0 144 37,743

Sundry liabilities ...... 145 0 146 0 147 0 148 0 149 0 150 0

Total ...... 151 0 152 37,775 153 0 154 4 155 80,007 156 117,786

Notes to the Accounts - Attachment 17 Company CATTOLICA ASSICURAZIONI SOC. COOP. Financial Year 2016

Disclosure on “guarantees, commitments and other memorandum accounts”

Financial Year Previous year

I. Guarantees given: a) sureties and endorsements given in the interests of parent, subsidiary and affiliated companies ...... 1 0 31 0 b) sureties and endorsements given in the interests of associated and other investee companies ...... 2 0 32 0 sureties and endorsements given in the interests of third c) parties ...... 3 78,154 33 61,709 d) other unsecured guarantees given in the interests of parent, subsidiary and affiliated companies ...... 4 3,160 34 4,139 e) other unsecured guarantees given in the interests of associated and other investee companies ...... 5 0 35 0 other unsecured guarantees given in the interests of third f) parties ...... 6 0 36 0 g) secured guarantees for bonds of parent. subsidiary and affiliated companies ...... 7 0 37 0 h) secured guarantees for bonds of associated and other investee companies ...... 8 0 38 0 i) secured guarantees for bonds of third parties …...... 9 0 39 0 l) guarantees given for bonds of the company ...... 10 9,114 40 9,047 m) assets lodged under deposit for reinsurance transactions ...... 11 0 41 0

Total ...... 12 90,428 42 74,895

II. Guarantees received: a) from Group and associated companies and other investees ...... 13 60 43 60 b) from third parties ...... 14 145,502 44 135,314

Total ...... 15 145,562 45 135,374 Guarantees given by third parties in the interests of the III. company: a) from Group and associated companies and other investees ...... 16 0 46 0 b) from third parties ...... 17 0 47 0

Total ...... 18 0 48 0

IV. Commitments: a) commitments for purchases with obligation to resell ………… 19 0 49 0 b) commitments for sales with obligation to repurchase ...... 20 0 50 0 c) other commitments ...... 21 72,651 51 42,416

Total ...... 22 72,651 52 42,416 V. Assets pertaining to pension funds managed in the name and on behalf of third parties 23 0 53 0

VI. Securities lodged with third parties ….…………...……..….. 24 9,389,519 54 8,733,175

Total ...... 25 9,389,519 55 8,733,175

Notes to the Accounts - Attachment 18

Company CATTOLICA ASSICURAZIONI SOC. COOP. Financial Year 2016

Statement of commitments for transactions on derivative contracts

Financial Year Previous year

Derivative contracts Purchase Sale Purchase Sale

(1) (2) (1) (2) (1) (2) (1) (2)

1 21 61 Futures: on shares 0 101 0 0 121 0 41 0 141 0 0 161 0 2 22 62 on bonds 0 102 0 0 122 0 42 0 142 0 0 162 0 3 23 63 on currency 0 103 0 0 123 0 43 0 143 0 0 163 0 4 24 64 on rates 0 104 0 0 124 0 44 0 144 0 0 164 0 5 25 65 other 0 105 0 0 125 0 45 0 145 0 0 165 0

6 26 66 Options: on shares 0 106 0 0 126 0 46 0 146 0 0 166 0 7 27 67 on bonds 0 107 0 0 127 0 47 0 147 0 0 167 0 8 28 68 on currency 0 108 0 0 128 0 48 0 148 0 0 168 0 9 29 69 on rates 0 109 0 0 129 0 49 0 149 0 0 169 0 10 30 50 70 other 0 110 0 0 130 0 0 150 0 0 170 0

11 31 51 71 Swaps: on currency 0 111 0 0 131 0 0 151 0 0 171 0 12 32 52 72 on rates 0 112 0 0 132 0 0 152 0 0 172 0 13 33 53 73 other 0 113 0 0 133 0 0 153 0 0 173 0

14 34 54 74 Other transactions 0 114 0 0 134 0 0 154 0 0 174 0

Total ...... 15 0 115 0 35 0 135 0 55 0 155 0 75 0 175 0

Only the transactions on derivative contracts outstanding as of the date the financial statements are drawn up which involve commitments for the company must be inserted. In the event that the contract does not exactly correspond to the figures described or in which characteristic elements of several types converge, said contract must be inserted in the nearest applicable contractual category. Offsetting of items is not permitted unless in relation to purchase/sale transactions referring to the same type of contract (same content, maturity, underlying assets, etc.).

The contracts which envisage the exchange of two currencies must be indicated just once, conventionally making reference to the currency to be purchased. The contracts which envisage both the exchange of interest rates and the exchange of currency are only indicated under the contracts on currency. The derivative contracts which envisage the exchange of interest rates are conventionally classified as “purchases” or as “sales” depending on whether they involve the purchase or sale of the fixed rate for the insurance company.

(1) The settlement price of derivative contracts which involve or may involve the forward exchange of capital is indicated for the same; the face value of the reference capital is indicated in all the other cases.

(2) Indicate the fair value of the derivative contracts;

Notes to the Accounts - Attachment 19

Company CATTOLICA ASSICURAZIONI SOC. COOP. Financial Year 2016

Summary information concerning the technical account - non-life business

Gross premiums Gross premiums Gross liability Operating Reinsurance written for the year for claims expenses balance

Direct insurance:

Accident, injury and health (classes 1 and 2) ...... 1 224,263 2 222,495 3 119,667 4 63,996 5 -5,874

TPL - Land motor vehicles (class 10) ...... 6 790,261 7 801,767 8 563,021 9 194,514 10 -7,439

Land vehicle hulls (class 3) ...... 11 109,307 12 108,718 13 54,950 14 30,047 15 -4,019

Maritime, aeronautical and transport insurance (classes 4, 5, 6, 7, 11 and 12) ...... 16 11,978 17 13,225 18 8,346 19 2,892 20 356

Fire and other damage to assets (classes 8 and 9) ...... 21 297,680 22 314,343 23 240,245 24 83,801 25 13,832

TPL -General (class 13) ...... 26 156,119 27 160,539 28 82,804 29 47,657 30 -35,963

Credit and surety ship (classes 14 and 15) ...... 31 15,488 32 18,029 33 7,247 34 6,084 35 -1,585

Sundry financial losses (class 16) ...... 36 11,833 37 13,524 38 -772 39 3,265 40 -2,429

Legal protection (class 17) ...... 41 11,802 42 11,902 43 -1,712 44 4,381 45 -4,049

Assistance (class 18) ...... 46 29,291 47 28,733 48 7,705 49 9,612 50 -1,612

Total direct insurance ...... 51 1,658,022 52 1,693,275 53 1,081,501 54 446,249 55 -48,782

Indirect insurance ...... 56 32,260 57 27,991 58 16,402 59 10,764 60 -2,884

Total Italian portfolio ...... 61 1,690,282 62 1,721,266 63 1,097,903 64 457,013 65 -51,666

Foreign portfolio ...... 66 14,607 67 14,483 68 8,642 69 4,471 70 -2

Grand total ...... 71 1,704,889 72 1,735,749 73 1,106,545 74 461,484 75 -51,668

Notes to the Accounts - Attachment 20

Company CATTOLICA ASSICURAZIONI SOC. COOP. Financial Year 2016 Summary information concerning the life classes relating to premiums and the reinsurance balance

Direct business Indirect business Total

Gross premiums: 1 861,062 11 48 21 861,110 a) 1. for individual contracts ...... 2 616,658 12 48 22 616,706

2. for collective contracts ...... 3 244,404 13 0 23 244,404 b) 1. periodic premiums ...... 4 327,585 14 48 24 327,633

2. single premiums ...... 5 533,477 15 0 25 533,477 c) 1. for contracts without profit-sharing …………. 6 39,208 16 0 26 39,208

2. for contracts with profit-sharing ...... 7 642,432 17 48 27 642,480

3. for contracts when the investment risk is borne by the policyholders and for pension funds ...... 8 179,422 18 0 28 179,422

Reinsurance balance ...... 9 1,030 19 0 29 1,030

Notes to the Accounts - Attachment 21

Company CATTOLICA ASSICURAZIONI SOC. COOP. Financial Year 2016

Investments income (item II.2 and III.3)

Non-life business Life business Total

Income deriving from shares and holdings:

Dividends and other income from shares and holdings of group companies and investees ...... 1 33,847 41 11,296 81 45,143 Dividends and other income from shares and holdings of other companies ...... 2 2,464 42 3,584 82 6,048

Total ...... 3 36,311 43 14,880 83 51,191

Income from investments in land and buildings ...... 4 1,888 44 0 84 1,888

Income deriving from other investments:

Income on bonds of group companies and

investees ...... 5 199 45 956 85 1,155

Interest on loans to Group companies and

investees ...... 6 17 46 0 86 17

Income deriving from units of mutual investment funds ...... 7 11,621 47 13,297 87 24,918

Income on bonds and other fixed income securities ...... 8 64,603 48 140,402 88 205,005

Interest on loans ...... 9 54 49 61 89 115

Income on units of mutual investments ...... 10 0 50 0 90 0

Interest on deposits with credit institutions ...... 11 0 51 24 91 24

Income on sundry financial investments ...... 12 0 52 0 92 0

Interest on deposits with ceding companies...... 13 17 53 162 93 179

Total ...... 14 76,511 54 154,902 94 231,413

Reversal of adjustment on investments relating to:

Land and buildings ...... 15 0 55 0 95 0

Shares and holdings of Group companies and investees ...... 16 0 56 0 96 0

Bonds issued by Group companies and

investees ...... 17 0 57 0 97 0

Other shares and holdings ...... 18 497 58 647 98 1,144

Other bonds ...... 19 1,085 59 5,083 99 6,168

Other financial investments ...... 20 2,190 60 6,550 100 8,740

Total ...... 21 3,772 61 12,280 101 16,052

Profits on realisation of investments:

Capital gains deriving from the sale of land and buildings ...... 22 0 62 0 102 0

Profits on shares and holdings of Group companies and

investees ...... 23 0 63 0 103 0

Profits on bonds issued by Group companies and

investees ...... 24 0 64 0 104 0

Profits on other shares and holdings...... 25 3,419 65 7,514 105 10,933

Profits on other bonds ...... 26 47,531 66 21,476 106 69,007

Profits on other financial investments ...... 27 929 67 411 107 1,340

Total ...... 28 51,879 68 29,401 108 81,280

GRAND TOTAL ...... 29 170,361 69 211,463 109 381,824

Notes to the Accounts - Attachment 22

Company CATTOLICA ASSICURAZIONI SOC. COOP. Financial Year 2016

Income and unrealised capital gains on investments for benefits of life - assurance policyholders who bear the investment risk and deriving from the management of pension funds (item II.3)

I. Investments relating to benefits associated with investment funds and stock market indices

Amounts

Income deriving from:

Land and buildings ...... 1 0

Investments in Group companies and investees ...... 2 0

Units of mutual investment funds ...... 3 795

Other financial investments...... 4 615

- of which income from bonds ...... 5 604

Other assets ...... 6 0

Total ...... 7 1,410

Profits on realisation of investments

Capital gains deriving from the sale of land and buildings ...... 8 0

Profits on investments in Group companies and investees...... 9 0

Profits on units of mutual investment funds ...... 10 717

Profits on other financial investments ...... 11 14

- of which bonds ...... 12 2

Other income ...... 13 0

Total ...... 14 731

Unrealised capital gains ...... 15 4,540

GRAND TOTAL ...... 16 6,681

II. Investments deriving from the management of pension funds

Amounts

Income deriving from:

Investments in Group companies and investees ...... 21 7

Other financial investments...... 22 13,714

- of which income from bonds ...... 23 11,641

Other assets ...... 24 108

Total ...... 25 13,829

Profits on realisation of investments

Profits on investments in Group companies and investees...... 26 5

Profits on other financial investments ...... 27 7,580

- of which bonds ...... 28 5,799

Other income ...... 29 23

Total ...... 30 7,608

Unrealised capital gains ...... 31 4,651

GRAND TOTAL ...... 32 26,088

Notes to the Accounts - Attachment 23

Company CATTOLICA ASSICURAZIONI SOC. COOP. Financial Year 2016

Equity and financial charges (items II.9 and III.5)

Non-life business Life business Total

Charges for management of investments and other charges

Charges relating to shares and holdings ...... 1 3,358 31 6,616 61 9,974

Charges relating to investments in land and buildings ...... 2 1,020 32 166 62 1,186

Charges relating to bonds ...... 3 1,984 33 2,059 63 4,043

Charges relating to units of mutual investment funds...... 4 0 34 79 64 79

Charges relating to units in mutual investments ...... 5 0 35 0 65 0

Charges relating to sundry financial investments ...... 6 38 36 134 66 172

Interest on deposits received from re-insurers ...... 7 352 37 668 67 1,020

Total ...... 8 6,752 38 9,722 68 16,474

Adjustment on investments relating to:

Land and buildings ...... 9 868 39 0 69 868

Shares and holdings of Group companies and investees...... 10 40,970 40 3,207 70 44,177

Bonds issued by Group companies and investees ...... 11 759 41 5,132 71 5,891

Other shares and holdings ...... 12 3,849 42 1,174 72 5,023

Other bonds ...... 13 12,284 43 19,692 73 31,976

Other financial investments...... 14 8,189 44 6,050 74 14,239

Total ...... 15 66,919 45 35,255 75 102,174

Losses on realisation of investments

Capital losses deriving from the sale of land

and buildings...... 16 0 46 0 76 0

Losses on shares and holdings ...... 17 2,382 47 3,678 77 6,060

Losses on bonds...... 18 2,746 48 3,346 78 6,092

Losses on other financial investments ...... 19 2,039 49 1,843 79 3,882

Total ...... 20 7,167 50 8,867 80 16,034

GRAND TOTAL ...... 21 80,838 51 53,844 81 134,682

Notes to the Accounts - Attachment 24

Company CATTOLICA ASSICURAZIONI SOC. COOP. Financial Year 2016

Equity and financial charges and unrealised capital losses on investments benefiting policyholders who bear the risk and investments deriving from the management of pension funds (item II.10)

I. Investments relating to benefits associated with investment funds and stock market indices

Amounts

Operating expenses deriving from:

Land and buildings ...... 1 0

Investments in Group companies and investees ...... 2 0

Units of mutual investment funds ...... 3 0

Other financial investments ...... 4 10

Other assets ...... 5 115

Total ...... 6 125 Losses on realisation of investments

Capital losses deriving from the sale of land and buildings ...... 7 0

Losses on investments in Group companies and investees ...... 8 0

Losses on units of mutual investment funds ...... 9 326

Losses on other financial investments ...... 10 89

Other charges ...... 11 0

Total ...... 12 415

Unrealised capital losses ...... 13 1,656

GRAND TOTAL ...... 14 2,196

II. Investments deriving from the management of pension funds

Amounts

Operating expenses deriving from:

Investments in Group companies and investees ...... 21 0

Other financial investments ...... 22 2,204

Other assets ...... 23 1,875

Total ...... 24 4,079 Losses on realisation of investments

Losses on investments in Group companies and investees ...... 25 0

Losses on other financial investments ...... 26 5,356

Other charges ...... 27 0

Total ...... 28 5,356

Unrealised capital losses ...... 29 10,008

GRAND TOTAL ...... 30 19,443

Company CATTOLICA ASSICURAZIONI SOC. COOP. Non-life insurance - Summary statement of the technical accounts

Class code 01 Class code 02 Accident and injury Health

(name) (name) Direct business gross of transfers under reinsurance Premiums written ...... + 1 168,965 1 55,298

Change in premium provision (+ or -)...... - 2 1,195 2 573

Claims incurred...... - 3 66,173 3 53,494

Change in sundry technical provisions (+ or -) (1) ...... - 4 0 4 -106

Balance of other technical items (+ or -)...... + 5 -2,549 5 -1,452

Operating expenses ...... - 6 56,382 6 7,614 Technical balance del direct business (+ or -) ...... A 7 42,666 7 -7,729 Profit (loss) of liability reinsurance transactions (+ or -) ...... B 8 -6,331 8 457 Net result of indirect business (+ or -) ...... C 9 877 9 156 Change in equalisation provisions (+ or -) ...... D 10 8 10 0 Portion of profit from investments transferred from the non- technical account E 11 2,567 11 1,228 Result of technical account (+ or -) ...... (A + B + C - D + E) 12 39,771 12 -5,888

Class code 07 Class code 08 Goods in transit Fire & natural forces

(name) (name) Direct business gross of transfers under reinsurance Premiums written ...... + 1 6,686 1 110,718

Change in premium provision (+ or -)...... - 2 -834 2 -11,118

Claims incurred...... - 3 4,954 3 98,134

Change in sundry technical provisions (+ or -) (1) ...... - 4 0 4 0

Balance of other technical items (+ or -)...... + 5 29 5 -3,462

Operating expenses ...... - 6 1,662 6 34,157 Technical balance del direct business (+ or -) ...... A 7 933 7 -13,917 Profit (loss) of liability reinsurance transactions (+ or -) ...... B 8 166 8 17,045 Net result of indirect business (+ or -) ...... C 9 2 9 -1,786 Change in equalisation provisions (+ or -) ...... D 10 4 10 345 Portion of profit from investments transferred from the non- technical account E 11 94 11 2,938 Result of technical account (+ or -) ...... (A + B + C - D + E) 12 1,191 12 3,935

Class code 13 Class code 14 TPL -General Credit (name) (name) Direct business gross of transfers under reinsurance Premiums written ...... + 1 156,119 1 612

Change in premium provision (+ or -)...... - 2 -4,420 2 -221

Claims incurred...... - 3 82,804 3 -1,168

Change in sundry technical provisions (+ or -) (1) ...... - 4 0 4 0

Balance of other technical items (+ or -)...... + 5 -5,046 5 -95

Operating expenses ...... - 6 47,657 6 381

Technical balance del direct business (+ or -) ...... A 7 25,032 7 1,525 Profit (loss) of liability reinsurance transactions (+ or -) ...... B 8 -35,963 8 -820 Net result of indirect business (+ or -) ...... C 9 1,620 9 6 Change in equalisation provisions (+ or -) ...... D 10 0 10 -88 Portion of profit from investments transferred from the non- technical account E 11 15,818 11 62 Result of technical account (+ or -) ...... (A + B + C - D + E) 12 6,507 12 861

(1) This item includes both the change in “Other technical provisions” and the change in the “Reserve for profit-sharing and repayments”

Notes to the Accounts - Attachment 25 Financial Year 2016 accounts by individual class - Italian portfolio Class code 03 Class code 04 Class code 05 Class code 06 Land vehicle hulls Railway rolling stock Aircraft hulls Maritime vessels

(name) (name) (name) (name)

1 109,307 1 329 1 1,353 1 1,991

2 589 2 99 2 -460 2 -1

3 54,950 3 49 3 1,484 3 958

4 0 4 0 4 0 4 0

5 -638 5 0 5 -790 5 -134

6 30,047 6 16 6 172 6 298

7 23,083 7 165 7 -633 7 602

8 -4,019 8 43 8 639 8 -389

9 393 9 0 9 -146 9 2

10 0 10 0 10 0 10 0

11 1,059 11 2 11 11 11 12

12 20,516 12 210 12 -129 12 227

Class code 09 Class code 10 Class code 11 Class code 12 Other damage to assets TPL - Land motor vehicles TPL - Aircraft TPL - Maritime vessels

(name) (name) (name) (name)

1 186,962 1 790,261 1 321 1 1,298

2 -5,545 2 -11,506 2 -54 2 3

3 142,111 3 563,021 3 0 3 901

4 0 4 0 4 0 4 0

5 -3,256 5 -8,013 5 -111 5 -6

6 49,644 6 194,514 6 44 6 700

7 -2,504 7 36,219 7 220 7 -312

8 -3,213 8 -7,439 8 -81 8 -22

9 872 9 -4,149 9 0 9 4

10 2 10 0 10 0 10 0

11 2,250 11 29,841 11 0 11 76

12 -2,597 12 54,472 12 139 12 -254

Class code 15 Class code 16 Class code 17 Class code 18 Suretyship Sundry financial losses Legal protection Assistance

(name) (name) (name) (name)

1 14,876 1 11,833 1 11,802 1 29,291

2 -2,320 2 -1,691 2 -100 2 558

3 8,415 3 -772 3 -1,712 3 7,705

4 0 4 0 4 0 4 0

5 -1,418 5 -401 5 -147 5 -219

6 5,703 6 3,265 6 4,381 6 9,612

7 1,660 7 10,630 7 9,086 7 11,197

8 -765 8 -2,429 8 -4,049 8 -1,612

9 74 9 16 9 0 9 0

10 0 10 0 10 0 10 0

11 559 11 184 11 41 11 141

12 1,528 12 8,401 12 5,078 12 9,726

Notes to the Accounts - Attachment 26

Company CATTOLICA ASSICURAZIONI SOC. COOP. Financial Year 2016

Summary statement of the technical account recapitulating all the non-life classes

Italian portfolio

Direct insurance risks Indirect insurance risks Retained risks Total Direct risks Risks transferred Undertaken risks Retroceded risks

1 2 3 4 5 = 1 - 2 + 3 - 4

Premiums written ...... + 1 1,658,022 11 221,352 21 32,260 31 4,260 41 1,464,670

Change in premium provision (+ or -) ...... - 2 -35,253 12 -6,482 22 4,269 32 -1,373 42 -23,129

Claims incurred...... - 3 1,081,501 13 120,336 23 16,402 33 1,109 43 976,458

Change in sundry technical provisions (+ or -) ...... - 4 -106 14 0 24 0 34 0 44 -106

Balance of other technical items (+ or -) ...... + 5 -27,708 15 -1,570 25 0 35 0 45 -26,138

Operating expenses ...... - 6 446,249 16 57,146 26 10,764 36 1,640 46 398,227

Technical balance (+ or -)...... 7 137,923 17 48,782 27 825 37 2,884 47 87,082

Change in equalisation provisions (+ or -) ...... - 48 271 Portion of profit from investments transferred from the non-technical account ...... + 9 55,520 29 1,363 49 56,883

Result of technical account (+ or -)...... 10 193,443 20 48,782 30 2,188 40 2,884 50 143,694

Notes to the Accounts - Attachment 27

Company CATTOLICA ASSICURAZIONI SOC. COOP. Financial Year 2016 Life insurance - Summary statement of the technical accounts by individual class - Italian portfolio

Class code 01 Class code 02 Class code 03 Insurance on the duration of human life Insurance on the duration of human life Marriage insurance and birth insurance linked to investment funds (name) (name) (name) Direct business gross of transfers under reinsurance Premiums written ...... + 1 558,669 1 0 1 30,013

Claims incurred...... - 2 458,278 2 0 2 13,951

Change in mathematical provisions and sundry technical provisions (+ or -) ...... - 3 165,257 3 0 3 17,693

Balance of other technical items (+ or -) ...... + 4 -8,595 4 0 4 -33

Operating expenses...... - 5 45,332 5 0 5 4,386

Income from investments net of the portion transferred to the non-technical account (*).... + 6 112,599 6 0 6 4,256

Profits (loss) of direct business gross of transfers under reinsurance (+ or -) ...... A 7 -6,194 7 0 7 -1,794

Profit (loss) of liability reinsurance transactions (+ or -) ...... B 8 1,286 8 0 8 0

Net result of indirect business (+ or -) ...... C 9 224 9 0 9 0

Result of technical account (+ or -) ...... (A + B + C) 10 -4,684 10 0 10 -1,794

Class code 04 Class code 05 Class code 06

Health insurance Capitalisation transactions Pension Funds

(name) (name) (name) Direct business gross of transfers under reinsurance Premiums written ...... + 1 1,110 1 121,861 1 149,409

Claims incurred...... - 2 0 2 61,747 2 368,817

Change in mathematical provisions and sundry technical provisions (+ or -) ...... - 3 387 3 89,587 3 -216,709

Balance of other technical items (+ or -) ...... + 4 162 4 -335 4 3,310

Operating expenses...... - 5 148 5 1,025 5 816

Income from investments net of the portion transferred to the non-technical account (*).... + 6 36 6 30,425 6 5,175

Profits (loss) of direct business gross of transfers under reinsurance (+ or -) ...... A 7 773 7 -408 7 4,970

Profit (loss) of liability reinsurance transactions (+ or -) ...... B 8 -230 8 -26 8 0

Net result of indirect business (+ or -) ...... C 9 0 9 0 9 0

Result of technical account (+ or -) ...... (A + B + C) 10 543 10 -434 10 4,970

(*) Algebraic sum of the items relating to the class and to the Italian portfolio included in items II.2, II.3, II.9, II.10 and II.12 of the income statement

Notes to the Accounts - Attachment 28

Company CATTOLICA ASSICURAZIONI SOC. COOP. Financial Year 2016

Summary statement of the technical account recapitulating all the life classes Italian portfolio

Direct insurance risks Indirect insurance risks Retained risks Total Direct risks Risks transferred Undertaken risks Retroceded risks

1 2 3 4 5 = 1 - 2 + 3 - 4

Premiums written ...... + 1 861,062 11 12,939 21 48 31 0 41 848,171

Claims incurred...... - 2 902,793 12 16,322 22 409 32 0 42 886,880

Change in mathematical provisions and sundry technical provisions (+ or -) ...... - 3 56,215 13 -4,034 23 -439 33 0 43 59,810

Balance of other technical items (+ or -) ...... + 4 -5,491 14 0 24 0 34 0 44 -5,491

Operating expenses ...... - 5 51,707 15 1,681 25 3 35 0 45 50,029

Income from investments net of the portion transferred to the non-technical account (*)...... + 6 152,491 26 149 46 152,640

Result of technical account (+ or -) ...... 7 -2,653 17 -1,030 27 224 37 0 47 -1,399

(*) Algebraic sum of the items relating to the Italian portfolio included in items II.2, II.3, II.9, II.10 and II.12 of the income statement

Notes to the Accounts - Attachment 29

Company CATTOLICA ASSICURAZIONI SOC. COOP. Financial Year 2016

Summary statement relating to the non-life and life technical accounts - foreign portfolio

Section I: Non-life insurance

Total classes

Direct business gross of transfers under reinsurance

Premiums written ...... + 1 0

Change in premium provision (+ or -) ...... - 2 0

Claims incurred ...... - 3 0

Change in sundry technical provisions (+ or -) ...... - 4 0

Balance of other technical items (+ or -) ...... + 5 0

Operating expenses ...... - 6 0

Technical balance of direct business (+ or -) ...... A 7 0

Profit (loss) of liability reinsurance transactions (+ or -) ...... B 8 0

Net result of indirect business (+ or -) ...... C 9 964

Change in equalisation provisions (+ or -) ...... D 10 0

Portion of profit from investments transferred from the non-technical account ...... E 11 233

Result of technical account (+ or -) ...... (A + B + C - D + E) 12 1,197

Section II: Life insurance

Total classes

Direct business gross of transfers under reinsurance

Premiums written ...... + 1 0

Claims incurred ...... - 2 0

Change in mathematical provisions and sundry technical provisions (+ or -) ...... - 3 0

Balance of other technical items (+ or -) ...... + 4 0

Operating expenses ...... - 5 0

Income from investments net of the portion transferred to the non-technical account (1) .... + 6 0

Profits (loss) of direct business gross of transfers under reinsurance (+ or -) ...... A 7 0

Profit (loss) of liability reinsurance transactions (+ or -) ...... B 8 0

Net result of indirect business (+ or -) ...... C 9 0

Result of technical account (+ or -) ...... (A + B + C) 10 0

(1) Algebraic sum of the items relating to the foreign portfolio included in items II.2, II.3, II.9, II.10 and II.12 of the income statement

Notes to the Accounts - Attachment 30

Company CATTOLICA ASSICURAZIONI SOC. COOP. Financial Year 2016

Transactions with Group companies and other investees I: Income

Parent Affiliated Associated Subsidiaries Other Total companies companies companies

Income from investments

Income from land and buildings ...... 1 0 2 103 3 0 4 0 5 0 6 103

Dividends and other income from shares and holdings ...... 7 0 8 42,513 9 0 10 0 11 2,631 12 45,144

Income on bonds ...... 13 0 14 0 15 0 16 310 17 852 18 1,162

Interest on loans ...... 19 0 20 17 21 0 22 0 23 0 24 17

Income on other financial investments ...... 25 0 26 0 27 0 28 0 29 0 30 0

Interest on deposits with ceding companies...... 31 0 32 0 33 0 34 0 35 0 36 0

Total ...... 37 0 38 42,633 39 0 40 310 41 3,483 42 46,426

Income and unrealised capital gains on investments benefiting policyholders who bear the risk and deriving from the management of pension funds ...... 43 0 44 0 45 0 46 0 47 7 48 7

Interest on receivables ......

Interest on receivables ...... 49 0 50 0 51 0 52 0 53 0 54 0

Recoveries of administrative expenses and charges……………………… 55 0 56 14,926 57 0 58 0 59 0 60 14,926

Other income and recoveries ...... 61 0 62 0 63 0 64 0 65 0 66 0

Total ...... 67 0 68 14,926 69 0 70 0 71 0 72 14,926

Profits on realisation of investments (*) ...... 73 0 74 0 75 0 76 0 77 649 78 649

Extraordinary income ...... 79 0 80 0 81 0 82 0 83 0 84 0

GRAND TOTAL ...... 85 0 86 57,559 87 0 88 310 89 4,139 90 62,008

Transactions with Group companies and other investees II: Expense

Parent Associated Affiliated Subsidiaries Other Total companies companies companies

Charges for management of investments and interest expense:

Charges relating to investments ...... 91 0 92 0 93 0 94 0 95 0 96 0 Interest on subordinated liabilities ...... 97 0 98 0 99 0 100 0 101 1,512 102 1,512

Interest on deposits received from re-insurers ...... 103 0 104 0 105 0 106 0 107 0 108 0

Interest on payables deriving from direct insurance transactions ...... 109 0 110 0 111 0 112 0 113 0 114 0

Interest on payables deriving from reinsurance transactions………………………………………………….. 115 0 116 0 117 0 118 0 119 0 120 0

Interest on payables due to banks and financial institutions ...... 121 0 122 0 123 0 124 0 125 0 126 0

Interest on payables with secured guarantee ...... 127 0 128 0 129 0 130 0 131 0 132 0

Interest on other payables ...... 133 0 134 0 135 0 136 0 137 0 138 0 Losses on receivables (impairment) ...... 139 0 140 0 141 0 142 0 143 0 144 0 Administrative charges and expenses on behalf of third parties …...... 145 0 146 117,581 147 0 148 0 149 0 150 117,581

Sundry charges ...... 151 0 152 7,470 153 1,565 154 0 155 189 156 9,224

Total ...... 157 0 158 125,051 159 1,565 160 0 161 1,701 162 128,317

Charges and unrealised capital losses on investments benefiting policyholders who bear the risk and deriving from the management of pension funds ...... 163 0 164 0 165 0 166 0 167 35 168 35

Losses on realisation of investments (*) ...... 169 0 170 0 171 0 172 0 173 0 174 0

Extraordinary charges ...... 175 0 176 0 177 0 178 0 179 0 180 0

GRAND TOTAL ...... 181 0 182 125,051 183 1,565 184 0 185 1,736 186 128,352

(*) With reference to the counterparty in the transaction

Notes to the Accounts - Attachment 31

Company CATTOLICA ASSICURAZIONI SOC. COOP. Financial Year 2016

Summary statement of direct business premiums written

Non-life business Life business Total

Establishment L.P.S. Establishment L.P.S. Establishment L.P.S.

Premiums written: in Italy ...... 1 1,653,267 5 0 11 860,709 15 0 21 2,513,976 25 0 in other European Union countries ...... 2 0 6 393 12 0 16 0 22 0 26 393 in third countries……...... 3 0 7 4,362 13 0 17 353 23 0 27 4,715

Total ...... 4 1,653,267 8 4,755 14 860,709 18 353 24 2,513,976 28 5,108

Notes to the Accounts - Attachment 32

Company CATTOLICA ASSICURAZIONI SOC. COOP. Financial Year 2016 Statement of charges relating to staff, directors and auditors I. Personnel costs

Non-life business Life business Total

Costs for subordinate work services:

Italian portfolio: - Remuneration ...... 1 43,707 31 11,927 61 55,634

- Social security contributions ...... 2 12,712 32 3,318 62 16,030

- Provision for employee severance indemnities 0 0 and similar commitments…………………………………………… 3 2,656 33 710 63 3,366

- Miscellaneous costs pertaining to personnel ...... 4 5,090 34 2,356 64 7,446

Total ...... 5 64,165 35 18,311 65 82,476

Foreign portfolio:

- Remuneration ...... 6 0 36 0 66 0

- Social security contributions ...... 7 0 37 0 67 0

- Miscellaneous costs pertaining to personnel ...... 8 0 38 0 68 0

Total ...... 9 0 39 0 69 0

Grand total ...... 10 64,165 40 18,311 70 82,476

Costs for freelance work services:

Italian portfolio ...... 11 50,356 41 16 71 50,372

Foreign portfolio ...... 12 0 42 0 72 0

Total ...... 13 50,356 43 16 73 50,372

Total costs for work services ...... 14 114,521 44 18,327 74 132,848

II: Description of the items booked

Non-life business Life business Total Operating expenses relating to investments 15 1,441 45 2,710 75 4,151

Claims incurred ...... 16 51,438 46 -147 76 51,291

Other acquisition expenses ...... 17 23,307 47 9,879 77 33,186

Other administrative expenses ...... 18 35,591 48 5,138 78 40,729

Administrative charges and expenses on behalf of third parties ...... 19 2,744 49 747 79 3,491

20 0 50 0 80 0

Total ...... 21 114,521 51 18,327 81 132,848

III: Average headcount during the year

Number

Executives ...... 91 33

Employees ...... 92 745

Workers ...... 93 0

Other 94 41

Total ...... 95 819

IV: Directors and statutory auditors

Number Fees due

Directors ...... 96 18 98 6,156

Statutory Auditors ...... 97 5 99 824

The undersigned declare that these financial statements are true and consistent with the underlying accounting records The legal representatives of the company (*)

The Chairman PAOLO BEDONI (**)

(**)

(*) For foreign companies, the signature must be that of the general representative for Italy. (**) Indicate the office covered by the signee.

Real Estate Property

(amounts in units of €)

NON-LIFE BUSINESS Cost as of Cost as of Book value as of Town or Surface December December Address REVALUATIONS WRITEDOWNS December City area 31st, 2015 31st, 2016 31st, 2016 (*)

PROPERTY USED BY THIRD PARTIES

ROME P.ZA DEI CAVALIERI DEL LAVORO 5 -15 320 8,186 8,186 712,288 -229,474 491,000 ROME VIA CURTATONE 8 2,334 786,128 786,128 6,901,565 -575,510 7,112,183 ROME VIA CURTATONE 4 3,190 2,039,059 2,039,059 7,249,365 0 9,288,424 ROME VIA NAZIONALE 89 A 2,749 2,210,150 2,210,150 12,309,784 0 14,519,934 ROME VIA DEL PESCACCIO 30 10,348 8,530,985 8,530,985 5,340,136 0 13,871,121

TOTAL PROPERTY USED BY THIRD 18,941 13,574,508 13,574,508 32,513,138 -804,984 45,282,662 PARTIES

PROPERTY USED DIRECTLY

VERONA L.GE CANGRANDE 16 16,036 31,924,883 32,136,553 26,172,198 -4,476,529 53,832,222 ROME VIA URBANA 169 A/171 6,814 8,317,631 8,317,631 26,528,081 0 34,845,712

TOTAL PROPERTY USED DIRECTLY 22,850 40,242,514 40,454,184 52,700,279 -4,476,529 88,677,934

GRAND TOTAL BUILDINGS 41,791 53,817,022 54,028,692 85,213,418 -5,281,513 133,960,597

(*) Gross of accumulated depreciation for properties amounting to € 32,699,830 as of December 31st, 2016

The Chairman (Paolo Bedoni)

Attestation of the financial statements pursuant to Article 81 ter of Consob Regulation No. 11971 dated May 14th, 1999 and subsequent amendments and additions

1. The undersigned, Giovan Battista Mazzucchelli, as Managing Director, and Giuseppe Milone, as Executive in charge of preparing the financial reports of Cattolica Assicurazioni Soc. Coop., hereby certify, taking into account the provisions of Article 154 bis, paragraphs 3 and 4 of Italian Legislative Decree No. 58 dated February 24th, 1998:

- The adequacy with respect to the Company’s structure and

- the effective application,

of the administrative and accounting procedures in place for preparing the financial statements as of financial year 2016.

2. The adequacy of the administrative and accounting procedures in place for preparing the financial statements as at December 31st, 2016, has been assessed through a process established by Cattolica Assicurazioni Soc. Coop. on a consistent basis with the Internal Control – Integrated Framework model issued by the Committee of Sponsoring Organizations of the Treadway Commission which represents the reference framework generally accepted at international level.

3. It is also certified that:

3.1 the financial statements as at December 31st, 2016:

a) are prepared in compliance with the provisions of the Italian Civil Code, the Italian Legislative Decree No. 173 dated May 26th, 1997, the Italian Legislative Decree No. 209 dated September 7th, 2005 and subsequent amendments and applicable provisions, regulations and circular letters issued by IVASS;

b) correspond to the related books and accounting records;

c) provide a true and correct representation of the balance sheet, income statement and financial position of the issuer.

3.2 The management report includes a reliable analysis of the performance and of the management result, as well as of the position of the issuer and all the companies included in the scope of consolidation, together with the description of the main risks and uncertain situations to which they are exposed.

Verona, March 16th, 2017

Signature of Chief Executive Officer Signature of Corporate Financial Reporting Manager

Giovan Battista Mazzucchelli Giuseppe Milone

Board of Statutory Auditors’ Report

Board Board of Statutory Auditors’ Report of Statutory Auditors’ Report

Dear Shareholders,

The ordinary shareholders’ meeting of Società Cattolica di Assicurazione is called to approve the annual financial statements for the year ended December 31st, 2016. Highlighting the provisions of the law which discipline the formation of the same, we hereby reveal that the financial statements present a profit of € 63,707,745, which was affected by writedowns of equity investments, mainly bank related, for € 45 million. The consolidated financial statements of the Cattolica Group for 2016 are also presented, having closed with a net consolidated profit of € 93.368 million, of which € 76.254 million pertaining to the same. The writedowns weighed in for € 57 million on the Group result. The financial statements of the Company and the Group’s consolidated financial statements, prepared by the Directors in accordance with the law, have been duly communicated to the Board of Statutory Auditors together with the management reports, of the Company and the Group respectively. The Board of Statutory Auditors also acquired the reports issued by the Independent Auditors and, with regard to the technical provisions, by the Actuarial Unit, which has taken over the duties of the actuary appointed in accordance with Solvency II Legislation. The annual financial statements have been drawn up in observance of the current provisions as per Italian Legislative Decree No. 209/2005, ISVAP Regulation No. 22/2008 and Italian Legislative Decree No. 173/1997. The Italian accounting standards adopted are those laid down by current legislation, up-dated during the year. The accounting standards used for the formation of the 2016 final balance, shown in “Part A - Accounting principles” of the explanatory notes and, if required, agreed in advance with the Board of Statutory Auditors, take into account the innovations introduced by Italian Legislative Decree No. 139/2015 and the amendments to ISVAP Regulation No. 22/2008 made by IVASS Provision No. 53/2016. As far as we are aware, the Directors have not departed from the legal provisions relating to the formation of the annual financial statements. When drawing up the financial reports, the recommendations contained in the joint Bank of Italy/CONSOB/IVASS Documents and the CONSOB communications regarding the areas deemed to be of greatest relevance indicated by ESMA were taken into consideration. The 2016 consolidated financial statements have been drawn up in observance of the IAS/IFRS international accounting standards, approved by the European Commission by December 31st, 2015.

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Reporting on the activities carried out, we hereby inform you of the following:

1. The Board of Statutory Auditors oversaw the observance of the law and the Articles of Association, taking into account the standards of conduct for boards of statutory auditors of listed companies, recommended by the Italian Accounting Profession and, if compatible, the indications provided by the Consob Communication No. 1025564 dated April 6th, 2001 and subsequent amendments and additions, as well as pursuant to Article 153 of Italian Legislative Decree No. 58 dated February 24th, 1998 (hereinafter also the Consolidated Finance Law or TUF) and Article 2429 of the Italian Civil Code.

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Furthermore, in its capacity as “Internal control and accounts audit committee” as per Article 19 of Italian Legislative Decree 39 dated January 27th, 2010, the Board of Statutory Auditors oversaw: (i) the financial disclosure process, (ii) the efficacy of the internal control, internal audit and risk management systems, (iii) the official audit of the annual accounts and the consolidated accounts, (iv) the independence of the Independent Auditors, in particular with regard to the provision of services not associated with the audit to the body subject to the official audit of the accounts.

2. During the year, by means of information and data illustrated during the Board Meetings, which the Board of Statutory Auditors always took part in, the Directors reported to the Board of Statutory Auditors, according to the Article of Association formalities and at least quarterly, on the activities carried out as well as the transactions of greatest economic, financial and equity significance carried out by the Company and by the subsidiaries and thus in compliance with the dictates of Article 150, paragraph 1, of Italian Legislative Decree No. 58/1998 and Article 42 of the Articles of Association, among which mention is made in particular of the merger via incorporation of FATA Assicurazione Danni S.p.A., finalised on December 22nd, 2016 with effectiveness as from December 31st and accounting and tax effects back-dated to January 1st of the same year, the dealings with Banca Popolare di Vicenza as a result of the exercise of the right to withdraw from the partnership agreement communicated on August 4th, 2016, as well as the exercise of the right to withdraw communicated to Veneto Banca on January 7th, 2016 further to its transformation into an Italian joint-stock company. With regard to these transactions and the additional ones of significance, the Board of Directors provides account in its Management Report, in the section "Significant events during the year" and with regard to the aspects occurring after December 31st, 2016, in the section “Significant events during the first few months of 2017”. In another section of the document, pursuant to Consob Communication DEM/6064293 dated July 28th, 2006, the Directors report that no atypical and/or unusual transactions were entered into during the year, indicating any non-recurrent significant events or operations with important effects on the Company’s accounts. With reference to the transactions carried out and described in the Management report, we believe that the same are compliant with the law and the Articles of Association, are not manifestly imprudent, hazardous, in potential conflict of interest or in contrast with the resolutions adopted by the shareholders’ meeting or such that they compromise the integrity of the company assets.

3. The Board of Statutory Auditors did not come across any atypical and/or unusual transactions with third parties, related parties or intercompany. In this connection, it is hereby disclosed that, pursuant to Consob regulation No. 17221 dated March 12th, 2010 and subsequent amendments, as from January 1st, 2011 the Company entered into and periodically up-dated a specific “Procedure for the handling of Related Party transactions”, with the establishment of a dedicated organisational unit and specific procedures for detecting presupposed circumstances, as well as a Committee tasked with the examination of transactions not falling within the cases of exclusion. Disclosure is provided on the transactions with related parties and/or intercompany ones of an ordinary nature, in specific sections of the Management report (i.e. “Significant events during the year” and “Transactions with related parties”) and of the notes to the accounts (i.e. in Part C - Other information, the section “Transactions with related parties”), to

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which reference is made also for the indications on the characteristics of said transactions, as well as the related conditions agreed. With regard to the transactions with related parties outside the Group, the same are generally placeable within the sphere of market values. With regard to the companies subject to Group management and co-ordination and the other Group companies, the Board refers to the specifications provided in the section “Transactions with related parties” in the notes to the accounts which, in line with the previous year, classify the intercompany transactions in three categories: a) agreements for the disbursement of general services, for services relating to the management of the investments and to other operational activities; b) insurance and reinsurance transactions which it has been appropriately decided to maintain within the Group; c) joint option for tax consolidation. In this connection, the notes to the accounts provide appropriate quali- quantitative information and in a specific synoptic table (Table No. 75) the related statement of financial position and income statement balances. Again within the sphere of the transactions in question, the Company has entered into a number of extraordinary non- atypical and/or unusual transactions with related parties, whose description can be found in the section of the Management Report “Significant events during the year”. The Company has also operated taking into account the ISVAP Regulation No. 25 dated May 27th, 2008 concerning the supervision of intercompany transactions, also envisaging the appropriate initiatives for the application of the provisions as per IVASS Regulation No. 30 dated October 26th, 2016, which repealed and replaced the previous legislation. Overall, the Board of Statutory Auditors agrees with the approach adopted by the Company and as far as it is responsible, it believes that all the afore-mentioned transactions are fair and comply with the Company’s interests.

4. In the Management Report, the Directors provide adequate disclosure with regard to the intercompany transactions or those with related parties, also via reference to Part C of the notes to the accounts, where it is stated, amongst other things, that no atypical and/or unusual transactions have taken place. With regard to this matter, the Board of Statutory Auditors does not have any particular objections and/or observations.

5. As of today’s date, the Independent Auditors Deloitte & Touche S.p.A. issued the reports pursuant to Article 14 and 16 of Italian Legislative Decree No. 39/2010 and Article 102 of Italian Legislative Decree No. 209/2005, without findings. Within the meaning of this latter provision, with reference to the annual financial statements the opinion is expressed on the sufficiency of the technical provisions - Article 102, paragraph 2. The opinion has also been expressed on the consistency - with the financial statements - of the Management reports and the envisaged information presented in the Report on corporate governance and the ownership structures.

6. The Board of Statutory Auditors did not receive any complaints during the year under review, as per Article 2408 of the Italian Civil Code.

7. The Board of Statutory Auditors did not receive any petitions during the year under review.

8. The Company granted the Independent Auditors Deloitte & Touche S.p.A. a number of appointments other than the accounts audit, whose costs, excluding out-of-pocket expenses and VAT, are indicated below:

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a. examination of the “annual pension funds management report”, € 12,180; b. examination of the “annual internal funds management report”, € 155,798; c. certification of the annual rate of return for segregated management schemes, € 106,400; d. certification of Economic Balance Sheet and Own Funds Solvency II, € 375,000; e. check on Unico 2016 form and 770 form, € 21,213; f. other appointments: € 5,580 for the audit of the consolidated financial statements in English, € 5,588 for the audit of the consolidated interim report in English, € 15,000 for the audit of the individual financial statements in English, €225,000 for Procedures agreed with reference to the Solvency II data and € 175,000 for Due Diligence activities. It is also hereby specified that, within the sphere of the other companies included in the consolidation area and subject to audit activities, the value of the appointments assigned to said Independent Auditors Deloitte & Touche S.p.A., for checking the Unico 2016 form and the 770 form, the certification of the annual rate of return for segregated management schemes and the appointments for the examination of the “annual internal funds management report”, the certification of Economic Balance Sheet and Own Funds Solvency II and Procedures agreed with reference to the Solvency II data, on the basis of the quotes, came to € 619,384 (excluding out-of-pocket expenses and VAT).

9. In order to ascertain the possible granting of appointments to parties linked by on-going relations with the Independent Auditors and the related costs, a specific request was made to Deloitte & Touche S.p.A. with regard to the parties linked to the same by these types of relationship. By means of note dated February 2nd, 2017 sent to the Company, with reference to its “network” as defined in accordance with Article 149 bis, paragraph 2 of the Issuers’ Regulations (limited to the countries in which Cattolica Assicurazioni Group entities are present), the Independent Auditors disclosed:  that the operating entities with registered offices in Italy are: Deloitte Central Mediterranean S.r.l., Deloitte Consulting S.r.l., Deloitte eXtended Business Services S.r.l., Deloitte Finance Process Solutions S.p.A., Deloitte Financial Advisory S.r.l., Deloitte Italy S.p.A., Deloitte Risk Advisory S.r.l., Deloitte Touche Tohmatsu Tax Services S.r.l. a socio unico, Intellium Italia S.r.l. a socio unico, Icare S.r.l. – Informatica e Comunicazione a socio unico, Qualitekna S.r.l. a socio unico, Telnext S.r.l. a socio unico, Studio Legale Associato, Studio Tributario e Societario and Consorzio Deloitte Consulting;  that the operating entities with registered offices in Ireland are: Deloitte, Deloitte N.I. Limited, Deloitte Consultants Limited, Emblem Brands Limited, Deloitte Rfs, DT Tech Solution UK Limited, Deloitte Technology Solutions Limited and Deloitte Leyton Consulting Ireland Limited. The checks carried out have not revealed to the Statutory Auditors that the Company or other Group companies have granted any appointment to companies of the Network of the Independent Auditors Deloitte & Touche S.p.A.. The Board of Statutory Auditors has acquired the letter of the Independent Auditors Deloitte & Touche S.p.A. for the annual confirmation of independence as per Article 17.9, letter a) of Italian Legislative Decree No. 39/2010 certifying that no situations have been noted which have compromised the independence or any causes of incompatibility pursuant to Articles 10 and 17 of the afore-mentioned decree and the related implementing provisions, as well as insofar as the provisions of the European Regulation No. 537/2014 may be applicable. In discussions with the partner of the Independent Auditors, the Board

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of Statutory Auditors also acquitted the legislative provisions as per Article 17.9, letter b) of the same decree. This having been stated, the Board of Statutory Auditors believes that no critical aspects have emerged with regard to the independence of the Independent Auditors.

10. During the year under review, where required the Board of Statutory Auditors provided the opinions and observations envisaged by the law. The resolutions subsequently adopted by the Board of Directors did not emerge as in contrast with the content of these opinions.

11. The activities of the Board of Statutory Auditors carried out in 2016 involved a total of 39 meetings. Furthermore, the Board of Statutory Auditors took part in the general shareholders’ meeting last year, was always present during the Board meetings which numbered 30, as well as the meetings of the Executive Committee which numbered 25. The Board of Statutory Auditors formally acknowledges that the meetings of the Audit and Risks Committee numbered 16. The entire Board of Statutory Auditors usually takes part in this Committee within the sphere of its supervisory activities, as well as for the purposes of a more effective co-ordination of the control functions. It also formally acknowledged the following meetings of the other Committee within the Board of Directors: Remuneration Committee, 10 meetings; Investments Committee, 3 meetings; Corporate governance Committee, 6 meetings; the Related Parties Committee, 6 meetings. The Chairman of the Board of Statutory Auditors usually assists during the meetings of these committees. In conclusion, the members of Cattolica’s control body also cover the role of Auditor in the main Group companies, for the purpose of ensuring, pursuant to Consob DAC/RM/97001574 communication of February 20th 1997, the acquisition of information necessary for fulfilling the related functions as well as more fully ensuring the co- ordination of the supervisory activities, in accordance with current legislation and in particular Article 151, paragraph 2, of Italian Legislative Decree No. 58/98. Meetings were held during the year with the members of the Group’s Boards of Statutory Auditors so as to encourage in-depth analysis into certain aspects of mutual interest with regard to Italian Legislative Decree No. 231/2001 (Organisation model and administrative liability of corporate bodies, companies, etc.) and Anti-money laundering safeguards.

12. When carrying out is appointment, the Board of Statutory Auditors acquired knowledge of and supervised, in as far as it is responsible, the observance of the principles of correct administration, by means of direct observation, collecting information from the heads of the administration division and the heads of the specific corporate areas, as well as via meetings with the Independent Auditors Deloitte & Touche S.p.A. and thus for the purpose of a reciprocal exchange of significant data and information. On conclusion of the activities carried out, the Board of Statutory Auditors confirmed the observance of the correct principles of administration.

13. The Board of Statutory Auditors acquired awareness of and oversaw the adequacy of the organisational structure of the Company and the Group, required to deal with the commitments laid down by operational needs and a legislation framework undergoing constant change. The changes which have taken place in the organisational set-up have been monitored along with the related changes in the system of authorisations and powers, required by the process for strengthening and rationalising the structure, by means of

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measures aimed at making the procedures, information systems and data quality efficient, as well as the system of controls, also within the context of an effective implementation of the regulations as per the Solvency II Directive. Within this sphere, indication should be made inter alia of the establishment of the Actuarial Unit supplementing the internal control system and the measures implemented and scheduled in the activities of the Anti-money Laundering Unit, aimed at a better and more effective application of the related legislation, also in response to the recommendations of the authority in charge. It is also formally acknowledged that the Company, in its capacity as parent company, has for some time adopted Group Regulations for the purpose of identifying a system of principles and rules for the organisation of the dealings with the subsidiaries, which its management and co-ordination action must also be brought in line with. The Company has taken steps to up-date the internal norms, concerning policies, regulations and procedures, required by the periodic audits, by the organisational changes implemented and/or by specific provisions, including - in particular - those pertaining to the application of the Solvency II Legislation. In conclusion, it is formally acknowledged that the Company has continued with the Group training activities with the implementation of training plans pertaining to the main operational areas of the organisation (technical, 231/2001 Model, Anti-money laundering, etc.) and aimed at the employees and the agency networks and the Welfare and pension product advisors, as well as the distribution network of the banking intermediaries. The Board of Statutory Auditors deems that the organisational structure is essentially adequate, having taken into account the above.

14. The Board of Statutory Auditors has overseen the adequacy and functioning of the internal control system. The action unfolded by means of participation in the meetings of the Control and Risks Committee, during which the Statutory Auditors acquired awareness of the activities carried out by the control units, as well as via the direct collation of information from the respective managers. In particular, it examined the periodic reports, etc. issued by the Internal Audit Division and by the Risk Management, Compliance, Actuarial and Anti-money Laundering Units, monitoring the outcomes and the consistency of the checks with the annual Plans submitted to the Board of Directors. Both at the time of the joint meetings with the Control and Risks Committee and during separate meetings, the Board of Statutory Auditors engaged with the Executive appointed to prepare the corporate accounting documents, as controlling role in the handling of the risks pertaining to the financial disclosure as per Article 154 bis of the TUF, and with the Supervisory Body pursuant to Italian Legislative Decree No. 231/2001, examining the periodic reports and receiving the up-dates on the activities carried out. Via its presence during the meetings of the Chairman or his appointee, it also took part in the activities of the internal board committees (Related parties committee, Investments committee, Remuneration committee, Corporate governance committee) in relation to which the preliminary and support activities for the decisions of the management body in accordance with the respective duties, were ascertained. The set-up of the internal control system was overhauled in July 2016, when the Board of Directors in order to strengthen the control, governance and co-ordination supports of the respective activities, resolved on the hierarchical repositioning of the Risk Management, Compliance, Actuarial and Anti-money Laundering Units reporting to the new figure of Chief Risk Officer (C.R.O.). In the definition of the related responsibilities, it is envisaged

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that the individual control units answer to the management body, also via the Chief Risk Officer, so as to maintain the respective characteristics of independence and separateness and in observance, also, of the principle of separateness between operational units and control units. Within the sphere of the activities and the controls pertaining to the system in question, the Board of Statutory Auditors formally acknowledges that the Company is endowed with the regulatory, procedural and organisational safeguards required by specific legislation such as: Market abuse, Internal dealing, prevention and countering of fraud, security and protection of personal data (Privacy Code), divulgation of privileged information, in relation to which the related register has been established. With reference to the activities and functions of greatest importance, during the year the Statutory Auditors monitored the activities and the controls for the observance of the Solvency II Legislation and, together with the Boards of Statutory Auditors of the other Group companies concerned, for the improvement of the action for preventing and countering money laundering and the funding of terrorism, following the process for adaptation to the indications formulated by the Supervisory Authority. It is hereby disclosed that the Group has taken steps to internally assess the risk and solvency profile (Own Risk and Solvency Assessment – ORSA) on a consistent basis with the 2015-2017 Business Plan and the foreseeable evolutionary dynamics, forwarding the results to IVASS on May 31st, 2016, subject to the approval of the Company’s Board of Directors. In conclusion, we hereby formally acknowledge that, as from January 1st, 2016, further to the enforcement of the Solvency II Directive, the Company satisfied the fulfilments required by the Delegated Regulation (EU) 2015/35 of the European Commission dated October 10th, 2014 and by the Eiopa Guidelines with regard to disclosure for the purpose of financial stability, sending the Supervisory Body the relating reports. In light of the above, on the basis of the analysis performed, the elements acquired and the improvement processes underway, no elements emerged which lead this Board of Statutory Auditors to consider the Cattolica Assicurazioni internal control and risk management system as inadequate, essentially complying in its entirety with the efficiency and effectiveness requirements in the supervision of the risks and the observance of the procedures and the internal and external legislation.

15. The adequacy of the administrative-accounting system has been evaluated by the Board of Statutory Auditors with particular reference to the reliability of the structures and the ability of the same to correctly represent the operating events, of the Company and the Group. The action involved obtaining information from the heads of the respective divisions, the examination of the company documents and periodic reciprocal exchanges of data and information with the Independent Auditors, during which no problematic elements emerged, also with regard to the consolidation processes. The review of the Company’s and Group’s results was carried out on the basis of a Plan drawn up for the purpose by the Independent Auditors and submitted for the examination of the Board of Statutory Auditors which discussed the contents, checking the adequacy of the planned checks and controls. Also for the purpose of acquitting the supervisory duties on the financial disclosure process pursuant to Article 19, paragraph 1, letter b) of Italian Legislative Decree No. 39/2010, the activities included consultation with the Executive appointed to draw up the corporate accounting documents on specific aspects pertaining to such disclosure, with

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regard to the procedures for the monitoring of the significant processes for the purpose of Italian Law No. 262/05. In this connection, the Board of Statutory Auditors formally acknowledges that the Company has established a specific risk management and internal control system correlated to the financial disclosure process pursuant to Article 123 bis, section 2, letter b) of the TUF (consolidated finance law), in relation to which sets of periodic controls are envisaged on the company processes concerned, subject to mapping. The Managing Director and the Executive appointed to draw up the corporate accounting documents have issued the declarations envisaged by Article 154 bis, paragraph 5 of Italian Legislative Decree No. 58/1998. The Board of Statutory Auditors deems that the administrative-accounting system is essentially adequate, having taken into account the above.

16. In accordance with the matters envisaged by Article 114, paragraph 2, of Italian Legislative Decree No. 58/1998, Cattolica di Assicurazione, in its capacity as issuer, imparted instructions to the subsidiaries necessary for ensuring the acquittal of the communication obligations envisaged by the law. The presence of members of Senior Management and the Board of Directors of the Company in the Boards of Directors of said companies contributes towards such observance. The management and co-ordination activities were carried out with regard also to Articles 2497-2497 septies of the Italian Civil Code. In conclusion, it is revealed that the Directors and the Statutory Auditors of the subsidiaries have also been invited to take part in the training programme for the Parent Company Directors, for the purpose of encouraging the divulgation of mutual know-how.

17. During the meetings held with the auditors for the exchange of information as per Article 150, paragraph 3, of Italian Legislative Decree No. 58/98, no significant aspects emerged, also further to the periodic check as per Article 14, paragraph 1, letter b) of Italian Legislative Decree No. 39/2010. The Board of Statutory Auditors also oversaw the official audit of the annual accounts and the consolidated accounts, in pursuance of Article 19, paragraph 1, letter c) of Italian Legislative Decree No. 39/2010, by means of specific meetings with the Independent Auditors during which the significant aspects of the audit plan and the audit action planned or implemented were reviewed. In conclusion, we also reveal that the report pursuant to Article 19, paragraph 3, of Italian Legislative Decree No. 39/2010, produced by the same Independent Auditors, did not disclose any significant shortfalls in the internal audit system in relation to the financial disclosure process.

18. Società Cattolica Assicurazioni has complied with the “Borsa Italiana S.p.A. Code of Conduct” of the Committee for the Corporate Governance of listed companies. The Board of Directors effectively implemented the above by setting up the “Audit and Risks Committee”, the “Remuneration Committee” the “Related Parties Committee”, the “Corporate Governance Committee” and the “Investments Committee”, approving the respective regulations. In July 2015, the Corporate Governance Committee issued an up-dated edition of the “Code of Conduct”, containing a number of amendments; the issuers are required to comment on compliance with the same by the end of 2016. During the latter, the Board of Directors took steps to adapt the regulations of the Committees in force in compliance with the amendments introduced. In this context, it decided to confirm the decision not to proceed with the establishment of

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an Appointments Committee. The Report on Corporate Governance and the Ownership Structures, to which reference is made, contains the envisaged reasons for the choice. As specified herein, during the year the Board of Statutory Auditors took part in the work of the Committees in question, as represented by the Chairman or an appointee of the same. In January 2017, in observance of the Borsa Italiana Code of Conduct and the ISVAP Regulation No. 20/2008, the Board of Directors concluded the annual process for the self- assessment of its members, including the check on the independence requirements of certain Directors, as per formalities essentially similar to the previous editions. The related conclusions did not present elements of note and are precisely indicated in the Report on corporate governance and the ownership structures. With particular regard to the criteria and assessment procedures used by the Board to assess the independence of the members of the Board of Directors, the Board of Statutory Auditors does not have any particular observations. On conclusion of the afore-mentioned process, the management body therefore took steps to up-date the document containing the stances on the expertise and professionalism of the directors, without essential changes compared with the previous version of the same, approved on March 2nd, 2016. As communicated to the Board of Directors by note dated February 14th, 2017, the Board of Statutory Auditors ascertained the independence of its members, in light of the same criteria as well as Article 148, paragraph 3, letters b. and c. of Italian Legislative Decree No. 58/98. It is also formally acknowledged that on May 8th, 2013 - confirming the same in subsequent similar resolutions - the Board of Directors resolved the non-application also for the Directors, of the independence requirement envisaged by point 3.C.1 e) of the Code of Conduct [loss of the requisite if one has been a Director of the Company for more than nine years in the last 12 years] in compliance with the recognised need to show preference with regard to an essential valuation. A similar amendment was also confirmed for the Statutory Auditors, on December 12th, 2012, at the time of adoption of the 2011 edition of the Code of Conduct, in relation to point 8.C.1. In any case, none of the Auditors in office fall within the case in question. The individual members of the Board of Statutory Auditors therefore certify observance of the limits to the accumulation of the appointments as per Article 148 bis, paragraph 1 of Italian Legislative Decree No. 58/98. The Board of Statutory Auditors reveals that the Board of Directors on March 7th, 2017 approved the “Report on remuneration policies for 2016” pursuant to Article 123 ter of the TUF, to be submitted to the shareholders’ meeting in observance of both Consob resolution No. 18049 dated December 23rd, 2011 and the ISVAP Regulation No. 39 dated June 9th, 2011. In observance of current legislation, the Policies in question were examined by the management body once the regulatory procedure had been observed which envisaged the drafting by the Human Resources and Organisational Development Unit and the involvement of the Remuneration Committee and the Audit and Risks Committee for preliminary validation. With regard to the matters stated above, the Board of Statutory Auditors has no particular observations to make.

19. On the basis of the afore-mentioned, the Board of Statutory Auditors can certify that during the supervisory and audit activities no significant facts emerged which would require being reported to the Supervisory bodies or a mention in this report, other than the matters stated above.

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20. In relation to the proposals to be presented to the shareholders’ meeting as per Article 153.2 of Italian Legislative Decree No. 58/98, please see the matters which will be indicated further on in relation to certain specific considerations, including those of the insurance and co-operation sector.

***** We therefore believe that it is necessary to state that: a. the Board of Statutory Auditors has carried out, where applicable, additional specific checks, also via the use of samples deemed suitable for the cases taken into consideration, in compliance with the IVASS circulars and provisions currently applicable, in light of current provisions; in particular, with regard to the control of the assets assigned to cover the technical provisions, the Board of Statutory Auditors has checked the full availability and absence of restrictions and charges on these assets, as well as the observance by the Company of the admissibility requisites and the investment limits envisaged by regulations; b. the company’s solvency margin, calculated on the basis of the metric laid down by Solvency II Legislation, emerges as adequate, remaining as such throughout the year; c. with regard to the classification and valuation of the securities portfolio, the Company has provided appropriate information in the notes to the accounts and the Management report. During the year, the Company operated in accordance with the policies resolved by the Board of Directors. The Board of Statutory Auditors took steps to carry out the checks as per Article 7 of ISVAP Regulation No. 36 dated January 31st, 2011, as well as Article 12 of IVASS Regulation No. 24 dated June 6th, 2016, in force as from October 1st, 2016, and has found no irregularities in this connection. Furthermore, the compliance of the operations with the guidelines indicated in the related outline resolution concerning investments, also in terms of determination of the related strategic policy and composition of the medium/long-term portfolio, is monitored by means of periodic reports, accompanied by specific stress tests, produced by the Finance Division to the Board of Directors, together with the Risk Management Unit and subject to joint review by the Audit and Risks Committee and the Board of Statutory Auditors, insofar as they are respectively competent; d. the contained transactions on financial derivatives and those on complex assets, carried out during 2016, were established in relation to the directives imparted by the Board of Directors and marked by prudence. The Company made the related periodic communications to IVASS. The Board of Statutory Auditors also certifies the coherence of these transactions according to Article 7, paragraph 1, letter b) of Regulation No. 36 and Article 12, paragraph 1, letter b) of the IVASS Regulation No. 24, as indicated above; e. account has been provided in the Management Report that the Company has seen to the management and registration of the complaints, as per ISVAP Regulation No. 24 dated May 19th, 2008, amended by means of IVASS Provision No. 46 dated May 3rd, 2016; f. the Board of Directors has also reported, in the specific sections of the paragraph of its Report entitled “Significant events during the year”, on the inspections, disputes and certain facts, relating to the most significant dealings with CONSOB and IVASS, as well as with the Italian Internal Revenue Agency, in relation to which it kept the Board of Statutory Auditors informed; g. with regard to the pension funds set up by Società Cattolica Assicurazioni, the appointed

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Independent Auditors certified, in its reports, that the statements of account on the accumulation phase of the various segments of the “Fondo Pensione Aperto Cattolica Gestione Previdenza - a Contribuzione Definita” and the “Fondo Pensione Aperto Risparmio & Previdenza – a Contribuzione Definita” have been drawn up clearly and provide a true and fair view of the situations of the net asset values and the related changes in the year. The annual report of the Manager of the afore-mentioned Pension Funds, intended for COVIP, also concluded without irregularities. Likewise, the corresponding report pertaining to the Individual Pension Plans set up care of the Company also lacked irregularities; h. the Consulta (council) and the Ethics and Disciplinary Board, respectively pursuant to Articles 47 and 48 of the Articles of Association, did not meet during the year; i. pursuant to Article 2545 of the Italian Civil Code, with reference to the corporate management for the pursuit of the mutual purpose, reference is made to the matters specified by the Directors in the Management Report in the specific section “Shareholders” - “Mutual purpose”. On a consistent basis with the related Article of Association provision, the Company permits the shareholders to take out insurance policies under favourable conditions. The entity of the premiums of the shareholders and the amount of the benefits enjoyed are specified in the notes to the accounts, in the section “Activities carried out with the shareholders”.

***** Dear Shareholders, taking into account the matters disclosed up to this point, the Board of Statutory Auditors does not find any reasons which would prevent the approval of the financial statements as of December 31st, 2016, as drawn up by the Board of Directors, and expresses a favourable opinion with regard to the proposal to allocate the profit for the year and the dividend distribution, to be withdrawn in part from the extraordinary reserve.

Verona, Italy, March 30th, 2017

THE BOARD OF STATUTORY AUDITORS

Giovanni Glisenti – Chairman

Luigi de Anna - Statutory Auditor

Federica Bonato - Statutory Auditor

Cesare Brena - Statutory Auditor

Andrea Rossi - Statutory Auditor

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Report