Compagnia Assicuratrice Unipol S.p.A. Registered and Head Offices in Bologna – Via Stalingrado 45 – Share capital € 2,360,144,410.00 fully paid-up. Tax Code and Companies' Register in Bologna 00284160371 – R.E.A. 160304 – Authorized to provide insurance services by MD 28 December 1962 (OJ 15/18.1.63) and MD 29 April 1981 (OJ 135/19.5.81) www.unipol.it Unipol Assicurazioni Reports and Accounts 2005 Ordinary Shareholders’ Meeting held on 3 May 2006 Translation from the original Italian text. Company’s Boards and Officials...........................................................................5 Notice convening the Ordinary Shareholders’ Meeting ................................7 Introduction ................................................................................................................9 Company Highlights..............................................................................................13 Board Report Business Performance ...............................................................................................17 Insurance Business.....................................................................................................21 Property and Financial Management.......................................................................37 Shares held by Directors and Statutory Auditors ..................................................45 The Unipol Group .....................................................................................................45 Relations with Group Undertakings and Related Parties.....................................46 Recent Significant Events .........................................................................................47 Business Outlook .......................................................................................................49 Solvency Margin .........................................................................................................49 Proposals to the Shareholders’ Meeting..................................................................50 2005 Annual Accounts Balance Sheet (€) ........................................................................................................55 Profit and Loss Account (€) .....................................................................................69 Notes to the Accounts Part A: Valuation Criteria..........................................................................................81 Part B: Information on Balance Sheet and on Profit and Loss Account...........87 Part C: Other Information......................................................................................117 Notes to the Accounts - Annexes .....................................................................119 Notes to the Accounts – Additional Annexes Reclassified Balance Sheet .....................................................................................188 Reclassified Profit and Loss Account....................................................................190 Statement of Changes in Shareholders’ Equity....................................................191 Statement on Usage and Availability of Equity Reserves ..................................192 Cash Flow Statement...............................................................................................193 Land and Buildings Write-ups – Summary Statement........................................194 Statement of Shareholdings under Consob Circ. 11971, Article 126...............195 Land and Buildings ..................................................................................................197 Statements of Solvency Margin..............................................................................203 Statements of Assets Matching the Technical Provisions..................................225 Statutory Auditors’ Report..................................................................................287 External Auditors’ Report...................................................................................293 Report on Corporate Governance.....................................................................299 Annual Accounts of Subsidiaries and Affiliated Undertakings................331 Summary of Resolutions adopted by the Shareholders’ Meeting ...........361 COMPANY’S BOARDS AND OFFICIALS (*) Honorary Chairman Enea Mazzoli Board of Directors Chairman and Managing Director Pierluigi Stefanini Vice Chairman and Vanes Galanti Managing Director Board Members Antonio Silvano Andriani Massimo Masotti Jean Dominique Antoni Enrico Migliavacca Francesco Boccetti Pier Luigi Morara Rocco Carannante Milo Pacchioni Piero Collina Marco Pedroni Bruno Cordazzo Aldo Soldi Pier Luigi Fabrizi Graziano Trere’ Jacques Forest Marco Giuseppe Venturi Fabrizio Gillone Francesco Vella Claudio Levorato Luca Zaccherini Ivan Malavasi Mario Zucchelli Riccardo Margheriti Secretary to the Board of Directors Roberto Giay Remuneration Committee Members Piero Collina Enrico Migliavacca Mario Zucchelli Internal Audit Committee Members Francesco Boccetti Rocco Carannante Massimo Masotti Area General Managers Carlo Cimbri Carmelo De Marco Joint General Managers Riccardo Laurora Salvatore Petrillo Central Managers Domenico Brighi Stefano Dall’Aglio Giancarlo Brunello Francesco Montebugnoli Federico Corradini Stefano Scavo Board of Statutory Auditors Chairman Umberto Melloni Members Carlo Cassamagnaghi Luigi Capè Alternate Members Marco Baccani Roberto Chiusoli External Auditors K.P.M.G. spa (*) Updated on the basis of the resolutions adopted by the Shareholders’ Meeting on 3 May 2006. Compagnia Assicuratrice UNIPOL S.p.A. Registered Offices in Bologna, Via Stalingrado 45 – Share Capital €2,360,144,410 fully paid-up Tax Code and Companies’ Register in Bologna 00284160371 NOTICE CONVENING THE ORDINARY SHAREHOLDERS’ MEETING Shareholders are convened to an Ordinary General Meeting at the registered offices (Bologna, Via Stalingrado 45) on 29 April 2006 at 10.30 a.m. in first call and, if necessary, in second call on 3 May 2006 at the same time and place, to decide on the following AGENDA 1. Accounts for the year ended 31 December 2005; Board Report; Report of the Board of Statutory Auditors and of the Independent Auditors. Allocation of the profit for the year and dividend distribution. Related and consequent resolutions. 2. Granting of the scope audit for the unconsolidated and consolidated accounts relating to the financial years 2006-2011, pursuant to Legislative Decree 58 of 24 February 1998 and 209 of 7 September 2005; granting of the limited scope audit as regards the half-yearly report, also consolidated, for the financial years 2006-2011. 3. Purchase and disposal of own shares and of shares of the holding company. Related and consequent resolutions. 4. Resolutions on the replacement of Board Members who terminated their posts. With reference to item 4. above, pursuant to the Self-regulation Code for listed companies as adopted by the Company, the Shareholders willing to submit proposals for the appointment of Board Members are invited, at least 10 days before the date on which the Meeting is convened at the registered offices in Bologna, Via Stalingrado 45, to deposit the candidates’ curricula vitae and any information concerning their eligibility to act independently in accordance with the above mentioned Self-regulation Code for listed companies and Article 147-ter of Legislative Decree 58 of 24 February 1998. The provision under the ‘Regulation of the Company’s ordinary and extraordinary Shareholders’ Meeting’ involving the open vote will not be applied. In accordance with the Law and the Company’s By-laws, holders of ordinary shares for whom the Company has received communication, as laid down by Article 2370(2) of the Codice Civile [Civil Code], at least two days before the date of first call of the Meeting, can attend the General Meeting. The Board Reports concerning agenda matters and the relevant resolution proposals, together with the associated documents and the annual report on corporate governance, will be filed at the Company’s registered offices and at Borsa Italiana S.p.A. within the terms provided for by the regulations in force and will be available to Shareholders who request a copy up until the date of the General Meeting. These documents will also be made available on the Company’s website www.unipol.it. Bologna, 24 March 2006 The Chairman of the Board of Directors Pierluigi Stefanini Introduction Macroeconomic background Insurance business Last year was characterised by a difficult international The figures issued by ISVAP indicate that in the first situation, a slowdown in growth worldwide and an nine months of 2005 (the last period for which figures increase in rates of inflation. are available) premium income in Italy recorded an In 2005 Italian GDP grew by 0.1%, considerably less increase of 11.8% compared with the same period of the than the 1.1% recorded at the end of 2004. previous year. In the Eurozone as a whole GDP grew by only 1.4% Non-Life business continued to show very modest growth compared with 1.8% in the previous year. (less than +2%), partly because of the unfavourable In the Summer of 2005 international rates of inflation business cycle. Growth was almost exclusively in non- began to be affected by the continued increases in energy Motor business, which was up 4.2%, whilst Motor costs. However, in Italy consumer prices rose by only premium income grew by only 0.5%. 2% whereas the average for Europe as a whole