CONSOLIDATED FINANCIAL STATEMENTS YEAR 2007 FONDIARIA-SAI S.p.A. FONDIARIA-SAI S.P.A. - REGISTERED OFFICE AND FLORENCE HEADQUARTERS - P.ZA DELLA LIBERTA 6 - TURIN HEADQUARTERS - CORSO G. GALILEI, 12 - SHARE CAPITAL EURO 168,692,679 FULLY PAID-IN – TAX, VAT AND FLORENCE COMPANY REGISTRATION NO. 00818570012 - COMPANY AUTHORISED TO UNDERTAKE INSURANCE ACTIVITIES PURSUANT TO ARTICLE 65 R.D.L. NO. 966 OF APRIL 29, 1923, ENACTED INTO LAW NO. 473 OF APRIL 17, 1925. 1 5 YEAR OVERVIEW - CONSOLIDATED* Euro/thousand 2003 % 2004 % 2005 % 2006 % 2007 % TOTAL PREMIUMS MOTOR AND MARITIME TPL 4.115.795 44,53 4.187.410 42,65 4.210.494 44,30 4.307.043 43,18 4.190.572 35,27 NON-LIFE DIVISION 2.707.779 29,29 2.822.633 28,75 2.933.822 30,87 2.997.751 30,05 3.127.573 26,32 LIFE DIVISION 2.419.888 26,18 2.807.567 28,60 2.360.942 24,84 2.670.472 26,77 4.564.123 38,41 TOTAL 9.243.462 100,00 9.817.610 100,00 9.505.258 100,01 9.975.266 100,00 11.882.268 100,00 APE - - - 244.410 402.757 investment contracts - - 717.752 882.541 171.982 CLAIMS PAID and related charges 5.955.637 6.515.165 6.614.224 7.063.900 8.166.014 GROSS TECHNICAL RESERVES UNEARNED PREMIUM RESERVE 2.400.713 2.456.758 2.490.917 2.567.470 2.621.820 CLAIMS RESERVE 8.783.862 9.010.996 8.949.726 9.083.916 8.969.398 OTHER TECHNICAL RESERVES 26.749 25.153 10.825 10.501 14.463 LIFE TECHNICAL RESERVES 13.659.635 15.135.113 13.908.135 15.264.706 19.737.383 TOTAL 24.870.959 26.628.020 25.359.603 26.926.593 31.343.064 TECHNICAL RESERVES/PREMIUMS 269,1% 271,2% 266,8% 269,9% 263,8% SHAREHOLDERS' EQUITY SHARE CAPITAL AND RESERVES 2.761.256 2.829.741 3.922.539 4.453.774 4.550.883 NET PROFIT 321.417 445.027 586.350 600.768 620.050 3.082.673 3.274.768 4.508.889 5.054.542 5.170.933 INVESTMENTS 24.506.267 26.297.585 30.065.020 33.812.476 38.020.751 EMPLOYEES PARENT COMPANY 6.157 6.031 5.852 5.991 6.154 * The data relating to the year 2003 refers to the financial statements prepared in accordance with Italian GAAP; the data relating to the year 2004 refers to the financial statements prepared in accordance with IAS/IFRS with the exclusion of IAS 32, 39 and IFRS 4 which were applied from 1/1/2005; the data relating to the years 2005 and 2006 refer to the financial statements prepared in accordance with IAS/IFRS. 2 MISSION VISION AND VALUES The capacity to combine ethics and social responsibility and profit, without sacrificing any of these objectives means developing a broader concept of wealth than that of a simple economic return, evolving toward an in- tangible goal in which collective well being and satisfaction encompasses all of its members and at the same time also includes a healthy environment - and not simply the work environment - with improved psychologi- cal-physical living conditions. Responsibility, a spirit of teamwork, innovation and communication are the values that systematically guide our actions towards all those with legitimate interests in Fondiaria-SAI Groups’s internal and external opera- tional processes. Responsibility Responsibility can be divided into actions that are aimed at handling the interests of customers, creating value for shareholders and operating honestly and correctly in management and focusing attention on social and en- vironmental responsibility. Communication Communications is not just a corporate function, but an integrated activity that is focussed on the building of the corporate identity. In the era of image, communication and corporate culture are two sides of the same coin, where brands, cultural identity and strategic vision merge together in order to communicate with the market, customers and partners. Team Spirit For us, creating a work environment that knows how to serve the needs of the different stakeholders and co- ordinate their abilities, in order to reach the best possible outcome, means promoting a sense of pride, invest- ing in the development of partners and the integration of skills to optimise team work in consideration of the conduct regulations for the consolidation of the functioning of the processes. Innovation Innovation means the ability to face the future by maintaining one’s roots anticipating and managing change with any opportunity that presents itself. Tradition and corporate culture are the cornerstones of our Group. Throughout the years, we have managed to innovate and integrate our corporate culture, taking advantage of post-merger economies of scale offered in organisational terms and acquiring the wealth of experience and values that resulted from the merger of the former Fondiaria and the former SAI. 3 MAIN EVENTS IN 2007 Acquisitions and Bancassurance Popolare Vita S.p.A. On September 7, 2007, the Banco Popolare Group and the Fondiaria-SAI Group completed the agreement for an exclusive strategic partnership in the Banco Popolare Group bancassurance Life and Pension sectors. Having obtained the necessary authorisations from the relevant Authorities, Fondiaria-SAI acquired from the Banco Popolare Group a total holding of 50% in the share capital of Popolare Vita S.p.A. (formerly BPV VITA) at a price of Euro 530 million. Specifically, Fondiaria-SAI acquired a holding of 35% in Popolare Vita S.p.A. (formerly BPV VITA) from Banco Popolare Soc. Coop., at a price of Euro 371 million, and a holding of 15% in Credito Bergamasco S.p.A. at a price of Euro 159 million. Within this agreement, Fondiaria-SAI acquired a further share of Popo- lare Vita S.p.A. (formerly BPV VITA), consequently becoming the majority shareholder in the company. The Banco Popolare Group and the Fondiaria-SAI Group also signed a shareholder agreement in order to govern the industrial aspects of the partnership and the corporate governance regulations of Popolare Vita S.p.A. (formerly BPV VITA). The agreement provides for reciprocal options in the case of the dissolution of the partnership, valuing the holding of Fondiaria-SAI at the appraisal value. Also on September 7, 2007, Popolare Vita S.p.A. and the Banco Popolare Group signed a ten year distribu- tion agreement, renewable for a further 5 year period. This exclusive agreement will commence from January 1, 2008, except in relation to the existing distribution agreements with AVIVA and AURORA (exclusive agreements expiring in May 2009 in the branches of the former Reti Bancarie S.p.A.). Once fully operational, the distribution of Popolare Vita S.p.A. can therefore count on a total network of approximately 2,200 branches. Banca Gesfid S.A. On May 31, 2007, Fondiaria-SAI concluded an agreement with Meliorbanca S.p.A. for the residual purchase of 40% of the share capital of Banca Gesfid S.p.A. at a price of SFR 47 million. The operation was com- pleted in July, after obtaining the necessary authorisations from the relevant Italian and Swiss authorities. DDOR Novi Sad On November 26, 2007, the sale was concluded through a public auction of the second Serbian insurance company DDOR Novi Sad with Fondiaria-SAI successful in obtaining 83.3% of the share capital at a price of Euro 220 million. On January 31, 2008, the sales/purchase contract of the above quota was completed, sold by the Deposit Insurance Agency of Serbia as shareholder and representative for the minority shareholders. For further details in relation to the closing of the operation reference should be made to the paragraph “sub- sequent events after the year end”. 4 Bipiemme Vita S.p.A. On June 29, 2007, Milano Assicurazioni, on the basis of the agreements completed on June 14, 2006 with Banco Popolare di Milano, exercised the option for the purchase of a further quota of 1% in the share capital of Bipiemme Vita S.p.A., increasing its total holding to 51%; the operation resulted in the transfer of control of Bipiemme Vita to Milano Assicurazioni. Banca Italease On January 8, 2008, following the changed conditions in the proposed industrial partnership, Banca Italease and Fondiaria-SAI mutually agreed to resolve the sales/purchase agreement and the related agreements signed on April 26, 2007. Banca Italease and Fondiaria-SAI also signed, on the same date, a new agreement which provides for the ex- clusive distribution of the Life insurance products of the Fondiaria-SAI Group through the branches and net- works of the agents and conventional intermediaries of the Banca Italease Group. This commercial agreement refers to Life products prevalently in classes I, III, and V and for a duration of 5 years, renewable for a further 5 years. On February 20, 2008, Fondiaria-SAI ceded the distribution agreement with Banca Italease to its subsidiary EFFE VITA S.p.A., the insurance company of the Group which acts as a vehicle for the realisation of distri- bution agreements with banks in the Life Division. Novara Assicura On October 11, 2007, the sale was completed – by the subsidiary Milano Assicurazioni S.p.A. – of 100% of the share capital of Novara Assicura S.p.A. to Banco Popolare S. Coop and Holding di Partecipazioni Finan- ziarie Popolare di Verona e Novara S.p.A. for 50% each. The sales price was Euro 15.6 million. Other events 2006 - 2008 Industrial Plan On April 12, 2007, at the annual meeting with the Financial Community, the Chief Executive Officer Prof.