ANNUAL REPORT 2018 BNP PARIBAS CARDIF SCHADEVERZEKERINGEN N.V.  

IndexIndexIndexIndex

Boards, officials and external advisors…………………………………………………………………………………………………………………………………………………………………………..3

Key figures…………………………………………………………………………………………………………………………………………………………………………………………………………4

Supervisory Board's report……………………………………………………………………………………………………………………………………………………………………………...5

Board of Directors' report………………………………………………………………………………………………………………………………………………………………………………7

Financial Statements…………………………………………………………………………………………………………………………………………………………………………………………………………38

Balance sheet - Assets as at 31 December 2018………………………………………………………………………………………………………………………………………………………………………………38

Balance sheet - Liabilities as at 31 December 2018………………………………………………………………………………………………………………………………………………………………………………39

Profit and Loss Account for the year ended 31 December 2018………………………………………………………………………………………………………………………………………………………………………………40

Cash Flow Statement for the year ended 31 December 2018………………………………………………………………………………………………………………………………………………………………………………42

Notes to the balance sheet………………………………………………………………………………………………………………………………………………………………………………43

Assets as at 31 December 2018………………………………………………………………………………………………………………………………………………………………………………49

Equity and liabilities as at 31 December 2018………………………………………………………………………………………………………………………………………………………………………………53

Notes to the profit and loss account………………………………………………………………………………………………………………………………………………………………………………64

Statutory appropriation of the result……………………………………………………………………………………………………………………………………………………………………………………………..67

Appropriation of the result 2017…………………………………………………………………………………………………………………………………………………………………………………..67

Proposal appropriation of the result 2018………………………………………………………………………………………………………………………………………………………………………………67

Independent Auditor's report………………………………………………………………………………………………………………………………………………………………………………69

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Boards, officials and external advisorsBoards, officials and external advisorsBoards, officials and external advisorsBoards, officials and external advisors

Supervisory BoardSupervisory BoardSupervisory BoardSupervisory Board ◊ Mr C.P.F. De Longueville ◊ Mr R.H.A. van Vledder ◊ Mr O.J.G. Martin ◊ Mrs I.P.G.M. Brekelmans

Committees within this Supervisory Board as per 31-12-2018: ◊ Remuneration Committee (Supervisory Board members: C.P.F. De Longueville, I.P.G.M. Brekelmans) ◊ Audit and Risk Committee (Supervisory Board members: R.H.A. van Vledder, O.J.G. Martin)

Board of DirectorsBoard of DirectorsBoard of DirectorsBoard of Directors ◊ Mr C. de Jong ◊ Mr W. Eikelboom ◊ Mrs M. van Zuien

External Independent AuditorExternal Independent AuditorExternal Independent AuditorExternal Independent AuditorPricewaterhouseCoopers Accountants N.V.

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Key figuresKey figuresKey figuresKey figuresIn thousand euros

KEY FIGURES 2014 - 2018KEY FIGURES 2014 - 2018KEY FIGURES 2014 - 2018KEY FIGURES 2014 - 2018 2018201820182018 2017201720172017 2016201620162016 2015201520152015 2014201420142014

Gross written premiums 20.242 22.224 23.536 24.863 23.418

Net earned premiums insurer 60.324 49.414 53.617 54.608 66.051 Claim charge* (14.305) (15.306) (10.350) (39.814) (44.288) Result on investments 6.039 20.392 21.125 28.465 27.260 Operating expenses (16.416) (16.212) (18.090) (19.028) (20.862) Other income 34 49 50 59 65

RESULT BEFORE TAXESRESULT BEFORE TAXESRESULT BEFORE TAXESRESULT BEFORE TAXES 35.676 38.337 46.352 24.290 28.226

Result on technical account 34.267 33.708 42.486 19.616 24.010

Result on non-technical account 1.409 4.629 3.866 4.674 4.216

RESULT BEFORE TAXESRESULT BEFORE TAXESRESULT BEFORE TAXESRESULT BEFORE TAXES 35.676 38.337 46.352 24.290 28.226

RESULT AFTER TAXESRESULT AFTER TAXESRESULT AFTER TAXESRESULT AFTER TAXES 26.510 28.744 34.757 18.231 21.237

TOTAL EQUITYTOTAL EQUITYTOTAL EQUITYTOTAL EQUITY 88.733 93.222 96.981 80.455 83.461

BALANCE SHEET TOTALBALANCE SHEET TOTALBALANCE SHEET TOTALBALANCE SHEET TOTAL 365.168 421.864 469.852 500.142 527.027

FINANCIAL INVESTMENTSFINANCIAL INVESTMENTSFINANCIAL INVESTMENTSFINANCIAL INVESTMENTSFor the risk of the company 356.853 412.541 458.692 483.442 506.326

TECHNICAL PROVISIONSTECHNICAL PROVISIONSTECHNICAL PROVISIONSTECHNICAL PROVISIONS 271.321 323.525 363.360 414.819 438.857

NUMBER OF FTEs**NUMBER OF FTEs**NUMBER OF FTEs**NUMBER OF FTEs** 108 111 124 130 129

* Claims for the insurance company and movement technical provision for outstanding claims

and BNP Paribas Cardif Schadeverzekeringen N.V.

**Combined average FTE's of BNP Paribas Cardif B.V., BNP Paribas Cardif Levensverzekeringen N.V.

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Supervisory Board's reportSupervisory Board's reportSupervisory Board's reportSupervisory Board's report

In this report, the Supervisory Board of BNP Paribas Cardif Schadeverzekeringen N.V. provides the explanation of itsstructure and the way it supervised BNP Paribas Cardif Schadeverzekeringen N.V. during 2018 (BNP Paribas CardifSchadeverzekeringen N.V. is a 100% subsidiary of BNP Paribas Cardif B.V.).

Members of the Supervisory Board of BNP Paribas Cardif Schadeverzekeringen N.V.Members of the Supervisory Board of BNP Paribas Cardif Schadeverzekeringen N.V.Members of the Supervisory Board of BNP Paribas Cardif Schadeverzekeringen N.V.Members of the Supervisory Board of BNP Paribas Cardif Schadeverzekeringen N.V.The Supervisory Board consists of the following members: ◊ Mr C.P.F. De Longueville, Chairman ◊ Ms I.P.G.M Brekelmans ◊ Mr O.J.G. Martin ◊ Mr R.H.A. van VledderOne member of the four members is women, which means that we are not fully compliant with the 30% target. BNP Paribas Cardif Schadeverzekeringen N.V. aims to take this into consideration when preparing profiles if a position in the Supervisory Board becomes available.

Committees within this Supervisory Board: ◊ Remuneration Committee ◊ Risk Committee ◊ Audit Committee

Supervision and advice of the Supervisory Board relating to the 2018 annual financial statementsSupervision and advice of the Supervisory Board relating to the 2018 annual financial statementsSupervision and advice of the Supervisory Board relating to the 2018 annual financial statementsSupervision and advice of the Supervisory Board relating to the 2018 annual financial statementsThe Executive Board of BNP Paribas Cardif Schadeverzekeringen N.V. prepared the annual financial statements on thereporting year 2018. The Supervisory Board of BNP Paribas Cardif Schadeverzekeringen N.V. approved the annualfinancial statements.

The 2018 annual financial statements were audited by PricewaterhouseCoopers Accountants N.V.

In accordance with the provisions of the Articles 35 and 36 of the Articles of Association, the Supervisory Boardapproved the Executive Board’s proposal to have the following result distributed as a dividend:BNP Paribas Cardif Schadeverzekeringen N.V.: 26.510 thousand euros.

Meetings and activities of the Supervisory Board and its CommitteesMeetings and activities of the Supervisory Board and its CommitteesMeetings and activities of the Supervisory Board and its CommitteesMeetings and activities of the Supervisory Board and its CommitteesThe Supervisory Board of BNP Paribas Cardif Schadeverzekeringen N.V. convened five official meetings in 2018, on: ◊ 9 February 2018 self-assessment with external Party: Mens & Kennis ◊ 23 February 2018 ◊ 7 May 2018 ◊ 28 September 2018 ◊ 7 December 2018 meeting with Verbond van Verzekeraars

The Committees of the Supervisory Board of BNP Paribas Cardif Schadeverzekeringen N.V. convened various official meetings in 2018, on: ◊ 9 February 2018 Audit and Risk, Remuneration ◊ 7 May 2018 Audit and Risk ◊ 14 September 2018 Audit and Risk ◊ 23 November 2018 Audit and Risk ◊ 28 November 2018 Remuneration

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A delegation of the Supervisory Board had a meeting with the Works Council of BNP Paribas Cardif Schadeverzekeringen N.V. on 19 April 2018. The main topics on the agenda were the company’s future strategy and employability. It was experienced by both the Supervisory Board members and the Works Council as a very open and useful meeting. Later that day, this delegation joined a meeting about the pension contract that was up for renewal.

On 7 December 2018, there was a meeting that focused on distribution, including used distribution models in the Dutch insurance landscape, current affairs regarding distribution rules and a broader view from distribution perspective to Europe. This meeting took place in the context of permanent education of the Supervisory Board and was organized by the Verbond van Verzekeraars.

Focus of supervision in 2018Focus of supervision in 2018Focus of supervision in 2018Focus of supervision in 2018During the year the Supervisory Board paid a lot of attention to these developments in the owner occupied housingmarket and the mortgage market, as these markets influence sales of the Hypotheek Aflos Verzekering. Furthermore, the strategy focuses on the Re-launch, since the other two Re’s of the Re3 strategy, Re-fficiency and Re-mediation, were accomplished. Special attention was paid to the distribution of mortgages and the software in use by the mortgage distributors. Directly related to the attention to the Hypotheek Aflos Verzekering is the attention paid to thefinancial results of BNP Paribas Cardif. Furthermore they attended to the employment contracts of the Board of Directors.

Other topics under the attention of the Supervisory Board and its committees in 2018 were: ◊ Activities BNP Paribas Cardif undertook to be prepared for changes in legislation and regulations, these included the new European rules on the protection of personal data and the European Directive on Insurance Distribution ◊ The selection of a new pension contract and provider ◊ Solvency II obliged policies and other documents which needed approval by the Supervisory Board ◊ The 2018 Own Risk and Solvency Assessment (ORSA).

Oosterhout, 18 April 2019

Mr C.P.F. de Longueville, ChairmanMs I.P.G.M. Brekelmans Mr O.J.G. MartinMr R.H.A. van Vledder

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Board of Directors' reportBoard of Directors' reportBoard of Directors' reportBoard of Directors' report

IntroductionIntroductionIntroductionIntroduction

2018 was dominated by the re-launch of our Hypotheek Aflos Verzekering. This year, all our efforts in this respect ensureda stable market position as a protection specialist. We have started a new movement, for which we also receive recognition from the market. We continue to sell our product, we have received a Gouden Lotus award for the most innovative insurance product and our regional workshops on disability and the Hypotheek Aflos Verzekering are well attended and appreciated by mortgage advisors. This confirms our belief that payment protection definitely has a future.

In the meantime, we are obviously not standing still. We respond to the experiences of distribution partners with our Hypotheek Aflos Verzekering and introduce new developments in the product. After a preparatory period in 2018, we will be launching an even simpler Hypotheek Aflos Verzekering in 2019, which is of interest to a larger target group. Our preparations in 2018 concerning the development of a new term life proposition are also becoming reality.

The other two pillars of our strategy, re-efficiency and the protection of our in-force portfolio, remain important. We continued our cost reductions, which demanded discipline but which worked out as planned. Protecting the safety of the in-force portfolio (assets and liabilities) through sound risk management and secured operations are naturally another of our main priorities.

Economic growth in the Netherlands continued in 2018. As in the previous years, this economic growth was strongly reflected in fewer claim declarations. The improved economy and increased customer confidence also boosted the prices and sales of existing homes, particularly in the urban region. We are responding to this with the further development of our Hypotheek Aflos Verzekering.

The result of BNP Paribas Cardif Schadeverzekeringen N.V. of 26.5 million euros in 2018 was driven by the positive claims performance in the technical result and the lower financial result. Furthermore, the technical base for entry and recovery rates of disability and unemployment improved and the technical interest rate reduced to 1.75% in order to be sustainable in the future low interest environment. Although the net result is provisioned to be paid out as dividend, the capital position showed a strong improvement from 173% in 2017 to 211% in 2018.

Business and performanceBusiness and performanceBusiness and performanceBusiness and performance

BusinessBusinessBusinessBusiness

GeneralGeneralGeneralGeneralBNP Paribas Cardif Schadeverzekeringen N.V. offers payment protection insurances with covers for disability and unemployment and surety ships. We have a license to offer non-life insurance within the following sectors: ◊ S01 Accident insurance ◊ S02 Health insurance ◊ S09 Other property damage insurance ◊ S15 Suretyship ◊ S16 Pecuniary loss insurance

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Portfolio informationPortfolio informationPortfolio informationPortfolio information

Products and PortfolioProducts and PortfolioProducts and PortfolioProducts and PortfolioThe following figure presents the main products and covers of BNP Paribas Cardif Levensverzekeringen N.V. and BNP Paribas Cardif Schadeverzekeringen N.V. Both companies offer protection products. The protection-related products protect a policyholder from financial distress. The portfolio of BNP Paribas Cardif Levensverzekeringen N.V. also includes savingsproducts. None of these products has (discretionary) profit sharing. Furthermore, the distribution type and premium type are recognised. These policies are distributed either through independent financial advisors (IFAs), banks and collectives (classification according to DNB: Direct) or through accepted reinsurance (classification according to DNB: Indirect).

A distinction is made between creditor protection products and other protection products.

Creditor protection products are linked to either mortgages or consumer loans. BNP Paribas Cardif Levensverzekeringen N.V. provides protection for term life risks. The cover (mainly) provides for the outstanding balance of the loan. We provide protection for disability, critical illness and unemployment risks. The cover (mainly) provides for the monthly instalments as long as the disability, critical illness or unemployment continues (with a maximum defined per contract). The distribution of these policies is either Direct, through independent financial advisors (IFAs), Banks and Collectives, or Indirect through accepted reinsurance.

The other protection products concern a whole life cover in BNP Paribas Cardif Levensverzekeringen N.V. and a suretyship in BNP Paribas Cardif Schadeverzekeringen N.V. The whole life insurance covers funeral costs. A suretyship is sold in combination with the purchase of a new house. We mitigate the financial risk of a house seller when a house buyer isliable for the cancellation of the sale. The amount paid to the house seller is reclaimed in some cases (for example failure to finance the house) and not reclaimed in other cases (for example disability or unemployment).The distribution of these policies is Direct, through IFAs.

The purpose of the savings products is to reimburse an underlying mortgage loan, either by building up capital or providing death benefit.The distribution of these policies is Direct, through IFAs.

BNP Paribas Cardif Netherlands in the Netherlands recognises the contract term as the contract boundary for all contracts until 31 December 2016. An ‘en bloc’ clause is present and some contracts are explicitly renewed annually, but any significant change cannot be enforced legally in all adverse circumstances. Particularly in the Savings portfolio, revision of the interest rate is not a contract boundary, as the interest rate revision can only be triggered by the bank providing the mortgage; BNP Paribas Cardif Levensverzekeringen N.V. has not offered these mortgages itself. Since 2017, BNP Paribas Cardif Schadeverzekeringen N.V. offers one-year contracts.

SavingsIndirect Direct

Mortgage Consumer Loan Collective Other Mortgage Savings

Term Life Term Life Term Life Guaranteed-RateWhole Life Unit-Linked

Disability Disability Disability DisabilityUnemployment Unemployment Unemployment UnemploymentCritical Illness Critical Illness

Surety ships

Single premium

BNPPC Leven

DirectProtection

BNPPC Schade

Single premium / Periodic premiumPeriodic premium

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Portfolio MappingPortfolio MappingPortfolio MappingPortfolio MappingThe mapping of these portfolios into lines of business and homogeneous risk groups is presented below. This mapping is used in the remainder of this document and is also relevant for Solvency II.

See the table below for the mapping of lines of business. Besides premium type and portfolio, the disability criterion Any, Suitable or Own occupation is considered when determining homogeneous risk groups.

Within the Direct portfolio, the chosen line of business for both the disability and critical illness risk is Health. Henceforth in this document, disability and critical illness are considered jointly as Disability. Within the Health line of business, BNP Paribas Cardif in the Netherlands considers these risks as Similar to Life. Because the creditor protection products are mainly sold in combination with a (mortgage) loan, a duration of thirty years is common for these contracts. During the course of these thirty years, the premium is kept flat, while the risk increases with the insured party’s age and the maximum benefit decreases. Moreover, there are no legally enforceable contract boundaries. Hence, the Non-life cover provided for disability, critical illness and unemployment is similar to that of Life insurance.

The unemployment risk in the Direct portfolio is not related to the life or health of the insured party and is thus a Non-Life risk. Moreover, the unemployment risk is not explicitly addressed in any other Non-Life line of business. The line of business Miscellaneous Financial Loss is thus chosen by default for the unemployment risk.The classification Similar to Life is only explicitly applicable to the disability risk and not the unemployment risk. We feel that this is not due to the nature of the risk, but rather because Non-Life does not allow such a distinction, whereas Health does.

The suretyship product is classified in line with statutory accounts in the line of business Credit and Surety Ship.

Finally, for the Indirect portfolio, which concerns an accepted reinsurance contract, the accepted reinsurance line of business is chosen: Health Reinsurance and Miscellaneous Financial Loss.

Portfolio OverviewPortfolio OverviewPortfolio OverviewPortfolio Overview

To put the different portfolios in perspective, an overview is provided regarding number of covers, written premium and statutory provisions. The main segments and provisions are highlighted. In both entities, the Mortgage related covers are most material.

The table below shows the health and non-life portfolios broken down by number of covers and statutory provisions gross of reinsurance . Mortgage represents most of the covers (70%), written premium (62%) and provisions (94%).Consumer Loan and Collective represent 26% of the covers and 21% of written premium, but only 4% of provisions. The insured amounts are typically low in these segments. The Other segment is the Suretyship product. It represents 3% of covers, but 17% of written premium and 0.1% of provisions: it is a short natured product, running on average for only three months.

AbbreviationAbbreviationAbbreviationAbbreviation CodeCodeCodeCode Line of Business (S2)Line of Business (S2)Line of Business (S2)Line of Business (S2) Module (S2)Module (S2)Module (S2)Module (S2)

Disability TD - Direct L_H Health Health SLT

Unemployment IU NL_D_Mis Miscellaneous Financial Loss Non-Life

Surety Ship SS NL_D_Cred Credit and Surety Ship Non-Life

Disability TD - Indirect L_AR_H Health Reinsurance Health SLT

Unemployment IU NL_AP_Mis Miscellaneous Financial Loss Non-LifeIndirect businessIndirect businessIndirect businessIndirect business

Direct businessDirect businessDirect businessDirect business

Overview portfolioOverview portfolioOverview portfolioOverview portfolio

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The average duration of the whole portfolio is 19 years. For Single Premium contracts, the duration at issue is 19 years and approximately 5 years remaining. For Regular Premium contracts the same figures are respectively 21 and 14 years. Disability is the most significant long term risk in terms of covers (69%), written premium (58%) and statutory provisions (88%). The remainder of the long term risk is due to Unemployment (provisions: 12%), while Surety Ship represents significant production (written premium: 17%) and is a shorter term risk.

The statutory provisions are split almost equally between unearned premium (44%) and claims (56%). This is due to the materiality and long-term nature of the Disability risk: it represents 74% of covers and claim payments can last until the end of the contract. It is not uncommon for the term of contracts to be thirty years. Within Disability, provisions for claims (62%) are higher than for unearned premium (38%). Within Unemployment, the provision related mainly to unearned premium (90%); the claim payments last at most three years. The statutory provisions are decreasing due to the run-off of Single Premium contracts and payment of running claims.

The statutory provision is mainly related to Disability (87%) and this is even more pronounced for claims (96%). Additional detail on the Disability risk is presented in the table below, including a focus on claims. In all segments, the provision for claims is higher than that for premium. Paid claims are mainly coming from the Mortgage Single Premium segment (75%). This is where most active claims are accumulated (78%).

Note that in the Mortgage Regular Premium segment, a lower ratio of claims to covers is observed (1.2% versus 1.5%) as well as a lower ratio of paid claims to claims provisions (8.1% versus 20.3%). This is because the Mortgage Single Premium segment is a more mature portfolio , whereas the Mortgage Regular Premium segment is a more recent portfolio with (relatively) more future accumulation.

Within the Mortgage segment, Single Premium represents 81% of covers and Regular Premium 19%. Compared to Regular Premium, the Single Premium segment accumulated more claims reserves and premium provisions do not anticipate an inflow of written premium. However, the segment only represents 66% of statutory provisions. This indicates that the risk in the Regular Premium segment is more significant than initially implied.

Covers (#)Covers (#)Covers (#)Covers (#)Written Written Written Written

PremiumPremiumPremiumPremiumStatutory Statutory Statutory Statutory ProvisionsProvisionsProvisionsProvisions

Mortgage 312,355 12,795 258,207 Consumer Loan 23,611 866 10,581

Collective 90,471 3,597 611 Other 16,113 3,545 228

Indirect Indirect Indirect Indirect businessbusinessbusinessbusiness

Mortgage 5,741 - 4,229

TotalTotalTotalTotal 448,291 448,291 448,291 448,291 20,802 20,802 20,802 20,802 273,857 273,857 273,857 273,857

Direct businessDirect businessDirect businessDirect business

Overview portfolioOverview portfolioOverview portfolioOverview portfoliogross of reinsurancegross of reinsurancegross of reinsurancegross of reinsurance

Premium Claims

Disability 89,898 147,707 237,606 283,202

Unemployment 28,492 3,302 31,794 38,363

Surety Ship - 228 228 226

Disability 1,593 2,389 3,982 4,421 Unemployment 231 16 247 303

TotalTotalTotalTotal 120,214120,214120,214120,214 153,643153,643153,643153,643 273,857273,857273,857273,857 326,516326,516326,516326,516

2018201820182018 2017201720172017Overview - technical provisionsOverview - technical provisionsOverview - technical provisionsOverview - technical provisionsgross of reinsurancegross of reinsurancegross of reinsurancegross of reinsurance

Statutory ProvisionsStatutory ProvisionsStatutory ProvisionsStatutory Provisions

Direct businessDirect businessDirect businessDirect business

Indirect businessIndirect businessIndirect businessIndirect business

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Legal structureLegal structureLegal structureLegal structureBNP Paribas Cardif B.V. holds 100% of the shares of BNP Paribas Cardif Schadeverzekeringen N.V. and 100% of the shares of BNP Paribas Cardif Levensverzekeringen N.V. Hereafter in this document, BNP Paribas Cardif is used for general parts relating to both BNP Paribas Cardif Schadeverzekeringen N.V. and BNP Paribas Cardif Levensverzekeringen N.V.

The shares of BNP Paribas Cardif B.V. are owned 100% by the French company BNP Paribas Cardif S.A. which is ultimately owned by the company BNP Paribas S.A. (hereafter BNP Paribas Group).

Statutory boardStatutory boardStatutory boardStatutory boardThe Statutory Board of the insurance company comprises the following individuals: ◊ Mr C. de Jong ◊ Mr W. Eikelboom ◊ Mrs M. van Zuien

Supervisory boardSupervisory boardSupervisory boardSupervisory boardThere were no changes in the composition of the Supervisory Board in 2018. The Supervisory Board of the insurance company comprises the following members: ◊ Mr C.P.F. De Longueville ◊ Mr R.H.A van Vledder ◊ Mr O.J.G Martin ◊ Ms I.P.G.M Brekelmans

Premium Claims

Regular Premium 49,144 604 10,405 4,381 23,871 53,942

Single Premium 211,321 3,217 12 17,616 62,806 86,959 Regular Premium 12,211 183 572 1,057 3,148 6,255

Single Premium 464 13 - 65 23 255 Collective Regular Premium 56,188 26 1,694 85 50 296

Other

Indirect Indirect Indirect Indirect businessbusinessbusinessbusiness

Mortgage Single Premium 4,563 92 - 388 1,593 2,389

TotalTotalTotalTotal 333,891 333,891 333,891 333,891 4,135 4,135 4,135 4,135 12,683 12,683 12,683 12,683 23,591 23,591 23,591 23,591 91,491 91,491 91,491 91,491 150,096 150,096 150,096 150,096

Statutory ProvisionsStatutory ProvisionsStatutory ProvisionsStatutory Provisions

Direct businessDirect businessDirect businessDirect business

Mortgage

Consumer Loan

Claims (#)Claims (#)Claims (#)Claims (#)gross of reinsurancegross of reinsurancegross of reinsurancegross of reinsurance

Covers (#)Covers (#)Covers (#)Covers (#)Written Written Written Written

PremiumPremiumPremiumPremiumPremium TypePremium TypePremium TypePremium Type

PaidPaidPaidPaidClaimsClaimsClaimsClaims

Overview Disability portfolioOverview Disability portfolioOverview Disability portfolioOverview Disability portfolio

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Key functionsKey functionsKey functionsKey functionsSolvency II requires insurance companies to have at least the following four key functions in place. There were some changes in responsibilities during the year, since Mr Rajabaly left BNP Paribas Cardif NL in August: ◊ Risk Management Function (W. Eikelboom to 1 June 2018; B. Auffret from 1 June 2018) ◊ Compliance Function (Mr R.B.F. Meeuwis) ◊ Actuarial Function (W. Eikelboom to 1 June 2018; B. Auffret from 1 June 2018) ◊ Internal Audit Function (C. de Jong and the outsourced within BNP Paribas Cardif Group)

The responsibilities, resources, reporting and escalation lines and other main organisational aspects of these key functions are described in their respective charters that are updated regularly. All key functions are available within our organisation and are occupied by our own employees, except for the Internal Audit Function, which is outsourced within the BNP Paribas Cardif Group. Independence and objectivity are guaranteed because of the outsourcing and by the reporting of the Internal Audit Function to the Audit Committee in the Supervisory Board.

SupervisionSupervisionSupervisionSupervisionThe external audit is performed by PricewaterhouseCoopers Accountants N.V. Supervision of the insurance companies is performed by DNB.

Mission, vision & strategyMission, vision & strategyMission, vision & strategyMission, vision & strategyThe strategy of BNP Paribas Cardif Netherlands is developed by the BoD and approved by the Supervisory Board (SB). It is also part of the Mid Term Planning Process within the BNP Paribas Cardif Group and contributes to its vision towards 2022 Cardif Forward strategic plan. ◊ Vision: It comforts people to safeguard their financial future ◊ Mission: BNPPC is the specialist that enables people to acknowledge and cover their (credit related) payment risks ◊ Strategy: We build the best specialised insurance company in the Netherlands. We concentrate on our ◊ niche/specialism of Payment Protection products. We strive for a balanced, well controlled and profitable portfolio, ◊ fully adapted to the new standards of the financial world and needs of the final customers. We will focus on the most ◊ efficient distribution models, taking into account our financial stability and ‘robustness’.

Overall, the strategy is to rebuild and develop our core business - which is creditor insurance. We do that in a cost efficient, secure way that allows us to grow business in a sustainable way maintaining our existing portfolio in a healthy state.

The risk preference statements of the company were reviewed in 2018 and confirmed in the most recent ORSA: 1. Statement 1: "BNP Paribas Cardif Netherlands finished the remediation and re-efficiency strategy in 2018 and will 1. focus on a continuous improvement approach”. 2. Statement 2: “Re-launching a mass market business based on the key specialism of payment protection is the 1. business priority in the following years. In 2018, BNP Paribas Cardif Netherlands only sold products through brokers” 3. Statement 3: “Extracting stable and balanced benefits from the in-force portfolio by monitoring the commercial and 1. economic environment of the assumptions and processing of the claim experience”.

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Important internal and external developmentsImportant internal and external developmentsImportant internal and external developmentsImportant internal and external developmentsThe challenges of underconsumption and the obstruction of innovation caused by the ban on commission not only apply to our products but are observed on a broader scale in the insurance market. We continued to take the lead in 2018 to focus attention on these topics in the market and to embark on discussions on how to solve these issues. And with success. In the last months of 2018, we organised several regional workshops on disability and the Hypotheek Aflos Verzekering. These were well attended and appreciated by mortgage advisors. Also in 2018, the Hypotheek Aflos Verzekering was integrated in three advice software packages, which also shows the market’s belief in our product. We will continue to draw attention to these topics in 2019 to find new ways to speed up change in distribution processes as well as customer and advisor behaviour.

This attitude suits us: we are the insurer for a changing world. Over the past twenty years, we have become an innovative market leader in the Netherlands with specific insurance products. As the needs of consumers and business partners are often unique, we go one step further in insurance. In offering relevant products and comprehensive service, we highlight our personal engagement with our customers and with partners’ businesses.

Environment - Economic situationEnvironment - Economic situationEnvironment - Economic situationEnvironment - Economic situationAfter economic growth percentages of 2.9% in 2017 and 2.6% in 2018, a gross domestic product growth of 2.2% is projected for 2019 in the Netherlands. This means economic growth is past its peak and levelling off. The Statistics Netherlands’ business cycle tracer is a tool to assist in the analysis of the state and the course of the Dutch economy. It shows that the economic situation in January 2019 is less favourable than in January 2018, but also that most of its indicators are still performing above their long term average. Uncertainties that may have a negative economic impact remain substantial. This is related to amongst others developments around Brexit and the trade conflict between the United States and China.

In the Netherlands, labour shortages will continue to increase and after the sizeable fall in unemployment to 3.9% in 2018, this will decrease further to 3.6% in 2019. In 2018, UWV provided 336,000 new unemployment benefits: -14% compared to 2017. At the end of the year, 263,000 unemployment benefits were running, compared to 330,000 at the end of 2017. Labour shortages and higher inflation will cause rising increases in contract wages. Higher rents and increases in indirect taxes, in addition to wage cost increases, will contribute to rising inflation. Overall, households are expected to have increased spending power in 2019.

Market developments - Housing marketMarket developments - Housing marketMarket developments - Housing marketMarket developments - Housing marketIn 2018, 214,000 existing owner occupied houses were sold. Compared to 2017, this was a decrease of 12%. Compared to 2016, sales are at the same level.

House prices rose and are expected to increase further in 2019, but less than in the years before: 6%. In December 2018, rising house prices and the decreasing range of owner-occupied houses for sale were the main reasons why nearly half of the Dutch population felt it was not a good time to buy a house. Despite this feeling, about 210,000 existing owner occupied houses are expected to be sold in 2019. If more people start to think that it is not a good time to buy a house, this estimate will probably be reduced.

Looking at new owner occupied houses, the same developments occur: prices rose (even more than those of existing owner occupied houses) and supply decreased. In the year to date November 2018, 31,000 new owner occupied houses were sold, 2,700 fewer than in the same period in 2017. As the number of issued permits to build new owner occupied houses stabilises, new-build sales will not increase in the near future.

Due to the declining number of house sales, the number of mortgage applications (via HDN) to buy a house fell by 3.1% in 2018 compared to 2017. Including mortgage applications to refinance existing mortgages, HDN showed an increase of 4%. Again the share of starters decreased, while the share of movers increased, mainly due to movers aged 60 years and over. The average age of people applying for a mortgage rose to 42.2 years. The average mortgage requested in applications via HDN increased 2.9% to 244,000 euros in 2018.

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Insurance MarketInsurance MarketInsurance MarketInsurance MarketOnly a handful of insurers operate in the market of housing expense protectors. Since the ban on commission, they face challenges such as: consumers not willing to pay for advice about these products and advisors responding by not discussing them. Many insurers operate in the market for death risk insurance. They mainly compete on price and efficiency in the application process, but in 2018 the average premium of term life insurances with constant coverage increased for the first time in 17 years. (Only the average lowest premiums decreased a little.) As death risk insurance applications decline, the number of mortgages protected by such insurance seems to be decreasing. Sources: CPB, CBS, Nibud, NVM, Rabobank, ABN AMRO, VEH, HDN, MoneyView, Decisio.

Result, dividend and evolution of own fundsResult, dividend and evolution of own fundsResult, dividend and evolution of own fundsResult, dividend and evolution of own fundsThe profit and loss of BNP Paribas Cardif Schadeverzekeringen is as follows:

The net profit of BNP Paribas Cardif Schadeverzekeringen N.V. decreased in 2018 to 26.5 million euros (2017: 28.7 million euros). The decrease is the result of a strong improvement in the technical result and a significant lower investment result. The technical result is explained in more detail in the chapter ‘Underwriting performance’. The investment result is explained in the chapter ‘Investment performance’.

BNP Paribas Cardif Schadeverzekeringen N.V. set the target coverage ratio at 150% of the SCR. As stated in the Financial Agreement with the parent company, support by means of additional capital is arranged in case the coverage ratio breaches 125%. The Own Funds to cover the SCR are 124.1 million euros as shown in the table below.

The Own Funds under Solvency II consist of:The Own Funds under Solvency II consist of:The Own Funds under Solvency II consist of:The Own Funds under Solvency II consist of:31-12-201831-12-201831-12-201831-12-2018 31-12-201731-12-201731-12-201731-12-2017

Issued and paid up capital 62,223 62,223 Reserves 0 2,255 Result of the year 26,510 28,744 Reconciliation reserve (excluding foreseeable charges) 71,490 75,140 Excess of assets over liabilitiesExcess of assets over liabilitiesExcess of assets over liabilitiesExcess of assets over liabilities 160,223160,223160,223160,223 168,362168,362168,362168,362 Foreseeable dividends* (26,510) (30,999)Foreseeable charges (9,574) (9,106)Total Own Funds to cover SCRTotal Own Funds to cover SCRTotal Own Funds to cover SCRTotal Own Funds to cover SCR 124,139124,139124,139124,139 128,257128,257128,257128,257

PROFIT AND LOSS ACCOUNTPROFIT AND LOSS ACCOUNTPROFIT AND LOSS ACCOUNTPROFIT AND LOSS ACCOUNT 2018201820182018 2017201720172017

Earned premiums 60,324 49,414 Claim charge (14,305) (15,306) Operating expenses* (17,557) (17,130) Technical result according to SII QRT S.05.01 28,462 16,978 Other technical income insurer 34 49 Result on investments technical account* 5,771 16,681 Result technical account non-life insurance 34,267 33,708 Result on investments non-technical account 1,409 4,629 Result before taxes 35,676 38,337 Taxes (9,166) (9,594) Result after taxesResult after taxesResult after taxesResult after taxes 26,51026,51026,51026,510 28,74328,74328,74328,743

* The asset management expenses are reported within the operating expenses in the Solvency II accounts. In the statutory accounts

these costs are included in the result on investments (1,175 thousand euros).

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The share capital and reconciliation reserve elements are classified as Tier 1. The coverage ratio can be calculated by means of the Own Funds (available capital) versus the SCR (required capital). The SCR oBNP Paribas Cardif Schadeverzekeringen N.V. is calculated at 58.8 million euros per year end 2018 (2017: 74.1 million euros). The coverage ratio at the end of 2018 improved to 211% (2017: 173%).

BNP Paribas Cardif Schadeverzekeringen N.V. foresees paying as dividend the full result of 2018. After appropriation of the result, BNP Paribas Cardif Schadeverzekeringen N.V. is well capitalised and meets its regulatory and internal solvency targets

as of 31 December 2018.

Underwriting performanceUnderwriting performanceUnderwriting performanceUnderwriting performance

The underwriting result of BNP Paribas Cardif Schadeverzekeringen N.V. is the result of earned premiums from which incurredclaims are deducted. The underwriting performance is as follows:

In 2018, the technical result for BNP Paribas Cardif Schadeverzekeringen N.V. increased by 0.6 million euros to 34.3 million euros.

The following elements explain the evolution: ◊ The earned premium increased by 10.9 million euros. The increase in the portfolio is linked to the new assumptions ◊ for entry & recovery (+25.2 million euros); decrease of interest rate to 1.75% (-11.4 million euros), both of those new ◊ assumptions impacted more particularly disability risk. ◊ The claims charge of BNP Paribas Cardif Schadeverzekeringen N.V. increased by 1 million euros compared to last year. ◊ This is still historically low compared to the best estimate level. It is also impacted by the new entry & recovery rate ◊ (-1 million euros) and the decrease of interest rate (+5.6 million euros). ◊ The technical result for BNP Paribas Cardif Schadeverzekeringen N.V. for 2018 was also impacted by a strong decrease of ◊ the interest rate from 2.75% to 1.75%, following the Income sufficiency test performed in 2018. This led to a negative ◊ impact of -17 million euros affecting all line of business, more than offset by the update of the entry and recovery rate ◊ assumptions for Disability and Unemployment of +26.4 million euros. ◊ The operating expenses increased by 0.4 million euros. ◊ The (total) result on investment is explained further in the paragraph investment performance.

New business volumes are low as most products were de-risked or reduced in distribution scope and this is company action plan to continue and accelerate relaunch in 2019.

BNP Paribas Cardif Schadeverzekeringen N.V.BNP Paribas Cardif Schadeverzekeringen N.V.BNP Paribas Cardif Schadeverzekeringen N.V.BNP Paribas Cardif Schadeverzekeringen N.V. HealthHealthHealthHealth

TECHNICAL PROFIT AND LOSS ACCOUNT BYTECHNICAL PROFIT AND LOSS ACCOUNT BYTECHNICAL PROFIT AND LOSS ACCOUNT BYTECHNICAL PROFIT AND LOSS ACCOUNT BYLINE OF BUSINESSLINE OF BUSINESSLINE OF BUSINESSLINE OF BUSINESS

DisabilityDisabilityDisabilityDisability Unemploy-Unemploy-Unemploy-Unemploy-mentmentmentment

Surety-Surety-Surety-Surety-shipshipshipship

TotalTotalTotalTotal2018201820182018

TotalTotalTotalTotal2017201720172017

Earned premiums 47,588 9,191 3,545 60,324 49,414 Claim charge (13,836) (598) 129 (14,305) (15,306) Operating expenses* (12,641) (2,253) (2,663) (17,557) (17,130) Technical result according to SII QRT S.05.01 21,111 6,340 1,011 28,462 16,978 Other technical income insurer 20 8 6 34 49 Result on investments technical account* 5,101 671 (1) 5,771 16,681 Result technical account non-life insurance 26,232 7,019 1,016 34,267 33,708

* The asset management expenses are reported within the operating expenses in the Solvency II accounts. In the statutory accounts these costs

are included in the result on investments (1,175 thousand euros).

Non-LifeNon-LifeNon-LifeNon-Life

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Claims DevelopmentClaims DevelopmentClaims DevelopmentClaims DevelopmentClaims development is typical for Non-Life risks (BNP Paribas Cardif Schadeverzekeringen N.V.). Although Disability is classified as Health Similar to Life, the claim payments can take up to thirty years. So a significant claims reserve is held and claims development is relevant.

The claims development shows that on all occurrence years, the closing statutory claim provision is lower than expected on the outflow of monthly claim payments. In recent years, this can be due to a mix of claim declaration – waiting periods are typically one year for disability contracts - and more recovery. In more mature occurrence years, the result is mainly due to more recovery.

The claims development for Unemployment shows that after one development year, 84% of payments are done. This increases to 99% of total paid claims after three development years. The impact of economic recovery and internal remediation measures is visible in the most recent years, where paid claims decreased sharply.

The claim development for Surety Ship is based on the paid claims. The claims provision is attributed to the current accounting year and is not shown separately.

2018 2017 2016 2015 < 2015

- 28,136 22,544 15,692 93,678 160,050

70 745 2,066 2,830 17,879 23,591

24,178 22,455 12,814 14,291 76,358 150,096

TotalTotalTotalTotal (24,248) 4,936 7,664 (1,428) (559) (13,636)(13,636)(13,636)(13,636)

TotalTotalTotalTotalPaid claims - DisabilityPaid claims - DisabilityPaid claims - DisabilityPaid claims - Disabilitygross of reinsurancegross of reinsurancegross of reinsurancegross of reinsurance

Occurrence yearOccurrence yearOccurrence yearOccurrence year

Closing balance claim provision

Opening balance claim provision

Paid claims

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In 2016, BNP Paribas Cardif Schadeverzekeringen N.V. revised the methodology to account the paid claims for Surety Ship. When the initial payment is invoked, the full amount is reported as a paid claim. Any recovery of this amount is also accounted for in the paid claims. Previously, paid claims were only reported when an amount was deemed not recoverable.

As a result, the paid claims in 2018 and previous years cannot be properly compared and do not therefore provide insight into the claims development. The number of claims is insignificant relative to the whole portfolio of BNP Paribas Cardif Schadeverzekeringen N.V.BNP Paribas Cardif Schadeverzekeringen N.V. is not yet able to adapt the claims triangles on prior years to provide detailed insight into the claims development. Given the immaterial impact, this is not given priority.

Investment performanceInvestment performanceInvestment performanceInvestment performance

Financial marketsFinancial marketsFinancial marketsFinancial marketsThe Eurostoxx50 decreased by 14.3% in 2018 from 3,504 to 3,001 which leads to a negative revaluation of the stock funds in the investment portfolios. In the meantime, the 10 year yield of the Dutch bonds have decreased from 0.53% to 0.39% which sustains the level of unrealised gains within the fixed interest rate part of the portfolio.

The invested assets for BNP Paribas Cardif Schadeverzekeringen N.V. are split into bonds and investment funds. The bonds are valued at amortised cost price in statutory accounts and investment funds are valued at market value. Investment funds (51.0 million euros) consist of equity funds (27.4 million euros), bond funds (16.9 million euros) and liquidity funds (6.7). The value of the investment funds decreased by 17.8 million euros to 50.1 million euros, due to the evolution of the stock markets and sellings along the year to decrease the Beta exposure. The book value of the bond portfolio decreased by 37.9 million euros to 305.9 million euros in 2018, mainly due to the run-off of the portfolio.

The result on investments in statutory accounts is as follows:

Result on investmentsResult on investmentsResult on investmentsResult on investments Income Income Income Income and and and and

expensesexpensesexpensesexpenses

Unrealized Unrealized Unrealized Unrealized change in change in change in change in valuationvaluationvaluationvaluation

Realized Realized Realized Realized result due result due result due result due

to salesto salesto salesto sales

TotalTotalTotalTotal2018201820182018

TotalTotalTotalTotal2017201720172017

Shares and other non fixed-interest securites - (12,520) 7,748 (4,772) 3,327 Bonds and other fixed-interest securities 9,991 (209) 2,193 11,975 17,056 Other investments and cash at bank 11 (1) - 10 9 TotalTotalTotalTotal 10,00210,00210,00210,002 (12,730)(12,730)(12,730)(12,730) 9,9419,9419,9419,941 7,2137,2137,2137,213 20,39220,39220,39220,392

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The result on investments in 2018 decreased by 14.4 million euros to 6 million euros compared to 2017. The decrease is due to the negative evolution of the stock markets in 2018, the decrease of the portfolio and more selling of funds compared to bonds in 2018. As bonds are valued at amortised cost in the statutory account, the selling of bonds generates new result, whereas selling funds result in a shift between (reversed) unrealised and realised result.

Performance other activitiesPerformance other activitiesPerformance other activitiesPerformance other activities

There are no other activities.

Any other informationAny other informationAny other informationAny other information

ProductsProductsProductsProducts

Hypotheek Aflos VerzekeringHypotheek Aflos VerzekeringHypotheek Aflos VerzekeringHypotheek Aflos VerzekeringWith the launch of our Hypotheek Aflos Verzekering, we introduced a totally new proposition in which convenience and simplicity are the key elements. In 2018, the rollout and promotion of our Hypotheek Aflos Verzekering had top priority. We experienced that coming back after a period of relatively low visibility in the market of payment protection was quite a challenge, but we are gradually observing a turnaround in the mindset of our partners. The number of applications is rising each month, which also counts for the interest in our product and disability in general, as we see in the number of participants in our workshops.

The media and events were another important means of focusing attention on the disability risk and the Hypotheek Aflos Verzekering. For this we used advertisements, advertorials, bannering campaigns, branded content, interviews and press releases in broker media. We were also present at big and small important broker events. Besides a branded stand, different speakers presented master classes about the effects of disability.

SuretyshipsSuretyshipsSuretyshipsSuretyshipsOur suretyships were again successful in 2018, due to the market circumstances and the expansion of our points of sale. Suretyships will also have our focus and attention in 2019, as we see opportunities to expand our distribution.

Term lifeTerm lifeTerm lifeTerm lifeIn 2018, we worked on a renewed proposition for term life. We will start a proof of concept period at the beginning of 2019. Based on the outcome, we will decide on the further steps around the rollout of this cover.

DistributionDistributionDistributionDistribution

Activation and reactivationActivation and reactivationActivation and reactivationActivation and reactivationIn 2018 we significantly expanded the number of connected distribution partners. We put considerable focus on activation, especially through our regional sessions about disability and the Hypotheek Aflos Verzekering. On the other hand, we noted that reactivation is also necessary. We must continue to draw attention to our product, also staying connected to the distribution partners which have already started implementing the Hypotheek Aflos Verzekering in their advice. In 2019 there will be more focus on both, to further boost our sales.

Hypotheek Aflos Verzekering directly applicable via advice packagesHypotheek Aflos Verzekering directly applicable via advice packagesHypotheek Aflos Verzekering directly applicable via advice packagesHypotheek Aflos Verzekering directly applicable via advice packagesIn 2018, we achieved the connection with HDN (Mortgage Data Network). Due to this connection, the Hypotheek Aflos Verzekering can be applied for directly via the advice packages Adviesbox, Finix and Unit4 Scenario Advies. Until this connection was achieved, the Hypotheek Aflos Verzekering was only available through our extranet Finagora.

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We are delighted with the connection to HDN and the integration in the packages. The power of the Hypotheek Aflos Verzekering lies in the simplicity. Because of these developments, the simplicity has increased even further. Due to the ban on commission, the willingness and ability of vendors of advice software to innovate is very important for our success. We have worked together with these vendors in a very pleasant and constructive way and we are confident that we will achieve more extensive innovation together in the future.

Connection service providers Connection service providers Connection service providers Connection service providers In 2018 our Hypotheek Aflos Verzekering also became available for smaller independent financial advisors through several service providers. We signed cooperation agreements with DAK, VCN, VKG and De Financiële Makelaar. The affiliated offices of these service providers can now advise the Hypotheek Aflos Verzekering to their clients. These new partnerships provide reaffirmation that the market sees a future in our products.

Working closely together with our distribution partnersWorking closely together with our distribution partnersWorking closely together with our distribution partnersWorking closely together with our distribution partnersTo achieve our goals, we work closely together with our distribution partners to find specific new routes through which each partner can integrate our solution in a way that suits the customer journey. An initiative that became reality in 2018 was the resollicitation funnel of Vereniging Eigen Huis, through which the customer receives an automatic offer of the Hypotheek Aflos Verzekering shortly after being given mortgage advice. The customer only receives this if they did not decide to take out insurance to cover disability during the advisory interview. The customer chooses whether or not they accept the offer.

Customer centricCustomer centricCustomer centricCustomer centric

Customer Centric ProgrammeCustomer Centric ProgrammeCustomer Centric ProgrammeCustomer Centric ProgrammeInitiatives focused on improving customer centricity are organised in the Customer Centric Programme (CCP) within BNP Paribas Cardif Group. The CCP is a comprehensive programme, offering local companies the opportunity to specify the customer-centricity aspects step by step.

Embedding Customer CentricityEmbedding Customer CentricityEmbedding Customer CentricityEmbedding Customer CentricityWithin the international organisation, BNP Paribas Cardif Netherlands has continued to be pioneering in terms of customer centricity within the organisation. Compliance with the requirements we impose on ourselves in this area, in combination with the mandatory standards of both AFM and Stichting toetsing verzekeraars (Stv), ensures an optimal customer experience.

Themed assessmentsThemed assessmentsThemed assessmentsThemed assessmentsAfter successfully completing all the applicable audits of the Stichting toetsing verzekeraars (Stv) on client centricity from 2015 until 2018, we were happy to prolong the Keurmerk Klantgericht Verzekeren (KKV). In 2018, a new cycle started. Stv changed its manual and shifted from strict auditing based themed assessments to a more cooperating and advising way of assessing. The assessment of two or three different themes a year stayed the same.

Two of the three audited themes applied to us in 2018. We started with the assessment on claim handling in the first quarter of 2018. The results were very satisfactory. The recommendations received from Stv were implemented where possible. The second theme, medical acceptance, did not apply to us. The final theme was Client feedback, which started

in the fourth quarter and will be completed in the Xrst quarter of 2019.

Corporate social responsabilityCorporate social responsabilityCorporate social responsabilityCorporate social responsability

GeneralGeneralGeneralGeneralAn active Corporate Social Responsibility (CSR) policy is one of the key strategic points of attention within the BNP Paribas Group. The scope of the national and international sustainability programmes was extended further in the past year.

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Financial education; active involvement in the classroomFinancial education; active involvement in the classroomFinancial education; active involvement in the classroomFinancial education; active involvement in the classroomWithin BNP Paribas Cardif Netherlands, the CSR policy has mainly focused on involvement in society in recent years, which is one of the pillars of the BNP Paribas CSR philosophy. Financial education occupies a key position, being the main sponsor of Stichting Leven en Financiën (LEF or Life and Finance Foundation). We actively communicated the LEF programme, the youth education project initiated by the financial sector, to make young people between ages 16 and 22 more financially aware. Several employees of various departments were trained as guest teachers and volunteered to present guest lessons at ROC schools. Several employees also participated in the ‘Fix je risk’ initiative of the Association of Insurers during ‘De week van het geld’. They gave an insurance class to elementary schools.

New partnership: Metropole OrchestraNew partnership: Metropole OrchestraNew partnership: Metropole OrchestraNew partnership: Metropole OrchestraIn the past seven years, BNP Paribas has supported jazz by sponsoring the North Sea Jazz event. Since the partnership ended after the 2017 edition of North Sea Jazz, we focused on finding a suitable new sponsoring initiative in 2018. After an extended selection process, we decided to form a partnership with the Metropole Orchestra. The communication and rollout of concrete plans about this new partnership are planned for the beginning of 2019.

Social Responsible InvestmentsSocial Responsible InvestmentsSocial Responsible InvestmentsSocial Responsible InvestmentsA Social Responsible Investment (SRI) policy for new investments has been implemented and is continuously upgraded. The objective is to improve SRI performance for each portfolio for each asset class, while maintaining the financial performance. Based on equal fundamental and perspectives, the best noted issuer by Vigéo (European leading agency in the SRI notation of companies) is selected.

The SRI policy for equity mutual funds is to invest at least 20% of the equity exposure in SRI mutual funds. BNP Paribas Cardif Netherlands has invested in two SRI mutual funds (Camdriam Sustainable World and BNP Paribas Aqua), which were selected from a database of SRI funds based on several financial indicators.BNP Paribas Aqua is a thematic fund investing in international companies which have business related to water. Candriam Sustainable World invests in a diversified portfolio of global companies with a strong positioning in sustainable development issues selected based on Best-in-Class analysis.

The selection of new investments in sovereign bonds is based on an ESG (Environmental, Social and Governance) rating determined by the Vigeo criteria Environmental responsibility, Institutional responsibility and Social responsibility & Solidarity. In his mandate, the Asset Manager is required to favour the States having ratified the main international treaties on respect, protection & promotion of human and labour rights.

The selection of new investments in corporate bonds is also based on an ESG rating determined by the Vigeo criteria Human rights, Community Involvement, Environment, Governance, Business Behaviour and Human resources. To reinforce this objective, a list of excluded issuers was added in 2018. These issuers were chosen with the aim of increasing the Carbon footprint, the Energy Transition strategy and ESG Climate approach.All investments in the tobacco Industry are also prohibited.

BNP Paribas Cardif Netherlands has invested in green bonds. These are bonds for which the issued amount is used for segregated and dedicated environmental investments projects like wind, solar, biomass, geothermal or energy efficiency. BNP Paribas Cardif NL had five green bonds in the portfolio at the end of 2018. Stockland bonds invested the issued amountin sustainable building projects. With the raised amount of green bonds, GDF Suez helps finance projects dedicated to the development of renewable energy and energy efficiency measures. Région Île de France invests in energy efficient projects in public transportation, rehabilitation of real estate and renewable energies.

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Governance systemGovernance systemGovernance systemGovernance system

General information on the governance systemGeneral information on the governance systemGeneral information on the governance systemGeneral information on the governance system

We have a two-tier board: a Board of Directors and a Supervisory Board.

The Executive Committee manages the daily activities of both companies. At the end of 2018, the Executive Committee had 5 members, including the three members of the Board of Directors: ◊ Mr C. de jong ◊ Mr W. Eikelboom ◊ Mrs M. van Zuien ◊ Mr L.P.J. Kasper ◊ Mr B. Auffret (from 1 June 2018)

W. Eikelboom replaced M.R.E. Harkema as interim CFO from July 2017. He joined the Board of Directors as a permanent CFO on 1 June 2018. He is primarily responsible for Finance and Risk.

B. Auffret joined the Board of Directors as the CRO on 1 June 2018. He is primarily responsible for Actuary and Risk.

Solvency II governance and key functionsSolvency II governance and key functionsSolvency II governance and key functionsSolvency II governance and key functionsEuropean insurance companies must meet numerous requirements with the introduction of Solvency II. Besides the quantitative requirements in the first pillar and mandatory disclosure in the third, the second pillar contains extensive requirements relating to how insurers structure their businesses and organisations. Section 41 of the Solvency II Directive stipulates that these companies must have an effective system of governance in place to ensure sound and prudent management of their business.

Solvency II requires insurance companies to have at least the following four key functions in place: ◊ Risk Management Function ◊ Compliance Function ◊ Internal Audit Function ◊ Actuarial Function

The responsibilities, resources, reporting and escalation lines and other main organisational aspects of these key functions are described in their respective charters that are updated regularly. All key functions are available within our organisation and are occupied by our own employees, except for the Internal Audit Function, which is outsourced within the BNP Paribas Group. Independence and objectivity are guaranteed because of the outsourcing and by the reporting of the Internal Audit Function to the Audit & Risk Committee in the Supervisory Boards.

Vertical integration legal and complianceVertical integration legal and complianceVertical integration legal and complianceVertical integration legal and complianceBNP Paribas Group has chosen to organise some of its functions decentrally to be more suited to dealing with the complex circumstances of the activities worldwide. The compliance Function and the Legal Function are organised according to the key principles independence, integration and decentralisation. They have an additional hierarchical link (besides the existing hierarchical link) within the function itself ensuring a high level of independence.

Fit and proper requirementsFit and proper requirementsFit and proper requirementsFit and proper requirements

PersonnelPersonnelPersonnelPersonnel

StaffingStaffingStaffingStaffingIn 2018, the staffing levels increased from 103.48 FTE on 1 January 2018 to 109.71 FTE on 31 December 2018.

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As per 31 December 2018, the team consisted of 55 female and 65 male employees. The Statutory Board consists of three members, two male and one female. Absenteeism fell to 2.8% (previous year 5.06%).

Training and educationTraining and educationTraining and educationTraining and educationThe PE programme was continued at Nyenrode University for the group of key officers. We organised a training in “Medical aspects at acceptance and claim handling” for 9 employees in the Claims Department. The training consisted of 7 sessions of 5 hours. We organised a collective training day for all staff linked to two themes: Connection and Development. In the morning, 6 workshops were given by an external training agency and actors. Each employee followed 3 workshops. In January 2019, the new digital tool About Me will be launched. About Me has 3 pillars: My Profile, Continuous Feedback & Performance, Personal Development. We adapted the local Performance Management policy to align with the new tool. Managers received training (organised by an external training agency) of one whole day in December to explain the new tool and practise feedback and intervision.Various individual courses, training courses and programmes were also started.

Employee satisfaction surveyEmployee satisfaction surveyEmployee satisfaction surveyEmployee satisfaction surveyIn May 2018, the annual Global People Survey (GPS) of BNP Paribas Group took place. The participation rate was 81%, which was higher than the 74% of 2017. The Executive Committee decided to assign a dedicated project team to analyse the GPS report 2018. It will also organise dialogue sessions with all staff to discuss the scores of the GPS 2018. Report and action plan will be ready in Q1 2019.

Remuneration policyRemuneration policyRemuneration policyRemuneration policyWe have a remuneration policy based on a function and salary house. For this we use the Hay methodology. Each job profile is linked to a salary scale with a minimum and maximum level. Remuneration consists of a fixed monthly salary supplemented by fixed remuneration components such as holiday allowance and a 13th month. For positions with a variable remuneration, a maximum of 20% is applicable. In 2018 the total amount of bonuses granted was 327 thousand euros.

The remunerations including social securities and pensions for the Board of Directors amount to 470 thousand euros (2017: 550). The remuneration for the Supervisory Board for 2018 was 73 thousand euros (2017: 34).

Pension schemePension schemePension schemePension schemeWith the 5-year contract for the Defined Benefit pension scheme with Nationale Nederlanden expiring on 31 December 2018, a pension project team was composed to facilitate the process for selecting a new pension scheme and pension provider. The project team consisted of 2 members of the Executive Committee, 2 members of the Works Council and two members of the HRM department. The project team was supported by an external specialist pension consultancy firm. After a trajectory during whole 2018 (with several meetings, trainings, tenders) and with the consent of the Works Council, a Defined Contribution scheme was chosen as the new pension scheme. A contract was duly signed with the pension provider BeFrank.

Risk management framework and risk governance systemRisk management framework and risk governance systemRisk management framework and risk governance systemRisk management framework and risk governance system

This section offers a general overview of the framework of risk management within BNP Paribas Cardif Netherlands. The risk management principles, risk management bodies, risk governance sets and risk management teams are applied jointly over all legal entities and only deviate from the legal entities in certain specific risks.

Risk management frameworkRisk management frameworkRisk management frameworkRisk management framework

As BNP Paribas Cardif Netherlands is part of BNP Paribas Cardif Group, its policies and procedures for establishing and maintaining adequate internal control are the local interpretation of those applied by BNP Paribas Cardif Group for its riskmanagement.

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The risk management framework is designed under the supervision of the Chief Financial Officer and the Chief Risk Officer, to provide reasonable assurance regarding the identification, measurement, hedging, transfer and management of the risks. They also guarantee good compliance with the Solvency II guidelines related to the governance system.

The ultimate goal for risk management is to provide sound and prudent management for the organisation. The primary responsibility for local risk management lies with the managers of BNP Paribas Cardif Netherlands who make risk-taking decisions. Risk management is the responsibility of all employees in their daily business activities. They are the first lines of defence. They operate within a defined risk appetite and a certain delegation. They have monitoring and reporting obligations.

A rigorous approach to risk management is essential for guaranteeing the solvency, business continuity and the development of BNP Paribas Cardif Netherlands, in optimal conditions of risk and profitability, in line with a defined risk appetite.

The management of BNP Paribas Cardif Netherlands considers that effective risk management is a key competitive advantage. The risk management system of BNP Paribas Cardif NL comprises the following elements: ◊ Defined risk categories: ◊ ● Financial risk (covering market risk, underwriting risk and credit risk) ◊ ● Operational risk ◊ ● Compliance risk ◊ A risk management organisation with: ◊ ● Risk functions, including mandatory key functions as stated in Solvency II: Key functions are the Risk Management ◊ ● Function and the Actuarial Function, guaranteed by the Chief Risk Officer. The Compliance Function is guaranteed ◊ ● by the compliance officer. These functions are internal to BNP Paribas Cardif Netherlands. The Audit Function ◊ ● relies on the general inspection of BNP Paribas Group and guaranteed by the CEO. ◊ Risk-related documents (governances, policies) as presented in the chart below: the risk management organisation is ◊ defined and documented for all risk families and is the translation of BNP Paribas Group governance and risk policies ◊ into the Dutch business, covering: ◊ ● Actuarial Governance ◊ ● ALM Governance ◊ ● Credit Governance ◊ ● Operational Permanent Control Governance ◊ ● Compliance Governance ◊ ● Outsourcing Governance ◊ ● Internal Audit Governance

The overview of all policies and governances is provided below:

There are risk registers at two levels: a risk register at company level built and owned by senior management, covering all major risk categories, and a risk register for each department built and owned by managers, covering operational risks in department processes. ◊ A Own Risk and Solvency Assessment (ORSA) with a risk strategy based on risk appetite statement(s). ◊ Risk committees have been defined for both risk taking, like new products or new activities and risk monitoring. Both ◊ are organised in regular local risk committee meetings. The Audit & Risk Committee of the Supervisory Board occurs ◊ with the same frequency as the meetings of the Supervisory Board, chaired by a member of the Supervisory Board.

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Note that within Financial risk, Credit Risk is split between Liabilities and Assets. In the Solvency II framework, these risks are captured by different modules of the Standard Formula. BNP Paribas Cardif Netherlands applies the Standard Formula. The Credit Risk on Liabilities is the counterparty default risk in the Standard Formula. The Credit Risk on Assets is further split between the spread risk on bonds and the counterparty default risk on cash and deposits in the Standard Formula.

The chart below provides a comprehensive view of the risk management system, with boards, departments, committees and risk families. The Board of Directors includes the CEO, CFO and CCO.

Synthesis of the Risk Management System:

Note to the chart above:

◊ Dark green boxes present risk functions

◊ Ownership of risks by function is in red

◊ Dotted green frames represent risk committees and associated owners and risk families

◊ 2 and 3 represent lines of defence

◊ Key functions are shown in green italic. Some portfolios may be under the responsibility of the same person

The organisational structure above presents the overall structure of BNP Paribas Cardif , with the SupervisoryBoard and management levels: the statutory Board of Directors and extended Executive Committee, where all portfolios are represented. Note that some portfolios may be under the responsibility of the same person.

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Internal control systemInternal control systemInternal control systemInternal control system

Control processesControl processesControl processesControl processes

Control processes can be analysed from different points of view: ◊ Control of risk/Control of governance processes ◊ Control of the global risk governance/Control of each specific governance ◊ Control of operational risk/Control of non-operational risk ◊ Control at corporate level/Control at local level

Internal control frameworkInternal control frameworkInternal control frameworkInternal control framework

Internal Control ObjectivesInternal Control ObjectivesInternal Control ObjectivesInternal Control ObjectivesBNP Paribas Cardif Group’s Internal Control Objectives are presented in the Corporate Risk Governance Principles document. Internal Control is the overall framework aimed at controlling the enterprise risk while seeking to achieve strategic objectives. This system aims at ensuring: ◊ The effectiveness and efficiency of internal operations ◊ The reliability of internal and external information ◊ The security of transactions ◊ The compliance with laws, regulations and internal policies

Internal Control Processes ScopeInternal Control Processes ScopeInternal Control Processes ScopeInternal Control Processes ScopeBNP Paribas Cardif Group’s Internal Control Processes Scope is presented in the Corporate Risk Governance Principles. The scope of internal control processes covers all activities for which BNP Paribas Cardif Group is responsible.Consequently, it includes: ◊ All activities carried out by all departments of BNP Paribas Cardif, at corporate and local levels. ◊ All activities for which BNP Paribas Cardif is responsible and which are delegated to an entity from BNP Paribas ◊ Cardif (either internal or external from BNP Paribas Group). ◊ Internal Control Processes Principles. ◊ BNP Paribas Cardif Group’s Internal Control Processes Principles are presented in the Corporate Risk.

Internal control process principlesInternal control process principlesInternal control process principlesInternal control process principlesThe internal control processes of BNP Paribas Cardif NL are based on the following principles: ◊ Internal Control is in line with the policies and directives of BNP Paribas Group on internal control. ◊ Internal control processes are reviewed constantly and are challenged regularly, to ensure continuous improvement

Internal Control TypologyInternal Control TypologyInternal Control TypologyInternal Control TypologyBNP Paribas Cardif Group’s Internal Control Typology is presented in the Corporate Risk Governance Principles. Internal control is composed of Permanent Control and Periodic Control. These two controls are complementary, but are separated and independent from each other.

Internal audit function Internal audit function Internal audit function Internal audit function

The Internal Audit Function is outsourced within the BNP Paribas Group. Independence and objectivity are guaranteed because of the outsourcing and by the reporting of the Internal Audit Function to the Audit & Risk Committee in the Supervisory Boards. The audit plan of the Internal Audit Function is determined in the Audit & Risk Committee. Audit objectives are defined from a risk perspective. Reporting on the execution of the audits is discussed in the Audit & Risk Committee as well as the follow-up on recommendations.

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Actuarial functionActuarial functionActuarial functionActuarial function

Article 48 of the Solvency II Directive sets a minimum level of tasks to be performed by the Actuarial Function of the company: ◊ Coordinate the calculation of technical provisions. ◊ Inform the Administrative, Management and Supervisory Body (AMSB) of the reliability and adequacy of the ◊ calculation of the technical provisions. ◊ Express an opinion on the overall underwriting policy and on the reinsurance arrangements. ◊ Contribute to the risk management system.

The Actuarial Function is neither necessarily an organisational unit nor a specific person or group of people, but rather a regulatory ‘function’ which conducts the list of tasks specified in Article 48.

For BNP Paribas Cardif Netherlands, the organisation of the Actuarial Function relies on the following principles: ◊ The Actuarial Function is internal to BNP Paribas Cardif Netherlands. ◊ The Actuarial Function holder is the Chief Risk Officer (CRO). ◊ The Actuarial Function holder will request the support of an external actuarial consultant to review the work of the ◊ first-line actuaries and to perform detailed validation work on technical provisions construction (model, assumption, ◊ data, outcome), with a focus on Solvency II. ◊ The support of the external actuary will be similar to the work performed as an appointed actuary. ◊ The Actuarial Function Report (AFR) will be a master document, collecting a comprehensive analysis of the year-end ◊ technical closing, in statutory accounting and Solvency II, enriched with the opinion of the external actuary on ◊ the reviewed scope. ◊ The external actuary will also express an opinion on the ORSA report. ◊ The underwriting and reinsurance policies are reviewed internally and are not subject to an additional review by ◊ the external actuary.

The other measures for the independence of the Actuarial Function are:

The CRO is responsible for both the Actuarial Function and the Risk Management Function. The manager of the actuarial department reports to the CRO. To ensure the independent role of the Actuarial Function, BNP Paribas Cardif Netherlands has taken the following measures: ◊ The Actuarial Function has a formal status and the roles and responsibilities are those described in the Internal ◊ Actuarial Function charter. ◊ The position in the organisation does not lead to any conflicts of interest and the function can be executed ◊ independently (i.e. without influence of other key functions like the Risk Management Function). ◊ The Actuarial Function is separated from operational first-line actuarial activities within the organisation. ◊ The representatives of the Actuarial Function have the authority to escalate to the Board of Directors at their ◊ own initiative.r. ◊ The Actuarial Function can escalate to the Audit and Risk Committees of the Supervisory Board if differences of opinion ◊ arise between the Actuarial Function and the Board of Directors.

When the Actuarial Function is requested to execute tasks that are not described in the Charter, the Board of Directors decides whether such tasks lead to a conflict of interests. If there is a conflict of interests, the Board will not give permission to proceed with these activities without any additional measures, possibly by outsourcing the activities involved.

The appointment of persons carrying out responsibilities of the Actuarial Function requires the approval of the Board of Directors.

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OutsourcingOutsourcingOutsourcingOutsourcing

The rules applying to an outsourced operational or functional activity are laid down in the BNP Paribas Cardif Group Outsourcing Policy. The policy incorporates the requirements of the Solvency II regulatory framework imposed on the insurance industry, as well as the regulatory changes known to date.

The control framework must be proportionate to the nature, size and complexity of the outsourced activity, as well as to the associated risks. This assessment will be conducted by expert functions in each of the areas including Security, Continuity and Controls. The aspects of risk management in outsourcing projects encompass mainly: ◊ The regulatory due diligence ◊ The risk approach

These two critical aspects are to be analysed and monitored during the various phases of an outsourcing project. The regulatory due diligence and risk analysis can lead to: ◊ Additional requirements in the project specifications. ◊ The definition of the applicable control framework. ◊ Taking the internal control system of the provider into account when it is a regulated institution therefore subject to ◊ the same constraints and regulatory requirements as BNP Paribas Cardif Netherlands.

A body dedicated to the monitoring and control of the risks associated to Outsourcing has been set up at the corporate and local levels to meet the regulatory and BNP Paribas Group Governance requirements and reviews the risk analyses prepared for any outsourcing project.

The relationship with the service provider must be subject to a formal agreement. This agreement aims to manage this liaison for both the legal and regulatory aspects, as well as for operational aspects. This monitoring is performed by the contract manager who will lead the relationship with the internal client(s) and will, if needed, get the expert functions to intervene for the issues encountered.As BNP Paribas Cardif NL remains accountable for controlling its risks, including in case of activity outsourcing, the risk analyses are to be reviewed regularly and in case of significant evolutions.

Risk profileRisk profileRisk profileRisk profile

Risk management is an essential part of the business of BNP Paribas Cardif. It enables us to steer the company based on four performance indicators: annual result, value creation, required capital and operational risks. Continuous monitoring of these indicators and the annual Own Risk and Solvency Assessment (ORSA) allow the company to assess the exposure to risks and take management actions when warranted.

BNP Paribas Cardif is mainly sensitive to market risk and underwriting risk. The market risk is high because of significant assets held due to a historical portfolio, which was in single premiums and exacerbated due to the current level of interest rates that generate a material amount of unrealised gains. The underwriting risk is linked to future mortality forBNP Paribas Cardif Levensverzekeringen N.V. and disability rates for BNP Paribas Cardif Schadeverzekeringen N.V., which are the main drivers of the Life and Disability liabilities in the portfolio.BNP Paribas Cardif manages the market risk through regular asset liability management (ALM) studies. These studies limit the exposure to interest rate risk by duration matching and advice on the level of spread and equity risk to be taken within the risk profile limits set. Concentration risks – at company, industry and geography levels – are managed in monthly asset management committees. BNP Paribas Cardif does not use complex financial instruments, such as derivatives or swaps, to manage the market risk.BNP Paribas Cardif manages the underwriting risk through product development and reinsurance. The Life risk is partly reinsured in BNP Paribas Cardif Levensverzekeringen N.V. and the Disability risk is partly reinsured in BNP Paribas Cardif Schadeverzekeringen N.V. We do not use other risk limiting techniques, such as special purpose vehicles.

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The above risks can be deduced from the absolute and relative contribution of each risk module to the company’s capital requirement (SCR). BNP Paribas Cardif uses the Standard Formula and does not use a (partial) internal model. However, the risk profile has modelling limits. For instance, non-quantifiable risks are not included (for example operational risks).

These limits are addressed with another risk identification exercise: the risk register from which are derived the major risks as perceived by the executive board risk committee. The identification results in a list of major risks which are the main surveillance areas for the executive board:

The highest risks are subject to specific monitoring by the Executive Committee. The top risks are summarised in risk cards, monitored during monthly risk committees and measured in stress tests. Management actions have been defined in case of the emergence of these risks.

From the above information, a prospective risk profile has been built over the budget horizon of four years. BNP Paribas Cardif uses deterministic scenarios to assess the impact of adverse events and evolutions on the risk profile. The building of the risk profile results in a risk appetite declaration defining the acceptable level for the quantitative risk metrics. The risk appetite is not an absolute cap on the risk profile but a level over which risk management actions become a high priority to get back under the risk appetite. The risk management framework of BNP Paribas Cardif includes a risk preference statement. The following risk preference statements of the company have been set:

◊ Statement 1: “BNP Paribas Cardif Netherlands is now focussing on new risk takings…”. ◊ Statement 2: “…thanks to a good coverage ratio of the SCR in line with our current risk profile…” ◊ Statement 3: “…in addition we will keep a tight monitoring of our costs”.

Contribution to SCRContribution to SCRContribution to SCRContribution to SCR 2018201820182018 2017201720172017

Market 20% 28%Counterparty Default 0% 0%Life Underwriting 0% 0%Health Underwriting 51% 50%Non-Life Underwriting 20% 20%Operational 2% 1%Intangible Asset 0% 0%

SCR (million euros)SCR (million euros)SCR (million euros)SCR (million euros) 58.82258.82258.82258.822 74.09474.09474.09474.094

The proportion among risk modules is stable compared to former years. The evolution of the SCR shows a decrease partly due to the run-off nature of the in-force portfolio and also due to a lower symmetric adjustment (equity shock, Market), changed entry and recovery rates (Health Underwriting).

Health underwriting risks correspond to the disability portfolio. The disability shock is 85% of the module’s total. Non-Life underwriting risks correspond to unemployment; where premium and reserve shocks represent 91% of the module’s total.

The proportion of market risk is relatively high for portfolios that mainly consist of protection products. However, it is consistent with the asset size inherited from the single premium portfolio. Interest, spread and equity shocks are equally high: interest risk driven by the current low level, spread risk due to the high share of corporate bonds in the portfolio and equity due to the perceived risk. These risks are among the major risks.

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Underwriting riskUnderwriting riskUnderwriting riskUnderwriting risk

The underwriting risks are managed within the actuarial governance. The actuarial governance of the Group provides the overall framework for risk taking, risk mitigating and risk monitoring. The local actuarial governance of BNP Paribas Cardif is a translation of the Group framework, taking into account local market specificities and local expertise and experience to underwrite risks, under the local risk appetite definition.

Underwriting risks are monitored on a frequent basis as set out in internal risk management governance. Reports are frequently made to risk management committees in charge of monitoring the evolution of risk indicators and profitability indicators. The underwriting profit is monitored in both statutory and Solvency II closing form, where an excess of assets over best estimate provisions with risk margin gives comfort in the adequacy of technical provisions.

The accuracy of the risk monitoring system and reservation policy is evaluated by the Actuarial Function supported by an external independent actuary and the auditors.

The underwriting risks of BNP Paribas Cardif Schade N.V. mainly consist of disability, unemployment, expenses and surrender risks. Besides these core risks, suretyship and critical illness are in the portfolio. The in-force portfolio is dominated by single-premium policies essentially underwritten prior to 2008, as well as the main contributor to the technical and financial profit.

The new business consists of disability, unemployment and suretyship covers. Suretyship covers are increasing in volume, but do not add significantly to the risk profile. Moreover, volumes for disability and unemployment based on monthly premium are low. The portfolio size and underwriting risks therefore decreases because of expiries and surrenders.

Health underwriting SCR (56.8 million euros)Health underwriting SCR (56.8 million euros)Health underwriting SCR (56.8 million euros)Health underwriting SCR (56.8 million euros)

The Health SCR is decreasing in the portfolio, but also due to assumption changes. The relative decrease is comparable with the relative decrease in BEL. The main source of risk, disability, decreases by 15.3 million euros (24%). It is explained by disability assumptions (10%) and the decreasing evolution of the in-force portfolio (14%). The BEL claims is decreasing mainly due to the portfolio evolution while the BEL premium also strongly depends on disability assumption. On aggregate level it means that the BEL is decreasing at the same speed as the SCR does.

Many policies have regular premiums with embedded future profits, so BNP Paribas Cardif Schadeverzekeringen N.V. is mainly subject to a mass lapse shock.

Disability Unemployment

Surety Ship Disability Unemployment

Best Estimate Liabilities 162,279 - - 3,387 - 165,666 213,014

Reinsurance Recoverable 2,565 - - - - 2,565 3,179

Health SLT 55,287 - - 1,397 - 56,684 70,587 Mortality 65 - - - - 65 56 Longevity 163 - - 0 - 163 39 Disability 46,584 - - 1,350 - 47,934 63,209 Lapse 19,996 - - - - 19,996 17,991 Expense 6,598 - - 89 - 6,687 7,456 Revision - - - - - - - Diversification (18,119) - - (43) - (18,162) (18,164)Health NSLT - - - - - - - Catastrophe 922 - - 16 - 938 1,122 Diversification (811) - - (15) - (826) (833) TotalTotalTotalTotal 55,39855,39855,39855,398 ---- ---- 1,3981,3981,3981,398 ---- 56,79656,79656,79656,796 70,87670,87670,87670,876

20172017201720172018201820182018Health SCRHealth SCRHealth SCRHealth SCRnet of reinsurancenet of reinsurancenet of reinsurancenet of reinsurance

Direct businessDirect businessDirect businessDirect business Indirect businessIndirect businessIndirect businessIndirect business

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Mortality and Longevity Mortality and Longevity Mortality and Longevity Mortality and Longevity Mortality and Longevity shocks are calculated by recalculating with increased respectively decreased mortality parameters at a policy level.

Because the products in Cardif Schade do not provide a cover in case of death and the cover lasts up to pension age, the portfolio is not sensitive to either mortality or longevity.

DisabilityDisabilityDisabilityDisabilityThe disability shock is applied to the in-force policies and claims. The shock is a simultaneous increase of entry and decrease of recovery. The shock is an increase of entry rates of 35% in the first twelve months and 25% after. The recovery is reduced by 20%. Given the long-term nature of the portfolio and the absence of significant recovery on long term disability, the 25% shock on entry rate is the most important shock.

The impact of the shock on policies is caused by both an increase in benefits paid and a loss of future profits. Since policiescannot claim twice, these end after a claim. The impact of the shock in Individual Disability is 35.8% on 128.2 million euros of expected future benefits: 45.9 million euros.

The impact of the shock is distinctly different on claims. A lower shock is expected as the majority of the benefits paid stem from the monthly payments of existing claims that are not subject to entry, do not have future premium nor future profits and recovery expectations are limited to 72 months after entry. The impact of the shock is an increase of 10.8% on 145.7 million euros of the expected benefits in the claims provision for Individual Disability: 10.5 million euros.

Other portfolios account for 2.1 million euros. Reinsurance reduces the impact of the shock by 0.1 million euros.

LapseLapseLapseLapseLapse is a significant risk in the Disability portfolio, where many policies have regular premiums with embedded future profits. Compared to last year, the lapse shock increase by 2.0 million euros (11%). The lapse risk increases because, due to the new disability assumptions, more policies embed future profits.

The lapse shock taken is the most adverse out of three scenarios: an increase in lapse rates, a decrease in lapse rates and an instantaneous mass lapse shock. As periodic premium contracts remain profitable and for single premium contracts a surrender value applies, the mass lapse shock is currently the greatest of the three.

ExpenseExpenseExpenseExpenseCardif Schade applied the expense shock of 10% at cost level and a 1% increase in cost inflation per year. Given the long-term nature of the portfolio, the expense shock is significantly higher than the 10% at cost level, due to the effect of inflation. The shock decreased compared to last year due to the higher recovery rates, which caused less projected claim costs.

The cost level reported in the Individual Disability portfolio increased by 18.9% on expected costs of 36.6 million euros:6.6 million euros. Other portfolios accounted for 0.1 million euros.

Disability Unemployment

Surety Ship Disability Unemployment

Best Estimate Liabilities 162,279 - - 3,387 - 165,666 213,014

Reinsurance Recoverable 2,565 - - - - 2,565 3,179

Lapse up 6,344 - - - - 6,344 5,772 Lapse down 2,696 - - 3 - 2,699 4,389 Mass lapse 19,996 - - - - 19,996 17,991 TotalTotalTotalTotal 19,99619,99619,99619,996 ---- ---- ---- ---- 19,99619,99619,99619,996 17,99117,99117,99117,991

Health SCRHealth SCRHealth SCRHealth SCRnet of reinsurancenet of reinsurancenet of reinsurancenet of reinsurance

Direct businessDirect businessDirect businessDirect business Indirect businessIndirect businessIndirect businessIndirect business2018201820182018 2017201720172017

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CatastropheCatastropheCatastropheCatastropheBNP Paribas Cardif Schadeverzekeringen N.V. applied the Mass Accident and Pandemic scenarios to the portfolio. The Accident Concentration shock is nil.

Accidental death and medical treatment events are not covered. The Mass Accident shock to 0.15% of the population leads to long-term disability for 20% of the affected population. Probabilities of 1.5%, 5%, respectively 13.5% lead to disability of one year, ten years or permanent disability. The maximum total benefit is 8,313 million euros. Due to the one year waiting period that applies to most disability covers of BNP Paribas Cardif Netherlands, the one year shock has limited impact.

The gross SCR in this scenario is 0.7 million euros (2017: 0.8 million euros).

The same policyholders are subject to the Pandemic scenario, with probability 0.0075%. The gross SCR in this scenario is0.6 million euros (2017: 0.7 million euros).

RevisionRevisionRevisionRevisionBNP Paribas Cardif Schade N.V. mainly sold policies where an insured is eligible to the full benefit in case a threshold percentage of disability is reached (conform WIA: 35%). It did not sell a material amount of policies which are subject to revision. Hence, the revision shock does not apply to any policy in the portfolio.

Non-Life Underwriting SCR (24.0 million euros)Non-Life Underwriting SCR (24.0 million euros)Non-Life Underwriting SCR (24.0 million euros)Non-Life Underwriting SCR (24.0 million euros)

The decrease of the Non-Life SCR is linked to a decrease in premium volume driven by high lapses. Although the Collective portfolio is smaller, it has a relatively high SCR because the SCR depends on Gross Written Premium and includes a high commission. On the other hand, Individual portfolio has barely any commission left. Hence the Collective portfolio has a relatively high Gross Written Premium. The SCR Collective decreases faster because the lapse in Collective portfolio is even higher than in Individual portfolio. Compared to last year, the SCR has decreased in line with the portfolio.

Premium and ReservePremium and ReservePremium and ReservePremium and ReserveThe volume measure for Non-Life consists of two components: Premium and Reserve.

As a volume measure for the Premium in Unemployment, BNP Paribas Cardif Schade N.V. takes the future Earned Premium for existing contracts. Since the contract boundary is the term of the contract, the run-off of policies spans a long period of time (over thirty years). The future Earned Premium consists of two elements: ◊ Release of statutory Technical Provisions, ◊ Future Gross Written Premium on In-Force business,The future Earned Premium is approximated by taking the sum of these components. The difference is the time value. The projected Gross Written Premium in the Best Estimate Liabilities is 55.7 million euros. The statutory technical provisions are 3.3 million euros. Hence, the total Premium volume measure is 59.0 million euros.

BNP Paribas Cardif Schadeverzekeringen N.V. takes the Best Estimate provision for claims of 3.1 million euros as the volume measure for Reserve unemployment.The expected Earned Premium for Suretyship contracts to be written in the next twelve months is 3.9 million euros, which is higher than the written premium in 2018. BNP Paribas Cardif Schadeverzekeringen N.V. takes this expectation as a volume measure for the Premium in Suretyship.

Disability Unemployment Surety Ship Disability Unemployment

Best Estimate Liabilities - 18,406 255 - 228 18,889 25,442

Reinsurance Recoverable - - - - - - -

Premium / Reserve - 20,338 1,536 - 103 21,977 26,778 Lapse - 1,278 - - - 1,278 1,464 Catastrophe - 2,845 2,747 - 11 5,603 5,920 Diversification - (4,090) (716) - (19) (4,825) (5,291) TotalTotalTotalTotal ---- 20,37120,37120,37120,371 3,5673,5673,5673,567 ---- 95959595 24,03324,03324,03324,033 28,87028,87028,87028,870

Non-Life SCRNon-Life SCRNon-Life SCRNon-Life SCRnet of reinsurancenet of reinsurancenet of reinsurancenet of reinsurance

Direct businessDirect businessDirect businessDirect business Indirect businessIndirect businessIndirect businessIndirect business2018201820182018 2017201720172017

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Due to the short-term nature of the suretyship product and the single premium payment, all written premium in the last twelve months has already been earned, so no technical provisions are added to this amount. BNP Paribas Cardif Schade takes the statutory Claims Reserve of 0.2 million euros as the volume measure for Reserve Surety Ship.

LapseLapseLapseLapseThe lapse shock that should be applied to the Non-Life portfolio is an instantaneous mass lapse shock of 40% at policy level. Since the Unemployment is no longer profitable according to the BEL, the impact of the shock is limited.

CatastropheCatastropheCatastropheCatastrophe The catastrophe shock for Unemployment is a 40% shock on the budgeted Earned Premium for the next twelve months.

The budgeted Earned Premium for Unemployment is 10.1 million euros. The catastrophe shock for Suretyship is 100% on the budgeted Earned Premium for the next twelve months of 3.9 million euros and 10% on the two largest exposures of total 0.3 million euros.

Market riskMarket riskMarket riskMarket risk

Market risk has a relatively high share in the risk profile due to the dominance of past Single Premium products in the balance sheet. This proportion in the risk profile is decreasing along with the exposure in Single Premium policies. The market risk is composed of interest rate risk, equity risk, spread risk, currency risk, property risk and concentration risk.

The interest rates risk reflects the sensitivity of the value of assets, liabilities and financial instruments to changes in terms of the structure of interest rates or in their volatility. It is measured by the impact of upward and downward shocks.

Sensitivity to market and credit risks is relatively high on the value of assets of the company in the current financial market situation, where very low interest rates increased the market value of bonds in general. The up-shock dominates. The proportion of the interest rates risk has decreased since 2015.

The equity risk reflects the impact of change in equity prices, which impacts on direct equity exposure and loss of fees (measured by the impact of downwards shock for EEA and OCDE equities and for the other equities). The level of shocks on this sub-module results in a relatively high weight while equity represents 8% of the assets.

The spread risk reflects the impact of an increase in credit spreads on investments in fixed-income securities, offset by movements in the premiums or on the liabilities. On spread risk, the sensitivity is high because of the high proportion of corporate bonds (40% of bonds). The shock is a negative function of rating.

The currency risk is immaterial. The property risk is absent. The concentration risk is limited and is almost completely diversified within the portfolio.

To manage market risks, an ALM policy is defined in coordination with BNP Paribas Group ALM governance and BNP Paribas Group’s governance on market risk monitoring. A comprehensive ALM study is performed at least every three years and results in an investment framework for the asset managers. The transformation from Single Premiums production into Regular Premiums production requires close monitoring of the cash flows.

The latest ALM study reviewed the following elements: ◊ Life and Non-Life were previously managed using the same modified duration. They will now be managed using ◊ distinct modified duration based on the liability profiles for Life and Non-Life. ◊ The contractual liabilities are matched with a replicating portfolio, while the rest are considered as free assets ◊ and have fewer constraints. ◊ Solvency II results in a link between asset allocation and capital requirements. Therefore the study is based on ◊ the Solvency II framework. ◊ The study is based on risk appetite quantitative metrics.

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The management of investments is outsourced to BNP Paribas Asset Management, a BNP Paribas Group company, which is mainly in charge of selecting investments and managing the portfolio’s assets in accordance with restrictions set out in the investment policy. The following constraints are given to the asset manager to manage the risks related to the investment portfolio: ◊ Asset duration ◊ Portfolio composition ◊ Equity proportion ◊ Ratings limits.

Limits are monitored monthly in the Asset Management Committee. The performance and composition of the portfolio by sector and location is monitored and discussed with the asset manager each quarter.

Credit riskCredit riskCredit riskCredit risk

The credit (or counterparty default) risk reflects the possible losses due to unexpected default or deterioration in the credit standing of the counter parties. This risk can be present within the investments, for instance as spread risk or with intermediaries and reinsurers.

The ‘counterparty default risk not related to investments’ is present in receivables and technical provisions. The company has limited exposure to these credit risks, 1% of the risk profile. The Counterparty Default risk consists of two types of exposures. Type 1 exposures that are relevant to BNP Paribas Cardif Netherlands are reinsurance and cash at bank. Type 2 exposures are other receivables on the balance sheets that cannot be allocated to a single name, which includes the creditrisk on intermediaries. The credit risk on investments is analysed by BNP Paribas Cardif Netherlands as spread risk.

Counterparty default risk - IntermediariesCounterparty default risk - IntermediariesCounterparty default risk - IntermediariesCounterparty default risk - IntermediariesBecause our products are sold mainly on a Business-to-Business distribution mode, monitoring the counterparty default risk of intermediaries is a component of our risk management framework and we follow the counterparty default risk governance defined by BNP Paribas Group.

The counterparty default risk on distributors can arise in the case of: ◊ Upfront payments to our business partners on periodical premiums contracts, where distributors are required to pay ◊ back a portion of the received commissions if the customers surrender. This conditional debt of distributors creates ◊ a counterparty default risk for us. ◊ A surrender on single premiums contracts. We will pay a contractual surrender value to the customers and ◊ distributors must pay back the unearned commissions. This conditional debt of distributors creates a counterparty ◊ default risk for us. ◊ A delay in the event of premium collection.

The risk of commission clawbacks decreases because no new commissions have been paid since the ban of commissions as of 1 January 2013. The risk is mitigated by a surrender credit reserve, based on surrender, default and recovery rate assumptions.

The risk is monitored on a quarterly basis. The report monitors the exposure, the credit position of the most important counterparties and sufficiency of the surrender credit reserve.

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Counterparty default risk - ReinsuranceCounterparty default risk - ReinsuranceCounterparty default risk - ReinsuranceCounterparty default risk - ReinsuranceA counterparty default risk on reinsurers arises when reinsurance protections are purchased and premiums and reserves are ceded against a protection running in the future. We are exposed to the risk of bankruptcy of the reinsurer.

Our reinsurance cessions represent a small part of the portfolio. Reinsurance covers are purchased for the following scope:a quota share treaty for the term life covers for BNP Paribas Cardif Levensverzekeringen N.V.; a surplus share treaty for the highest insured amounts in disability for BNP Paribas Cardif Schadeverzekeringen N.V. . The quota share treaty has a quarterly risk premium payment and no reserve cession. The surplus share treaty is renewable annually with a clean-cut termination mode and without reserve cessions. The exposure is limited in accordance with the balance sheet.

Moreover, we participate in the National Terrorism Reinsurance scheme (NHT), which itself purchases retrocessions to a pool of reinsurers. The analysis of the credit risk shows that there is no credit risk for us because the liability towards the end customer is limited by what can be received from the NHT.

In selecting reinsurers, we use internal reinsurance or strictly adhere to the security list of the BNP Paribas Group. The security list contains reinsurers selected for their financial strength and rating.

Liquidity riskLiquidity riskLiquidity riskLiquidity risk

Liquidity risk is the risk arising if the organisation is unable to fulfil its short-term financial obligations due to a deficit in cash at bank. We manage this risk by closely monitoring the cash flow in the short and mid-term. Estimated cash receivables and payables are recorded in a cash flow model on a daily basis in order to identify cash needs. Actual cash flow is also recorded in the cash flow model, to analyse differences with estimations and to update the model for the next period. In addition to cash, the asset portfolio of both companies is very liquid. There are few short-term liabilities. Therefore the liquidity risk is not of concern to us.

Operational riskOperational riskOperational riskOperational risk

GeneralGeneralGeneralGeneralOperational risk is defined as the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events. Operational risk can arise due to a wide range of different external events ranging from power failures to earthquakes. Similarly, operational risk can arise due to internal events such as failures or inadequacies in any of our processes and systems or those of our outsourced service providers. Operational risk arising from human resources management may refer to a range of issues such as mismanaged or poorly trained employees and fraud. Operational risks differ from other risks in the sense that they are typically not borne directly in return for an expected reward; rather, these are part of the natural course of corporate activity.

Operational risk managementOperational risk managementOperational risk managementOperational risk managementThe aim of Operational Risk Management is not to have risks eliminated from the activities at any cost, but rather to ensure that operational risks are managed appropriately to maximise potential opportunities and minimise the adverse effects of risks.

The Operational Risk Management & Internal Control (ORM/IC) department is responsible for supervision and coordination of the risk management activities, providing advice and guidance, including developing standard templates and tools. The ORM/IC department organises training on the principles of risk management, risk assessment and how to implement risk management effectively. The ORM/IC department applies a comprehensive incident reporting system and maintains information on losses or adverse events when risks are evaluated.In accordance with the control plan, the ORM/IC department will perform operational risk monitoring activities. At a local level, the ORM/IC department has a hierarchical reporting line to the CRO. Within the matrix organisation of BNP Paribas Group, the ORM/IC department has a functional reporting line to the Risk department at BNP Paribas Cardif Group In 2018, the ORM/IC department improved the efficiency and effectiveness of their activities in incident reporting, risk quantification and monitoring. Overall risk awareness improved in the organisation.

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Other material risksOther material risksOther material risksOther material risks

Compliance riskCompliance riskCompliance riskCompliance risk

On the one hand, Compliance Risk is the combination of the risk arising from non-compliance of the company’s business operations with legislation, regulations or the company’s own applicable policy framework, processes and procedures and on the other hand the risk of compromising the integrity of the institution or the financial system due to improper or unethical conduct on the part of the organisation, its employees or management, in derogation of legislation, (self-) regulation or self-imposed standards or the standards expected by society.

The Compliance Function roles, responsibilities and competences are described in the Compliance Function Charter, which is updated annually. Within BNP Paribas Cardif Group, the Compliance Function has three levels. These levels are: Insurance Compliance, Regional Compliance and Local Compliance. Insurance Compliance is responsible for the Compliance Function at insurance group level with the following areas of attention: market integrity, relation with supervision, corporate social responsibility, financial security, professional ethics and protection of the customer’s interests. To enhance the independence, the Local Compliance function hierarchically reports to the entity’s Board of Directors and to the Regional and Head Office Compliance function. The system also enables better knowledge and

capacity distribution.

Further steps were taken in 2018 to increase compliance awareness and strengthen the Compliance Risk ownership of the operational departments. Furthermore, special attention has been paid to the implementation of the EU General Data

Protection Regulation (GDPR) and the EU Insurance Distribution Directive (IDD).

Information securityInformation securityInformation securityInformation securityOur work is based primarily on the trust given to us by our customers. It is therefore vitally important that everyone in the company plays their part in protecting assets from theft, unauthorised use, modification, disclosure or destruction through accidental, intentional or malicious means.

The risks recognised within Information Technology relate to integrity, continuity and assurance of confidentiality of our information provision. The digital interaction with both customers and partners is increasing significantly due to deploying web services, social media and operational outsourcing. This has been a continuous trend since 2016 and it will keep growing in the years to come. For all related existing and new business initiatives, the IT Security Manager is involved in order to identify and mitigate the IT risks, including increasing cyber security risks.

In 2018, Information Security was confirmed as being a key priority for BNP Paribas group. This led to additional security measures being implemented: ◊ Group security standards have been embedded in partnerships and suppliers by negotiating new contracts and ◊ pre-security assessments ◊ BNP Paribas Group program on cyber security as well as NIST standards have started to be deployed ◊ Security level of our applications has been fully reviewed ◊ Information Security tests have been performed on our core ◊ Internal staff has been trained on cyber security via e-learnings and phishing tests have been performed

These initiatives will continue in 2019, focusing on the deployment of NIST standards and BNP Paribas Group programme on Cyber Security.

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Business continuityBusiness continuityBusiness continuityBusiness continuity

Business Continuity Management is the system of activities that serves to assure the continuity of our business processes under adverse circumstances. The continuity of our organisation is formed by the sum of all operational business processes. The system of activities of the Business Continuity Management process crosses all business processes and the activities that guarantee continuity on an organisation-wide scale.

In 2018, BCP policy was updated to provide better alignment with the continuity risks of our organisation. Several actions were performed to ensure continuity of activities: ◊ Back-up & recovery tests ◊ The disaster recovery solution and site were tested in the Netherlands as well as in the BNP Paribas European ◊ data centre

In 2019, the crisis management plan will also be updated and new business continuity and evacuation tests will be performed.

Any other informationAny other informationAny other informationAny other information

There is no relevant information to be reported.

OutlookOutlookOutlookOutlook

Each year we prepare a three-year forecast for our company, based on economic, social and market developments. When preparing our forecasts, we structurally use the economic expertise of the BNP Paribas economic research office. Based on this information, we predict the developments of our portfolio of products and services.

With the start of the new movement in our niche, we have a strong base to further build on our proposition in 2019. So next year, the Re-launch will again be our number one priority. At the beginning of the year, we will introduce an even simpler Hypotheek Aflos Verzekering, which is interesting for a larger target group. We will also combine a new term life proposition with our existing coverage for disability and unemployment to offer the market a complete package to cover risks around the mortgage. We will also finalise the design of a new proposition for credit protection. Initial reactions from the market have been promising.

We continue to closely monitor unemployment and disability risks. In 2018, we again observed market improvements on both risks. Economic recovery in the Netherlands resulted in good unemployment and disability figures, visible in both inflows and outflows. We expect this to continue in 2019. We also monitor the mortality data closely. We see that life expectancy keeps growing, which is and will continue to be reflected in our product portfolio. With our improved processes in place, we have a stable base to provide better controls in terms of risk management, but also in terms of financial performance.

We have implemented the outcome of the latest performed asset liability management study. Together with the results of a stress test, this led to a reduction of our technical interest rate. We expect this to result in an optimisation of our risk & return, in a social and responsible manner.

In 2019 we will continue to increase our efficiency, improve controls and offer optimal service to our customers. Investments in our Information system will be made in order to support business development ‘Re-launch’, compliance with laws and regulations, process automation and digitisation. We will also specifically focus on managing cyber risks and system obsolescence.

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As announced, we have ensured that our knowledge and experiences are secured internally wherever possible, which significantly reduced the number of external employees. With the current staff, we have a stable and enthusiastic team that works hard with us to ensure a bright future. We expect staffing levels to remain stable in 2019. To make sure that we retain high quality staff, we offer a work place that wants to invest in its employees.

In 2019 we will continue building on our performance in our role as an insurer in a changing world.

Oosterhout, 18 April 2019

Mr C. de JongMr W. Eikelboom Mrs M. van Zuien

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Financial statements Financial statements Financial statements Financial statements

Balance sheet - Assets as at 31 December 2018Balance sheet - Assets as at 31 December 2018Balance sheet - Assets as at 31 December 2018Balance sheet - Assets as at 31 December 2018Before appropriation of resultIn thousand euros

ASSETSASSETSASSETSASSETS

(1) Intangible fixed assets (1) Intangible fixed assets (1) Intangible fixed assets (1) Intangible fixed assets Software 1.220 1.205

(2) Other investments(2) Other investments(2) Other investments(2) Other investmentsShares and other non fixed-interest securities 50.969 68.731 Bonds and other fixed-interest securities 305.884 343.810

356.853 412.541

(3) Receivables(3) Receivables(3) Receivables(3) ReceivablesReceivables direct insurance - policyholders - 17 Receivables direct insurance - intermediaries 213 636 Other receivables 233 187

446 840

(4) Other assets(4) Other assets(4) Other assets(4) Other assetsTangible fixed assets 420 360 Cash at banks 978 1.064

1.398 1.424

(5) Accrued assets(5) Accrued assets(5) Accrued assets(5) Accrued assetsAccrued interest 4.994 5.566 Other accrued assets 257 288

5.251 5.854

TOTAL ASSETS TOTAL ASSETS TOTAL ASSETS TOTAL ASSETS 365.168365.168365.168365.168 421.864421.864421.864421.864

31-12-201831-12-201831-12-201831-12-2018 31-12-201731-12-201731-12-201731-12-2017

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Financial statements Financial statements Financial statements Financial statements

Balance sheet - Liabilities as at 31 December 2018Balance sheet - Liabilities as at 31 December 2018Balance sheet - Liabilities as at 31 December 2018Balance sheet - Liabilities as at 31 December 2018Before appropriation of resultIn thousand euros

EQUITY AND LIABILITIESEQUITY AND LIABILITIESEQUITY AND LIABILITIESEQUITY AND LIABILITIES

(6) Equity (6) Equity (6) Equity (6) Equity

Issued and paid up capital 62.223 62.223 Legal reserve 999 759 Other reserves (999) 1.496 Undistributed result 26.510 28.744

88.733 93.222

(7) Technical provisions(7) Technical provisions(7) Technical provisions(7) Technical provisions

For unearned premiums and unexpired risks 120.214 160.960 For outstanding claims: gross 153.642 165.556 Reinsurers' share (2.535) (2.991)

271.321 323.525

(8) Provisions for deferred taxes(8) Provisions for deferred taxes(8) Provisions for deferred taxes(8) Provisions for deferred taxes 124 1.033

(9) Other liabilities(9) Other liabilities(9) Other liabilities(9) Other liabilities

Creditors arising from direct insurance 2.544 523 Creditors arising from reinsurance 204 219 Other liabilities 1.488 2.440

4.236 3.182

(10) Accrued expenses(10) Accrued expenses(10) Accrued expenses(10) Accrued expenses 754 902

TOTAL EQUITY AND LIABILITIES TOTAL EQUITY AND LIABILITIES TOTAL EQUITY AND LIABILITIES TOTAL EQUITY AND LIABILITIES 365.168365.168365.168365.168 421.864421.864421.864421.864

31-12-201831-12-201831-12-201831-12-2018 31-12-201731-12-201731-12-201731-12-2017

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Profit and loss account for the year ended 31 December 2018Profit and loss account for the year ended 31 December 2018Profit and loss account for the year ended 31 December 2018Profit and loss account for the year ended 31 December 2018

In thousand euros

TECHNICAL ACCOUNT NON LIFE INSURANCETECHNICAL ACCOUNT NON LIFE INSURANCETECHNICAL ACCOUNT NON LIFE INSURANCETECHNICAL ACCOUNT NON LIFE INSURANCE

(16) Net earned premiums insurer(16) Net earned premiums insurer(16) Net earned premiums insurer(16) Net earned premiums insurerProduction / written premiums 20.783 22.783 Surrenders (541) (559) (12) Gross written premiums 20.242 22.224 (13) Outgoing reinsurance premiums (665) (715) (14) Premiums net of reinsurance 19.577 21.509

(15) Movement technical provisions unearned(15) Movement technical provisions unearned(15) Movement technical provisions unearned(15) Movement technical provisions unearnedpremiums and unexpired risks: grosspremiums and unexpired risks: grosspremiums and unexpired risks: grosspremiums and unexpired risks: gross 40.747 27.905

60.324 49.414

(17) Result on investments allocated to the technical account(17) Result on investments allocated to the technical account(17) Result on investments allocated to the technical account(17) Result on investments allocated to the technical account 4.630 15.763

(18) Other technical income insurer(18) Other technical income insurer(18) Other technical income insurer(18) Other technical income insurer 34 49

(19) Claims for the insurance company(19) Claims for the insurance company(19) Claims for the insurance company(19) Claims for the insurance companyClaims incurred Gross (26.082) (27.564) Reinsurers' share 320 329 Claims net of reinsurance (25.762) (27.235)

(20) Movement technical provision for outstanding claims(20) Movement technical provision for outstanding claims(20) Movement technical provision for outstanding claims(20) Movement technical provision for outstanding claimsProvision for outstanding claims: gross 11.912 11.642 Provision for outstanding claims: Reinsurers' share (455) 287 Movement technical provision for outstanding claims gross 11.457 11.929

(21) Operating expenses(21) Operating expenses(21) Operating expenses(21) Operating expensesAcquisition costs (8.944) (8.672) Administration, personnel and amortization costs (7.472) (7.540)

(16.416) (16.212)

(11) RESULT TECHNICAL ACCOUNT NON-LIFE INSURANCE(11) RESULT TECHNICAL ACCOUNT NON-LIFE INSURANCE(11) RESULT TECHNICAL ACCOUNT NON-LIFE INSURANCE(11) RESULT TECHNICAL ACCOUNT NON-LIFE INSURANCE 34.26734.26734.26734.267 33.70833.70833.70833.708

2018201820182018 2017201720172017

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Profit and loss account for the year ended 31 December 2017Profit and loss account for the year ended 31 December 2017Profit and loss account for the year ended 31 December 2017Profit and loss account for the year ended 31 December 2017

In thousand euros

NON-TECHNICAL ACCOUNTNON-TECHNICAL ACCOUNTNON-TECHNICAL ACCOUNTNON-TECHNICAL ACCOUNT

(11) Result technical account non-life insurance(11) Result technical account non-life insurance(11) Result technical account non-life insurance(11) Result technical account non-life insurance 34.267 33.708

(22) Investment income(22) Investment income(22) Investment income(22) Investment income

Result from investments 10.002 11.896

Increase of value investments 278 280

Realized profit on investments 10.124 6.521 20.404 18.697

(22) Non-realized profit on investments(22) Non-realized profit on investments(22) Non-realized profit on investments(22) Non-realized profit on investments - 3.216

(22) Investment costs(22) Investment costs(22) Investment costs(22) Investment costs

Administration and interest costs (1.174) (967)

Decrease of value investments (487) (554) Realized loss on investments (183) -

(1.844) (1.521)

(22) Non-realized loss on investments(22) Non-realized loss on investments(22) Non-realized loss on investments(22) Non-realized loss on investments (12.521) -

(17) Result on investments allocated to the technical account(17) Result on investments allocated to the technical account(17) Result on investments allocated to the technical account(17) Result on investments allocated to the technical account (4.630) (15.763)

(23) Result before taxes(23) Result before taxes(23) Result before taxes(23) Result before taxes 35.676 38.337

(24) Taxes (24) Taxes (24) Taxes (24) Taxes (9.166) (9.593)

RESULT AFTER TAXESRESULT AFTER TAXESRESULT AFTER TAXESRESULT AFTER TAXES 26.51026.51026.51026.510 28.74428.74428.74428.744

2018201820182018 2017201720172017

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Cash flow statement for the year ended 31 December 2018Cash flow statement for the year ended 31 December 2018Cash flow statement for the year ended 31 December 2018Cash flow statement for the year ended 31 December 2018

In thousand euros

CASH FLOW STATEMENTCASH FLOW STATEMENTCASH FLOW STATEMENTCASH FLOW STATEMENT

Cash flow from operating activitiesCash flow from operating activitiesCash flow from operating activitiesCash flow from operating activitiesResult after taxes 26.510 28.744 (7) Movement technical provisions (52.204) (39.835) (1) Disposal cumulative cost intangible FA - 552 (1) Disposal cumulative amortization FA - (549) (1) Amortization intangible fixed assets 757 576 (2) Amortization investments 334 (1.205) (22) Reinvested realized result on investments (18.769) (17.450) (4) Depreciation tangible fixed assets 208 217 (2) Movement of value investments 12.520 (3.218)

(30.644) (32.168)

(3) Movement receivables 394 (64) (5) Movement accrued assets 603 1.757 (9) Movement other liabilities 1.054 (4.337) (10) Movement accrued expenses (148) (275)

(28.741)(28.741)(28.741)(28.741) (35.087)(35.087)(35.087)(35.087)

Cash flow from investing activitiesCash flow from investing activitiesCash flow from investing activitiesCash flow from investing activitiesInvestments and purchase

(2) Shares and other non fixed-interest securities (21.006) - (2) Bonds and other fixed-interest securities (7.280) (14.110) (22) Reinvested realized result on investments 18.769 17.450 (1) Intangible fixed assets (772) (292) (4) Tangible fixed assets (293) (169)

(10.582) 2.879 Disposals, redemptions and sales(2) Shares and other non fixed-interest securities 26.248 6.929 (2) Bonds and other fixed-interest securities 44.872 57.755 (4) Tangible fixed assets 25 26

71.145 64.710 60.56360.56360.56360.563 67.58967.58967.58967.589

Cash flow from financing activitiesCash flow from financing activitiesCash flow from financing activitiesCash flow from financing activities(6) Change in share capital issued and paid up - - (6) Dividend payment (30.999) (32.503) (8) Movements provision for deferred taxes (909) 155

(31.908)(31.908)(31.908)(31.908) (32.348)(32.348)(32.348)(32.348)

Movement cash at bankMovement cash at bankMovement cash at bankMovement cash at bank (86)(86)(86)(86) 154154154154

Cash at bankCash at bankCash at bankCash at bankOpening balance 1.064 910 Closing balance 978 1.064

Movement cash at bankMovement cash at bankMovement cash at bankMovement cash at bank (86)(86)(86)(86) 154154154154

2018201820182018 2017201720172017

The cash flow statement is prepared according to the indirect method.

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Notes to the balance sheet Notes to the balance sheet Notes to the balance sheet Notes to the balance sheet

In thousand euros

General General General General BNP Paribas Cardif Schadeverzekeringen N.V., with its registered at the Chamber of Commerce (20100172) under its registered addres Oosterhout (Hoevestein 28, 4903 SC), is a 100% subsidiary of holding company BNP ParibasCardif B.V. At December 31, 2018 BNP Paribas Cardif B.V. is a wholly owned subsidiary of BNP Paribas Cardif S.A.in France, which is part of the Group BNP Paribas (BNP Paribas S.A.). The Chamber of Commerce number of BNP Paribas Cardif B.V. is 20100169.

BNP Paribas Cardif Schadeverzekeringen N.V. has taken up the business of non-life insurance as dictated by 'Wet op het Financieel Toezicht' and all activities which are associated with or can support these undertakings.

Head of the BNP Paribas Group Head of the BNP Paribas Group Head of the BNP Paribas Group Head of the BNP Paribas Group The financial data of the legal entity are consolidated in the consolidated financial statements of the parent company BNP Paribas S.A., with its registered seat in: 1, bd Haussmann, 75009 Paris, France. The consolidated financial statements are deposited at the commercial register: Greffe du Tribunal de Commerce de Paris, 1 Quai de la Corse, 75198 Paris, France.

Related partiesRelated partiesRelated partiesRelated partiesAll legal entities that can be controlled, jointly controlled or significantly influenced are considered to be a related party. Also entities which can control the company are considered to be a related party. In addition,statutory directors, other key management of BNP Paribas Cardif Schadeverzekeringen N.V. or the ultimate parent company and close relatives are regarded as related parties.

BNP Paribas Cardif Schadeverzekeringen N.V. has transactions with related parties. BNP Paribas Cardif's head office in France charges the costs for provided services. With BNP Paribas Cardif B.V. there is an agreement for subcontracting personnel. Of all BNP Paribas Cardif B.V.'s personnel costs 65% are being charged to BNP Paribas Cardif Schadeverzekeringen N.V. General costs are charged from BNP Paribas Cardif Schadeverzekeringen N.V. to BNP Paribas Cardif Levensverzekeringen N.V.

The nature, extent and other information is disclosed if this is necessary in order to provide the required insight. The transactions mentioned below are considered to be at arm's length.

Transaction Type Transaction Type Transaction Type Transaction Type Relation Type Relation Type Relation Type Relation Type Total 2018Total 2018Total 2018Total 2018 Total 2017Total 2017Total 2017Total 2017

BNP Paribas Asset Management France* group company (351) (398) - Investment portfolio management GIE BNP Paribas Cardif S.A. group company (712) (434) - Head office supportBNP Paribas Cardif B.V. group company (5.698) (5.226) - Charged Personnel costs BNP Paribas Cardif B.V. group company (30.999) (34.758) - Dividend paymentBNP Paribas Cardif Levensverzekeringen N.V. group company 2.899 3.691 - Recharged costs

Arval group company (119) (96) - Lease costs company cars

Total Total Total Total (34.980)(34.980)(34.980)(34.980) (37.221)(37.221)(37.221)(37.221)

* In 2017 CamGestion S.A. changed into BNP Paribas Asset Management France.

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Futhermore premiums, commissions and claims of BNP Paribas Cardif Levensverzekeringen N.V. are settled via BNP Paribas Cardif Schadeverzekeringen N.V. as a consequence of the integrated products.

Comparison with previous yearComparison with previous yearComparison with previous yearComparison with previous yearThe valuation principles and method of determining the result are the same as those used in the previous year, with the exception of the changes in accounting policies as set out in the relevant sections.

Changes in estimatesChanges in estimatesChanges in estimatesChanges in estimatesIn order to present the technical provisions in a more appropriate way, the following two main changes in estimates have been processed:

The assumptions for the technical interest move from 2.75% to 1.75% following the decrease of the long-term interest rates in the market over the last years. The change in interest rate in 2018 resulted in and increase of the unearned premium reserve for an amount of 11.5 million euros and an increase of the claim reserve for an amount of 5.6 million euros on the balance sheet. In the profit and loss the earned premium decreased with 11.5 million euros and the claim charge decreased with 5.6 million euros.

The best estimate assumptions of entry and recovery rates for disability and unemployment has been updated. The total impact of updating these inputs is an increase of the claims result by 26.4 million euros. The largest part of the impact holds for the disability mortgage periodic premium products.

LeasingLeasingLeasingLeasing

Operational leasingOperational leasingOperational leasingOperational leasingOperational leasing are contracts whereby a large part of the risks and rewards associated with ownership are not for the benefit of nor incurred by the company. Lease payments are recorded on a straight-line basis, taking into account reimbursements received from the lessor, in the income statement for the duration of the contract.

Financial instrumentsFinancial instrumentsFinancial instrumentsFinancial instrumentsFinancial instruments include primary financial instruments, such as receivables and payables. The company does not have any derivatives. The notes to the specific items of the balance sheet disclose the fair value of the related instrument if this deviates from the carrying amount. If the financial instrument is not recorded in the balance sheet the information on the fair value is disclosed in the notes to the ‘Contingent rights and obligations’. For the principles of primary financial instruments, reference is made to the recognition per balance sheet item.

Accounting principles Accounting principles Accounting principles Accounting principles

GeneralGeneralGeneralGeneralThe accounting principles for BNP Paribas Cardif Schadeverzekeringen N.V. are based on Dutch GAAP in accordance to Part 9 of Book 2 of the Dutch Civil Code. Valuation of assets and liabilities and determination of the result take place under the historical convention, unless presented otherwise. In the balance sheet, income statement and the cash flow statement, references are made to the notes.

ACCOUNTING PRINCIPLES BALANCE SHEETACCOUNTING PRINCIPLES BALANCE SHEETACCOUNTING PRINCIPLES BALANCE SHEETACCOUNTING PRINCIPLES BALANCE SHEET

Intangible fixed assestsIntangible fixed assestsIntangible fixed assestsIntangible fixed assestsAt initial recognition the intangible fixed assets are valued at fair value (purchase price). After initial recognition the intangible fixed assets are valued at amortized cost. Intangible assets are amortised over their estimated useful lives as from the moment they are ready for use, and if applicable less impairments. The useful life and the amortization method are reassessed at the end of each financial year. In principle, these assets will be amortized on a straight line basis over the expected economic life cycle of five years. For self developed software a legal reserve is created.

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InvestmentsInvestmentsInvestmentsInvestmentsInvestments are accounted for based on transaction date and recognised initially at fair value.

After initial recognition the shares and non-fixed interest securities are valued at fair value (market value as listed at the stock market). Changes in the fair value are recognised directly in the income statement.

Bonds and other fixed-interest securities are valued at amortized cost after initial recognition. The unamortized part (the difference between the bond's redemption value and the costs price minus the amortization) is presented under the investments. The realized profit and realized loss is recorded in the profit and loss account.

On balance sheet date, the company tests whether there are indications of an asset which could be subject to impairment. If there are such indications, the recoverable amount of the asset concerned is estimated. An asset is considered for impairment if its book value is higher than its recoverable value. Impairment is recognized as an expense in the profit and loss account.

Investments in bonds through mutual funds are valued at market value and reported as shares and non-fixed interest securities. After initial recognition changes in the market value are recognized as unrealized gains and losses in the profit and loss.

Transaction costs are expensed in the income statement.

ReceivablesReceivablesReceivablesReceivablesReceivables are recognised initially at fair value and subsequently measured at amortised cost. In case of doubtful receivables a provision is taken into account.

Other assestsOther assestsOther assestsOther assestsAt intial recognition the tangible fixed assets are valued at fair value (purchase price). After initial recognition the tangible fixed assets are valued at amortized cost. Tangible assets are depreciated over their estimated useful lives as from the moment they are ready for use.

On each balance sheet date, the company assesses whether there are any indications that a fixed asset may be subject to impairment. If there are such indications, the realisable value of the asset is determined. If it is not possible to determine the realisable value of the individual asset, the realisable value of the cash-generating unit to which the asset belongs is determined.An impairment occurs when the carrying amount of an asset is higher than the realisable value; the realisable value is the higher of the fair value less cost to sell and the value in use. An impairment loss is directly recognised in theincome statement while the carrying amount of the asset concerned is concurrently reduced.The useful life and the amortization method are reassessed at the end of each financial year. In principle, these assets will be amortized on a straight line basis over the expected economic life cycle of five years, taking into consideration any residual value.The cash is valued at nominal value. If cash is not freely disposable, then this has been taken into account upon valuation.

Accrued assetsAccrued assetsAccrued assetsAccrued assetsThe accrued interest is calculated based upon the interest rate applied to the nominal value. The other accrued assets relate to prepayments.

Technical provisions Technical provisions Technical provisions Technical provisions

Technical provisions for unearned premiums and unexpired risksTechnical provisions for unearned premiums and unexpired risksTechnical provisions for unearned premiums and unexpired risksTechnical provisions for unearned premiums and unexpired risksUnearned premiums and unexpired risks - disability and unemployment

The premium provision is calculated for risk and costs. First, the claims paid and premiums received are projected during the term of the policy. Second, these projected cash flows are discounted with a technical interest rate. Last, the costs are deferred linearly. BNP Paribas Cardif NL ensures the total provision is always at least nil on policy level.

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The claims paid are periodic payments depending on the entry and recovery rates and insured amount. The insured amount is fixed at the start of the contract. The entry and recovery rates are based on experience. An explicit prudence factor is applied to the best estimate claims paid. The premium received is the net premium after commissions and surrenders. The net premium is split in a risk and cost part. The costs are earned immediately in case of regular premium and not part of the provision.

Within the category disability and unemployment other covers are reported. The risk premium and administration costs.

Unearned premiums and unexpired risks - suretyship

A benefit for suretyship is due in case of cancellation of the purchase of a house. The premium for Surety Ship is received from the notary at time of passing the act (moment of purchase). It is by definition received after the risk has expired. Hence, the reserve is nil. 

Technical provisions for outstanding claimsTechnical provisions for outstanding claimsTechnical provisions for outstanding claimsTechnical provisions for outstanding claimsTechnical provisions for outstanding claims - disability and unemployment

The claims provision consists of two parts, RBNS (reported but not settled) and IBNR (incurred but not reported).

The RBNS is calculated on individual basis. Claims paid are projected as periodic payments based on recovery curves and insured amount. These projected cash flows are discounted with a technical interest rate. For claims that are not decided, BNP Paribas Cardif NL applies a probability that the claim will be paid in the future.

The IBNR is calculated with a run-off triangle approach (chain ladder) using a loss per policy for less developed occurrence periods. In addition, there is a reserve for claims handling expenses. The confidence level to capture variance in the IBNR calculation is set at 90%. The details of the run-off triangle approach are desribed below.

Due to insufficient statistical experience, the claims provision for critical illness covers and the collective portfolio is determined with a proxy. The claims provision is determined with a delay factor method: the IBNR is equal to a proportion of the paid claims. An explicit margin is included proportional to the margin in the claims provision of the other portfolios.

Technical provisions for outstanding claims - suretyship

The claims provision for Surety Ship consists of an IBNR. This IBNR is a based on the risk premium to be received on in force contracts. This provision is released linearly.

Technical provisions for outstanding claims - reinsurance

The claim provision is calculated with an RBNS and IBNR similar to the disability and unemployment.

Details of run-off triangle approachDetails of run-off triangle approachDetails of run-off triangle approachDetails of run-off triangle approachThe statutory IBNR is calculated using a run-off triangle approach (chain ladder) using a loss per policy for less developed occurrence periods.

First, triangles by homogeneous group are constructed by taking the sum of the total amount paid on the claims by occurrence year and reporting delay of the claims. The reporting delay is the difference between occurrence and reporting year of the claim. For disability and unemployment, the total amount paid includes the RBNS and the claim handling costs.

Second, the best estimate is calculated based on standard chain-ladder link ratios, that is, the average development observed when going from one reporting delay to the next. A loss per policy is defined for the most recent year using expert judgement. In addition, a tail factor is applied for disability to capture the incidental, long term behaviour of claims declared many years after occurrence.

Third, since the previous step gives a point estimate, this point estimate is transformed into annual cash flows. The cash flow pattern follows from outstanding RBNS claims. The present value is calculated by discounting the annual cash flows.

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Deferred taxDeferred taxDeferred taxDeferred taxFor amounts of taxation payable in the future, due to differences between the valuation principles in the annual report and the valuation for taxation purposes of the appropriate balance sheet items a provision has been formed for the aggregate of these differences, multiplied by the current rate of taxation. These provisions are reduced by amounts of taxation recoverable in the future in respect of the carry-forward of unused tax losses, to the extent that it is probable that future tax profits will be available for settlement.

Corporate taxCorporate taxCorporate taxCorporate taxCorporate income tax is calculated at the applicable rate on the result for the financial year, taking into account permanent differences between profit calculated according to the financial statements and profit calculated for taxation purposes, and with which deferred tax assets (if applicable) are only valued so far as their realization is likely. Taxes are calculated on the basis of the recorded result, taking into account components which are free of tax and completely (or partially) non-deductible costs.

Other liabilities Other liabilities Other liabilities Other liabilities At initial recognition the other liabilities are valued at fair value and subsequently measured at amortised cost.

Provisions are recognised for legally enforceable or constructive obligations that exist at the balance sheet date, and for which it is probable that an outflow of resources will be required and a reliable estimate can be made.Provisions are measured at the best estimate of the amount that is necessary to settle the obligation as per the balance sheet date. The other provisions are carried at the nominal value of the expenditure that is expected to be necessary in order to settle the obligation, unless stated otherwise.

EstimatesEstimatesEstimatesEstimatesTo apply the accounting policies and rules for the preparation of the financial statements, it is necessary for the Board of Directors to form opinions on various matters and to prepare estimates that may be essential to the amount included in the financial statements. If necessary to provide the insight required in accordance withArticle 2:362 paragraph 1 of the Dutch Civil Code, the nature of these opinions and estimates, including the associatedassumptions, is included in the notes to the relevant items in the financial statements.

ACCOUNTING PRINCIPLES PROFIT AND LOSS ACCOUNT ACCOUNTING PRINCIPLES PROFIT AND LOSS ACCOUNT ACCOUNTING PRINCIPLES PROFIT AND LOSS ACCOUNT ACCOUNTING PRINCIPLES PROFIT AND LOSS ACCOUNT

General General General General Income and expenses are accounted for on an accrual basis. Profit is only included when realized on balance sheet date. Liabilities and any losses originating before the end of the financial year are taken into account if they have become known before preparation of the financial statements or as soon as they are foreseen.

Premiums Premiums Premiums Premiums The earned premiums are taken into account in the profit and loss account on an annual basis. Regular premiums are directly taken into account in the profit and loss account. All earned premiums are geographically related to the Netherlands.

Investment income and costsInvestment income and costsInvestment income and costsInvestment income and costsAfter initial recognition the shares and non-fixed interest securities are valued at fair value (market value as listed at the stock market). Changes in the fair value are recognised directly in the income statement.

Bonds and other fixed-interest securities are valued at amortized cost after initial recognition. The unamortized part (the difference between the bond's redemption value and the costs price minus the amortization) is presented under the investments. Investments in bonds through mutual funds are valued at market value and reported as shares and non-fixedinterest securities. After initial recognition changes in the market value are recognized as unrealized gains and losses in the profit and loss.

47

The investment income (income of dividends and coupons) is accounted for at the moment of notification and/or the due date. The realized profit and realized loss is recorded in the profit and loss account. Transaction costs are expensed in the income statement. Interest income and expenses are recognised on a pro rata basis, taking account of the effective interest rate of the assets and liabilities to which they relate.

On balance sheet date, the company tests whether there are indications of an asset which could be subject to impairment. If there are such indications, the recoverable amount of the asset concerned is estimated. An asset is considered for impairment if its book value is higher than its recoverable value. Impairment is recognized as an expense in the profit and loss account.

Amortisation of intangible fixed assets and depreciation of tangible fixed assetsAmortisation of intangible fixed assets and depreciation of tangible fixed assetsAmortisation of intangible fixed assets and depreciation of tangible fixed assetsAmortisation of intangible fixed assets and depreciation of tangible fixed assetsAmortisation and depreciation costs are not presented as a separate item in the profit and loss. These costs have been recognised in the operating expenses. Intangible assets are amortised and tangible fixed assets are depreciated over their estimated useful lives as from the moment they are ready for use. Future depreciation and amortisation is adjusted if there is a change in estimated future useful life.

OtherOtherOtherOtherFor the other components of the profit and loss account reference is made to the accounting principle of the balance sheet.

Deferred taxesDeferred taxesDeferred taxesDeferred taxesDeferred tax assets and liabilities are netted if there is a legally enforceable right to net current tax assets and liabilities and the deferred tax items relate to the same taxation authority. Deferred tax assets are recognized for temporary differences, carry forward of unused tax losses and carry forward of unused tax credits when, in the opinion of management, it is probable that they can be utilized.

TaxesTaxesTaxesTaxesTaxes are calculated on the basis of the recorded result, taking into account the losses available for set-off from previous financial years components, componements of timing difersses and completely (or partially) non-deductible costs.

ACCOUNTING PRINCIPLES CASH FLOW STATEMENTACCOUNTING PRINCIPLES CASH FLOW STATEMENTACCOUNTING PRINCIPLES CASH FLOW STATEMENTACCOUNTING PRINCIPLES CASH FLOW STATEMENT

The cash flow statement is prepared according to the indirect method. The funds in the cash flow statement consist ofcash and cash equivalents. Cash equivalents can be considered to be highly liquid investments. Cash flows in foreign currencies are translated at an estimated average rate. Exchange rate differences concerning finances are shown separately in the cash flow statement.

Corporate income taxes, issuance of share capital, interest received and dividends received are presented under the cash flow from operating activities. Interest paid and dividends paid are presented under the cash flow from financing activities.

48

Assets as at 31 December 2018Assets as at 31 December 2018Assets as at 31 December 2018Assets as at 31 December 2018

In thousand euros

(1) Intangible fixed assets(1) Intangible fixed assets(1) Intangible fixed assets(1) Intangible fixed assets Software Software Software Software developed developed developed developed

Software Software Software Software purchasedpurchasedpurchasedpurchased

Software Software Software Software 31-12-201831-12-201831-12-201831-12-2018

Software Software Software Software 31/12/201731/12/201731/12/201731/12/2017

Balance at 1st of January

Intangible at cost 1.851 3.310 5.161 5.421 Cumulative amortization (1.092) (2.864) (3.956) (3.929) Book value 759759759759 446446446446 1.2051.2051.2051.205 1.4921.4921.4921.492

Movements in the year

Investments 662 110 772 292 Disposal cumulative cost - - - (552) Disposal cumulative amortization - - - 549 Amortizations (422) (335) (757) (576) Total Movements 240240240240 (225)(225)(225)(225) 15151515 (287)(287)(287)(287)

Balance at 31st of December

Intangible at cost 2.513 3.420 5.933 5.161 Cumulative amortization (1.514) (3.199) (4.713) (3.956) TotalTotalTotalTotal 999999999999 221221221221 1.2201.2201.2201.220 1.2051.2051.2051.205

The amortization of the intangible fixed assets is reported in the profit and loss account under the operating expenses.

49

(2) Other investments (2) Other investments (2) Other investments (2) Other investments

31-12-2018 31-12-2018 31-12-2018 31-12-2018 Book value Book value Book value Book value

31-12-2018 31-12-2018 31-12-2018 31-12-2018 Market Market Market Market

valuevaluevaluevalue

31-12-2018 31-12-2018 31-12-2018 31-12-2018 Cost priceCost priceCost priceCost price

31-12-2017 31-12-2017 31-12-2017 31-12-2017 Book valueBook valueBook valueBook value

31-12-2017 31-12-2017 31-12-2017 31-12-2017 Market Market Market Market

valuevaluevaluevalue

31-12-2017 31-12-2017 31-12-2017 31-12-2017 Cost priceCost priceCost priceCost price

Shares and other non fixed-interest

securities

Banking and insuring investment funds 50.969 50.969 36.625 68.731 68.731 41.867

Bonds and other fixed-interest securities

Government 129.774 151.022 131.575 141.799 166.749 143.325 Corporate 176.110 191.464 175.791 202.011 224.754 201.633

305.884 342.486 307.366 343.810 391.503 344.958 TotalTotalTotalTotal 356.853356.853356.853356.853 393.455393.455393.455393.455 343.991343.991343.991343.991 412.541412.541412.541412.541 460.234460.234460.234460.234 386.825386.825386.825386.825

In 2018 the revaluation of the variable-yield securities generated a loss of 12.5 million euros (2017: 3.2 million euros) which is linked to the selling of securites in 2018 on which the reevaluation of past years had to be written-off andthe decrease of the stock markets (Eurostoxx50 by - 14.3%).

At the end of 2018 the market value of the bonds and other fixed-interest securities (incl. Group investments) ended approximately 36.6 million euros higher (2017: 47.7 million euros higher) compared to the book value at amortized cost.

On an individual basis, all investments were studied with a particular focus on the watchlist of issuer and securities with lower market value than amortized costs. Based on the list, the Board of Directors takes a decision whether to impair a security or not. In 2018 no impairments were made.

In 2018 the exposure of BNP Paribas Cardif Schadeverzekeringen N.V. in Tier 1 bonds decreased from 4.2 million euros to 1.2 million euros. The Tier 1 bonds represent 0.4% of the portfolio. Tier 1 bonds are a specific type of subordinated bonds issued by credit institutions. In the event of liquidation they are subordinate to senior bonds (bonds ranking first), participation certificates subordinated bonds, and silent participations.

(2) Movement schedule other (2) Movement schedule other (2) Movement schedule other (2) Movement schedule other investmentsinvestmentsinvestmentsinvestments

Shares and Shares and Shares and Shares and other non other non other non other non

fixed-fixed-fixed-fixed-interest interest interest interest

securitiessecuritiessecuritiessecurities

Bonds and Bonds and Bonds and Bonds and other fixed-other fixed-other fixed-other fixed-

interest interest interest interest securitiessecuritiessecuritiessecurities

Total Total Total Total 31-12-201831-12-201831-12-201831-12-2018

Total Total Total Total 31-12-201731-12-201731-12-201731-12-2017

Book value at the beginning of the year 68.731 343.810 412.541 457.696 Purchases 21.006 7.280 28.286 14.110 Sales and redemptions (26.248) (44.872) (71.120) (63.690) Amortization - (334) (334) 1.207 Movement in valuation (12.520) - (12.520) 3.218 TotalTotalTotalTotal 50.96950.96950.96950.969 305.884305.884305.884305.884 356.853356.853356.853356.853 412.541412.541412.541412.541

The unamortized part of the bonds amounts to 4,991 thousand euros (2017: 5,311 thousand euros).

50

(3) Receivables (3) Receivables (3) Receivables (3) Receivables 31-12-201831-12-201831-12-201831-12-2018 31-12-201731-12-201731-12-201731-12-2017

Receivables direct insurance

Receivables direct insurance - policyholders ---- 17171717

Intermediaries total 563 556 Intermediaries provision for doubtful receivables (350) (336) Intermediaries corrected for provision for doubtful receivables 213 220 BNP Paribas Cardif Levensverzekeringen N.V. 0 416 Receivables direct insurance - intermediairies 213213213213 636636636636

Other receivables

Reclaim tax on dividends 66 58 Current corporate income tax 167 - BNP Paribas Cardif Assurance B.V. - 129 Other receivables 233233233233 187187187187

All receivables are due within one year, except for the reclaim tax on dividends. Interest is only due for the receivables from policyholders.

Receivables direct insuranceReceivables direct insuranceReceivables direct insuranceReceivables direct insurance

Receivable BNP Paribas Cardif Levensverzekeringen N.V.Receivable BNP Paribas Cardif Levensverzekeringen N.V.Receivable BNP Paribas Cardif Levensverzekeringen N.V.Receivable BNP Paribas Cardif Levensverzekeringen N.V.The intercompany position with BNP Paribas Cardif Levensverzekeringen N.V. relates to the position of December and is settled on a monthly basis. 

(4) Other assets (4) Other assets (4) Other assets (4) Other assets

Tangible fixed assetsTangible fixed assetsTangible fixed assetsTangible fixed assets HardwareHardwareHardwareHardware InventoryInventoryInventoryInventoryCompany Company Company Company

carscarscarscarsTotal Total Total Total

31-12-201831-12-201831-12-201831-12-2018Total Total Total Total

31-12-201731-12-201731-12-201731-12-2017

Balance at the beginning of the year

Tangible at cost 1.285 416 297 1.998 3.983 Cumulative depreciation (1.037) (359) (242) (1.638) (3.549) Book value 248248248248 57575757 55555555 360360360360 434434434434

Movements in the year

Acquisition 152 56 85 293 169 Disposal cumulative cost - - (294) (294) (2.151) Disposal cumulative depreciation - - 269 269 2.125 Depreciation (124) (38) (46) (208) (217) Total movements 28282828 18181818 14141414 60606060 (74)(74)(74)(74)

Balance at the end of the year

Tangible at cost 1.437 472 88 1.997 2.001 Cumulative depreciation (1.161) (397) (19) (1.577) (1.641) TotalTotalTotalTotal 276276276276 75757575 69696969 420420420420 360360360360

The depreciation percentage is for all tangible fixed assets 20%. As a result of the ban of commission, which has been effective as of 1 January 2013, no new capitalised costs have been added. Per the end of 2016 the deferred acquisition costs are fully amortized.

51

Cash at banksCash at banksCash at banksCash at banksCash at bank and in hand are freely disposable.

(5) Accrued assets (5) Accrued assets (5) Accrued assets (5) Accrued assets 31-12-201831-12-201831-12-201831-12-2018 31-12-201731-12-201731-12-201731-12-2017Accrued interest of bonds 4.994 5.566 Prepayments 257 288 TotalTotalTotalTotal 5.2515.2515.2515.251 5.8545.8545.8545.854

52

Equity and liabilities as at 31 December 2018Equity and liabilities as at 31 December 2018Equity and liabilities as at 31 December 2018Equity and liabilities as at 31 December 2018

In thousand euros

(6) Equity (6) Equity (6) Equity (6) Equity

Issued and paid up capitalIssued and paid up capitalIssued and paid up capitalIssued and paid up capital

Balance at 1st of January 62.223 62.223 Share capital issued and paid up in the year - -

Balance at 31st of December 62.22362.22362.22362.223 62.22362.22362.22362.223

Legal reserveLegal reserveLegal reserveLegal reserve

Balance at 1st of January 759 810 Addition:- addition to legal reserve 662 - Withdrawal:- release of legal reserve (422) (51)

Balance at 31st of December 999999999999 759759759759

Other reservesOther reservesOther reservesOther reserves

Balance at 1st of January 1.496 (809) Addtition:- Undistributed result - 2.254 - To legal reserve 422 51 Withdrawal:- Undistributed result (2.255) - - To legal reserve (662) -

Balance at 31st of December (999)(999)(999)(999) 1.4961.4961.4961.496

Undistributed resultUndistributed resultUndistributed resultUndistributed result

Balance at 1st of January 28.744 34.757 Addition:

26.510 28.744 - Allocation to the other reserves 2.255 - Withdrawal:- Dividend payment (30.999) (32.503) - Allocation to the other reserves - (2.254)

Balance at 31st of December 26.51026.51026.51026.510 28.74428.74428.74428.744

TotalTotalTotalTotal 88.73388.73388.73388.733 93.22293.22293.22293.222

The share capital consists of 90,683 ordinary shares (2017: 90,683) of 880 euros of which divided into 50,734 ordinary shares (2017: 50,734) have been paid in full and 39,949 ordinary shares (2017: 39,949) have been paid for 440 euros.

A legal reserve has been taken into account for self developed software.

2018201820182018

- Result current year according to

2017201720172017

53

(7) Technical provision for (7) Technical provision for (7) Technical provision for (7) Technical provision for unearned premiums and unearned premiums and unearned premiums and unearned premiums and unexpired risksunexpired risksunexpired risksunexpired risks

HealthHealthHealthHealth Health Health Health Health Non-LifeNon-LifeNon-LifeNon-Life

DisabilityDisabilityDisabilityDisability UnemploymentUnemploymentUnemploymentUnemployment SuretyshipSuretyshipSuretyshipSuretyship DisabilityDisabilityDisabilityDisability UnemploymentUnemploymentUnemploymentUnemployment

Opening balance gross of reinsurance

125.672 33.113 - 158.785 1.901 274 2.175 160.960 188.866

Incoming - New business added to provision

2 7 - 9 - - - 9 146

Incoming - Interest added to provision

3.252 26.014 - 29.266 - - - 29.266 4.041

Outgoing - Net release of risk and costs out of provision

(24.350) (31.387) - (55.737) (308) (44) (352) (56.089) (34.006)

Mutations (14.678) 745 - (13.933) - - - (13.933) 1.913

Total gross of reinsuranceTotal gross of reinsuranceTotal gross of reinsuranceTotal gross of reinsurance 89.89889.89889.89889.898 28.49228.49228.49228.492 ---- 118.391118.391118.391118.391 1.5931.5931.5931.593 230230230230 1.8231.8231.8231.823 120.214120.214120.214120.214 160.960160.960160.960160.960

Reinsurance - - - - - - - - -

Total net of reinsuranceTotal net of reinsuranceTotal net of reinsuranceTotal net of reinsurance 89.89889.89889.89889.898 28.49228.49228.49228.492 ---- 118.391118.391118.391118.391 1.5931.5931.5931.593 230230230230 1.8231.8231.8231.823 120.214120.214120.214120.214 160.960160.960160.960160.960

(7) Technical provision for (7) Technical provision for (7) Technical provision for (7) Technical provision for outstanding claimsoutstanding claimsoutstanding claimsoutstanding claims

HealthHealthHealthHealth Health Health Health Health Non-LifeNon-LifeNon-LifeNon-Life

DisabilityDisabilityDisabilityDisability UnemploymentUnemploymentUnemploymentUnemployment SuretyshipSuretyshipSuretyshipSuretyship DisabilityDisabilityDisabilityDisability UnemploymentUnemploymentUnemploymentUnemployment

Opening balance gross of reinsurance

157.530 5.250 226 163.006 2.520 29 2.549 165.555 177.197

Incoming - Interest added to provision

2.968 82 - 3.050 - - - 3.050 3.552

Outgoing - Net release of risk and costs out of provision

(16.294) (1.993) 2 (18.285) (211) (13) (224) (18.509) (16.661)

Mutations 3.503 (37) - 3.466 80 0 80 3.546 1.468

Total gross of reinsuranceTotal gross of reinsuranceTotal gross of reinsuranceTotal gross of reinsurance 147.707147.707147.707147.707 3.3023.3023.3023.302 228228228228 151.237151.237151.237151.237 2.3892.3892.3892.389 16161616 2.4052.4052.4052.405 153.642153.642153.642153.642 165.556165.556165.556165.556

Reinsurance (2.535) - - (2.535) - - - (2.535) (2.991)

Total net of reinsuranceTotal net of reinsuranceTotal net of reinsuranceTotal net of reinsurance 145.172145.172145.172145.172 3.3023.3023.3023.302 228228228228 148.702148.702148.702148.702 2.3892.3892.3892.389 16161616 2.4052.4052.4052.405 151.107151.107151.107151.107 162.565162.565162.565162.565

Technical provisions for insurances provided by mortgage products have a long-term character. The technical provisions for the insurances provided by the consumer credit products mainly have a short medium term character. The average duration of the whole portfolio at issue is 19 years (2017: 19 years). For single premium contracts the remaining duration is approximately 5 years (2017: 6 years); for regular premium contracts 14 years (2017: 15 years).

Claim developmentClaim developmentClaim developmentClaim development

2018 2017 2016 2015 < 2015

Opening balance claim provision - 28.136 22.544 15.692 93.678 160.050 Paid claims 70 745 2.066 2.830 17.879 23.590 Closing balance claim provision 24.178 22.455 12.814 14.292 76.358 150.097

Total Total Total Total (24.248) 4.936 7.664 (1.430) (559) (13.637)(13.637)(13.637)(13.637)

DIRECT BUSINESSDIRECT BUSINESSDIRECT BUSINESSDIRECT BUSINESS INDIRECT BUSINESSINDIRECT BUSINESSINDIRECT BUSINESSINDIRECT BUSINESS TOTAL TOTAL TOTAL TOTAL

Non-LifeNon-LifeNon-LifeNon-Life Total Direct Total Direct Total Direct Total Direct 31-12-2018 31-12-2018 31-12-2018 31-12-2018

Total Indirect Total Indirect Total Indirect Total Indirect 31-12-2018 31-12-2018 31-12-2018 31-12-2018

Total Total Total Total 31-12-2018 31-12-2018 31-12-2018 31-12-2018

Total Total Total Total 31-12-2017 31-12-2017 31-12-2017 31-12-2017

Paid claims - DisabilityPaid claims - DisabilityPaid claims - DisabilityPaid claims - Disabilityreinsurancereinsurancereinsurancereinsurance

TotalTotalTotalTotalOccurrence yearOccurrence yearOccurrence yearOccurrence year

DIRECT BUSINESSDIRECT BUSINESSDIRECT BUSINESSDIRECT BUSINESS INDIRECT BUSINESSINDIRECT BUSINESSINDIRECT BUSINESSINDIRECT BUSINESS TOTAL TOTAL TOTAL TOTAL

Non-LifeNon-LifeNon-LifeNon-Life Total Direct Total Direct Total Direct Total Direct 31-12-2018 31-12-2018 31-12-2018 31-12-2018

Total Indirect Total Indirect Total Indirect Total Indirect 31-12-2018 31-12-2018 31-12-2018 31-12-2018

Total Total Total Total 31-12-2018 31-12-2018 31-12-2018 31-12-2018

Total Total Total Total 31-12-2017 31-12-2017 31-12-2017 31-12-2017

54

In the interest of our policyholders BNP Paribas Cardif is dedicated to be adequately capitalized at all times. We closely monitor our capital position and carry out stress tests on a quarterly basis. The technical provisions have a book value of 273.9 million euros. Solvency II value of the technical provision consists of two components: the best estimate liabilities and the risk margin. The best estimate is calculated by means of projected future cash flows for premiums, claims and expenses. The parameters and assumptions are yearly updated according to the latest developments. The cash flows are discounted at the risk free rate (swap rate and volatility adjustment). The risk margin corresponds to the cost of holding capital in Solvency II, which is determined at 6%. The required capital in Solvency II is calculated at a 99.5 percentile. BNP Paribas Cardif applies the standard formula in order to determine the required capital.

The best estimate of the liabilities including reinsurance that are to be covered by the technical provision equals 184.6million euros and the risk margin 29.1 million euros. The lower market value compared to the book value of the liabilities amounts to 60.5 million euros and illustrates the adequacy. In addition to this the market valule of the investments backing the technical provisions are higher compared to the book value, which illustrates the adequacy even more.

On a total balance sheet level the difference in value of the assets and liabilities in Solvency II compared to the Dutch GAAP is presented in the reconciliaton reserve.

55

The Reconciliation Reserve consists of the following restatements from statutory The Reconciliation Reserve consists of the following restatements from statutory The Reconciliation Reserve consists of the following restatements from statutory The Reconciliation Reserve consists of the following restatements from statutory accounts to Solvency II: accounts to Solvency II: accounts to Solvency II: accounts to Solvency II: 31-12-201831-12-201831-12-201831-12-2018 31-12-201731-12-201731-12-201731-12-2017

- Fair value of financial assets 36.602 47.694 - Variation on Best Estimate Liability (BEL) and Risk Margin (RM) 60.228 53.708 - Reinsurance recoverable 30 188 - Elimination Intangible Assets (1.220) (1.205) - Pending litigations (319) (198) - Deferred Taxes (23.831) (25.047) Total reconciliation reserve excluding foreseeable charges 71.490 75.140 - Foreseeable charges (9.574) (9.106) Total reconciliation reserve including foreseeable chargesTotal reconciliation reserve including foreseeable chargesTotal reconciliation reserve including foreseeable chargesTotal reconciliation reserve including foreseeable charges 61.91661.91661.91661.916 66.03466.03466.03466.034

The Own Funds under Solvency II consist of: The Own Funds under Solvency II consist of: The Own Funds under Solvency II consist of: The Own Funds under Solvency II consist of: 31-12-201831-12-201831-12-201831-12-2018 31-12-201731-12-201731-12-201731-12-2017Issued and paid up capital 62.223 62.223 Statutory reserves - 2.255 Result of the year 26.510 28.744 Total equity according to the financial statements 88.733 93.222 Reconciliation reserve excluding foreseeable charges 71.490 75.140 Total Own Funds Solvency II Balance Sheet 160.223 168.362 Foreseeable dividends, distributions and charges (36.084) (40.105) Total Own Funds to cover Solvency Capital Requirement (SCR)Total Own Funds to cover Solvency Capital Requirement (SCR)Total Own Funds to cover Solvency Capital Requirement (SCR)Total Own Funds to cover Solvency Capital Requirement (SCR) 124.139124.139124.139124.139 128.257128.257128.257128.257

The share capital and reconciliation reserve elements are classified as Tier 1. The coverage ratio is calculated by means of the available funds to cover the SCR, in relation to the SCR (required capital). The available own funds exclude the foreseeable dividends and charges. The SCR of BNP Paribas Cardif Schadeverzekeringen N.V. is calculated at 58.8 million euros per year end 2018 (2017: 74.1 million euros). The coverage ratio at the end of 2018 is 211% (2017: 173%).

BNP Paribas Cardif Schadeverzekeringen N.V. set the target coverage ratio at 150% and a target for Hard Own Funds of 90% of the SCR, with a minimum of 80%. As stated in a Financial Agreement with the parent company, support by means of additional capital is arranged in case the coverage ratio breaches 125%.

The Statutory Board proposes to the Shareholders Meeting to pay the full result of 2018 and the undistributed result of previous years as dividends. After appropriation of the result BNP Paribas Cardif Schadeverzekeringen N.V. is well capitalized and meets its regulatory and internal solvency targets as of 31 December 2018.

(8) Provisions for deferred taxes(8) Provisions for deferred taxes(8) Provisions for deferred taxes(8) Provisions for deferred taxes

2018201820182018 2017201720172017

Balance at 1st of January 1.033 1.015 Addition - 18 Release (909) -

Balance at 31st December 124124124124 1.0331.0331.0331.033

The deferred tax liability decreased in 2018 to 124 thousand euros (2017: 1.033 thousand euros). Due to the short termcharacter of the temporary differences 25% of corporate tax is applied.

56

(9) Other liabilities (9) Other liabilities (9) Other liabilities (9) Other liabilities 31-12-201831-12-201831-12-201831-12-2018 31-12-201731-12-201731-12-201731-12-2017Creditors arising from direct insurance Creditors arising from direct insurance Creditors arising from direct insurance Creditors arising from direct insurance 2.5442.5442.5442.544 523523523523 Creditors arising from reinsuranceCreditors arising from reinsuranceCreditors arising from reinsuranceCreditors arising from reinsurance 204204204204 219219219219 Creditors 79 287 Group company - BNP Paribas Asset Management France 90 100 Group company - BNP Paribas Cardif B.V. 648 - Group company - GIE BNP Paribas Cardif S.A. 176 121 Corporate income tax - 1.439 VAT to be paid 57 43 Insurance tax 6 - Tax on wages to be paid related to claim payments 425 450 Custody costs to be paid 7 - Other liabilitiesOther liabilitiesOther liabilitiesOther liabilities 1.4881.4881.4881.488 2.4402.4402.4402.440

TotalTotalTotalTotal 4.2364.2364.2364.236 3.1823.1823.1823.182

All other liabilities are due within one year. No interest is due.

(10) Accrued expenses(10) Accrued expenses(10) Accrued expenses(10) Accrued expensesThe accrued expenses amount to 754 thousand euros (2017: 902). These expenses consist of costs that relate to 2018 and for which the invoice has not been received yet.

Group company - GIE BNP Paribas Cardif S.A.Group company - GIE BNP Paribas Cardif S.A.Group company - GIE BNP Paribas Cardif S.A.Group company - GIE BNP Paribas Cardif S.A.The intercompany position with GIE BNP Paribas Cardif S.A. is settled on a quarterly basis. The position at the end of 2018 reflects the group overheads recharged to BNP Paribas Cardif Schadeverzekeringen N.V.

Corporate income taxCorporate income taxCorporate income taxCorporate income taxIn 2018 the balance on corporate tax for 2017 has been settled. The position on the balance sheet per year end 2018reflects the liability position on corporate tax 2018.

Tax Group, Off balance obligations and National Terrorism Reinsurance SchemeTax Group, Off balance obligations and National Terrorism Reinsurance SchemeTax Group, Off balance obligations and National Terrorism Reinsurance SchemeTax Group, Off balance obligations and National Terrorism Reinsurance Scheme

Tax Group Tax Group Tax Group Tax Group BNP Paribas Cardif Schadeverzekeringen N.V. is part of the BNP Paribas Netherlands fiscal unity for corporate income tax,headed by BNP Paribas S.A. (Netherlands branch), and for that reason it is jointly and severally liable for the tax liabilitiesof this fiscal unity. The corporate tax position with respect to the financial year will be settled with the head of the fiscalunity, as much as possible on the basis of the individual fiscal result and taking into account the allocation of the benefitsof the fiscal unity to the various members of the fiscal unity.

Off balance obligationsOff balance obligationsOff balance obligationsOff balance obligationsThe holding company, BNP Paribas Cardif B.V., has rental and lease agreement for facilities, company cars and IT for multiple years. The costs are taken into account in both BNP Paribas Cardif Schadeverzekeringen N.V. and BNP Paribas Cardif Levensverzekeringen N.V. The total off balance obligations are presented below:

2019

The rental obligations for 2019 amount to 375 thousand euros (2018: 360 thousand euros). The lease obligations for 2019 regarding company cars amount to 160 thousand euros (2018: 123 thousand euros). For IT the lease obligations for 2019 amount to 968 thousand euros (2018: 1,153 thousand euros). Amounts are including VAT.

2020-2023

The rental obligations for 2-5 years amount to 750 thousand euros (2019-2022: 871 thousand euros). The lease obligations for 2-5 years regarding company cars amount to 194 thousand euros (2018-2021: 159 thousand euros). For IT the lease obligations for 2-5 years amount to 76 thousand euros (2019-2022: 108 thousand euros). Amounts are including VAT. There are no rental or lease agreements for more than five years.

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Guarantee resulting from participating in the National Terrorism Reinsurance Scheme Guarantee resulting from participating in the National Terrorism Reinsurance Scheme Guarantee resulting from participating in the National Terrorism Reinsurance Scheme Guarantee resulting from participating in the National Terrorism Reinsurance Scheme BNP Paribas Cardif Schadeverzekeringen N.V. participates in the National Terrorism Reinsurance Scheme (NHT), which itself purchases retrocessions to a pool of reinsurers. As a result of this BNP Paribas Cardif Schadeverzekeringen N.V. paid their share in the reinsurance premium and other costs. The liability towards the end customer is limited by what can be received from the NHT. The guarantee of BNP Paribas Cardif is limited to 0.33%.

Risk ManagementRisk ManagementRisk ManagementRisk Management

Risk profile Risk profile Risk profile Risk profile Risk management is an essential part of the business of BNP Paribas Cardif NL. It enables BNP Paribas Cardif NL to steer the company based on four performance indicators: annual result, value creation, required capital, and operational risks. Continuous monitoring of these indicators and the annual Own Risk and Solvency Assessment (ORSA) allow the company to assess the exposure to risks and take management actions when warranted.

BNP Paribas Cardif NL is mainly sensitive to market risk and underwriting risk. The market risk is high because of significant assets held due to a historical portfolio, which was in single premiums, and exacerbated due to the current level of interest rates that generate a material amount of unrealised gains. The underwriting risk is linked to future disability rates for BNP Paribas Cardif Schadeverzekeringen N.V., which are the main drivers of the disability liabilities in the portfolio.

BNP Paribas Cardif NL manages the market risk through regular asset liability management (ALM) studies. These studies limit the exposure to interest rate risk by duration matching, and advice on the level of spread and equity risk to be taken within the risk profile limits set. Concentration risks – both on company, industry, and geography level – are managed in monthly asset management committees. BNP Paribas Cardif NL does not use complex financial instruments, such as derivatives or swaps, to manage the market risk.

BNP Paribas Cardif NL manages the underwriting risk through product development and reinsurance. The disability risk is partly reinsured in BNP Paribas Cardif Schadeverzekeringen N.V. BNP Paribas Cardif NL does not use other risk limiting techniques, such as special purpose vehicles.

The above risks can be deduced from the absolute and relative contribution of each risk module to the company’s capital requirement (SCR). BNP Paribas Cardif NL uses the standard formula, and does not use a (partial) internal model. However, the risk profile has modelling limits. For instance, non-quantifiable risks are not included (for example operational risks).

These limits are addressed with another risk identification exercise: the risk register from which are derived the major risks as perceived by the Executive Board Risk Committee. The identification results in a list of major risks which are the main surveillance areas for the Board of Directors: ◊ Disability ◊ Interest rate risk ◊ Price volatility ◊ (Pre)acceptance / transaction ◊ Product development ◊ Staff / Human Resources ◊ Security ◊ Enforceability of contracts and contract liability ◊ Information ◊ Costs ◊ Compliance

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The highest risks are subject to specific monitoring by the Executive Committee. The top risks are summarised in risk cards, monitored during monthly risk committees and measured in stress tests. Management actions have been defined in anticipation in case of emergence of these risks.

From the above information, a prospective risk profile is built over the budget horizon of four years. BNP Paribas Cardif NL uses deterministic scenarios to assess the impact of adverse events and evolutions on the risk profile. The building of the risk profile results in a risk appetite declaration on what is the acceptable level for the quantitative risk metrics. The risk appetite is not an absolute cap on the risk profile but a level over which risk management actions become a high priority to get back under the risk appetite. The risk management framework of BNP Paribas Cardif NL includes a risk preferencestatement.

The risk preference statements of the company have been set since 2014 and are confirmed in the most recent ORSA: ◊ Statement 1: “BNP Paribas Cardif NL is able to accept the current risk profile”. ◊ Statement 2: “but BNP Paribas Cardif NL wishes to de-risk progressively…” ◊ Statement 3: “… to make the company ready for new risk-takings”.

Derisking measures have been important in the last years, in compliance with statement 2. For the next three years statement 3 (the relaunch strategy) will become more important, in relation to have statement 1 and 2 under control.

Contribution to SCRContribution to SCRContribution to SCRContribution to SCR 2018201820182018 2017201720172017Market 25% 28%Counterparty Default 0% 0%Life Underwriting 0% 0%Health Underwriting 51% 50%Non-Life Underwriting 21% 20%Operaitonal 2% 1%Intangible Asset 0% 0%SCRSCRSCRSCR 58.82258.82258.82258.822 74.09474.09474.09474.094

Capital position Capital position Capital position Capital position In the interest of our policyholders we are dedicated to be adequately capitalized at all times. We closely monitor our capital position and carry out stress tests on a yearly basis. BNP Paribas Cardif is well capitalized and meets its regulatory solvency targets as of 31 December 2018.

Market risk Market risk Market risk Market risk The market risk is the risk of potential loss due to adverse movements in market variables. Market risks include interest rate, equity, real estate and foreign exchange risks. No direct or indirect investments are done in real estate. No foreign exchange risk is taken; all investments are denominated in euros.

BNP Paribas Cardif Schadeverzekeringen N.V. is exposed to market risk to the extent to which the market value of investments may be adversely impacted due to movements in financial markets; these include interest rates, creditspreads and equity prices.

On the asset part BNP Paribas Cardif Schadeverzekeringen N.V. delegates the management to BNP Paribas Asset Management France (Group company), which is mainly in charge of selecting investments to be made on behalf of BNP Paribas Cardif Schadeverzekeringen N.V. and managing the portfolio’s assets in accordance with constraints set out in the annual investment policy. Constraints are monitored on monthly basis and discussed quarterly with the Asset Manager during the Asset Management Committee.

In August 2018 the asset management mandate has been renewed. Ratings limits have been reviewed according tothe outcome of the ALM study performed in 2017. Social responsible policy has been extended by excluding specific securities and issuers from the portfolio.

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Counterparty default risk - InvestmentsCounterparty default risk - InvestmentsCounterparty default risk - InvestmentsCounterparty default risk - InvestmentsCounterparty default risk in the investments is the risk of potential loss due to default by BNP Paribas Cardif Schadeverzekeringen N.V.’s investments issuers.

The table below shows the split of the bond portfolio by rating (incl. Group securities) in million euros:

The BBB Governement bonds are Italian debt.

Ratings are within the limits of the asset management mandate. The credit risk is monitored through the monthly asset reports received from the asset manager.

Equity risk Equity risk Equity risk Equity risk Equity risk is the financial risk involved in holding equity investments.

The investments in mutual funds are valued at market value in the balance sheet. There are three types of mutual funds invested in: stock mutual funds, long term bond mutual funds and cash investment funds. The exposure to stock mutual funds represents the equity risk.

The investments in mutual funds are 51.0 million euros in 2018 (2017: 68.7 million euros), split into 27.5 million euros in stock mutual funds, 16.8 million euros in long term bond mutual funds and 6.7 million euros in cash investment funds.The mutual funds decreased with 17.7 million euros in 2018 due to the evolution of the financial markets in 2018and net disinvestments in order to reduce the exposure and remain close to the benchmark.

The beta of the portfolio is a measure of the risk arising from exposure to general market movements. At the end of 2018 the beta equals 6.9% (2017: 8.9%), which is within the limits described in the investment mandate (between 5% and 15%). The benchmark is 5.6%. The beta is monitored through the monthly asset reports received from the asset manager.

Interest rate risk Interest rate risk Interest rate risk Interest rate risk Interest sensitive assets and liabilities in our balance sheet create exposure to interest rate risk. The interest rate risk consists of liquidity risk, concentration risk and credit risk.

The bond portfolio of BNP Paribas Cardif Schadeverzekeringen N.V. at the end of 2018 is 305.9 million euros (2017: 343.8million euros). The decrease is linked to disinvestments for regular cash needs and the dividend payment to the shareholder. The portfolio is valued at amortized cost.

The constraint for the modified duration is based on a range from 4-8 years for the portfolio of BNP Paribas Cardif Schadeverzekeringen N.V. At the end of 2018 the modified duration of the portfolio of BNP Paribas Cardif Schadeverzekeringen N.V. is 6.0 (2017: 6.1).The modified duration is monitored through the monthly asset reports received from the asset manager.

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Liquidity risk Liquidity risk Liquidity risk Liquidity risk Liquidity risk is the risk that arises in the event that the organization is not able to fulfil its short term financial obligations due to a deficit in cash at bank.

The dividend payment to the shareholder was 31.0 million euros (related to the 2017 result and the remainder of the 2016 result). BNP Paribas Cardif Schadeverzekeringen N.V. had a negative operating cash flow in 2018.

BNP Paribas Cardif Schadeverzekeringen N.V. manages this risk by closely monitoring the cash flow in the short and midterm. Estimated cash receivables and payables are recorded in a cash flow model on a daily basis in order to identify cash needs. Actual cash flow is also recorded in the cash flow model, in order to analyze differences with estimations and in order to update the model for next period.

Concentration risk Concentration risk Concentration risk Concentration risk Concentration risk is the risk that an investor will suffer from lack of diversification, investing too heavily in one company, industry or one geographic area.

In Solvency II a concentration shock is calculated based on the exposure in a company.

BNP Paribas Cardif also monitors its exposure in an industry or geographic area. More than half of the bond portfolio (56.1%) is invested in Sovereign bonds (2017: 42.1%). The banking sector represents 14.2% of the bond portfolio (2017: 19%).The majority of the portfolio (59.5%) is invested in French bonds (2017: 57.9%), the rest of the portfolio is split overseveral countries. The concentration risk is monitored through the monthly asset reports.

Credit risk Credit risk Credit risk Credit risk The credit (or counterparty default) risk reflects the possible losses due to unexpected default or deterioration in the credit standing of the counterparties. This risk can be present within the investments, for instance as spread risk, or with intermediaries and reinsurers.

The counterparty default risk not related to investments are present in receivables and technical provisions. The company has limited exposure to these credit risks, 1% of the risk profile. The counterparty default risk consists of two types of exposures. Type 1 exposures that are relevant to BNP Paribas Cardif NL are reinsurance and cash at bank. Type 2 exposures are other receivables on the balance sheets that cannot be allocated to a single name, which includes the credit risk on intermediaries. The credit risk on investments is analysed by BNP Paribas Cardif NL as spread risk.

Counterparty default risk - General

Counterparty default risk is the risk of potential loss due to default by BNP Paribas Cardif Schadeverzekeringen N.V.’s debtors. This risk can be present within our investments, intermediaries and reinsurers.

Counterparty default risk - Intermediary

Because BNP Paribas Cardif NL products are sold mainly on a Business-to-Business distribution mode, monitoring the counterparty default risk of intermediaries is a component of the risk management framework of BNP Paribas Cardif NL, and BNP Paribas Cardif NL follows the counterparty default risk governance defined by the BNP Paribas Group.

The counterparty default risk on distributors can arise in the case of: ◊ Upfront-payments to our business partners on periodical premiums contracts, where distributors must pay back a ◊ portion of the received commissions in case the customers surrender. This conditional debt of distributors creates a ◊ counterparty default risk for BNP Paribas Cardif NL. ◊ On single premiums contracts, in case the customers surrender, BNP Paribas Cardif NL will pay a contractual ◊ surrender value to the customers and distributors must pay back the unearned commissions. This conditional debt of ◊ distributors creates a counterparty default risk for BNP Paribas Cardif NL. ◊ In the event of a delay in premium collection.

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The risk of commission claw-backs decreases, because no new commissions have been paid since the ban of commissions as of 1 January 2013. The risk is mitigated by a surrender credit reserve, based on surrender, default and recovery rate assumptions.

The risk is monitored on a quarterly basis. The report monitors the exposure, the credit position of the most important counterparties, and sufficiency of the surrender credit reserve.

Counterparty default risk - Reinsurance

A counterparty default risk on reinsurers arises when reinsurance protections are purchased and premiums and reserves are ceded against a protection running in the future. BNP Paribas Cardif NL is exposed to the risk of bankruptcy of the reinsurer.

BNP Paribas Cardif NL reinsurance cessions represent a small part of the portfolio. Reinsurance covers are purchased for the following scope: a surplus share treaty for the highest insured amounts in disability for BNP Paribas Cardif Schadeverzekeringen N.V. The surplus share treaty is yearly renewable with a clean-cut termination mode and without reserve cessions. The exposure is limited conform the balance sheet.

Moreover, BNP Paribas Cardif NL participates in the National Terrorism Reinsurance Scheme (NHT), which itself purchases retrocessions to a pool of reinsurers. The analysis of the credit risk shows that there is no credit risk for BNP Paribas Cardif NL because the liability towards the end customer is limited by what can be received from the NHT.

In selecting reinsurers, BNP Paribas Cardif NL uses internal reinsurance or strictly adheres to the security-list of the BNP Paribas Group. The security-list contains reinsurers selected for their financial strength and rating.

Underwriting risk Underwriting risk Underwriting risk Underwriting risk The underwriting risks are managed within the actuarial governance. The actuarial governance of the BNP Paribas Group provides the overall framework for risk taking, risk mitigating and risk monitoring. The local actuarial governance of BNP Paribas Cardif NL is a translation of the BNP Paribas Group framework, taking into account local market specificities and local expertise and experience to underwrite risks, under the local risk appetite definition.

Underwriting risks are monitored on a frequent basis as set out in internal risk management governance. Reports are made to the monthly risk committee in charge of monitoring the evolution of risk indicators and profitability indicators. The underwriting profit is monitored in both statutory and Solvency II closing form, where an excess of assets over best estimate provisions with risk margin gives comfort in the adequacy of technical provisions.

The accuracy of the risk monitoring system and reservation policy is evaluated by the Actuarial Function supported by an external independent actuary and the independent auditor.

Non-Life underwriting riskNon-Life underwriting riskNon-Life underwriting riskNon-Life underwriting riskThe Non-Life underwriting risks for BNP Paribas Cardif NL consist of unemployment and suretyship covers. The total technical reserves on the unemployment activity amount to 32.0 million euros and for surety ship to 0.2 million euros. The unemployment covers protects borrowers for their credit payments in case of involuntary unemployment. The cover corresponds to a percentage of costs of living in case of mortgage loans and monthly instalments in case of consumer loans. Internal technical bases are used for pricing and reserving.

The essential risks are related to the employment situation in the economy and to regulatory risks on unemployment law. Furthermore, the guarantee is given for a long period. The unemployment risks represent approximately 11.7% of the company global portfolio in terms of level of reserve.

In Solvency II, the unemployment cover is highly capital intensive when applying the standard formula.

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The unemployment risk assumptions are monitored on a regular basis: ◊ Entry and exit rates in unemployment are updated yearly. ◊ Reported claims are monitored monthly by operations and quarterly by actuarial. ◊ National entry rates and national predictions regarding unemployment are followed-up on a regular basis. ◊ Lapse rates are monitored quarterly and updated yearly when needed. ◊ The technical result is monitored quarterly. ◊ There is a contractual revision clause enabling to revise premiums or benefits in certain conditions (En Bloc clause), ◊ although judged valid only in extremely unfavorable situations and impactfully unfavorable law evolutions.

Catastrophe

The Non Life portfolio of BNP Paribas Cardif is not a standard property and casualty portfolio. The exposure to catastrophes relates more to systemic risks. There is no protection program purchased against those risks.

Health underwriting risk Health underwriting risk Health underwriting risk Health underwriting risk The health underwriting risks for BNP Paribas Cardif mainly consist in disability covers. Other covers are mostly critical illnesses and are non-significant.

The disability cover protects borrowers for their credit payments in case of impairments to various subsystems of the body. The cover corresponds to a percentage of costs of living in case of mortgage loans and monthly instalments in case of consumer loans.

The cover has a long term nature (monthly payment for the whole remaining duration of the credit), and in most cases, start after a waiting period of 12 months.

Own-occupation, suitable occupation and any occupation disability are covered. Any occupation was dominant in the past. Over time, more general disability coverage was provided through suitable occupation and later own occupation. Own-occupation is surplus share reinsured with GenRe.

National risk models exist for disability. They were used as references in the past. Currently, internal technical bases are used. The essential risks are related to the disability evolutions and to regulatory risks on disability law. An attention point is that policies last up 30 years. The disability risks are the highest exposure of the company and represents approximately 88% of the company global portfolio in terms of level of reserve. The total technical reserves on the disability activity amount to 241.6 million euros.

The disability risk assumptions are monitored on a regular basis: ◊ Entry and exit rates in disability are updated yearly. ◊ Reported claims are monitored monthly by the operations and by actuarial. ◊ Lapse rates are monitored quarterly and updated annually when needed. ◊ The technical result is monitored quarterly. ◊ There is a contractual revision clause enabling to revise premiums or benefits in certain conditions (En Bloc clause), ◊ although judged valid only in extremely unfavorable situations and impactfully unfavorable law evolutions.

Catastrophe

The exposure to catastrophes in the health portfolio relates to pandemics or systemic risks. There is no protection program purchased against those risks, although the highest insured amounts are reinsured through the surplus share treaty mentioned before. The purchase of an additional protection program is being studied.

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Notes to the profit and loss account Notes to the profit and loss account Notes to the profit and loss account Notes to the profit and loss account

In thousand euros

Health Health Health Health DisabilityDisabilityDisabilityDisability UnemploymentUnemploymentUnemploymentUnemployment Surety shipSurety shipSurety shipSurety ship

(12) Gross written premiums 12.171 4.526 3.545 20.242 22.224 (13) Outgoing reinsurance premiums (665) - - (665) (715) (14) Premiums net of reinsurance 11.50611.50611.50611.506 4.5264.5264.5264.526 3.5453.5453.5453.545 19.57719.57719.57719.577 21.509 (15) Movement technical provisions unearned premiums and unexpired risks: gross

36.082 4.665 - 40.747 27.905

(16) Net earned premiums insurer 47.58847.58847.58847.588 9.1919.1919.1919.191 3.5453.5453.5453.545 60.32460.32460.32460.324 49.414 (17) Result on investments allocated to the technical account

4.084 542 4 4.630 15.763

(18) Other technical income insurer 20 8 6 34 49

(19-20) Claims net of reinsurance and movement technical provision for outstanding claims

(13.836) (598) 129 (14.305) (15.306)

(21) Operating expenses (11.624) (2.124) (2.668) (16.416) (16.212) (11) Result technical account non-life (11) Result technical account non-life (11) Result technical account non-life (11) Result technical account non-life insuranceinsuranceinsuranceinsurance

26.23226.23226.23226.232 7.0197.0197.0197.019 1.0161.0161.0161.016 34.26734.26734.26734.267 33.70833.70833.70833.708

Of the above amount the indirect part for the Of the above amount the indirect part for the Of the above amount the indirect part for the Of the above amount the indirect part for the result technical account non-life insurance is result technical account non-life insurance is result technical account non-life insurance is result technical account non-life insurance is

38383838 38383838 ---- 76767676 114114114114

(23) The result before taxes can be specified in the following result(23) The result before taxes can be specified in the following result(23) The result before taxes can be specified in the following result(23) The result before taxes can be specified in the following result 2018201820182018 2017201720172017

Result on risk 33.543 20.965 Result on cost (3.812) (2.793) Result on interest 1.301 10.938 Insurer income 5.260 8.882 Other (616) 345 TotalTotalTotalTotal 35.67635.67635.67635.676 38.33738.33738.33738.337

Result on risk Result on risk Result on risk Result on risk For BNP Paribas Cardif Schadeverzekeringen N.V. the Result on Risk is 33.5 million euros as the Earned Risk Premium available to cover the claims is at 47.8 million euros and the claim charges is 14.3 million euros. The loss ratio is 30% (2017: 42%). Earned risk premium and claims charges are impacted by the adjustment made in the technical interestinterest from 2.75% to 1.75% and by the update of best estimate assumptions of entry and recovery rate. This resultsin an increase of the Earned risk premium (+13.7 million euros) and an increase of the claim charges (-4.4 million euros)Excluding the one off impacts, the loss ratio is 29% (Q4 2017: 36%) and compared to 2017, the claim charges decreased (-10%) compared to a decrease (-9%) in earned risk premium.

The Earned risk premium of the individual portfolio (46.3 million euros) is split into 17.0 million euros on single premiums and 29.3 million euros on periodic premiums. The remaining is coming from the collective portfolio (0.8 million euros), suretyship (0.8 million euros) and DSB Reinsurance (-0.2 million euros). The evolution is led by the run-off status of the portfolios as new business is not sufficient to compensate.

The claim charges are -14.3 million euros, split into net paid claims (-25.8 million euros) and release of claim reserves(+11.5 million euros). The claims charges of the individual portfolio (-14.5 million euros) is split into -13.7 million eurosfor disability risk and -0.8 million euros for unemployment risk.

(11-21) Result technical account non-life (11-21) Result technical account non-life (11-21) Result technical account non-life (11-21) Result technical account non-life insurance by line of businessinsurance by line of businessinsurance by line of businessinsurance by line of business

Non-LifeNon-LifeNon-LifeNon-Life Total Total Total Total 2017201720172017

Total Total Total Total 2018201820182018

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Result on costResult on costResult on costResult on costThe Result on cost is -3.8 million euros, the Cost loadings (8.0 million euros) are not sufficient to cover the allocated costs (-11.8 million euros). The allocation of costs is based on an average of the cost models of 2015, 2016 and 2017, in which 65.2% of the total company costs is allocated to BNP Paribas Cardif Schadeverzekeringen N.V.

The aim of cost allocation is to apportion all costs incurred to profit centers and to split them along the value chain of the business. This allows the establishment of split of the costs by company, by destination. Results of the cost study will also be used for Solvency II purposes and profit study.

Result on interestResult on interestResult on interestResult on interestThe Result on Interest (+1.3 million euros) is equal to Financial income allocated to the Reserves (+5.1 million euros) minus the technical interest on reserves (-3.8 million euros). The total financial income (6.7 million euros) is partly allocated to the reserves (5.1 million euros) and partly to the equity (1.6 million euros), this allocation is based on the average level of reserves and equity during the year. The total financial income is impacted by the downsize of the assets under management resulting in a lower income on bonds and lower realized gains on the AFS portfolio.The financial income is impacted by negative revaluation due to the negative development of stock marketlong the year (eurostoxx50 by -14.3% in 2018). More HFT securities have been sold than last year resulting in the write-off of the positive reevaluation (unrealized gains) from past years partly compensated by the realized gains.

The technical interest has been adjusted from 2.75% to 1.75%.

Insurer income Insurer income Insurer income Insurer income The insurer income (5.3 million euros) consists of the Insurer retention (3.7 million euros) and the Financial Income on Equity (1.6 million euros). The Insurer Retention is the remuneration for the shareholder for providing the solvency capital.

(22) Result on investments(22) Result on investments(22) Result on investments(22) Result on investments Income and Income and Income and Income and expensesexpensesexpensesexpenses

Unrealized Unrealized Unrealized Unrealized change in change in change in change in valuationvaluationvaluationvaluation

Realized Realized Realized Realized result due result due result due result due

to salesto salesto salesto sales

TotalTotalTotalTotal2018201820182018

TotalTotalTotalTotal2017201720172017

Shares and other non fixed-interest securites - (12.520) 7.748 (4.772) 3.327 Bonds and other fixed-interest securities 8.817 (209) 2.193 10.801 17.056 Other investments and cash at bank 11 (1) - 10 9 TotalTotalTotalTotal 8.8288.8288.8288.828 (12.730)(12.730)(12.730)(12.730) 9.9419.9419.9419.941 6.0396.0396.0396.039 20.39220.39220.39220.392

The effective interest rate of the total bond portfolio at the end of 2018 is 2.41% (2017: 3.0%).

(17) Result on investments allocated to the technical account (17) Result on investments allocated to the technical account (17) Result on investments allocated to the technical account (17) Result on investments allocated to the technical account The total result on investments is initially taken into account in BNP Paribas Cardif Schadeverzekeringen N.V.'s non-technical account. Based upon the average technical provision in relation to the equity and technical provision the result on investment is allocated to the technical account. The allocation percentage applicable for 2018 is 76.7% (2017: 77.3%).

(18) Other technical income insurer(18) Other technical income insurer(18) Other technical income insurer(18) Other technical income insurer 2018201820182018 2017201720172017

Charged administration costs 34 49 TotalTotalTotalTotal 34343434 49494949

(19-20) Claims net of reinsurance and movement technical provision for outstanding claims (19-20) Claims net of reinsurance and movement technical provision for outstanding claims (19-20) Claims net of reinsurance and movement technical provision for outstanding claims (19-20) Claims net of reinsurance and movement technical provision for outstanding claims See details in the above presented table.

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(21) Operating expenses(21) Operating expenses(21) Operating expenses(21) Operating expenses 2018201820182018 2017201720172017

Acquisition costs 8.944 8.672 Administration, personnel and amortization costs (depreciation fixed assets) 7.472 7.540 TotalTotalTotalTotal 16.41616.41616.41616.416 16.21216.21216.21216.212

(24) Taxes(24) Taxes(24) Taxes(24) Taxes 2018201820182018 2017201720172017

The taxes can be specified as follows:- tax based on the taxable result (9.833) (9.570) - deferred tax 909 (18) - tax previous years (242) (5) Taxes according to the profit and loss accountTaxes according to the profit and loss accountTaxes according to the profit and loss accountTaxes according to the profit and loss account (9.166)(9.166)(9.166)(9.166) (9.593)(9.593)(9.593)(9.593)

Result before taxes according to profit and loss account 35.676 38.337 Permanent differences 18 17 Temporary differences 3.637 (73) Taxable resultTaxable resultTaxable resultTaxable result 39.33139.33139.33139.331 38.28138.28138.28138.281

Nominal tax rate 25% 25%Effective tax rate 26% 25%

Independent Auditor's feeIndependent Auditor's feeIndependent Auditor's feeIndependent Auditor's feeThe audit fee expensed for PriceWaterhouseCoopers Accountants N.V. amounts to 97 thousand euros (2017: 97 thousand euros).

Independent Auditor's feeIndependent Auditor's feeIndependent Auditor's feeIndependent Auditor's fee 2018201820182018 2017201720172017

Audit of the financial statements 66 77 Assurance activities - Solvency II 31 63 TotalTotalTotalTotal 97979797 140140140140

The fees listed above relate to the procedures applied to the company and its consolidated by group entities by accounting firms and independent auditors as referred to in Section 1, subsection 1 of the Audit Firms Supervision Act ‘Wet toezicht accountantsorganisaties - Wta’ as well as by Dutch and foreign-based accounting firms, including their tax services and advisory groups.

The fees relate to the fees of the audit of the respective financial year, regardless of when the procedures are performed. The fees of 2017 include a fee of Deloitte for a total amount of 43 thousand euros. The presented fees are including VAT.

PersonnelPersonnelPersonnelPersonnelAll BNP Paribas Cardif personnel NL is employed by the holding company BNP Paribas Cardif B.V. The average number of FTE's of BNP Paribas Cardif NL employees in 2018 was 108 (2017: 111). Of these employees 65% was allocated to BNP Cardif Schadeverzekeringen N.V. (2017: 62%). The allocation key is based on the cost study. Taxation on the salary costs is in accordance with the allocation key.

The remunerations including social securities and pensions for the Board of Directors amount to 526 thousand euros(2017: 550 thousand euros). The remunerations for the Supervisory Board for 2018 are 73 thousand euros (2017: 34 thousand euros).

Subsquent eventsSubsquent eventsSubsquent eventsSubsquent eventsNo subsequent events to be reported between 31 December 2018 and date signing of the financial statements.

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Statutory appropriation of the resultStatutory appropriation of the resultStatutory appropriation of the resultStatutory appropriation of the result

Article 35Article 35Article 35Article 3535.1 Distribution of profits pursuant to this article shall be made following the adoption of the annual accounts which show that such distribution is allowed.35.2 The profits shall be at the free disposal of the of the general meeting. In a tie vote regarding a proposal to distribute or reserve profits, the profits concerned shall be reserved.35.3 The company may only make distributions to sharehorders and other persons entitled to distributable profits to the extent that its equity exceeds the total amount of its issued share capital and the reserves to be maintained pursuant to the law.35.4 A loss may only be applied against reserves maintained pursuant to the law to the extent permitted by law.

Article 36Article 36Article 36Article 3636.1 Dividend shall be due and payable four weeks after they have been declared, unless the general meeting determines another date on the proposal of the managing board. 36.2 Dvidends which have not been collected within five years of the start of the second day on which they became due and payable shall revert to the company.36.3 The general meeting may resolve that dividends shall be distributed in whole or in part in a form other than cash.36.4 Without prejudice to article 35 paragraph 3 the general meeting may resolve to distribute all or any part of the reserves.35.5 Without prejudice to article 35 paragraph 3 interim destributions shall be made if the General Meeting so determines on the proposal of the managing board.

Appropriation of the result 2017Appropriation of the result 2017Appropriation of the result 2017Appropriation of the result 2017

The annual report has been adopted in the general meeting held on 9 May 2018. The General Meeting has determined the appropriation of the result in accordance with the proposal being made to that end.

Proposal appropriation of the result 2018Proposal appropriation of the result 2018Proposal appropriation of the result 2018Proposal appropriation of the result 2018

In anticipation of the decision of the General Meeting the Board of Directors proposes to pay the full result of 2018 and the undistributed result of previous years as dividends (26,510 thousand euros in total). The financial statements do not yet reflect the proposal.

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Signing of the financial statementsSigning of the financial statementsSigning of the financial statementsSigning of the financial statements

Oosterhout, date of signing 18 April 2019

Board of Directors

W. Eikelboom CFO

M. van Zuien CCO

Original has been signed by:C. de JongCEO

Signing of the financial statementsSigning of the financial statementsSigning of the financial statementsSigning of the financial statements

Oosterhout, date of signing 18 April 2019

Original has been signed by:

Supervisory Board

C.P.F. De Longueville R.H.A. van Vledder

O.J.G. Martin I.P.G.M. Brekelmans

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Independent auditor’s report

To: the general meeting and the supervisory board of BNP Paribas Cardif Schadeverzekeringen N.V.

Report on the financial statements 2018

Our opinion In our opinion, BNP Paribas Cardif Schadeverzekeringen N.V.’s financial statements give a true and fair view of the financial position of the Company as at 31 December 2018, and of its result for the year then ended in accordance with Part 9 of Book 2 of the Dutch Civil Code.

What we have audited We have audited the accompanying financial statements 2018 of BNP Paribas Cardif Schadeverzekeringen N.V., Oosterhout (‘the Company’).

The financial statements comprise: the balance sheet as at 31 December 2018; the profit and loss account for the year then ended; and the notes, comprising a summary of the accounting policies and other explanatory information.

The financial reporting framework that has been applied in the preparation of the financial statements is Part 9 of Book 2 of the Dutch Civil Code.

The basis for our opinion We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. Our responsibilities under those standards are further described in the section ‘Our responsibilities for the audit of the financial statements’ of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

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Independence We are independent of BNP Paribas Cardif Schadeverzekeringen N.V. in accordance with the European Regulation on specific requirements regarding statutory audit of public-interest entities, the ‘Wet toezicht accountantsorganisaties’ (Wta, Audit firms supervision act), the ‘Verordening inzake de onafhankelijkheid van accountants bij assuranceopdrachten’ (ViO – Code of Ethics for Professional Accountants, a regulation with respect to independence) and other relevant independence requirements in the Netherlands. Furthermore, we have complied with the ‘Verordening gedrags- en beroepsregels accountants’ (VGBA – Code of Ethics for Professional Accountants, a regulation with respect to rules of professional conduct).

Our audit approach Overview and context BNP Paribas Cardif Schadeverzekeringen N.V. is an insurance company offering payment protection insurance against disability, unemployment and suretyship risks for private persons. We paid specific attention to the areas of focus driven by the operations of the Company, as set out below.

The Company has an in-house actuarial function supported by an external actuary. The Company has an external investment manager, an external administrator and an external custodian. These parties are related parties of BNP Paribas Schadeverzekeringen N.V. We explained the impact to our audit approach in the section ‘The scope of our audit’.

As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In particular, we considered where the board of directors made important judgements, for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. In the notes to the balance sheet, the Company describes the areas of judgement in applying accounting policies and the key sources of estimation uncertainty. Given the significant estimation uncertainty in the valuation of assets and liabilities arising from insurance contracts and the related higher inherent risks of material misstatement, we considered this to be a key audit matter as set out in the section ‘Key audit matters’ of this report. In addition, we consider the disclosures regarding capital requirements based on Solvency II regulations as a key audit matter since some important estimates and valuation models are applied in which input is used that is not observable in the market. Furthermore, we identified the valuation and existence of the investments as a key audit matter because of the significant audit time spent, due to the size of the investments in the financial statements and their importance to the stakeholders.

The business operations and financial processes of the Company are highly automated, which makes IT General Controls (‘ITGC’) relevant to our audit. Mostly, however, we considered a substantive audit approach to be more effective and efficient, in relation to several audit areas. We did, to the extent relevant for our audit, perform procedures relating to IT dependencies to enable us to rely on IT-generated reports, interfaces and calculations.

As in all of our audits, we also addressed the risk of management override of internal controls, including evaluating whether there was evidence of bias by the board of directors that may represent a risk of material misstatement due to fraud.

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We ensured that the audit teams included the appropriate skills and competences which are needed for the audit of an insurance company. We therefore included specialists in the areas of actuarial expertise and IT specialists in our team.

The outline of our audit approach was as follows:

Materiality Overall materiality: €887,300.

Audit scope We conducted our audit work at the Company’s place of business in

Oosterhout. We discussed the outcome of the actuarial report and analysis with the

external actuary. We used the ISAE3402 type 2 report from the external custodian. We tested the existence and valuation of the investments independently.

Key audit matters Disclosures regarding capital requirements based on Solvency II

regulations Uncertainties in the valuation of assets and liabilities arising from

insurance contracts Valuation and existence of investments.

The scope of our audit BNP Paribas Cardif Schadeverzekeringen N.V. operates as a stand-alone entity in the Netherlands.

We designed our audit to obtain sufficient and appropriate audit evidence to provide a basis for our opinion. As part of our audit, we took into consideration that the Company has outsourced its asset management activities. The Company has an external investment manager, an external administrator and an external custodian. As described in the section ‘Overview and context’, these parties are related parties of BNP Paribas Schadeverzekeringen N.V. We discussed the role and responsibilities of the administrator and the investment manager, and paid specific attention to their independence from the Company. Based on our work performed we verified that there is sufficient segregation of duties between the Company and the administrator, the custodian, and the investment manager.

We rely on the ISAE3402 type 2 report from the custodian, in relation to internal controls surrounding custody regarding design, existence and operational effectiveness of the controls as far as these are relevant to our audit. The ISAE3402 type 2 report is certified by an auditor, of whom we have assessed aspects such as knowledge, quality and reputation, independence and type of audit opinion. In addition we tested the existence and valuation of the investments independently to external sources.

In relation to the activities performed by the investment manager, we inspected the mandate and verified if the investment manager acts in compliance with the mandate, to the extent relevant to our audit.

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In relation to the technical provision, we discussed the outcome of the actuarial report and analysis with the external actuary. Since the external actuary is a management expert, we paid attention to the aspects such as expertise, reputation, and independence.

Audit plan We have developed and executed a comprehensive audit plan. As part of this audit plan we carried out a process of understanding the strategy of the Company, its business, its internal control environment and IT systems. We looked at where and how this all impacted the Company’s financial statements and internal control framework. Based on these procedures, we have prepared our risk assessment and audit strategy and prepared our audit plan which has been discussed with the board of directors and the supervisory board.

Materiality The scope of our audit is influenced by the application of materiality which is further explained in the section ‘Our responsibilities for the audit of the financial statements’.

Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall materiality for the financial statements as a whole as set out in the table below. These, together with qualitative considerations, helped us to determine the nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and to evaluate the effect of identified misstatements, both individually and in aggregate, on the financial statements as a whole and on our opinion.

Overall materiality €887,300.

Basis for determining materiality

We used our professional judgement to determine overall materiality. As a basis for our judgement we used 1% of equity. In our judgement we took into consideration that we performed a first-year audit.

Rationale for benchmark applied

We used 1% of equity as the primary benchmark, a generally accepted auditing practice, based on our analysis of the common information needs of stakeholders (including the regulator Dutch Central Bank), of the financial statements. On this basis, we believe that equity is an important metric for the financial performance of the Company.

In determining the percentage, we have set up the audit of the Solvency II information in such a way that an undetected difference in the Solvency Capital Requirement (SCR) ratio is 5% points at its maximum.

We also take misstatements and/or possible misstatements into account that, in our judgement, are material for qualitative reasons.

We agreed with the supervisory board that we would report to them misstatements identified during our audit above €44,350, as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.

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Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial statements. We have communicated the key audit matters to the supervisory board. The key audit matters are not a comprehensive reflection of all matters that were identified by our audit and that we discussed. In this section, we described the key audit matters and included a summary of the audit procedures we performed on those matters.

The key audit matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon. We do not provide separate opinions on these matters or on specific elements of the financial statements. Any comments or observations we make on the results of our procedures should be read in this context.

Key audit matter How our audit addressed the matter

Disclosures regarding capital requirements based on Solvency II regulations We refer to section ‘Claim development’ in the financial statements.

Solvency II requirements are applicable to the insurance activities of the Company. Management implemented a reporting process for the information required to determine the capital position.

The Company applied the standard Dutch Central Bank formula to determine the solvency capital requirements.

When determining the available funds (€124.1 million) and required capital position (€58.8 million), the Company applied some important estimates and valuation models using inputs that were not observable in the market. The main elements were: the cash flows used to determine the economic

value of the technical provisions and reinsurancerecoverables;

the market value of contingent liabilities; expected premium income for the next year.

With respect to the loss-absorbing capacity of deferred taxes, the Company accounted for the deferred tax asset to the extent that this can be offset against the deferred tax liability.

Relating to the management estimates and complex valuation models, there is a higher risk of misstatement. As the solvency ratio is an important metric and the Solvency II information is being used in the capital and dividend policy of the Company, we believe this information is important to our audit.

We verified the accuracy and completeness of the adjustments to aririve from the Dutch GAAP balance to the economic balance sheet, the basis for calculation of the available capital, in accordance with Solvency II regulations.

We tested the estimates (parameters and assumptions with respect to claims, disability, recovery, lapse and future expenses) used to determine the cash flows to the observed historical developments in the insurance portfolio. Where the assumptions take into account actions of management, we challenged management on the feasibility and associated impact. We determined that management’s assumptions were supported by evidence and found these to be reasonable.

We assessed that the capital requirements for each sub-risk were calculated in accordance with the Solvency II regulations. In this respect, we tested (for a sample) the reconciliations and reasonableness of the data, by verifying the data of the client with our own external data. Furthermore, we performed sample tests on the calculations in the Solvency II model.

We assessed that the loss-absorbing capacity of deferred taxes of the Company is accounted for to the extent that this can be offset against the deferred tax liability.

Furthermore, we assessed the adequacy of the disclosures.

We did not note any material findings.

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Key audit matter How our audit addressed the matter

Uncertainties in the valuation of liabilities arising from insurance contracts We refer to note 7 in the financial statements.

Non-life insurance liabilities consist of: earned premiums and unexpired risks of

€120.2 million; outstanding claims gross of €153.6 million

The calculation of the liabilities arising from insurance contracts is complex, highly judgemental and is based on assumptions, which are affected by future economic and political conditions. These relate to the amount of the claims, the number of incurred but not yet reported claims, recovery, lapse, disability, incidence & recovery rates and future expense and other assumptions used in the liability adequacy test.

The assumptions required significant management’s judgement. The Company had comprehensive procedures in place to determine the value of the liabilities arising from insurance contracts and for performing liability adequacy tests.

The significance of management’s estimates combined with the extent of the related liabilities and assets result in a higher risk of misstatements.

We therefore considered this a key audit matter.

We performed tests, based on sampling, to verify that the standing data, such as starting date of the policy, the age of the insured person, the insured amount and the premium were accurate by reconciling these to the original policies and the actuarial system and we recalculated premium income based on the original premium schemes. These standing data were used in the valuation of the liabilities arising from insurance contracts. We have not noted any material differences.

We performed testing of the Company’s procedures regarding the determination of the assumptions, testing of the assumptions based on market observable data and actuarial analysis of the technical results during the year compared with the expected outcome based on the assumptions used.

We discussed the outcome of the actuarial analysis with the internal and external actuaries and the actuarial function holder. Specific attention was paid to claims arising from disability, illness and the impact of recovery rate on these claims. We determined that management’s assumptions were based upon available audit evidence and found the assumptions used to be reasonable.

Furthermore, we assessed the adequacy of the disclosures.

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Key audit matter How our audit addressed the matter

Valuation and existence of investments We refer to note 2 in the financial statements.

The total value of the Company’s investments consists of the following assets: shares and other non-fixed interest securities of

€51.0 million; bonds and other fixed-interest securities of

€305.9 million.

The valuation is based on the accounting principles for valuation and determination of result as disclosed in the accounting principles in the notes to the balance sheet of the financial statements.

The investments are valued at fair value or amortised costs. The investments held by the Company are publicly traded investments whose rating is less sensitive to estimates by management. Therefore, no estimates are made.

The investments are material to the financial statements, as the investments account for 98% of the assets. We identified the valuation and existence of the investments as a key audit matter because of the significant audit time spent on the investments, due to the size of the investments in the financial statements and their importance to the stakeholders.

We tested the existence of the Company’s investments by performing a full reconciliation with the confirmation of the investments in custody as obtained from the custodian.

We determined the valuation of all investments as at 31 December 2018 by an integral reconciliation to the prices from external data vendors. We have not noted any material differences.

Furthermore, we determined that the disclosures regarding the investments as included in the financial statements of the Company are adequate.

Report on the other information included in the annual report

In addition to the financial statements and our auditor’s report thereon, the annual report contains other information that consists of: information on the boards, officials and external advisors; key figures; the supervisory board’s report; the board of directors’ report; the other information pursuant to Part 9 of Book 2 of the Dutch Civil Code.

Based on the procedures performed as set out below, we conclude that the other information: is consistent with the financial statements and does not contain material misstatements; contains the information that is required by Part 9 of Book 2 of the Dutch Civil Code.

We have read the other information. Based on our knowledge and understanding obtained in our audit of the financial statements or otherwise, we have considered whether the other information contains material misstatements.

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By performing our procedures, we comply with the requirements of Part 9 of Book 2 of the Dutch Civil Code and the Dutch Standard 720. The scope of such procedures was substantially less than the scope of those performed in our audit of the financial statements.

The board of directors is responsible for the preparation of the other information, including the board of directors’ report and the other information in accordance with Part 9 of Book 2 of the Dutch Civil Code.

Report on other legal and regulatory requirements

No prohibited non-audit services To the best of our knowledge and belief, we have not provided prohibited non-audit services as referred to in Article 5(1) of the European Regulation on specific requirements regarding statutory audit of public-interest entities.

Services rendered The services, in addition to the audit, that we have provided to the Company, for the period to which our statutory audit relates, are disclosed in the section ‘Independent auditor’s fee’ in the financial statements.

Responsibilities for the financial statements and the audit

Responsibilities of the board of directors and the supervisory board for the financial statements The board of directors is responsible for: the preparation and fair presentation of the financial statements in accordance with Part 9 of

Book 2 of the Dutch Civil Code; and for such internal control as the board of directors determines is necessary to enable the preparation

of the financial statements that are free from material misstatement, whether due to fraud orerror.

As part of the preparation of the financial statements, the board of directors is responsible for assessing the Company’s ability to continue as a going concern. Based on the financial reporting framework mentioned, the board of directors should prepare the financial statements using the going-concern basis of accounting unless the board of directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. The board of directors should disclose events and circumstances that may cast significant doubt on the Company’s ability to continue as a going concern in the financial statements.

The supervisory board is responsible for overseeing the Company’s financial reporting process.

Our responsibilities for the audit of the financial statements Our responsibility is to plan and perform an audit engagement in a manner that allows us to obtain sufficient and appropriate audit evidence to provide a basis for our opinion. Our audit opinion aims to provide reasonable assurance about whether the financial statements are free from material misstatement. Reasonable assurance is a high but not absolute level of assurance which makes it possible that we may not detect all misstatements. Misstatements may arise due to fraud or error.

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They are considered to be material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.

Materiality affects the nature, timing and extent of our audit procedures and the evaluation of the effect of identified misstatements on our opinion.

A more detailed description of our responsibilities is set out in the appendix to our report.

Rotterdam, 18 April 2019 PricewaterhouseCoopers Accountants N.V.

Original has been signed by M.P.A. Corver RA

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Appendix to our auditor’s report on the financial statements 2018 of BNP Paribas Cardif Schadeverzekeringen N.V.

In addition to what is included in our auditor’s report, we have further set out in this appendix our responsibilities for the audit of the financial statements and explained what an audit involves.

The auditor’s responsibilities for the audit of the financial statements We have exercised professional judgement and have maintained professional scepticism throughout the audit in accordance with Dutch Standards on Auditing, ethical requirements and independence requirements. Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error. Our audit consisted, among other things of the following: Identifying and assessing the risks of material misstatement of the financial statements, whether

due to fraud or error, designing and performing audit procedures responsive to those risks, andobtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.The risk of not detecting a material misstatement resulting from fraud is higher than for oneresulting from error, as fraud may involve collusion, forgery, intentional omissions,misrepresentations, or the intentional override of internal control.

Obtaining an understanding of internal control relevant to the audit in order to design auditprocedures that are appropriate in the circumstances, but not for the purpose of expressing anopinion on the effectiveness of the Company’s internal control.

Evaluating the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by the board of directors.

Concluding on the appropriateness of the board of directors’ use of the going-concern basis ofaccounting, and based on the audit evidence obtained, concluding whether a materialuncertainty exists related to events and/or conditions that may cast significant doubt on theCompany’s ability to continue as a going concern. If we conclude that a material uncertaintyexists, we are required to draw attention in our auditor’s report to the related disclosures in thefinancial statements or, if such disclosures are inadequate, to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor’s reportand are made in the context of our opinion on the financial statements as a whole. However,future events or conditions may cause the Company to cease to continue as a going concern.

Evaluating the overall presentation, structure and content of the financial statements, includingthe disclosures, and evaluating whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.

We communicate with the supervisory board regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. In this respect we also issue an additional report to the audit committee in accordance with Article 11 of the EU Regulation on specific requirements regarding statutory audit of public-interest entities. The information included in this additional report is consistent with our audit opinion in this auditor’s report.

We provide the supervisory board with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

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From the matters communicated with the supervisory board, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, not communicating the matter is in the public interest.

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BNP Paribas Cardif Hoevestein 28Postbus 40064900 CA OosterhoutT +31 (0)162 486 000E info@bnpparibascardif.nl www.bnpparibascardif.nl