Rome, 17/04/2015

BNP Paribas Cardif in Italy

27 million clients and 6,800 branches across its retail network

Nearly

185,000 employees of which 145.000 in Europe

4 domestic markets in Europe: France, Italy, Belgium and Luxembourg

A responsible bank which undertakes on a daily basis to combine ethics and economic performance, serves and finances its clients and support growth.

2 core business: • Retail Banking & Services

• Corporate & Institutional Banking

Presente in 75 paesiPresence in

75 countries

39,2 39,2 Billion €

REVENUESREVENUESEXCLUDING EXCEPTIONAL ITEMSEXCLUDING EXCEPTIONAL ITEMS

2

77Billion €

NET INCOME ATTRIBUTABLENET INCOME ATTRIBUTABLETO EQUITY HOLDERSTO EQUITY HOLDERS

EXCLUDING EXCEPTIONAL ITEMS EXCLUDING EXCEPTIONAL ITEMS

157157Million €

NET INCOMENET INCOMEATTRIBUTABLEATTRIBUTABLE

TO EQUITY HOLDERSTO EQUITY HOLDERS

2014 KEY FIGURES

BNP Paribas GroupA leading bank in the Eurozone

3

BNP Paribas GroupOrganizational structure

3rd Banking Groupfor revenues

Responsiveness, Creativity, Commitment and Ambition:the values driving daily actions as business strategies

Leadership in each sectors:a complete and quality offer

18,000 employees 28 Companies

More than 5 million clients among individual and corporate clients

BNP Paribas is represented in Italy by 26 companies counting on nearly 19,000 employees competences and constituting the 3rd Banking Group for revenues.

BNP Paribas Group in ItalyPresent since more than 40 years

4

Present since more than 40 years

Innovative business model based on partnerships

10,000 employees*

2 business sectors:

Savings

Protection

90 million clients insured around the world

Present in 37 countries across Europe, Asia and Latin America. 

BNP Paribas Cardif in the worldInsurance Leader in the Eurozone

27,5 27,5 Billion €

GROSS WRITTEN GROSS WRITTEN PREMIUMSPREMIUMS

5

2,2 2,2 Billion €

NET BANKING NET BANKING INCOMEINCOME

1,1 1,1 Billion €

PRE-TAX NET PRE-TAX NET PROFITPROFIT

2014 KEY FIGURES

* Headcount for legal entities controlled by BNP Paribas Cardif: nearly 8,000 employees.

Latin AmericaActivities in 6 countries

EuropeActivities in 24 countries

AsiaActivities in 7 countries

Algeria, Austria, Belgium, Bulgaria, Croatia, France, Czech Republic, Denmark, Germany, Hungary, Italy, Luxembourg, Norway, Poland, Portugal, Romania, Russia, Slowakia, Spain, Sweden, The Netherlands, Turkey, Ukraine, United Kingdom

China, India, Japan, South Korea, Taiwan, Thailand, VietnamArgentina, Brasil, Chile,

Colombia, Mexico, Peru

BNP Paribas Cardif in the world Strong positions in the world

An organization which allows to monitor partnerships locally or globally and an efficient replication of successful products

6

7th Insurance Company in Italy*CPI , Employees and

Pension Loans, multi-support Leader

Digital approach in the damage industry:

1°telematic home insurance in Europe

30 multichannel distributors:

banks, consumer credit, financial institutions,

financial captive car, large retail organization,utilities

3 million clients:6% of the adult Italian

population

Present since more than 25 years

5°player life bancassurance & 1°for

productivity

Nearly 390 employees

Strong Commitment in CSR projects

especially in financial education

3 main business sectors: • Savings• Individual Protection• Goods Protection

3 distribution networks:• Retail Banking• Partnership• Digital

7

BNP Paribas Cardif in ItalyThe second domestic market after France

Since 1989 BNP Paribas Cardif develops and markets in Italy Savings and Protection insurance products through several channels. Its range of innovative solutions is able to meet the needs of every type of customer.

* 2013 ANIA ranking 2013

5,5545,554Billion €GROSS GROSS

WRITTEN WRITTEN PREMIUMSPREMIUMS

99,4 99,4 Million €GROSS GROSS

OPERATING OPERATING INCOMEINCOME

173,2173,2Million €

NET BANKING NET BANKING INCOMEINCOME

8

BNP Paribas Cardif in ItalyKey Figures 2014

• Entrance of the two legal entitiesCardif Assurance Vie and Cardif Assurances Risques Divers in the Italian market

• Setting up of the Italian branch Cardif Assicurazioni S.p.A.

• Creation of F&B, the JV between Ageas and BNP Paribas Cardif (50/50)

• Acquisition through F&B of the 50% stake in UBI Assicurazioni

• Long-term distribution agreement with UBI Banca (P&C)

• 100% acquisition of Cardif Vita S.p.A.

• Launch of E-commerce website www.cardif.it and of innovative insurance product Habit@t

• Merger between Cardif Assicurazioni and Cardif Vita and change of the company name to Cardif Vita S.p.A.

Our HistorySince 25 years in Italy

1989 1996 2009 2011 2013 2014

BNP Paribas Cardif and Ageas acquire 100% of UBI Assicurazioni (now CARGEAS Assicurazioni S.p.A.)

9

CARDIF ASSURANCE VIE Rappresentanza per l’Italia

CARDIF ASSURANCES RISQUES DIVERS

Rappresentanza per l’ItaliaCARDIF VITA S.P.A.

CARDIF ASSURANCE VIECARDIF ASSURANCES

RISQUES DIVERS

CARGEAS ASSICURAZIONI S.P.A

Italia

Francia

AGEAS

10

Our organizational structure

Creditor Insurance

Lifestyle Protection

Health

Property & Casualty

(P&C)

Individual Protection

Pension Funds

Credit Cards Personal Loans Car Loans Purchase Loans Leasing Mortgages Employees and

Pension Loans

Payment Protection (PPI) GAP Fraudulent Use of Credit

Cards Extended Warranty Goods Protection Household Family TPL

Critical Illness Hospitalization Recover Plan Surgery

Current Account Protection

Bill Protection Shopping basket Income Protection

Personal Accident Term Life

CUSTOMERCUSTOMER

Savings

Protection

A comprehensive offer range

Multi- Support

Investment-linked

contracts

11

Business model with multichannel approach

BUSINESS MODEL

CUSTOMERS

RETAIL

DIS

TR

IBU

TIO

N C

HA

NN

EL

S

PARTNERSHIP

DIGITAL

B2B&C

- Banks- Financial Institutions- Auto Captive Finance Houses- Big retailers

MULTICHANNEL APPROACH

Banks Financial advisors

Banks Consumer Credit Companies Auto Captive Finance Houses Leasing Companies Brokers Big retailers Telemarketing platforms Utilities Internet

Savings

Products

Protection

Products

12

ValueCreationValue

CreationClient FocusClient Focus Sustainable profitabilitySustainable profitability TransparencyTransparency

Reputation and market risks

control

Reputation and market risks

control

The partnership culture, part of our DNA

The bancassurance model developed by BNP Paribas Cardif for its own partners is unique and represents a distinctive element in the insurance market. It evolves according to the life cycle of the partnership and is based on 5 key success factors:

END CUSTOMER SATISFACTION

KNOWLEDGE OF CUSTOMER NEEDS

•Market knowledge•Competitive intelligence•Best practice sharing•Value for money•Client Journey

RISK MANAGEMENT

•Specialized actuarial teams•International experience•Monitoring tools

PROFIT MAXIMIZATION

•Marketing tools•Training & Incentive programs•Product innovation•Claims management•Multichannel approach

DEVELOPMENT OF THE PARTNERSHIP CULTURE

•Regular meetings•Reporting sharing•Demand managers •Definition of service levels with the Partner•Common approach with global Partners

ADAPTATION TO NEW REGULATORY FRAMEWORKS

•Legal, Compliance and Institutional Affairs teams for relations with Consumer Associations and the EU•Benchmarking

13

Our 7 key points

1 Bancassurance expertise, our main strength resulting from twenty-five years experience on Italian market

2 Partnership culture, our key distinctive expertise and our key growth factor

3A complete product range in 3 business sectors: Savings Individual protection Goods protection

6

Innovation, at the center of our offer and an integral part of our culture

4

Customer Focus, the customer is our first priority

Customer centricity is a commitment rooted in our offer: from product creation to service delivery, from distribution to contact with the end customers. High service standards are confirmed by Quality Certification UNI EN ISO 9001:2008 for the Claims Management Area

.5

7

Socially responsible player, strong commitment in CSR projects

People Care, we value the strengths of human resources taking care of our employees, promoting equal opportunities, recognizing performances and developing their skills and talents

14

Our responsible growth

In line with the objectives of the BNP Paribas Group, Corporate Social Responsibility represents for BNP Paribas Cardif an ongoing commitment and an integral part of our strategy.

THE 4 PILLARS AT THE BASIS OF OURCORPORATE SOCIAL RESPONSABILITY POLICY

OUR ECONOMIC

RESPONSABILITYTo insure people,

their families and their property ethically

OUR SOCIAL

RESPONSABILITYTo develop a committed

and loyal management of our human resorces

OUR CIVIC

RESPONSABILITYCombating exclusion

and promoting education

OUR ENVIRONMENTALRESPONSABILITY

Combating climate change

15

Our values and management principles

COMMITMENT AMBITION

CREATIVITYREACTIVITY

OUR VALUES OUR MANAGEMENT PRINCIPLES

LEAD BY EXAMPLE

PEOPLECARE

INNOVATION

CLIENT FOCUSRISK-AWARE

ENTREPRENEURSHIP

ASSERTIVENESS

16

Cost Allocation ProcessPrinciples & Methodology

Rome, 17/04/2015

Financial Planning & Control dept @ BNP Paribas Cardif Italy

Turnover Report

Enterprise Reporting Dashboard

Cost Management Information

System

International Overheads

Report

Cost Model

Budget and Forecast process

Closing Process

Redditivity Analysis

Business Planning

19

Cost Center: A segment of a business or other organization in which costs can be segregated, with the head of that segment being held accountable for expenses. Cost centers are established to identify responsibility and to control costs.

Task: service provided by a principal cost center to its clients. A list of tasks is defined for each cost center. This list must cover all activities of all the individuals attached to the cost centre.

Profit Center: A segment of a business for which costs, revenues, and profits are separately calculated at the crossroads of a segment (ie product or group of products) and a distributor (corresponding to partners, but also distribution modes and distribution channels) – many level of granularity exist.

Value chain: categorization of the generic value-adding activities of an organization. A distinction is made in the value chain between "core business" and "support activities".

Full Costs by Cost Center

Task A

Task B

Task C

Profit Center 1

Profit Center 2

Profit Center 3

Profit Center 4

Profit Center 5

Profit Center 6Value Chain

Cost Allocation Keywords

Aim of Cost Allocation

20

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, along with a similar apportioning of revenues, allows the establishment of a profit and loss account by profit center.

Cost Model – Scope & Objectives

21

Exceptional items will remain in the cost base but will be isolated on the Cost Centers axis.

This is necessary in order to analyze the full cost base.

However, in some cases, those costs should be removed from the base.

Treating them on the cost center axis will give us flexibility.

Exceptional costs

Reliable and exhaustive Data

Reliable and exhaustive Data

Profitability Analysis, Costs Projections

Profitability Analysis, Costs Projections

Cost base

restatements

Cost base

Purpose

Complete cost base and

consistent with Group data

Cost structure and profitability

analysis, benchmarks;

Evaluation of the costs in

future years in BP

Report total costs base Neutralize exceptional costs,

Cost model Tech. cost bases for BP, Solovency II, ManDR

Direct Costs (payroll, travels, training, …)

Indirect Costs(office rent, phone, computers, …)

Direct Costs

Indirect Costs

All other Cost centers

Isolated on the cost center « exceptional costs »

Exceptional costs

Those costs will remain in the cost

base but will be isolated.

Depending on the need, they can be excluded in order not to impact the

projection.

The Cost Model has 2 principal objectives:

1.It is a base for countries' cost structure & profit center profitability analysis2.The annual Cost Study is a basis for countries’ cost projection (BPs, Solvency II, Man day rate) and it can be converted to a technical cost base for costs’ projection

22

Cost Model – Step by Step (1/3)

Keys

Direct allocation

23

Examples of tasks characteristics

Cost Model – Step by Step (2/3)

24

Cost Model – Step by Step (3/3)

A program can be defined as an analytic notion that allows to identify all the costs related to IT applications (Accounting system (such as SAP/Sun Account), Portfolio Management Systems, HR System....)

25

The specific case of the Telemarketing Cost Center

Campaign planning

Production set-up

Campaign execution

Call centers set-up / Monitoring

1.Campaign planning 4.Partner contract mgt

2. Business plan 5.Contract

3. Product development 6.Product quotation

1. Contract / Campaign Planning

MKG

TMK Sales

Finance

Actuary

Legal

Custom. service

Call center costs - TMK

Call center costs – Reallocation from other functions (step 0.2)*

1.Call centers managers

2.TM Operators

3.TM Supervisors

4.TM Coordination

5.Reporting

6.Recruiting

7.Training

8.Daily monitoring

9.Listeners / quality

10.Recruiting

11.Training

12.IT/Software

13.IT Maintenance

14.IT Support

15.Building

16.General expenses

11. Database segmentation

12. Campaign specifications

13. Sales materials

14. Lawyers

TMK

15.Training definition

16.Training execution

17. Daily monitoring

TMK

Sales

HR

IT

TMK

CorporateServices

Integration

Policy insurance

Billing

Payment

9.Customer service

10.Claims

Post campaign analysis

TMK Sales Finance

Actuary

IT Ops

IT Ops2. Printing

3. Fulfillment

6. Partner fees

7. Banking fees

8. Partner commission Finance

1. PMS / Manual

IT Ops

Indirect Acquisition Costs

TMK Telemarketing cost center

2. Production 3. Administration

Direct Acquisition Costs Administration Costs

CSA

Legal

(*) These costs should be included after reallocation of auxiliaries cost centers

7.Product definition 9.Design & test

8.Software customization 10.Provisions…IT

MKG

Actuary IT Ops Finance

Sales Other cost centers

11.Reporting / analysis

12.Ex-post analysis

(Ex: head of TMK)

(Ex: TGV)

26

Protection Business Allocation Phases (1/2)

27

Each task should be allocated to one of the following destinations:

Acquisition of new conventions: all the tasks performed to acquire new agreement/Convention. They are usually performed by the sales, by the actuarial department when quoting and developing new products, marketing and legal.Acquisition of new insured: tasks performed to get new insured for an existing convention or to cash in and manage individual's first premiums. They correspond to the activities held directly with the customers (underwriting).The acquisition costs of annual recurrent premium will be allocated to this category only for the first payment. The cash in costs of the next payments will be administration costs. The acquisition costs of monthly recurrent premium will be allocated to this category only the first year. The cash in costs of the next years payments will be administration costs. Claims Management All the tasks performed to manage these events should be allocated to this destination.Administration of products in portfolio: accounting closing (Actuarial affairs, accounting and controlling). All the tasks that would set a little more time in case of a new convention.Fix administration. You would find here all the management tasks, the general tasks, audit dept and finance. They are supposed to be constant in time.

The costs linked to the renewal or of the continuation of a contract are allocated to this category.As far as Recurrent Premium are concerned, the costs linked to the management of the second year premiums (not considered as new business) should be allocated to fix administration (see above "Acquisition of new insured")

Protection Business Allocation Phases (2/2)

28

Savings

Portfolio Switchings SurrendersInitial Premium Fix AdministrationMature Endowment DeathTop Up Premium

General Fund Unit Linked

Product a Product b Product c Product d Product e Product f Others

Acquisition costs

Operations costs

Administration costs

Single Premium Recurrent Premium

Savings

Portfolio Switchings SurrendersInitial Premium Fix AdministrationMature Endowment DeathTop Up Premium

General Fund Unit Linked

Product a Product b Product c Product d Product e Product f Others

Acquisition costs

Operations costs

Administration costs

Single Premium Recurrent Premium

Savings Business Allocation Phases (1/2)

29

Each task should be allocated to one of the following 5 destinations:

Initial Premium also called Acquisition costs. All the tasks performed to get new business (commercial prospecting, pricing) or to manage new business (premium collection). As far as Recurrent Premiums are concerned, the costs linked to their initial acquisition are to be allocated in this category, whereas the premium management of the next premiums will be allocated to "Fix Administration".For the specific case of "Surrender-Initial Premium" operations, the costs spent to manage the new Initial Premium are to be allocated in this category.Top Up Premium (or renewal premium). We consider it as New Business but as these premiums come naturally without the commercial intervention, the related costs have to be isolated in this category. These costs are mainly coming from the cost centre managing the premium.Portfolio Switching. The costs related to this category are mainly coming from the cost centres managing the portfolio switching.Claims: surrender; death and matures endowments. All the tasks performed to manage these events should be allocated to this destination. In some particular cases, management, sales or legal advisors also intervene.Fix Administration = all the other costs. You would find here all the management tasks, the general tasks, the accounting and planning departments, audit dept and finance. They are supposed to be constant in time.

As far as Recurrent Premiums are concerned, the premium management costs of the next premiums will be allocated to "Fix Administration" (see above "Initial Premium").

Savings Business Allocation Phases (2/2)

The information contained in this documentis confidential, non-contractual,

and belongs to BNP Paribas Cardif.No information can be used

without prior authorization of BNP Paribas Cardif.